Employment across Australia is expected to continue to grow in the first quarter of 2024, but at a slower rate than in previous quarters, according to the Quarterly Australian Work Outlook by the Australian HR Institute (AHRI).

The report surveyed 602 senior HR professionals and decision-makers, including HR, from organisations with 2+ employees.

AHRI’s Net Employment Intentions Index for the March 2024 quarter, which measures the difference between the proportion of employers that expect to increase staff levels and those that expect to decrease staff levels, remains positive.

The AHRI Net Employment Intentions Index for the March quarter of 2024 is +33, down from +41 in the previous quarter. Making up the Index, 36% of organisations are planning to increase employment levels in the March 2024 quarter compared with 3% of organisations planning to reduce the size of their workforce over the same period.

Broken down, the data showed that employment growth intentions are stronger in the public sector (+46) than in the private sector (+29).

Approximately 71% of organisations plan to hire staff in the March quarter of 2024, unchanged compared with the previous quarter.

At the same time, 22% of respondents plan to make workers redundant in the March quarter of 2024, compared with 31% in the December quarter. This easing in the planned rate of job losses could be due to a range of factors, including pausing redundancies, where possible, to assess forward economic conditions, ongoing difficulties in filling vacancies, or to ensure delivery of outputs to customers.

Among those employers that are planning job losses, an average of 6% of their workforce will be made redundant.

Overall, 70% of employers say they are adopting tactics to avoid or reduce redundancies. The most popular options include raising the prices of product and services (27%), reducing non-staff operation costs (23%) and reducing the use of non-permanent staff in their organisation (21%).

The report also found that 21% of employers say they are implementing recruitment freezes. Recruitment freezes appears to be significantly higher for the public sector (30%) than the private sector (19%). Some employers are reducing wage costs to help preserve some jobs; most notably delaying pay rises or cuts to pay (17%) and cuts or reductions to bonuses (16%).

Consistent with weaker labour demand, the share of organisations currently experiencing recruitment difficulties has fallen sharply over the past three months. Recruitment difficulties remain a cause for concern for 38% of employers who are recruiting in the March 2024 quarter, down from 48% in the December 2023 quarter.

When it comes to tackling recruitment challenges, the most common employer response to recruitment difficulties in the year ahead will be to upskill existing employees, cited by 42% of survey respondents.

In addition, almost a quarter (23%) of respondents say that they plan to invest in leadership and management capability while 18% say that they will use apprenticeships.

Looking further ahead, the mean basic pay increase in organisations (excluding bonuses) is expected to be 3.7% in the 12 months to January 2025, up from the 2.6% previously expected in the 12 months to October 2024 and the 2.8% previously expected in the 12 months to July 2024.

In terms of AI use, currently, HR professionals are most likely to use AI to create online application forms (56%), review CVs (54%) and source (53%) and screen candidates (53%).