Australian wages and demand for labour expected to grow in 2024

Besides shelving plans to reduce headcount this year, more organisations are looking to increase wages against the backdrop of inflation.
By: | February 21, 2024
Topics: Australia | Compensation and Benefits | Employee Experience | News | Talent Management

Wages in Australia are expected to grow faster than inflation in 2024, and employees can expect to earn 3.7% more by the end of the year, an increase from 2.6% annual growth expected three months ago. Demand for labour will also be expected to hold up into 2024, with salaries growing faster than inflation.

These are findings that the Australian Human Resources Institute’s March outlook report found, with the quarterly survey finding fewer organisations planning to reduce jobs and headcount, reported the Guardian.

Employees can expect wages without bonuses to increase 3.7% in the 12 months to January 2025, with just over one in three organisations (36%), expected to expand their workforces in the current quarter, and only 3% planning to shrink staff numbers. Those reporting recruitment difficulties eased to 38% from almost one in two surveyed late last year.

“Although recruitment difficulties have eased, many organisations are still having trouble both recruiting and retaining staff,” said Sarah McCann-Bartlett, Chief Executive of the Australian Human Resources Institute.

“70% of employers told us they are adopting tactics to avoid or reduce redundancies, with the most popular options being raising prices (27%), exercising greater control over non-staff operation costs (23%) and reducing the use of non-permanent staff (21%),” she said.

The quarterly survey also saw that hiring plans were strongest in the public sector, with 46% indicating they were looking to increase headcount compared to 29% of their private sector counterparts.

READ MORE: Australia eyes sustainable job growth post-pandemic

To address recruitment difficulties, 42% of those surveyed said they plan to increase the skills of their present employees, with only 18% saying they would use apprenticeships. Fewer than three out of 10 (29%) respondents said they would improve job security, with 25% of the respondents saying that they were lifting wages or improving employment conditions. Around a similar number are looking to recruit people from under-utilised groups, such as parents returning to the workforce.