Hardwood timber
Australia’s December labour market data presents a nuanced landscape, with mixed trends in employment, wages, and working hours.
While the Australian Bureau of Statistics (ABS) reported a steady unemployment rate of 4.0% and a year-on-year (YoY) increase in hours worked (+2.7%), contrasting insights from Employment Hero’s December SmartMatch Employment Report (SMER) reveal underlying shifts in the job market.
Drawing from payroll data of over 1.1 million Australians, Employment Hero reported a 7.6% YoY increase in employment. However, December marked the first monthly decline in employment (-0.1%) in over a year, hinting at potential recalibrations by employers in response to economic pressures.
Wages and work hours
The median hourly wage rose by 4.5% YoY to $42.20, yet total hours worked showed divergent trends. Employment Hero’s data indicated a slight monthly decline in hours worked (-0.6%) and a YoY decrease (-0.2%), contrasting with the ABS’s reported growth in hours worked.
Full-time employment led gains (+5.4% YoY), followed by part-time (+5.1% YoY). Casual roles grew slower at +3.5% YoY, with casual workers experiencing reduced hours worked (-10.7% quarter-on-quarter) and a marginal monthly wage decrease (-0.3%).
Sectoral performance
Tech, Trades, and Transport on Top
Technology: Science & Technology roles saw the highest median hourly wage ($63.50) and wage growth (+3.7% month-on-month). Employment grew by 7.9% YoY, reflecting continued demand for tech skills.
Construction & Trade Services: This sector led annual wage growth (+6.9% YoY), highlighting sustained demand for skilled tradespeople.
Transport & Logistics: Employment increased (+6.0% YoY) as the sector managed holiday season demand, with hours worked rising (+1.5% YoY).
Retail and Hospitality Slowdown
Despite the festive season, Retail, Hospitality & Tourism saw muted activity. Wages dropped (-0.6% quarter-on-quarter), and employment growth (+3.8% YoY) was below average, suggesting cautious employer spending amid rising costs.
Healthcare Challenges
Healthcare workers, while among the highest earners ($47.50/hour median), saw limited wage growth (+2.5% YoY) and a decline in hours worked (-4.8% quarter-on-quarter), reflecting ongoing budgetary constraints in the sector.
Generational and state-level insights
Generational Divide: Older workers (45–54) saw the highest wage growth (+5.5% YoY), while Gen Z (18–24) experienced increased employment (+5.3% YoY) but reduced hours worked (-1.3% YoY), leaving many with thinner paychecks. Casual and teen workers faced the greatest challenges, with significant drops in hours worked.
State Trends: Queensland led the nation in employment growth (+8.0% YoY) and saw solid wage increases (+1.4% quarter-on-quarter). Western Australia, by contrast, lagged in both employment (+4.7% YoY) and wage growth (+2.6% YoY).
Outlook and challenges
Employment Hero CEO Ben Thompson highlighted employers’ cautious approach amid economic uncertainty, particularly in retail, healthcare, and casual work. Rising costs and regulatory changes may further challenge businesses in 2025. However, the upcoming election year brings potential for policies that address persistent labour market issues, offering hope for improved stability and growth.
The December data underscores the complexity of Australia’s job market, with strong annual employment gains tempered by emerging signs of economic adjustment as businesses recalibrate their workforce strategies.
Ben Thompson, CEO and Chief Economist at Employment Hero: “The SmartMatch Employment Report revealed stronger 7.6% year-over-year employment growth- alongside declining hours worked. However, for the first time in a year, the data showed employment rates decline, indicating businesses are cautious about expanding their teams to meet demand while trimming hours to manage rising operational costs and economic uncertainties. Workers are benefiting from a 4.5% wage increase to $42.20 an hour still outpacing inflation, however, fewer hours worked across the board will see pay packets slimmer than expected as employers seek to make ends meet.
“Casual employees in particular face fewer hours and tighter pay, as employers seem to be opting for more tenured staff, likely aiming to make their dollar go further with budgets remaining thin.
The real test for 2025 will be finding the right balance between meeting growth goals and addressing underemployment challenges. While some industries are thriving, others still face hurdles, especially when it comes to maintaining hours and retaining top talent. With the right insights and support, I believe Australian businesses can make this a year of resilience and progress for their teams.”
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.