The figures are a marked change from just a few months ago in July, when median hours worked were stable across most sectors.

The behaviour is an indicator of “labour hoarding”, according to the HR service provider. “Labour hoarding” refers to when businesses hold on to their staff to avoid dealing with labour shortages and recruitment costs in the future.

Ben Thompson, Employment Hero’s CEO and Chief Economist, expressed concern about “wageflation”, where wage increases outstrip economic output. 

“Wage growth is outpacing productivity, which is completely unsustainable, particularly for small businesses folding under the surging cost of operating,” said Thompson.

“It’s becoming harder for business owners to strike the right balance between maintaining staff and managing wageflation, which means more Australians will inevitably be grappling with job insecurity and inconsistent wages. Wageflation over the long term creates problems on both sides of the market, particularly where a paypacket boost today could spell a layoff in the future.”

Uneven wage growth across Australia

Employment Hero found vast wage growth disparities across the nation. While ACT saw a 6.9 per cent YoY increase, South Australia lagged behind with a 2.6 per cent increase. Meanwhile, the Northern Territory’s growth went backwards by 0.2 of a percentage point.

Meanwhile, employment growth was led by SMEs in Western Australia and Queensland, at 7.2 and 5.3 per cent respectively. 

Finally, SMEs in healthcare and community services had the fastest employee growth of all sectors with a 6.8 per cent YoY increase, while retail, hospitality, and tourism lagged behind, with a 1.5 per cent increase.

“It’s also alarming to see the disparity between economic activity across the nation,” said Ben Thompson. “While some regions and sectors are thriving, others are facing a lethargic economy where productivity ultimately suffers. When jobs growth across the country is uneven, this creates ripple effects for the communities who are most impacted.”

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The same is true for year-on-year median wages, which rose by 8.6 per cent in the past year but has seen no growth since October.

In November 2022, the average number of employees among Australian SMEs was 17 points more than in January 2019, but the growth from October to November 2022 was marginal at 0.7 points.

The research noted that in November, the median hourly rate for employees working in Australian SMEs was $35.00. Since November 2021, median wages grew by +6.8 per cent for the Under 18 demographic, +7.9 per cent for 18-24-year-olds, +8.6 per cent for employees aged 25-64, and +6.7 per cent among 65+. While median rates continue to grow month on month for under 18s (+2.5 per cent) and 18-24-year-olds (+0.5 per cent), this was not the case for 25-64-year-olds and 65+-year-olds, which saw no change over the same period. For workers aged 65+, the median hourly rate has not changed in the last three months. The median hourly rate was $17.00 for those under 18, $29.70 for 18-24-year-olds, $38.00 for 25-64-year-olds and $35.00 for 65+-year-olds.

“Our November data still indicates that SMEs across Australia have seen growth year on year,” Ben Thompson, Founder and CEO of Employment Hero, said. “The pace of employee growth from October to November tells a similar story to previous months, while employee growth has not declined (which, if we reflect on the last 12 months, is remarkable in itself), it has been stagnant or marginal.

“There’s no sugarcoating that SMEs have a tough year on the horizon as economic pressures and ongoing supply chain issues take their toll,” Thompson added. “The resilience shown by business owners over the last few years will continue to underpin every decision they make. While the demand for talent might be softening, it’s still there. It will be interesting to watch how the surge in skilled migrants and the expanded visa policy will help to alleviate these talent shortages and push up month-on-month employee growth.”

Thompson also pointed out that while median wages have grown across all age groups year on year, the median rates month on month differ across age brackets in our November data.

“While under 18s and 18-24s experienced growth, this was not the same for 25-65+-year-olds. For 65+-year-olds specifically, the median hourly rate has not changed in three consecutive months,” Thompson concluded.

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