Wages are up, but a modest increase in hours worked is an early indicator of an economic rebound.
So says the latest SmartMatch Employment Report. The latest report noted that ‘wageflation’ remains a major cause for concern. September’s data revealed annual wage grew at 3.8 per cent, outpacing September inflation (CPI) at 2.1 per cent. The report pegged the median hourly wage at $42.20, which it noted as reflecting sustained wage growth across most sectors.
Construction & Trade Services led the hourly wage growth trend with a notable 8.4 per cent annual growth, while Science & Technology saw slower gains at 2.8 per cent, indicating a rebalancing across traditionally volatile sectors.
Worked hours are up
Meanwhile, average hours worked showed slight improvement after months of decline, with a 2.2 per cent increase month-on-month and a 1.3 per cent annual rise, signalling tentative productivity gains as businesses focus on efficiency.
With regards to employment types, casual employment saw a sharp rise in hours worked, up 13.3 per cent month-on-month, which the report interprets as an indication of businesses embracing flexible staffing options. In fact, casual wages grew 0.5 per cent monthly and 3.4 per cent quarterly, while full-time annual wage growth dropped by 0.9 per cent compared to August 2024.
Despite these positive developments, Ben Thompson, CEO and Chief Economist at Employment Hero reminded Australians to not get complacent.
“SMEs aren’t out of the woods yet and are still struggling with the rising cost of operating,” Thompson said. “Our data indicates that while we are seeing early signs of stability, the cost of labour and continued wage pressures present a difficult balancing act for Australian businesses. As SMEs gear up for the end-of-year season, managing these rising costs without stalling productivity will be essential to economic resilience in the coming months.”
“Our workforce is at a critical inflection point: the signs of economic recovery are emerging, and inflation is slowly coming down, however, the issue of unsustainable wage growth threatens to prematurely stunt this recovery. Now is the time for SMEs to be cautiously optimistic in the lead-up to the holiday season, which will be pivotal in determining the stability of Australia’s workforce and economy,” added Thompson.
