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Job market booms, but falling hours keep productivity under pressure
Australia's job market is experiencing a significant resurgence, with employment figures showing a robust increase, according to the latest report from Employment Hero. The October Jobs Report, derived from real-time payroll data of over 1.5 million workers, reveals a 6.4% increase in national employment year-on-year and a 1.6% rise month-on-month, marking the strongest monthly growth since May. However, the report also highlights a concerning trend: while jobs are on the rise, the average number of hours worked is declining, putting pressure on productivity.
Job market booms, but falling hours keep productivity under pressure
Australia's job market is experiencing a significant resurgence, with employment figures showing a robust increase, according to the latest report from Employment Hero. The October Jobs Report, derived from real-time payroll data of over 1.5 million workers, reveals a 6.4% increase in national employment year-on-year and a 1.6% rise month-on-month, marking the strongest monthly growth since May. However, the report also highlights a concerning trend: while jobs are on the rise, the average number of hours worked is declining, putting pressure on productivity.
"Jobs are returning with force after a slower few months," said Ben Thompson, co-founder and CEO of Employment Hero. "Businesses are hiring again, but they’re still cautious about how much work they’re giving people. A spike in hires alongside a dip in hours suggests many Australians are patching together multiple jobs just to stay afloat. Plus, this dip in hours is across all employment types, including full-time, which is a red flag for output and job security. More people are working, but we’re not necessarily getting more done."
The report indicates that engineering is leading the employment surge, with a remarkable 20.4% year-on-year increase in hiring. This growth is driven by a rise in infrastructure, construction, and renewable energy projects. Following engineering, the construction sector saw an 8.2% increase, while retail and hospitality recorded a 7.3% rise. However, the tech sector is experiencing a slowdown in demand, with Science & Tech hiring declining in Brisbane (-6% YoY), Adelaide (-3.6% YoY), and Perth (-0.4% YoY).
"It’s a fascinating contrast," Thompson added. "We’re seeing engineers in huge demand as infrastructure, construction, and renewable projects ramp up, while tech roles have plummeted year-on-year in half of the major cities. The tech sector is hitting a lull, but it won’t last long. Businesses are still bullish on AI, so those jobs will come back in stride."
Retail and hospitality roles are also in high demand as businesses prepare for the peak season, relying heavily on casual and part-time workers to fill their rosters. Casual employment has increased by 9.5% year-on-year, reflecting a structural shift towards more flexible work arrangements. Full-time employment has also seen a boost, up by 3.7% year-on-year.
Despite the strong hiring gains, the average hours worked have fallen by 1.0% month-on-month, continuing a trend observed throughout most of 2025. This decline in hours worked is a concern for productivity and economic output, as it suggests that while more people are employed, the overall work being completed is not increasing proportionately.
Wage growth has remained steady at 4.8% year-on-year, with Consulting & Strategy (+9.2%) and Engineering (+7.5%) leading the way. Mid-level workers aged 25-34 are seeing the most significant wage gains, with a 6.7% increase year-on-year. Thompson believes that steady wage growth aligns with the current economic climate.
"It’s no surprise wages are still climbing… everything else is too. With inflation sitting at 3.2 per cent, employers are stretching to keep up. Most are trying to do right by their people, but it’s getting harder to match the rising cost of living," Thompson explained.
State-wise, Western Australia (+7.1%) and Queensland (+5.8%) recorded the highest hiring growth, reflecting regional variations in employment trends. The increase in casual employment and the decline in average hours worked highlight the ongoing challenges in the job market, as businesses navigate economic uncertainties and evolving workforce dynamics.
As the Australian job market continues to evolve, the Employment Hero Jobs Report provides valuable insights into the trends shaping employment across the country. For more detailed information, the full report can be accessed on Employment Hero's website.
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