This year’s spike in hiring won’t give employees back their bargaining power

Hiring appetites among Australian employees are bouncing back after a tumultuous 2023. Tech and finance will have the biggest say on whether these predictions are realised.

At a glance, half (50 per cent) of employers are looking to expand their headcounts this year, while nearly all (95 per cent) expect to at least maintain current levels. This time last year, at the break of 2023, only 75 per cent foresaw steady headcount numbers – suggesting employer appetites have bounced back.

These and other results were uncovered in Robert Half’s recent job market survey.

Let’s start with the headline statistics:

• Fifty per cent of employers plan to add new permanent positions, while 30 per cent say the same for contract staff.
• Forty-five per cent plan to maintain existing permanent headcounts (meaning they will only be filling vacated positions), while 58 per cent say the same of their contract workers.
• Three per cent will be freezing permanent hires (i.e., neither creating new positions nor filling vacated ones), while 6 per cent will be freezing contract hires.
• Two per cent of employers expect to reduce their current permanent workforce, while three per cent say the same for their contract staff.

“Australian businesses are looking to bounce back from a tumultuous 2023. While some businesses in more affected industries have stalled hiring, the majority are now looking to make strategic hires – by backfilling vacant roles or selectively interviewing highly skilled candidates aligned to strategic business objectives or to expand their teams,” said Nicole Gorton, director at Robert Half.

While hiring appetites are rising, the spoils might not necessarily be shared in contract negotiations as employee gains over the past few years are still fresh in the memory of Australian employers.

“While the country’s economy and hiring market will continue to shift, we’re coming off an incredibly elevated hiring period, so jobseekers should continue to search with confidence but perhaps with less bargaining power than they would’ve had a couple of years ago,” said Ms Gorton.

The two big players: Finance and tech

While tech leadership is looking to expand headcounts, partly correcting for industry-wide redundancies in recent years, finance executives are less bullish.

“Technology is driving overall hiring intentions in 2024 due to the high demand in skills and planned digital transformation projects for improvements in data usage, customer experience and artificial intelligence,” said Robert Half.

Added to that, the federal government is investing in boosting the nation’s tech headcount by 1.2 million before 2030. Tech jobs are among the most productive in the nation, and government subsidies and policies will continue to facilitate a tech employment boom to realise these benefits and correct the disproportionately high job vacancy rates in the sector.

That said, the gulf isn’t so wide that the gains made in tech will necessarily be muted or reversed. These appetites are reflected in the hiring intentions of, on the one hand, chief information officers (CIOs) and chief financial officers (CFOs) on the other, consider the following:

• While 54 per cent of CIOs expect to add to their headcounts this year, only 44 per cent of CFOs are making the same prediction.
• However, proportionately fewer CIOs foresee maintenance (i.e., only filling vacated positions) of existing headcounts than do CFOs, at 45 per cent and 47 per cent, respectively.
• One per cent of CIOs expect hiring freezes compared with 7 per cent of CFOs.
• No surveyed CIOs expect headcount reductions, while 3 per cent of CFOs do.

“CFOs are taking a more cautious approach to hiring compared to CIOs. The strategic business priorities for the finance sector include cost management, which has resulted in CFOs taking a more cautious approach to expanding headcount at a time of uncertainty,” explained Robert Half.