Employment intentions at a 2-year high

New research has revealed changes in the workforce, with half of Aussie businesses looking to grow their workforce and a quarter wanting to downsize.

The Australian HR Institute (AHRI) has released its latest Quarterly Work Outlook report, which reveals changes in the job market.

This study was compiled through a survey of 601 senior business decision-makers, which included HR Leaders from organisations with two or more employees across public, private, and not-for-profit organisations.

“AI is reshaping the labour market into a skills-based operation, which is requiring organisations to rapidly adapt and reorganise their structures,” said Sarah McCann-Bartlett, CEO of the Australian HR Institute.

“Employers need to consider how they can meet current and future skills’ needs.”

Promising growth in employment

The report found positive figures for employment growth, with high numbers and an increase in confidence.

“Employment confidence has reached its highest level since the survey began in May 2023,” it said.

Nearly half (48 per cent) of organisations intend to increase their workforce this quarter compared with 38 per cent last quarter.

AHRI’s findings suggest that employers expect the growth of employment over the next few years, with “over a quarter (27 per cent) of employers report[ing] that they expect their workforce to increase by more than 10 per cent over the next five years”.

Despite recent reports of a more subdued labour market, AHRI found that “job vacancies rose by 2.9 per cent in the three months to May 2025”.

Through data from the Mitchell Institute at Victoria University, AHRI found that “nearly half of all new jobs created in the past year required vocational qualifications or similar”.

The data also showed that over a third (33 per cent) of employers said skilled trade roles were the most difficult roles to fill.

“Jobseekers should consider specialist training, and there are plenty of free or low-cost online courses that can help separate them from the crowd,” she said.

Organisations approaching change

Based on its findings, 32 per cent of employees said that “one in five roles in their organisation are vulnerable or subject to considerable change over the same period”.

The report also found that redundancies increased this quarter, with 27 per cent of employers planning cuts, which is up 3 percentage points from last quarter.

The public sector (39 per cent) experienced higher redundancy intentions than the private sector (29 per cent), according to the report, with the distribution (35 per cent) and production (35 per cent) sectors having the highest rates.

“This research also reinforces the need for retraining and upskilling to both help individuals at risk of displacement and to help organisations remain competitive in this rapidly evolving landscape,” said McCann-Bartlett.

AI in the workforce

The report said: “61 per cent of employees predict the reduction of some roles due to AI, and 73 per cent of employers that AI will support their workforce planning strategies in this quarter.”

“The labour market is in flux, with employers redesigning the workforce in response to a rapidly changing external environment.”

AHRI continued, “nine in 10 employers say roles in their organisation will be vulnerable or undergo significant transformation in the next three to five years”.

“AI is reshaping the labour market into a skills-based operation, which is requiring organisations to rapidly adapt and reorganise their structures,” McCann-Bartlett said.