Aussie employers reluctant to recruit ‘people with certain characteristics’

More than two-thirds of surveyed recruiters admit to excluding candidates with either a mental or long-term illness, disability, or those over the age of 55.

New research from the Australian HR Institute (AHRI) has identified trends in hiring patterns, recruitment intentions and redundancy, raising questions around future labour supply.

Recent employer sentiment suggests the hiring market is cooling, but numbers remain positive for now. According to the AHRI’s March Quarter 2026 Australian Work Outlook, net employment growth expectations have fallen from +48 to +38 in the past two quarters, indicating the Australian labour market remains in an expansionary phase, albeit a slower one.

The survey of over 600 senior HR and business decision-makers revealed that employers are becoming more cautious, with both redundancy and hiring intentions falling; the latter hitting its lowest level since 2023, at 59 per cent. This represented a 12 per cent drop since December 2025 and suggested that, despite these numbers, the labour market remains tight by historical standards.

What is more surprising, however, is the continued exclusion of candidates based on personal attributes despite difficulty finding staff, with 69 per cent of surveyed recruiters admitting to the practice. Of this proportion, 32 per cent was on the basis of mental illness, 28 per cent due to long-term illness, 19 per cent for a disability, and 19 per cent again for workers over the age of 55.

According to AHRI chief executive Sarah McCann-Bartlett, “widespread reluctance to recruit people with certain characteristics highlights the challenge Australia faces if we want to maintain strong workforce participation”.

She addressed the importance of recruitment systems that allow and encourage employers to draw from the broadest possible pool of talent, adding: “In a country where workforce participation is expected to become more constrained as the population ages and labour demand increases, narrowing the available talent pool carries clear economic risks.”

“AHRI advocates for a jobs market where all candidates are fairly considered. Broadening opportunity ultimately strengthens organisations, improves social equity, and supports stronger economic performance for Australia’s future.”

While salaries are expected to increase 3.3 per cent over the next year, just above the previous quarter, headline inflation is forecast to reach 4.2 per cent in mid-2026, meaning workers are likely to experience worsened cost-of-living pressure.

McMann-Bartlett acknowledged that “employee satisfaction and engagement may become a challenge”. She said: “Addressing this will require renewed efforts to strengthen employability and remove barriers to recruitment, including older Australians and people with disability.”

In addition, workers should be heartened by recent figures on workforce upskilling, with 60 per cent of organisations planning to increase skills investment over the next year, and Australian employers spending approximately $13.76 billion on training last year, suggesting a continued investment in workforce capability.