Almost one third (31%) of employers intend to make redundancies this quarter while the jobs market will continue to grow strongly, according to findings in the Australian HR Institute (AHRI) third Quarterly Australian Work Outlook report.

The December quarter survey reveals redundancy intentions have risen sharply to 31% – up from 17% in the September quarter. At the same time, recruitment intentions have increased from 61% to 71%.

The survey records a Net Employment Intentions Index of +41, unchanged from the previous quarter. In total, 45% of organisations plan to increase staff levels in the quarter, compared with 4% that intend to reduce their workforce size.

Organisations are seeing an overall increase in unscheduled employee absence, driven in large part by Covid, home responsibilities and minor illnesses. The average Australian worker took six days off during the last financial year.

Cost-of-living pressures (51%), work-life balance concerns (40%) and excessive workloads (38%) are the most significant stressors for employees. The survey identifies investment in line management capability (31%) as one of the most effective interventions to reduce absence.

Almost two-thirds (64%) of employers believe that a law or policy that gives employees the right to disconnect from work-related communications outside of working hours would have a positive impact on employees in terms of them being able to work flexibly.

AHRI CEO, Sarah McCann-Bartlett says there could be a number of reasons why redundancy intentions and recruitment intentions are simultaneously high.

“Some of the factors that may be driving recruitment are ongoing high employee turnover rates which are leaving essential roles vacant and the fact that some employers are experiencing proficiency gaps. These point towards recruitment as an ongoing backfilling activity rather than a response to, or driver of, business growth,” she said.

“If the positive employment and recruitment indicators are viewed in this light, the higher redundancy intentions reported this quarter are not incompatible.”

McCann-Bartlett says organisations may also be undertaking restructuring alongside recruiting for existing/new roles. She cautions that the higher redundancy intentions, combined with modestly lower wage intentions, might serve as a forward indicator of economic challenges that HR professionals will need to consider in their planning for 2024.

“It will be important to consider strategic HR measures to control costs, enhance productivity and attract and retain skilled employees. This has been brought into sharp focus by the divergence between falling productivity growth and sharply rising unit wage costs, which will put further pressure on employers to contain wage costs either by raising productivity or keeping an even tighter lid on pay rises. Either way, 2024 looks a more challenging year for employers and workers,” she said.