Public sector employers eye job cuts

by Admin
August 13, 2024

A growing number of public sector employers are considering redundancies, according to new research by the Australian HR Institute (AHRI).

The latest Work Outlook Report shows 60% of public sector employers are anticipating job cuts in the September quarter. This is up from 31% in the June quarter.

Redundancy intentions in the private sector remain unchanged, at 21%.

About 39% of respondents said they were having trouble finding suitable workers.

AHRI CEO Sarah McCann-Bartlett said this suggests job cuts are more about restructuring than job cuts.

“This is potentially about the different skills that are needed as more organisations embrace digitisation, automation and AI,” she said.

“These incremental changes will have an ongoing impact on the composition of the workforce including higher quality jobs in Australian workplaces.

“This activity will increase employment levels, mirroring the trends in the official data.”

But it’s not all bad news for public sector workers. Recruitment intentions were higher in the public sector (88%) than in the private sector (62%).

Wage expectations are also rising. Employers expect the mean basic pay to increase by 3.8% in the year to July 2025 — the highest wage increase intent recorded by AHRI.

With inflation expected to fall to 2.8% by June 2025, this offers hope of a real wage increase this financial year.

McCann-Bartlett said organisations need to invest in skills to overcome workforce gaps.

“Employees should be advocating for upskilling within their organisations while job seekers should be focused on acquiring in-demand skills,” she said.

Recent data from the Australian Public Service Commission (APSC) showed Commonwealth public servant wages are not keeping up with inflation.

In the 12 months to December 2023, SES salaries grew 2.5%, and non-SES salaries grew 1.7%. During the same period, the Consumer Price Index rose by 2.7%.

Most public sector unions have won further pay increases this year.