Older employees see bigger hikes in median hours worked than younger staff
Employees across Australia are working longer hours for less pay, according to a new report.
Employment Hero's latest SME Index looked into the data of over 1.5 million employees as well as 150,000 small and medium enterprises to discover a trend in February where wages dipped by -1.3%, despite a monthly (1%) and annual (2.3%) increase in median hours worked.
The decline goes against the 7.5% annual wage growth, according to the report, indicating that median wages may be undergoing the early stages of market correction after a year of elevated operating costs that have strained businesses, particularly smaller ones.
Overall employee growth
According to the report, smaller businesses saw employee growth of 0.3% month-on-month and 5.6% annually. This is slower than the one per cent month-on-month growth for medium businesses, and 0.9% for large businesses.
Ben Thompson, Employment Hero CEO and co-founder, said this shows many businesses are experiencing overall employee growth.
"However, glaring issues remain for small businesses that are not only experiencing stagnant growth, but are at risk of insolvency and being forced to make hard decisions," Thompson said in a statement.
"As such, small business owners are looking to cut down on expenses and reduce workers' hours, while their employees are having to navigate job instability, underemployment and consequential financial strain; making them likely to seek another job to make ends meet," Thompson said.
Wages by location
Overall, February's wage trends have shown that all Australian states saw a downturn in wages despite moderate year-on-year growth.
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The Northern Territory saw the biggest monthly drop of -2.4%, while Western Australia fared best with -1%.
Year-on-year, the Australian Capital Territory and Queensland marked the highest wage growth with 8.7%, while the Northern Territory logged the lowest growth at 4.5%.
Working hours by age
Meanwhile, the report also discovered a generational gap when it comes to median hours worked. Employees older than 65 years old saw 10.4% month-on-month increase in working hours, while other age groups saw a decrease in median hours worked.
Annually, employees aged above 65 also saw a 2.9% increase in hours worked, while individuals between 25 and 64 years old only saw a 1.1% increase.
Eddie Kolwalski, senior insights manager at Employment Hero, said the differences in hours worked reflect economic pressures and its uneven impact across generations.
"The trend among the younger demographic can be attributed to the higher likelihood of underemployment, with many in this age group often finding themselves in hospitality or retail positions," Kolwalski said in a statement.
"On the other hand, the increase in hours for those aged 65 and above suggests a necessity-driven choice. While we have seen recently that Australia's unemployment rate has dropped, this data represents the very real concern of underemployment."