Redundancy intentions by employers also fall: report
Recruitment intentions in Australia slightly softened for the March quarter despite fewer employers experiencing recruitment difficulties.
Almost two-thirds (64%) of employers plan to hire staff in the March quarter, down slightly from the 67% in the previous quarter, found a report.
Redundancy intentions were also down, with only 23% of employers planning to make workers redundant in the March 2025 quarter, slightly lower than the 25% in December 2024.
The lower recruitment intentions in Australia come amid ongoing recruitment challenges for HR leaders, which have been on a downward trend.
The report from the Australian HR Institute (AHRI) revealed that 30% of employers are experiencing recruitment difficulties, remaining at December 2024 levels, but much lower than the 39% recorded in the third quarter of 2024.
Separate findings from Gartner said Australian employers are experiencing a decline of critical talent for 2025, driven strongly by:
"In Australia's challenging labour market, strategic workforce planning is now more complicated due to an increasing pace of change, decreasing labour supply and training not translating into readiness," said Mark Whittle, Vice President, Advisory in the Gartner HR practice.
Industries that are experiencing skill shortages include ones that are reliant on technology, healthcare, and trades, according to Hays.
It noted that one of the most prominent shortages in the country can be found in information technology, where there is high demand for:
More than a third of respondents (36%) in the AHRI report cited employees not being fully trained or experienced as a key cause of skills gaps.
Three in 10 respondents also said it was because of reluctance to develop new skills, evolving business or strategic needs, as well as constantly evolving skills' needs.
To improve the talent pipeline, 45% of AHRI respondents said they are implementing coaching and mentoring schemes. Others said they took other measures such as:
Organisations are also dipping their toes into the international talent pool to address skills shortages, with 60% of AHRI respondents saying they plan to recruit overseas workers in 2025.
More than three in 10 respondents attributed this move to the short supply of local candidates with the right skills or qualifications (33%) and the short supply of candidates with the right experience (30%).
"Employers are using migrant workers to ease skills shortages and recruitment challenges in their local Australian labour markets," the AHRI report states.
Whittle from Gartner also urged HR leaders to create a "future-ready workforce in 2025 by shifting from headcount planning to capabilities-led, integrated strategic workforce planning."
Gartner advised HR leaders to do this by first assessing the capabilities of the organisation's talent and the role of culture, organisational design, and EVP in shaping them.
"Then focus on segmenting talent roles by their impact on delivering workforce capabilities, identifying gaps, and creating scenarios for the future state of their organisation," Gartner said.
