Employment slowdown set to tip workplace power balance in bosses’ favour
Employers are set to be handed more power to dictate the terms and conditions of their workforce as a slowdown in jobs growth shakes up the labour market.
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Bosses are expected to be handed more power over their employees as a slowdown in the jobs market – spurred on by soaring interest rates – tips the scales away from workers, new analysis has revealed.
Released on Monday, the report from jobs advertising website SEEK predicts the advantage that workers had accrued through the pandemic to negotiate the terms and conditions of their employment will continue to dissipate through the year.
SEEK senior economist Matt Cowgill said as Australia’s ultra-tight labour market began to loosen, the “power balance that sat with the workers during the Great Job Boom of 2021-22 will continue to reverse itself”.
“Employers with greater bargaining power will be more able to dictate the terms of employment,” he said.
The Australian economy faced rampant skill shortages through the pandemic as border closures cut off businesses’ access to migrant workers – a crucial source of labour.
As a result, unemployment fell to multi-decade lows, easing to just 3.4 per cent in late 2022.
However, according to Reserve Bank forecasts, unemployment is expected to rise to 4.2 per cent by year’s end, up from 3.9 per cent in December, as the impact of tighter monetary policy slows the economy and brings inflation back to the central bank’s 2 to 3 per cent target band.
The fresh SEEK analysis comes as more than 61,000 Australians found themselves out of work in December, the Australian Bureau of Statistics said last week, in a further indication that the country’s red-hot labour market is beginning to cool.
But even as employment growth begins to weaken, job vacancies offering work-from-home options in some form are expected to continue to remain a fixture of the labour market.
“Two years on from Australia’s last lockdown and one in 10 job ads on SEEK indicate some sort of flexible working option. SEEK data shows that WFH is sticking around,” Mr Cowgill added.
Job ads data released by the platform shows 9.4 per cent of all available roles can be from home, marginally lower than its peak of 11 per cent in April 2023.
Before the onset of the coronavirus pandemic, very few advertised roles could be performed at home, at just 1.6 per cent in February 2022.
Separate data released by SEEK showed advertised salaries rose by 4.5 per cent in the year to December as bosses vied for talent by offering more competitive remuneration.
“Finally, advertised salaries are rising faster than prices once again. After a long period of declining real wages, the SEEK advertised salary index is now rising in real terms again, with 4.5 per cent advertised salary growth outpacing inflation at 4.3 per cent,” Mr Cowgill said.
Originally published as Employment slowdown set to tip workplace power balance in bosses’ favour
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