One third of bosses plan redundancies in December quarter

Redundancies are on the agenda for one in three organisations, according to a national HR report, with public servants and manufacturing workers in the line of fire.

Almost one third of Australian companies intend to make redundancies before Christmas, new research has found.

Almost one third of Australian companies intend to make redundancies before Christmas with the highest level in the public sector, where 60 per cent of bosses plan to sack people.

A report from the Australian HR Institute also found that workers in manufacturing and production will be strongly affected with 37 per cent of employers indicating they will have to lay off staff.

The redundancy level - 31 per cent of respondents say they will dismiss people – is a sharp increase on the 17 per cent in the September quarter.

AHRI’s quarterly Australian Work Outlook survey of more than 600 senior HR professionals, found, conversely, that recruitment intentions have increased from 61 per cent to 71 per cent, suggesting that many workers are jumping ship voluntarily and some companies are restructuring via redundancies rather than reducing overall staffing levels.

In total, 45 per cent of organisations plan to increase staff levels in the December quarter, compared with 4 per cent planning to reduce their workforce size.

And it’s not getting any easier to recruit in a tight market: the share of employers who have experienced recruitment difficulties in the past three months is 47per cent, around the same level as the previous quarter. Similarly, the average employee turnover

rate in the 12 months to the end of October 2023 is 14 per cent, which is unchanged compared with the previous quarter. The rate is highest among (private sector) manufacturing and production firms (18 per cent) and lowest among public sector (12 per cent) and not-for-profit organisations (12 per cent).

In a sign of workplace stress, AHRI found 40 per cent of employers reported an increase in staff taking sick or carers leave last financial year, with only 19 per cent seeing a decrease in such unscheduled absences. The days off work were driven in large part by Covid-19, home responsibilities and minor illnesses, with workers taking an average of six days off in FY2023. The survey found the most effective ways to reduce absence are making or simplifying processes for obtaining reasonable adjustments in work arrangements (36 per cent); investigating and reviewing job quality (35 per cent); and investing in leadership management and capability (31per cent).

The report revealed employers are very aware of the need for staff to quarantine work and home, with 64 per cent saying a law or policy giving employees the right to disconnect from work-related communications outside of working hours would have a positive impact on employees in terms of work flexibility.

Cost-of-living pressures (51 per cent), work-life balance concerns (40 per cent) and excessive workloads (38 per cent) are the most significant stress factors for workers but the report argues there’s an “encouraging realisation that good people management practices can significantly mitigate these challenges” . Investing in the skills of line managers was one of the most effective ways to reduce absence, it says.

The report found the mean basic pay increase in organisations (excluding bonuses) is expected to be 2.6 per cent in the 12 months to October 2024,

The CEO of AHRI, Sarah McCann-Bartlett, said: “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 cautioned that the higher redundancy intentions, combined with modestly lower wage intentions, might mean economic challenges ahead.