At the bottom of the pay ladder, the retail and hospitality sector recorded the lowest hourly rate at $33.10; a monthly decrease of -1.3 per cent since April. This is aligned with a downward trajectory, recorded from the Index since the start of 2024, causing repeated concern for both workers and business owners in this space.
At the top of the chain, the technology sector currently boasts the highest hourly rate at $55.79. However, a -3.3 per cent dip in monthly wages and an annual drop of -2.5 per cent suggests a continued cooling within this industry, and challenges in maintaining competitive pay as austerity continues in the sector’s push for growth.
Despite a -2.2 per cent monthly drop in healthcare wages, the sector recorded robust annual wage growth of +7.5 per cent, reflecting the ongoing demand for healthcare professionals.
On the other end of the spectrum, the construction and trade sector, amongst the biggest contributors to the nation’s economy, has shown steady wage growth over the past year, with significant annual growth of +6.2 per cent. Month-on-month, hourly rates grew by +0.7 per cent, up to $40.35, and quarterly growth of +0.9 per cent, indicating consistent upward momentum for this sector, after a concerning slump in recent months.
Overall, the average hourly rate across Australia sits at $38.67 Month-on-Month, a drop of -1.4 per cent in April. However, Year-on-Year, the average rate has grown annually by +8 per cent, which while potentially good for employees in the short-term, suggests an unsustainable and continued cost burden on SME employers.
Wages Signal Wider Economic Implications
Ben Thompson, Co-Founder and CEO of Employment Hero said: “The disparity in wage growth across industries paints a complex picture of the Australian economy right now. While the tech sector’s wage drop may signal an adjustment period, the overall high pay levels suggest sustained investment and demand in this field.
“Conversely, the retail and hospitality sector’s slower wage growth highlights challenges in maintaining profitability amid fluctuating consumer spending. However, for many industries, if ongoing wage growth continues unchecked, it may contribute to further inflation, posing risks to economic stability. And while the healthcare sector’s consistent growth reflects essential investments in public health and workforce sustainability, the same level of attention should be equally given to our retail and hospitality workers who are currently struggling.”
Healthcare & Construction leading in business growth
Over the past month, overall employee growth increased by +0.5 per cent, with an annual growth rate of +7.0 per cent in May. The healthcare sector saw the highest annual employee growth at +9.4 per cent, indicative of the sector’s critical role and the increasing demand for health services post-pandemic.
This was followed by the construction and trade sector, which saw a monthly growth rate of +8.7 per cent. This can be largely attributed to ongoing infrastructure development projects, and increasing demand for skilled labour in this sector. Interestingly, despite leading in wage growth, the lowest employee growth was recorded in the technology sector at just +0.1 per cent monthly.
Job stability fading for Hospo, Retail
The median hours worked have remained relatively stable across most sectors, with an average of 141.9 hours per month. Construction and trade employees worked the most hours, equating to 167.7 in May. This represented a -0.4 per cent drop Month-on-Month; the lowest drop of all other industries.
The healthcare sector saw the second highest number of hours worked with an average of 105.1, a -1.1 per cent drop in May, aligning with an overall growth trajectory seen in this sector.
For the retail and hospitality sector, the downward slope continues, with median hours dropping by -2.5 per cent; the biggest dip of all industries. As restaurants and retailers shut shop across the country, more pain may be on the horizon for workers in these businesses.
Eddie Kowalski, Senior Insights Manager at Employment Hero, said: “The stability in median hours worked across most sectors is encouraging, particularly in construction and trade services, which saw the least decline. This resilience can perhaps be attributed to the ongoing demand for workers on large-scale infrastructure projects across the country.
“Meanwhile, the healthcare sector continues to show high numbers of hours worked despite a slight drop, reflecting its critical role and growth trajectory which can somewhat be attributed to a rising population. However, the significant decrease in hours in the retail and hospitality sector highlights ongoing challenges and the need for strategic adaptation to shifting consumer behaviours, but even more so, it represents yet another concrete sign of struggle that signals a greater need for government support for small businesses.”
Mr Thompson added: “The retail and hospitality sector is particularly vulnerable in the current economic climate. Business owners are strapped for cash and the declining wages and reduced hours are symptomatic of broader financial pressures these businesses are facing. This trend not only impacts employees but also overall consumer spending and economic stability. Addressing these challenges is crucial for the health of the broader economy, and businesses need to now explore sustainable strategies to navigate these challenges and support their workforce as a direct result.”
The SME Index offers a detailed overview of the current economic landscape, highlighting the need for balanced growth across all sectors. While wage growth is a positive indicator of economic recovery, it must be carefully managed to prevent inflationary risks. The insights provided by the Index enable businesses and policymakers to make informed decisions that support sustainable economic development.
