Australian small and medium businesses are showing some real grit when it comes to hiring, with a 0.8 percent increase in headcount from August to September - the biggest jump since May, according to the latest Employment Hero Jobs Report.
Hiring bounces back
The rebound was broad-based. Headcount increased across seven of eight states and territories, and in 12 of 13 major industries tracked. Casual employment led the growth, up 1.0 percent month-on-month and 9.7 percent year-on-year, which Employment Hero says continues to give businesses operational flexibility.
Western Australia (1.0 percent month-on-month), the ACT (0.8 percent) and New South Wales (0.8 percent) led regional hiring gains, while Agriculture, Mining and Energy (2.2 percent) and Administration and Office Support (1.6 percent) led sector growth.
Employment Hero APAC Managing Director James Keene said the data reflects a retention-first approach among SMB leaders. “When I speak with small business leaders across the country, the message is consistent: nobody wants to let good people go,” he said.
But Keene cautioned against reading too much into a single strong month. “In September, we saw a notable hiring gain of 0.8% month-on-month, a welcome lift after three months of virtually flat headcount,” he said. “But looking at the bigger picture, one good month doesn’t reverse the trend. The quarterly read shows that overall hiring momentum has been gently easing since March.”
Wages take the hit
The hiring gain came alongside a sharp pullback in pay growth. The median hourly rate fell 2.3 percentage points to 2.2 percent year-on-year, driven by a 1.8 percent month-on-month drop, compressing what had been a gradual nine-month slide into one steep step down.
Keene linked the two trends directly. “Holding onto those teams in a tight economic climate comes with clear trade-offs, which is why September saw such a drop-off in wage growth,” he said. “This single sharp drop accelerates a gradual cooling pattern we’ve observed all year. Business owners are telling us that after months of absorbing higher overheads, something had to give, and right now, protecting job security is taking priority over pay increases.”
Where the gains landed
Younger workers remain a key driver of workforce growth. Employees aged 18 to 24 recorded the highest monthly headcount increase at 1.3 percent, and continue to outperform all other age groups on annual wage growth, at 7.0 percent year-on-year, a notable contrast to the broader wage slowdown.
Technology fills the gap
Keene pointed to technology and AI as part of how business owners are managing the balancing act between retaining staff and controlling costs. “To navigate this, business leaders are relying more heavily on technology and AI to lift day-to-day productivity,” he said. “It’s helping existing teams accomplish more without forcing owners to choose between overextending on overheads or cutting staff.”
The findings are drawn from Employment Hero’s monthly Jobs Report, which uses aggregated, anonymised first-party payroll data from more than 23,000 businesses and 1.7 million employees across Australia.