Full-time employment fell by 30,000 in February while part-time rose by 79,000, ABS data shows.
What’s happening: Australia’s seasonally adjusted unemployment rate rose to 4.3 per cent in February, according to the ABS, even as 49,000 jobs were added.
Australia added 49,000 jobs in February. Unemployment still went up. Both of those things are true and understanding why requires looking past the headline figure into what is actually happening inside the labour market.
The answer is in the composition of those jobs. Part-time employment rose by 79,000 people in February, according to the Australian Bureau of Statistics. Full-time employment fell by 30,000. Hours worked declined 0.2 per cent. More Australians are working, but fewer are working full-time hours, and the gap between those two trends is widening.
Sean Crick, ABS head of labour statistics, noted that the February result reflected fewer people who had been unemployed and waiting to start a job in January moving into employment in February compared to recent Februarys, as well as more people remaining unemployed compared to recent Februarys. The participation rate climbed to 66.9 per cent, meaning more Australians are actively seeking work, but a growing share of the roles available to them are part-time rather than full-time.
The ABS also noted that fewer people are leaving jobs to retire compared to a year ago, adding further complexity to a jobs market that on the surface looks healthy but underneath is restructuring in ways the headline unemployment rate does not capture.
The trend unemployment rate fell marginally from 4.3 per cent in January to 4.2 per cent in February, according to the ABS, suggesting the underlying direction of the market is not deteriorating. But the composition of employment is shifting in a way that matters for businesses and workers alike.
It is structural not cyclical
James Keene, Managing Director APAC at Employment Hero, tracks verified payroll data across 350,000 businesses and 1.5 million employees on its platform, giving the company a view of labour market movements that often predates official statistics. His read of the February data is clear.
“Across the 350,000 businesses on our platform, casual employment has surged 9.4% year-on-year, while full-time growth is less than half of that,” Keene said. “This isn’t businesses pulling back; it’s a structural shift. Employers are intentionally building flexibility into their workforce strategies to keep doors open while navigating an uncertain economy.”
Martin Herbst, CEO of JobAdder, sees the same pattern from a recruitment perspective. “The unemployment rate only tells part of the story. What we’re seeing underneath is a market in transition: employers aren’t just hiring less, they’re hiring differently,” Herbst said.
The distinction between pulling back and hiring differently is significant for small business owners trying to read the environment. The labour market is not contracting. It is reorganising around flexibility as the default setting rather than the exception.
Despite the softness in full-time hiring at the national level, Employment Hero’s payroll data shows small and medium businesses are actively recruiting in specific sectors. SME hiring is up 6.8 per cent year on year, with construction, engineering and agriculture leading the charge, according to Keene.
That aligns with SEEK’s February Employment Report, which showed construction up 11.5 per cent year on year and manufacturing, transport and logistics up 6.1 per cent among the strongest performing industries for job ad volumes. The physical and industrial sectors of the economy are growing their workforces while professional services and technology roles continue to decline.
Employment Hero’s payroll data also shows wages growing at 5.3 per cent annually, consistently running ahead of headline inflation. “Because our data looks at actual money moving through payroll, instead of surveys, we see these shifts before they show up in official statistics,” Keene said.
AI is accelerating the shift
The structural move toward flexible hiring is being reinforced by another development: AI is compressing the time it takes to fill roles, making it easier for businesses to hire quickly when they need to rather than maintaining permanent headcount as a buffer.
“On our platform, HeroAI and our Recruitment Agent has enabled candidates to land roles in as little as three days. By reducing screening time by 70%, this AI technology is shortening the hiring cycle by weeks,” Keene said. “This compressed timeline is exactly what enables participation to stay high even as the broader economy shifts.”
If hiring a casual or part-time worker can be done in three days rather than three weeks, the case for carrying permanent full-time headcount through periods of uncertainty weakens further. The flexibility pivot and the AI hiring acceleration are reinforcing each other.
Herbst flags that this dynamic is also reshaping what employers expect from candidates. “AI fluency has gone from a nice-to-have to a baseline requirement in many sectors. The good news is that demand for talent hasn’t disappeared. It’s shifted,” he said. “For jobseekers, the message is clear: prove you can work alongside AI, not compete with it. That means showing concrete examples of how you’ve used AI tools to get more done.”
What this means for your workforce
For small business owners, the February data and the real-time signals from Employment Hero and JobAdder point to a labour market that is rewarding flexibility and penalising rigidity. Businesses that can move quickly, hire for specific needs and structure roles around outcomes rather than hours are finding the market more responsive than the headline unemployment rate might suggest.
The shift away from full-time employment is not a temporary adjustment to a difficult economy. It is a deliberate strategic response to ongoing uncertainty, and it is being built into workforce structures that will persist well beyond the current period of volatility. For small businesses that have not yet thought carefully about how they structure their teams, the February data is a prompt to start.
ABS Labour Force data for February 2026 sourced from the Australian Bureau of Statistics. Employment Hero commentary attributed to James Keene, Managing Director APAC. JobAdder commentary attributed to Martin Herbst, CEO. Employment Hero data draws on verified payroll data from 1.5 million employees across 350,000 businesses on the platform.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
