James Keene of Employment Hero explains why younger workers are the standout in an otherwise softening SMB labour market.
Younger workers are emerging as the strongest part of an otherwise cooling SMB labour market, according to new payroll data from Employment Hero.
The company’s latest Jobs Report, based on aggregated payroll data from more than 23,000 businesses and 1.7 million employees, found workers aged 18-24 recorded the strongest wage growth of any age group in June, up 7.6% year-on-year. They were also the only age cohort to post employment growth that month, rising 0.4%.
Younger workers pull ahead
The report points to one possible explanation: businesses may have been lifting pay for younger staff ahead of the national minimum wage increase that took effect on 1 July. It’s a reasonable theory, though the June data on its own doesn’t establish employers were acting specifically because of the looming deadline, rather than other factors driving demand for younger workers.
What the data does show clearly is the scale of the gap. No other age group came close to the 7.6% annual wage growth or the 0.4% monthly employment increase recorded among 18 to 24 year olds.
Beyond the younger cohort, wage growth across the broader SMB sector is easing off an earlier hot streak. Wages rose 0.5% month-on-month in June, recovering from a 1.6% fall in May. But annual wage growth has slowed to 4.3%, down from 5.6% at the start of the year.
Employment Hero APAC Managing Director James Keene said the numbers point to a market that’s still solid but losing some steam. “June’s results suggest Australia’s SMB labour market remains resilient, although hiring momentum has softened following a strong May,” he said.
Employment holds steady
Employment slipped 0.1% month-on-month in June, following a stronger 1.2% rise in May. Keene framed the fluctuation as fairly typical, with the broader year-long trend staying within a narrow, stable range.
He pointed to younger workers as the clearest signal in the data. “One of the standout findings this month was the continued strength of younger workers,” Keene said. “Employees aged 18-24 were the only age group to record employment growth in June and also led the nation in annual wage growth, underscoring the important contribution younger Australians are making to workforce growth across the SMB economy.”
Keene expects conditions to hold broadly steady in the near term, with younger workers continuing to drive activity. “With last month’s ABS labour force figures indicating positive employment growth, next week we expect that results will remain broadly steady, led by younger workers entering Australia’s SMB workforce.”
For SME employers, the report suggests a labour market that’s normalising after a stronger start to the year, with younger workers increasingly central to both hiring and wage growth in the sector.
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