The economy can sometimes feel like a rollercoaster, and businesses – especially small and medium-sized businesses (SMEs) – need to be quick on their feet to survive the ups and downs. One way businesses can do this is by hiring casual workers, which can help them manage costs, adjust to changing demands, and stay flexible in tough times.
What’s happening with wages and jobs right now?
According to a report from Employment Hero, wages in Australia are rising more slowly than they were last year. The median hourly wage in January 2025 was $41.20, up by 4.3% compared to the previous year, but down by 2% from the month before. This shows that wage growth is cooling off after a busy hiring period during the holidays.
Ben Thompson, CEO of Employment Hero, explained it like this: “Wage growth is stabilising, but the sharp drop in hours signals that SMEs are feeling the squeeze. They need flexibility, and they’re choosing more casual hires over full-time commitments.”
What does that mean? Well, businesses are still hiring, but they’re choosing casual workers who are easier to let go if the business slows down.
Why should your business consider casual labour?
Casual workers can be the perfect solution for SMEs that need to adjust quickly to changing business conditions. Here’s why:
Seasonal Flexibility ‑ Many businesses have increased demand at certain times of year, eg: coastal tourism and hospitality during warmer months, and the snowfields during winter. Taking on extra casual labour for these usually predictable surges in activity is a flexible option for small businesses.
Daily/Weekly Flexibility ‑ Some industries are naturally busier at certain times of the day or week, eg: the weekday morning coffee rush, and pubs and clubs on Friday nights. Maintaining a roster of diligent casuals with flexible availability is a sound way to ensure that your staffing needs are met.
Potential Cost Savings ‑ Casual employees are usually not paid sick leave or annual leave. This is compensated by extra pay, ie a casual loading. Depending on the period of engagement and other circumstances, paying staff a loading instead of leave could lead to significant cost savings over time.
Flexibility for Staff ‑ Many employees simply aren’t looking for permanent full-time or even part-time work. Travel, study, family responsibilities and visa restrictions may mean that some workers are unable to commit to ongoing employment, but casual labour may suit their needs and yours.
Innovate to Thrive ‑ Whether you’re a start-up or looking to build on existing business by exploring new projects or product lines, taking on casual staff can be the perfect solution for innovative small businesses. Ideally your innovation pays off, but if it doesn’t you can easily reduce your staff costs.
A Chance To Shine ‑ Interviews and one-off trials are not always the best tools for deciding whether a new staff member will be suitable for a role. As well as probation periods, hiring casuals is a good way to assess a new employee’s competence, and their commitment to the job and to you.
Recruit with Speed ‑ At some point, most businesses will go through times of unpredictable increases in activity, when additional staff may be needed quickly to cope with customers’ demands. Employing casuals at very short notice can ensure that you exceed your customers’ expectations.
Increased Diversity ‑ Maintaining a roster with more casual employees than you could afford if they were permanent can help you build a diverse workforce with various backgrounds, experience and personalities. This could improve staff morale, cultural sensitivity and customer service standards.
Satisfy the Beancounters ‑ Your business partners may be reluctant to commit to the time and financial costs involved with hiring permanent staff. Casual employment may be a solution to maintain good working relationships among a firm’s decision-makers, especially with tight budgets.
Law, Leave and Letting Go – Depending on which state or territory you’re based in, some employee leave and dismissal regulations kick in at different times of employment arrangements. Employing on a casual basis and knowing exactly when those extra employee entitlements start may be the best solution for your business.
Ben Thompson also noted that, for young workers aged 18-24, things aren’t looking so great right now. “Hiring in the 18–24 age group is stalling,” he said. And the youngest workers, aged 14-17, saw their hours drop by an alarming 24.4% year-over-year. This means that it’s harder for younger people to find work right now. But it’s not all bad news! Older workers, 45 and over, saw a 6.1% increase in employment, showing that businesses are hiring people with more experience, even in tough times. Casual work is actually becoming more popular. Casual employment grew by 13.8% over the past year, while full-time jobs grew much more slowly. This is a sign that businesses are turning to casual workers to meet their needs without having to commit to long-term hires.
Even though casual employment is on the rise, it’s important to note that casual workers are getting fewer hours. Casual work hours dropped by 27.2% compared to last year. This is a sign that businesses are hiring casual workers but giving them fewer shifts. It’s all about balance – businesses are keeping costs low while still meeting demand. Different industries are experiencing different trends. For example, the retail sector isn’t doing as well. While retail jobs grew by 4.1% year-over-year, the number of hours worked in retail dropped significantly by 11.3%. This suggests that even though businesses are hiring, they are trimming hours to reduce costs.
On the other hand, sectors like construction and healthcare are still seeing growth. For example, healthcare jobs grew by 4.6%, and construction hiring increased by 6.3%. These are industries where demand for workers is staying strong despite the tough economic conditions.
How can SMEs make casual labor work for them?
If you’re a small business owner considering casual labor, here’s how you can make it work:
- Create Clear Contracts
Even though casual workers don’t have the same benefits as full-time employees, you should still have clear agreements with them. This helps everyone understand what’s expected and how long the job will last. - Offer Good Training
Casual workers need to get up to speed quickly, so make sure you give them proper training. This way, they can do their job well, and your business runs smoothly. - Track Worker Availability
Use systems to keep track of who’s available to work when you need them. This makes it easier to manage casual workers and get the help you need, when you need it.
In tough times, casual labor gives SMEs the ability to stay flexible, save money, and reduce risk. As the economy continues to shift, businesses that can hire casual workers when demand is high and scale back when things slow down will have a better chance of surviving and thriving.
As Ben Thompson said, “The way they hire is changing—expect more casual flexibility, and slower full-time wage growth, at least for now.” If you’re an SME owner, looking at casual labor could be the way forward to keep your business running smoothly, no matter what the economy throws your way.
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