Strong employment growth is set to continue in Q3 2023, but at a slightly slower pace than the previous quarter, while recruitment difficulties continue to plague employers, according to the Australian HR Institute’s (AHRI’s) second Quarterly Australian Work Outlook report.

The September quarter survey ofsenior HR professionals and organisational decision-makers in Australian organisations, records a Net Employment Intentions Index of +41, down from +45 in the previous report. In total, 44% of businesses intend to increase staffing levels over the quarter while just 3% intend to decrease employee numbers.

The survey also found that 43% of employers are having difficulty filling vacancies, down from 47% last quarter. Broadly consistent with the findings of the June quarter report, the most commonly cited reasons were lack of suitable candidates (72%), high salary expectations (45%), competition from rival organisations (37%) and the unattractiveness of the role (29%).

Employers believe the most effective measures to improve productivity are flexible working arrangements (46%), performance-related pay and other increments (36%) and on-the-job training (33%).

While 90% of employers in Australia report that they have provided some training over the past 12 months, on average, just over one-quarter (26%) of employees undertook external training and 45% undertook internal training over the same period.

AHRI CEO, Sarah McCann-Bartlett says the modest fall in projected employment growth is largely due to a slight softening in recruitment demand, but overall the results suggest that the impact of recent interest rate hikes on the demand for labour has yet to be felt.

“The Australian labour market remains tight. However, it remains to be seen whether this will be sustained; especially since other economic indicators have been subdued of late,” she said.

“AHRI’s message to employers based on the survey data is simple – with recruitment difficulties persisting, some employers reporting that some of their employees are not proficient in their roles and Australia’s productivity falling short of many of its OECD competitors, now is the time to invest in workplace training and the broader set of HR practices that boost organisational performance.”