Australian workers’ prospects for stronger real wage growth this financial year have been bolstered by a significant rise in employers’ pay expectations, according to the latest survey from the Australian HR Institute (AHRI).

AHRI’s September Quarterly Work Outlook report shows that employers expect the mean basic pay increase (excluding bonuses) to be 3.8% in the 12 months to July 2025, an increase from the 3% previously predicted for the 12 months to April 2025.

This is the highest figure for wage intentions recorded in any of the six Australian Work Outlook surveys published to date. With the RBA forecasting that CPI inflation will fall to 2.8% by June 2025, the data offers hope for workers of a stronger and more sustained increase in real wages this financial year.

The report also found that while there has been an increase in the percentage of employers planning to make redundancies this quarter (from 23% to 27%) recruitment intentions have remained high at 68%, reflecting a strong and balanced overall employment outlook.

There were significant differences in redundancy intentions between sectors, with 60% of public sector employers anticipating job cuts in the September quarter – up from 31% in the June quarter – while redundancy intentions in the private sector remain unchanged at 21%. Recruitment intentions were also considerably higher in the public sector (88%) than the private sector (62%).

AHRI CEO, Sarah McCann-Bartlett said the figures could be more about restructuring than job cuts. “This is potentially about the different skills that are needed as more organisations embrace digitisation, automation and AI in pursuit of higher productivity and growth. The redundancy figures could therefore be about restructuring and preparing for the future rather than cost savings.

“These incremental changes will have an ongoing impact on the composition of the workforce, including higher quality jobs in Australian workplaces. Indeed, the survey data suggests that the net effect of this activity will be to increase employment levels, mirroring the trends in the official data.”