Australia 2025 employment market insights

Key takeaways from people2people's 2024 Employment and Salary Report

Australia 2025 employment market insights

Key takeaways from people2people's 2025 Employment and Salary Report

Australia labour market update:

Key trends and insights for 2025

As 2025 unfolds, the Australian labour market is experiencing nuanced shifts influenced by economic policies, demographic changes, and evolving industry demands. The unemployment rate has seen a modest uptick, and various sectors are adapting to new challenges and opportunities.

In February 2025, Australia's seasonally adjusted unemployment rate remained steady at 4.1%, with the participation rate decreasing to 66.8% from January's record high of 67.3%. This decline in participation indicates that fewer individuals were engaged in the workforce, either employed or actively seeking employment. Notably, employment decreased by 52,800 positions during this period, reflecting a contraction in job availability.

The Australian government's recent initiatives aim to stimulate economic activity and support the labour market. The 2025 federal budget introduced tax cuts and cost-of-living relief measures, including a modest tax reduction for average earners and energy rebates. These policies are designed to enhance disposable income and consumer spending, potentially fostering job creation across various sectors.

Labour market forecasts suggest a slight increase in the unemployment rate, projected to reach 4.2% by the end of 2025. Employment growth is expected to be modest at 1.4%, indicating a cautious outlook for job creation. These projections underscore the importance of policies aimed at enhancing workforce participation and addressing skill shortages.

The Australian labour market faces challenges, including a slight rise in unemployment and fluctuations across specific sectors. However, strategic government initiatives and the strength of resilient industries offer potential for stability and growth. As economic conditions continue to shift, ongoing adaptation and targeted support for vulnerable areas of the workforce will play a critical role in shaping positive employment outcomes throughout 2025.

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Employment trends shaping Australia’s labour market in 2025

What are the leading causes you are losing your staff in 2025?

Employee retention and resignation remain significant challenges in today’s competitive workforce. Why are employees leaving their jobs, and what strategies can employers use to retain top talent? How does leadership influence employee engagement, and what role do workforce trends play in shaping supportive workplaces and addressing evolving career priorities in 2025?

What is the impact of forcing your team back into the office?

The debate around remote work continues to divide workplaces, with many organisations now mandating a full return to the office. But what is the true impact of forcing your team back in? Are businesses risking morale, productivity, and retention by removing flexibility? How can leaders strike the right balance between operational needs and evolving employee expectations in 2025?

What are the most desired employee benefits in 2025?

In 2025, the landscape of employee benefits is rapidly evolving to meet the changing priorities of today’s dynamic workforce. But what specific benefits are employees seeking most? How can organizations tailor their packages to align with these expectations? Getting it right could be the difference between retaining top talent and losing them to the competition.

Why are you losing your staff in 2025?

Employee retention and resignation are ongoing challenges in today’s dynamic workforce. Understanding why employees leave and how companies can improve retention strategies is crucial for fostering long-term engagement and productivity. In recent years, the factors driving employee resignations have evolved, highlighting the importance of addressing career development, workplace culture, and leadership. What are the root causes of employee resignations, the strategies businesses are employing to retain talent, and the broader implications for workforce management in 2025?

One of the most significant reasons employees continue to leave their roles in 2025 is the lack of clear career growth opportunities. This remains a leading driver of attrition, alongside low compensation, ineffective management, and workplace cultures that fail to support employee wellbeing. Increasingly, workers are also voicing concerns over limited flexibility, poor work-life balance, and outdated or insufficient employee benefits. These ongoing challenges highlight the importance for organisations to reassess their internal structures and create environments that align with the shifting values and expectations of today’s workforce.

To address rising turnover in 2025, organisations are leaning into more holistic and proactive retention strategies. Competitive base salaries, personalised career development plans, and a strong focus on upskilling are at the forefront. There’s also a growing trend of investing in employee experience—offering hybrid work options, wellbeing initiatives, and fostering internal mobility through lateral and cross-functional moves. These efforts signal a deeper commitment to building inclusive, future-ready workplaces where employees feel supported, engaged, and empowered to grow.

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What's the impact of forcing your team back to the office?

As return-to-office mandates become more common, businesses are facing growing concerns about how these policies impact their teams. Forcing employees back into the office can affect morale, productivity, and retention—especially when flexibility has become a key expectation. In 2025, understanding the balance between in-person collaboration and remote autonomy is crucial. What are the risks, and how can leaders make office returns work for both business and people?

In 2025, career development remains the top driver of employee retention, with increasing emphasis on training, upskilling, and supportive leadership. Trust in management and access to clear growth pathways continue to influence whether employees choose to stay. While both hiring managers and employees agree on the importance of competitive pay, the largest disconnect still lies in the perceived value of learning and development. Employees are prioritising ongoing career growth, while some managers continue to underestimate its impact—highlighting the urgent need to align strategies with evolving employee expectations.

In addition, work-life balance, flexible working arrangements, and a strong sense of purpose remain vital to retention efforts. Organisational culture, job stability, and accessible mental health support continue to shape employee satisfaction, reflecting the growing demand for a more human-centric workplace. While environmental impact and community involvement rank slightly lower, they still matter to a meaningful portion of the workforce. As retention strategies mature in 2025, understanding and acting on these priorities will be essential to staying competitive in the talent market.

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What are the most desired employee benefits in 2025?

In 2025, the landscape of employee benefits is evolving to meet the changing priorities of the workforce. Companies are enhancing their offerings to attract and retain top talent by focusing on comprehensive health coverage, flexible work arrangements, and financial wellness programs. But what specific benefits are employees seeking most? How can organizations tailor their packages to align with these expectations? Understanding the most desired employee benefits in 2025 is crucial for businesses aiming to foster a satisfied and productive workforce.

To remain competitive, many employers emphasize flexibility, career growth opportunities, and strong company reputations to attract candidates. However, job seekers’ expectations around returning to the office vary widely, with many requiring significant incentives, such as pay rises, to give up flexible arrangements. Additionally, timing plays a critical role, as over half of job seekers expect work flexibility to be available from their first day in a new role.

Work-from-home preferences reveal that most employees desire a hybrid model, balancing office presence with remote work. While some teams adopt shared anchor days in the office, others implement tailored individual flexibility arrangements. Employers who fail to adapt risk resignations, as flexibility continues to be a driving force in job satisfaction and decision-making for modern professionals.

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