Labour market has ‘rebalanced’ after COVID-19 boom: SEEK
The Reserve Bank’s monetary policy and reopening of borders are cooling hiring temperatures and creating a more competitive landscape for job seekers, according to SEEK.
The labour market is finally moderating after a hiring boom during the COVID-19 pandemic, according to a five-year review by employment platform SEEK.
The report, released Wednesday, said tighter monetary policy from the Reserve Bank of Australia and the reopening of international borders eased pressure on the nation’s job market, balancing conditions away from its tightest point in 2022.
“There are still jobs out there for those searching but they are not as plentiful as they were,” the report said.
The findings were based on its labour market balance indicator, which combined economic data from the past five years to analyse hiring dynamics since the pandemic.
While the indicator had loosened since late 2022, the report said it was still tighter than it was before the onset of the pandemic.
“Our summary measure suggests that the labour market after loosening since 2022 has tightened since late 2023 and is now broadly balanced,” it said.
As a result, job hunters were facing more competition and businesses were enjoying a broader pool of talent.
The market’s loosening resulted in longer search times, the report said, with the average recruitment period taking around 10 weeks longer compared to previous years.
SEEK said “all potential measures of tightness” also indicated the labour market was looser than it was two years ago.
Macroeconomic indicators suggested the market was “just on the tight side” with the national unemployment rate at 4.1 per cent.
The unemployment rate was broadly in line with the non-accelerating inflation rate of unemployment (NAIRU) – a benchmark indicator for the rate of unemployment at which inflation stabilises – sitting between 4.25 per cent and 4.5 per cent, according to estimates by the RBA and Treasury.
“If the unemployment rate is below the NAIRU, then the labour market is too tight, and inflation will accelerate and vice versa. In Australia, the NAIRU is the unemployment rate that is consistent with inflation,” the report said.
The employment-to-population ratio, another key indicator of the share of the population that is currently working, was currently at a record 64.4 per cent – significantly higher than pre-global financial crisis levels of 62.3 per cent.
Job vacancies, while declining from 2022 peaks, remained above pre-pandemic levels.
SEEK said the number of job advertisements indicating multiple positions exceeded historical norms, suggesting underlying hiring resilience.
It also anticipated “further loosening” in 2025 through reduced hours and slower job growth rather than widespread layoffs.
“Although it is generally slow-moving, the balance can switch quickly,” it said. “With the RBA likely to keep monetary policy restrictive in the near term, most economists expect a further loosening from here.”
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