From Growth to Efficiency in Australia’s Job Market

In 2025, Australia’s employment landscape is defined by strategic restraint, internal mobility, and accelerated technological integration. After the post-pandemic hiring boom, job ads have softened significantly year-on-year—yet they remain well above pre-COVID levels. This recalibration reflects a broader transition from high-volume hiring to value-driven decisions, particularly in a climate of rising operational costs and persistent skills shortages.

Businesses are navigating economic uncertainty by prioritising flexibility and risk mitigation. Contract and project-based roles are on the rise, helping organisations remain agile while avoiding overcommitting to fixed headcount. As employers adopt a “hiring filter” rather than a “hiring freeze,” the pressure to ensure return on investment for every new hire is pushing recruitment to become more selective and strategic.

Workforce development is increasingly focused inward. A growing number of companies are mapping internal talent, investing in employee upskilling, and promoting internal mobility to meet evolving skills demands. Simultaneously, employer value propositions (EVPs) are under scrutiny—companies are being encouraged to better communicate opportunities and culture to attract the right talent.

Artificial intelligence (AI) and automation are also beginning to reshape the employee lifecycle, with tools enhancing everything from candidate screening to workforce planning. But human insight remains essential, particularly as AI introduces new challenges around bias and authenticity.

“We’ve probably shifted from growth to efficiency.”



people2people Victoria Director Liz Punshon hosted a discussion with Brooke Lord, Head of Advocacy and Policy at RCSA, and Guy Davy, Senior Manager Talent Solutions at LinkedIn, on the key shifts driving the Australian labour market in 2025.

Brooke described the hiring climate as cautious but still competitive. “Recruitment activity softened… job ads are significantly down year-on-year,” she said. “But they’re still substantially above pre-pandemic levels.” She emphasised that skill shortages persist in many areas, noting that up to 35% of occupation types remain in severe shortage. “There’s still a race for talent,” she added.

Davy echoed the move from “growth to efficiency.” He noted that hiring is becoming more targeted: “It’s not a hiring freeze—it’s a hiring filter. People are far tougher on ROI. Every hire really counts.” He also highlighted a decline in roles linked to discretionary spending and a rise in referral-based hiring, as employers lean into trusted networks.

Internal upskilling and mobility are central strategies. “The smartest employers are turning inward,” Davy explained. He cited a 7% year-on-year rise in internal mobility and the growing use of market and skills mapping. “It’s about asking, ‘Who do we already have, and what do they need to grow into the next phase of their role?’”

Both speakers identified adaptability as a critical skill for 2025. “Even if you’re not changing your job, your job’s changing on you,” said Davy. Top in-demand skills include communication, strategic thinking, and AI proficiency. Brooke added: “Frontline roles, healthcare, trades, and ICT are still hugely in demand.”

AI's impact on the employment lifecycle is growing. “There’s been a 21x increase in job ads mentioning AI and a 140x increase in members listing AI skills,” Davy said. He described AI as transformational—not replacing jobs entirely, but reshaping tasks and workflows. “It's not coming for your job—it’s coming for your tasks.”

Brooke warned that AI tools must be expertly managed to avoid bias: “Used well, they can remove bias. Used poorly, they can bake it in.” She sees a competitive advantage for staffing professionals who learn to use AI tools responsibly and effectively.

Looking toward 2030, both leaders agreed that skills-based hiring will replace credential-based models. “We’re heading into a shift,” said Davy. “Millennials—who have had twice as many jobs as Gen X—are stepping into leadership, and they value experience and soft skills more heavily.”

Practical Takeaways for Australian Employers in 2025

• Focus on internal talent development and upskilling to meet evolving workforce needs.

• Reframe recruitment to prioritise quality over quantity, especially in business-critical roles.

• Embrace AI for efficiency and candidate matching, but invest in training to use it ethically and effectively.

• Create a compelling EVP by focusing on culture, flexibility, and impact—not just job descriptions.

• Prepare for skills-first hiring models by investing in microlearning and real-time skills mapping.