We’re entering a pivotal moment in the Australian job market, says this expert, with wages, worker rights and public sector jobs in the spotlight following the recent Federal election. Here’s what HR and business leaders need to know.

Australia’s re-elected Labor Government is set to usher in significant changes to the nation’s employment landscape – changes that will have wide-reaching implications for both business and HR leaders. 

This comes off the back of a three-year period of historic industrial relations changes from the government’s previous term, which saw the introduction of a swathe of changes under the Secure Jobs, Better Pay Bill and Closing Loopholes Bill. These changes included the introduction of the Right to Disconnect, a refresh of flexible working rights and the criminalisation of wage theft, to name just a few.

Fast-forward to today and worker protections, wage growth and public sector expansion are firmly on the government’s agenda, which means we are entering a pivotal moment for the job market.

These shifts will shape how organisations attract and retain talent, how workers negotiate their terms of employment and how public and private sectors compete for the best people in a tightening labour market.

Let’s explore some of these potential shifts in more depth.

1.Rising wages and shifting employee expectations

One of the government’s early signals of intent is its proposed minimum wage increase, from $24.10 to $24.68 per hour. 

This rise, which aims to outpace the current inflation rate of 2.4 per cent, is expected to benefit approximately three million workers, particularly in lower-paid sectors such as retail, cleaning and early childhood education. However, even those outside these directly affected industries will likely feel the ripple effects. 

As incomes rise for workers in these sectors, employee expectations across the board are poised to shift. Organisations in white-collar industries should prepare for increased pressure to offer not just competitive salaries, but also flexible working conditions and improved job security. 

AHRI’s recent Quarterly Work Outlook report (March, 2025) suggests that basic mean pay has increased to three per cent for the 12 months to January 2026, up from 2.7 per cent for the 12 months to October 2025. This is expected to rise further in the next quarter’s report.

Separate AHRI research also shows that flexible working arrangements are now a standard business practice, with 80 per cent of the 1000 employers surveyed saying that hybrid working will either increase or stay the same at their organisation over the next two years.

With the government seeming to set its sights on both areas, we might see the balance of power subtly tilting back toward workers.

In parallel, the government is pursuing reforms to employment law, including a proposed ban on non-compete clauses for lower- and middle-income workers and stronger protections for gig economy participants. 

These initiatives signal a broader trend towards empowerment and mobility for workers – a shift that will likely influence how businesses structure contracts, manage talent and navigate compliance.

“The post-election employment environment demands strategic foresight, operational flexibility and a renewed focus on people.”

2. A growing public sector draws talent away from private enterprise

The government’s commitment to creating 3400 new jobs within the Australian Public Service (APS) over the coming year – adding to the more than 40,000 roles created since 2022 – is another key pillar of its employment agenda. 

Agencies such as the National Disability Insurance Agency, the Australian Taxation Office and the Department of Defence are expected to lead this hiring surge.

This expansion represents both opportunity and challenge. For professionals in compliance, policy and technology, the public sector offers the chance to build meaningful careers contributing to large-scale initiatives. But for private sector employers, the growing appeal of government roles – offering job security, purpose-driven work and competitive benefits – heightens the war for talent.

Already, we are seeing more candidates expressing interest in public service careers. This trend will very likely force private sector employers to re-evaluate their value propositions. 

To remain competitive, businesses must provide not just attractive compensation packages, but also clear development pathways, greater workplace flexibility and a compelling sense of organisational purpose.

3. Optimism in the job market, tempered by economic uncertainty

Australia’s unemployment rate is at its lowest point in more than half a century. Wage growth, long stagnant, is finally gaining momentum. This is encouraging news for job seekers and a testament to a resilient labour market.

Yet, these positive indicators exist alongside cautionary ones. The government’s ambitious fiscal plans – including a projected $70 billion budget deficit – raise questions about economic sustainability. 

In an uncertain economic environment, agility becomes paramount. Employers must stay responsive, manage costs wisely and invest in internal capability-building to navigate any future shocks.

For HR leaders, this means designing workforce strategies that balance optimism with pragmatism. Upskilling initiatives, agile recruitment pipelines and strong retention programs will be critical to weathering uncertainty while capitalising on today’s favourable hiring conditions.

4. Housing, mobility and the competition for talent

The government’s $10 billion commitment to build 100,000 homes for first-home buyers, as part of a broader strategy to deliver 1.2 million homes by 2029, has implications that extend beyond the construction industry. For employers, housing affordability is increasingly linked to workforce stability and mobility.

Affordable living close to employment centres can materially affect an organisation’s ability to attract and retain employees. Rising living costs in major cities such as Sydney and Melbourne are already prompting workers to consider relocation – an insight borne out by recent Robert Walters research, which found that 56 per cent of Australians are contemplating a move this year, primarily due to cost-of-living pressures.

If successful, the government’s housing initiative could slow this talent exodus, stabilise workforce distribution and unlock new regional hiring opportunities for employers. 

For HR professionals, it’s another reminder of the interconnected nature of economic policy and workforce dynamics.

Preparing for a new phase in employment

The Labor Government’s policy agenda is underpinned by a focus on fair pay, strong public institutions and expanded access to employment. While the direction is clear, the effectiveness of these initiatives will depend on timely execution and the broader health of the economy.

For business and HR leaders, the implications are twofold. On one hand, workers are gaining more bargaining power and mobility. On the other, organisations must act decisively to remain competitive – adapting their employment models, investing in capability and nurturing cultures that appeal to a workforce with rising expectations.

In short, the post-election employment environment demands strategic foresight, operational flexibility and a renewed focus on people. Those that rise to meet this challenge will be best placed to thrive in the evolving world of work.

Dan Rogers is the Managing Director at Robert Walters Australia.