Pay fall reflects ‘turbulent times’ for hospitality and retail sectors

According to Employment Hero, the decline in hourly wages for hospitality and retail workers highlights the challenges these sectors currently face.

Employment Hero’s latest SME index for May shows that hospitality and retail workers saw their employment fall by 1.3% month-on-month compared to April, consistent with the downward trend seen since the start of 2024.

The total hourly rate across Australia also fell in May, falling 1.4 per cent to $38.67. However, year-on-year, the average rate rose 8 per cent.

Employment Hero reported that the retail and hospitality sectors also saw a decline in hours worked, highlighting the difficult situation these businesses currently face.

Median hours fell 2.5 percent, the largest decline of any industry.

“As restaurants and retail stores across the country close, employees at these businesses could experience even greater hardship,” the payroll software company said.

The indicator showed that, in a broader sense, the median hours worked remained relatively stable across most sectors, averaging 141.9 hours per month.

Construction and trade workers worked the most hours, at 167.7 in May. That was a 0.4% month-on-month decline, the smallest decline of any other industry.

The healthcare sector recorded the second highest number of hours worked, averaging 105.1, down 1.1% from May, consistent with the overall growth trajectory seen in the sector.

Eddie Kowalski, Senior Analytics Manager Employment Hero he said The healthcare sector, despite a slight decline, continues to record high numbers of hours worked, reflecting its critical role and growth trajectory, which can to some extent be attributed to the growing population.

“However, the significant decline in working hours across the retail and hospitality sectors highlights the ongoing challenges and need to strategically adapt to changing consumer behaviors, and more importantly, it is another concrete sign of the struggles that signal a greater need for government support for small businesses,” Kowalski said.

Thompson said the retail and hospitality sectors were particularly vulnerable to the crisis in the current economic climate.

“Business owners are struggling with cash, and falling wages and reduced hours are a symptom of the broader financial problems these businesses face,” Thompson said.

“This trend is not only impacting employees, but also overall consumer spending and economic stability. Addressing these issues is critical to the health of the broader economy, and companies must now explore sustainable strategies to address these issues and support their employees as a direct result.”