Insights Into Market Conditions That Will Shape 2026

After an extended period of economic uncertainty, the employment market is beginning to show signs of renewed momentum. As we move into 2026, changing market conditions, resetting salary expectations, the rapid acceleration of AI and a growing pipeline of technology projects are reshaping the employment landscape.

In this short insight piece, VIC General, Manager Gavin Campbell, shares his perspective on the forces set to influence growth, employment and opportunity in the year ahead.

Some signs of life in the economic conditions mean there may be some hope for the employment market. The last 18 months or so I’ve felt like a weary Bill Murray in Groundhog Day, we seem to be on the rise then we falter again. With the CommBank hedging their bets both ways (CommBank Report: at the Crossroads in 2026) there is a strong view that with the government leveling out on their own consumption and spending, private business will take over and help drive the economy forward. But the result I feel will essentially be only a slight improvement in outcomes for both growth and employment output. Pressure on inflation and RBA intervention is also on the horizon.

Anecdotally speaking, it’s been a refreshing start to the year with some decent signs of growth coming out of the employment market. The team is busy and from what I’m hearing other agencies and consultancies are experiencing the same.

Wages growth was steady for most of 2025 (Australian Industry Group) with neither business nor consumer confidence reaching any great new heights. The market has returned with some renewed vigour; however I feel wages growth will fail to meet the expectations of the marginal overflow of pent-up demand that we are now seeing.



A potential rise in interest rates in the next week has the potential to negatively impact both consumer and business confidence once again so the likelihood of seeing any real wages growth is unlikely, for at least the first half of this year. The inflationary impacts on consumer prices will mean those now entering the market and wanting to dip the toe in after two years of not much happening, will find that their expectations of the typical 10-20% when changing a role has not yet met business’s ability to pay these wages. As a result, the ability to attract passive top talent will again prove challenging if it is not met by that real growth in wages.

No surprises here. You’d be living on Mars not to recognise or be aware that our generation is now experiencing (in my opinion) the greatest transformation of how people live and work since the Industrial Revolution. Now, the only questions that remain are how quickly we will see the changes occur and how far they will go?

The challenge that we are now presented with relates to which jobs are in decline and how do we ensure human capital is able to leverage AI as an opportunity. Entry level and grad roles seemingly hardest hit and signs of that continuing. According to Stanford University who recently conducted a working paper on the Impacts of AI on the U.S. job market (“the canary in the coalmine”), workers in the age bracket 22-25 across AI-exposed jobs have seen employment decline by 13% since late 2022. Older workers in similar job types have seen growth, this highlights experience and age specific decline, not industry. It’s a worrying trend that talks to the future challenges that the post-university cohort and the lesser white collar skilled may experience.

On the other side of the AI generated coin, there will be opportunities for enablement and collaboration with these new tools and technology. AI governance, risk and ethics opportunities will see growth. The race to ensure organisations have something in place means the implementation of frameworks and safeguards are critical to ensure the management/privacy of data. Job types in AI engineering and AI automation will continue to increase in market and any AI-augmented roles more generally will see growth.

As the sunset over those post COVID boom times, we’ve stalled, stuttered and stammered through the last 18-24 months. The cliff we fell off, to the stagflation of last year, not much has been happening for quite a while now. But with the rise in AI engineering roles (LinkedIn Jobs on the Rise 2026) the demand for roles in around this new landscape will help drive demand and new projects in technology. From risk and compliance to data ethics, the want and desire for organisations to keep pace in new tech, will see new projects and AI augmented roles launching this year. There will also be a flow on effect, impacting demand for specialist roles and skills in Data Centres and electrical engineering with infrastructure and cloud transformation projects ensuring organisations keep pace.

I’m an eternal optimist but it feels like this year will be a decent year. I don’t think it will be a boom year by any stretch but if I’m comparing this year to last year, it will be an improvement and there will be some decent and subtle growth impacting the employment market. The market is showing signs of life and a pulse and I can only hope that this continues to gain momentum.