Labour Market update 2023

Report on Labour Market update 2023!

According to the Labour Market update 2023, the Australian Bureau of Statistics has shared new information about how often people change jobs. This can help us understand which jobs people tend to stay in, and which jobs they tend to leave more often.The Skills Priority List (SPL) has also been released, which shows an increase in skills shortages compared to last year. This report categorizes skills shortages into four levels based on Sue Richardson’s framework.

By analyzing the data, we can identify regions that have high vacancy rates for certain occupations that are in demand. Registered Nurses and Motor Mechanics are two of the most in-demand occupations in the country. Table 8 lists the top 10 regions with the highest vacancy rates for these jobs.

 

Table of Contents

Labour Market Update 2023: Conditions Stay Strong Over December 2022 Quarter

According to Australia’s Labour Market update 2023, Labor market conditions remained stable during the December 2022 quarter, with continued demand and expansion in labour supply. However, JSA’s Internet Vacancy Index and Recruitment Experiences and Outlook Survey suggest there may be signs of easing demand. Total employment increased during this time, led by significant gains in full-time employment while underemployment rates remained low.

Labour Market Update 2023: Shift Towards Higher Skilled Jobs

According to Australia’s Labour Market update 2023, Over the last year, total employment has shifted towards jobs requiring some level of post-secondary school qualification, such as Skill Level 1 to 4 occupations. Nearly 36% of the growth in total employment over this period has been among Skill Level 1 occupations – underscoring how important higher education and VET systems are in cultivating an experienced Australian workforce.

Labour Market Update 2023: Workers Staying Longer in their Jobs

According to Australia’s Labour Market update 2023, Although recruitment activity has moderated this quarter, worker retention appears to have improved as employers only hired for turnover purposes reached its lowest rate since December 2020. Furthermore, recruitment difficulty has diminished while the likelihood of filling an advertised role has slightly increased.

Promising Signs of Wages are Starting to Increase

Wages growth has shown encouraging signs, with the September 2022 wage price index recording its strongest quarterly growth rate since 2012. Other measures of wages – such as those reflecting job mobility or newly advertised positions – also show annual wage growth rates greater than 4.5%.

Important Skills Still Need Attention

While many macro indicators are positive, concerns still exist for key skills needs as shortages persist in certain occupations. The likelihood of filling vacancies has decreased significantly, particularly for regional areas and technician/trades worker occupations. High vacancy rates tend to cluster around engineering and medical professions – mostly located in regional areas.

What Causes not having Enough Skilled Workers?

According to Australia’s Labour Market update 2023, Jobs and Skills Australia has conducted an initial analysis to identify the underlying drivers behind skills shortages for 20 of Australia’s highest-demand occupations. These shortages could be due to a shortage of people with essential technical abilities or other factors like non-technical qualities that employers value or willingness to apply in current conditions.

Not Enough People Have the Right Skills for Top Jobs

According to Jobs and Skills Australia’s Labour Market Update 2023, there is a shortage of people with essential technical skills in seven of the top 20 occupations in demand. This shortage emphasizes the significance of providing domestic skills training programs to fill these voids.

Good Job Opportunities in December 2022

According to Jobs and Skills Australia’s Labour Market Update 2023, The December 2022 quarter saw strong labour market conditions, with growth in labor supply and ongoing strong demand for jobs. ABS Labour Force Survey figures show an increase in employment of 0.6% (or 87,300 positions), driven primarily by full-time employment increases. Furthermore, the unemployment rate decreased from 3.6% to 3.5%.

Fewer People are out of Work for a Long Time

Long-term unemployment decreased by 11.6% (or 14,600 jobs) over three months to December 2022, making it 25.0% lower than a year earlier. Female LTU fell by 21.5% while male LTU decreased by 3.7%; this level was lowest recorded since March 2010.

Updates on Jobs and Employment Across Different Regions in 2023

According to Jobs and Skills Australia’s Labour Market Update 2023, Employment increased in seven jurisdictions, while it decreased slightly in Queensland for the December 2022 quarter. New South Wales and Victoria saw the greatest increases in employed individuals, while unemployment rates were low across all states and territories – South Australia’s rate reaching its lowest level since February 1978 when this series began.

Fluctuations in Work Hours Because of Sickness

Employment has continued to grow, though trends in hours worked have been more volatile due to ongoing disruptions caused by illness. From November 2022 until December 2022, monthly hours worked increased by 1.3% but there were slight drops in both November and December of that same year.

More People Taking Time off from Work due to illness 

According to Jobs and Skills Australia’s Labour Market Update 2023, the number of people working reduced hours due to illness, injury or sick leave has increased by 85,900 (or 16.5%) in December 2022, reaching 606,500 – over 50% higher than the average level recorded each December over the last eight years.

Why Salaries Sometimes Increase at Different Rates: Understanding Wage Variability

Labour Market update 2023 The most recent wage price index for the September 2022 quarter indicates wages growth of 3.1% year-to-date, with a strong quarterly result of 1.0% since March 2012.

Treasury forecasts nominal increases in the wage price index to both June 2023 and 2024 at 3.3/4% each quarter. Unfortunately, this does not take into account job mobility’s effects on overall wages

Other Ways to Measure How Much People get Paid

Alternative measures of wage growth, such as Average Earnings on National Accounts (AENA) and SEEK Advertised Salary Index (ASI), aim to reflect job mobility differently and produce different estimates of wage increases. AENA reported annual growth in labour cost per employee of 4.8% for the year ending September 2022, while ASI showed annual increases in advertised salaries at 4.7% from January 2022 through December 2022.

Diverging Employment Growth

According to Jobs and Skills Australia’s Labour Market Update 2023, Employment growth varied considerably among skill levels, occupations and industries during the November quarter of 2022. Skill Level 1 and 4 occupations experienced the greatest employment gains over this period with gains of 50,100 (or 1.5%). Over one year to November 2022, all five skill level groups experienced increases in employment; Skill Level 1 experiencing the largest increases.

Major Occupational Group Level

From November 2022 through the third quarter, employment increased in four occupation groups and declined in another. Professionals saw the largest gains with 75,700 (or 2.2%), followed by Community and Personal Service Workers with 28700 (or 1.9%) and Labourers with 20800 (or 1.8%). Sales Workers, Clerical & Administrative Workers and Technicians & Trades Workers saw significant decreases. For the year ending November 2022 overall employment increased across seven occupation groups while decreasing one, with Professionals recording the largest gains.

What has been the Trend in Employment Across Industries since COVID-19 Began, and How have Job Advertisements and Recruitment Activity been Affected?

Since COVID-19 began, employment growth has been uneven across industries. Over the quarter ending November 2022, employment increased in 11 sectors while it decreased in 8. The biggest gains were seen in Financial and Insurance Services, Education & Training, Transport, Postal & Warehousing and Administrative & Support Services while retail trade, wholesale trade Public Administration and Safety Rental, Hiring & Real Estate Services experienced large declines.

Employment Trends in Industries Since COVID-19 Inception

Over the year to November 2022, employment increased in 13 industries and declined in 6. The largest gains were seen in Health Care and Social Assistance, Construction, Accommodation and Food Services, Transport Postal Warehousing. Conversely, employment decreased substantially across Public Administration & Safety Other Services Agriculture Forestry Fishing Rental Hiring Real Estate Services

Impact of COVID-19 on Job Ads and Recruitment Activity

The number of job advertisements has dropped sharply since its mid-2022 high. Between September 2022 and December 2022, job postings decreased by 3.5%, however, they remain significantly above pre-COVID-19 levels. Recruitment activity over the 12 months ending December 2022 has decreased 10.4% from its June 2022 high but remains 6.3% above the levels seen in December 2021.

Many employers are still recruiting, but fewer do so for turnover reasons alone. While turnover remains the primary motivation for employers to fill positions, job advertisements have fallen slightly from their peak levels recorded in March 2022 and July 2022. Furthermore, employers’ recruitment difficulty has eased slightly too – going from 72% in September 2022 to 68% by December 2022. Give titles to each paragraph below it.

What is the Current Labour Market Trend, According to JSA’s Survey of Employers who Have Recently Advertised (SERA)? 

According to JSA’s Survey of Employers who Have Recently Advertised (SERA), the likelihood of filling advertised roles has improved in recent months, though it remains lower than in prior years. While the fill rate has started increasing slightly due to an ongoing moderate upward trend and an average number of applicants and suitable applicants per vacancy rising each quarter during 2022, the likelihood of filling vacancies remains below that recorded in previous years.

How Does it Compare with Previous Years and which Occupational Group is Difficulty Finding Suitable Candidates?

According to Labour Market Update 2023, Employers have reported the greatest difficulty filling vacancies for Technicians and Trades Workers, with only 44% filled in 2022 compared to 50% in 2021. Shortages within this group appear to be persistent over time. Particularly  Automotive, Engineering, Construction Trades Workers, as well as Electrotechnology and Telecommunications Trades Workers experienced particularly low vacancies rates during 2022.

JSA analysis indicates employers seek skills beyond what is provided by qualifications, with the most common reason given for not suitability being a lack of experience and specific abilities. Thus, low fill rates aren’t due to not enough people being educated in this field but rather an imbalance between employer demands for experienced personnel with required abilities and their availability.

Australia’s 2022 Skills Priority List Highlights Shortages in Key Areas

Australia is facing a tight labor market, with skills shortages reported across various occupations. According to Jobs and Skills Australia’s predecessor organization, the National Skills Commission’s 2022 Skills Priority List (SPL), 31% of occupations were assessed as being in shortage from 19% in 2021 to 31% by 2022.

Labour Market Update 2023: Top 20 Occupations in Demand Nationally

According to Jobs and Skills Australia’s Labour Market Update 2023, The 2022 Standard Probability List provides a snapshot of occupations facing shortage. Combining this data with other datasets from Jobs and Skills Australia allows us to estimate some key skills gaps in the economy. Table 6 lists the top 20 occupations currently in high demand across various sectors, such as caring occupations or digital/data occupations.

Labour Market Update 2023: Regional Skills Pressures

To better comprehend regional skills shortages, Jobs and Skills Australia developed an indicator based on online job ads to employment ratios at each region. This indicator can be combined with findings from the Skilling Person List (SPL) to test current labour demand pressures for occupations on a region-by-region basis. Table 7 displays the top 10 vacancy rates from this regional skills pressure indicator for larger employing occupations identified as in shortage in accordance with SPL criteria.

Different Areas need Different Skills 

Some occupations and locations tend to experience high vacancy rates over time. This could be due to greater job mobility opportunities in capital cities with larger populations and labour forces. By analyzing similar figures for particular occupations that are assessed as being in shortage, one can identify regions experiencing similar high vacancy rates as well. Table 8 lists the 10 highest vacancy rates for Registered Nurses and Motor Mechanics – two of the current 20 occupations most in demand nationally.

Skill Shortages in Key Areas of the Labor Market

According to Jobs and Skills Australia’s Labour Market Update 2023, Skills shortages are currently observed in a range of occupations, particularly caring occupations and digital and data occupations where needs may be greater. Jobs and Skills Australia’s SPL data sets, along with other data sets produced by Jobs and Skills Australia, provide estimates of some key skills needs for Australia’s economy; however, many more occupations remain essential to both Australian economic well-being and wellbeing.

Sorting Out Jobs that Need More Workers

Labour Market update 2023, Richardson’s framework categorizes skills shortages into four levels: level 1 shortage, level 2 shortage, skills mismatch and quality gap. Each level represents different causes that may necessitate different strategies or policy responses in response.

Labour Market Update 2023: Job Mobility Data

The ABS provides data on job mobility rates at an occupational level, which can help identify occupations with higher or lower retention rates. Of the 20 top occupations in demand, three had significantly above-average rates of job mobility, nine were within 2 percentage points of this economy-wide figure and eight experienced rates of significantly below-average job mobility.

Suitability vs Qualifications

SERA data Labour Market update 2023 on the number of qualified and suitable applicants per vacancy can reveal potential skills mismatches in occupations. Unfortunately, many professions with shortages have fewer suitable applicants than qualified ones, often having less than one suitable applicant per two qualified ones.

Retail Managers Exception

Retail managers appear to be an exception, as some employers do not require mandatory qualifications when screening candidates for the role.

Labour Market Update 2023: Key Points!

Labour Market update 2023,Key Points following are key points of Labour Market update 2023.

  • Skills Priority List (SPL) indicates an increase in skills shortages compared to last year.
  • Sue Richardson proposed a framework for categorizing skills shortages.
  • Data from ABS provides insight into job mobility rates at the occupational level.
  • SERA data indicates potential skills mismatches in occupations where there are fewer qualified applicants than available positions.
  • Retail managers seem to be an exception, with some employers not requiring mandatory qualifications when screening candidates.
  • Skill shortages have been observed in caring occupations as well as digital and data occupations.
  • Table 8 provides the 10 highest vacancy rates for Registered Nurses and Motor Mechanics.
  • Jobs and Skills Australia’s SPL data sets provide estimates of key skills requirements for Australia’s economy.
  • Depending on the degree of shortage experienced, different strategies or policy responses may be necessary.
  • Job mobility rates can help identify occupations with higher or lower retention rates.
  • Qualified candidates outnumber suitable applicants, often having less than one suitable applicant per two qualified ones.
  • Retail managers do not require mandatory qualifications when screening candidates for the role.

What to do Now?

The Skills Priority List provides a comprehensive overview of current skill shortages in Australia. It is evident from the data that job mobility and suitability versus qualifications are major contributing factors when it comes to skills mismatches.

For those considering a migration or study abroad opportunities, the findings from this report suggest that there are many jobs with skills shortages across the country. International students and migrants should carefully research employment opportunities before moving to ensure their qualifications meet the needs of employers and labour markets in the region.

Furthermore, initiatives such as specialized visa programs have become increasingly popular, allowing individuals to gain professional experience and qualifications while in Australia. Such opportunities can be very beneficial for accelerating a career in the future.  With this knowledge, international students and migrants can gain a better understanding of skills shortages and Australian labour markets before making their decision to move. 

Labour Market Update 2023: Summary!

In conclusion, it is evident that skills shortages have very different causes and should be approached differently depending on the context. Unskilled labour may not be suited to certain tasks, whereas in other cases there may be a lack of qualified applicants or those with appropriate experience. Through data analysis of the labour Market update 2023 such as this, employers can identify areas where skills gaps may exist and adjust recruitment strategies accordingly.

For further information regarding the Labour Market update 2023,  please contact us. We are here to help you find the right job!

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I’m Nasir Nawaz. I’m a registered migration consultant in Australia. I am based in Sydney. I’ve studied Master of Laws at the University of New South Wales. I’m providing immigration services for several years.

Consult with me for legal advice on Australian visas to permanently live, study, and work in Australia.