Find out which sectors are badly hit and key contributors to the shortage
The country’s workforce crisis is only worsening as job vacancies have doubled since the COVID-19 pandemic. Amidst the problem, which sectors face the most significant labour shortages?
Based on the latest Australian Bureau of Statistics (ABS), there are already 480,100 job vacancies in Australia, a 111.1% rise since February 2020.
Meanwhile, The Guardian also reported that Australia’s unemployment rate plunged to 3.5% as the country approaches its full employment, which means that “almost everyone willing and able to work is in a job.”
Sectors with the biggest workforce shortages
According to the media outlet, the sectors with the biggest job vacancies are healthcare and social assistance with 68,900, accommodation and food services with 51,900, and professional scientific and technical services with 42,900.
It also reported that in terms of increase in job vacancies since COVID-19, arts and recreation saw the biggest growth at 250% of pre-pandemic levels, then accommodation and food services, followed by real estate.
“Construction rates highly by both measures, with 39,900 vacancies, 140% of pre-pandemic levels,” The Guardian reported.
Citing the director of the Centre for Future Work, Jim Stanford, The Guardian said that when calculating the vacancy rate, “the sectors most strapped for workers are: administration and support (8.9%), hospitality (5.7%), wholesale trade (5.2%) and real estate (4.3%).
Migration halt
Professor Jeff Borland, a labour market economist at the University of Melbourne, told The Guardian that labour demand was “very strong,” which drives a growth in the vacancy rate “across all occupations and industries.”
“We’re creating new jobs at such a rate, it’s taking time to hire and for the labour supply to catch up,” he said.
Borland said that workforce shortage mainly affects sectors that heavily depend on temporary migrants, “with food trade and preparation, hospitality, cleaners, and laundry workers among the jobs that had the biggest growth in vacancy rates.”
“There are vacancies everywhere, but in particular occupations this was super-charged by the withdrawal [during Covid] of temporary visa-holders, who made up a high proportion of the workforce in those sectors,” Borland told The Guardian.
Meanwhile, David Rumbens, a partner at Deloitte Access Economics, said that the sectors of finance, IT, insurance, mining services, and public administration were “more exposed to a lack of skilled migrants,” and sectors of retail, hospitality, and accommodation suffer from workforce shortage due to a lack of international students and working holiday-makers.
Pay rate issue
Aside from the temporary migration freeze in Australia, employers who fail to pay rates higher than the awards minimum can also result in workforce shortages, professor Bob Breunig, an Australian National University public policy economist, told The Guardian.
“Many of these sectors have relatively rigid award settings,” he said. “People say, ‘Here is the award wage, that’s what we pay,’ then they don’t get enough workers.”
Stanford also noted that the four sectors with the most significant job vacancy rates had “rapid turnover, none have experienced strong job growth, and all pay relatively low wages.”
“That reinforces the idea that it is precarity and instability that is causing high vacancies, not pure job growth or supply-and-demand imbalances,” Stanford said.
Given the pay rate issue, Breunig said that the challenge for employers was either to improve the productivity of their workers or to encourage society that it should value and pay them more.
Skills mismatch
Rumbens also highlighted that across the Australian workforce, there was “always a degree of mismatch between the unemployed and job vacancies.”
One example is the area of IT which, according to Rumbens, has a degree of an under-trained workforce, relying on migration to solve the workforce gap.
While many Australians get university degrees, Breunig said there is insufficient training relative to the number of jobs.
“Normally you’d think that higher wages in those trade jobs should attract more people to them but that doesn’t seem to be happening,” Breunig said.
With the increasing issue of skills mismatch, Stanford said that employers should significantly invest in retention, compensation, and training to at least alleviate the workforce issue.
