Recent influences on the Australian labour market have included: population ageing; increased participation of women in the workplace; a greater focus on skilled jobs and slower growth in lower skilled jobs; a greater number of young people participating in education; and technological change, greater labour market flexibility and economic reforms that alter working arrangements (DEEWR, 2011).

The Australian labour market

The Australian labour market has experienced an overall growth in employment in the past five years in the context of these broad trends. The labour market is also characterised by high levels of education, with three out of five employed Australians attaining a post-school qualification

Australia’s labour market (DEEWR, 2011)[1]

Key labour market statistics

Employment (number) / 11 390 100
Employment change (past 5 years) % / 13.1
Working part-time % / 30
Female % / 45
Aged 45 years or older / 38
Education
Without post-school qualifications % / 39
With VET qualifications (Cert III or higher) % / 30
With a Bachelor degree or higher % / 26

However, the global economic context has had an impact, which is evident in a slowing in the labour market with a 0.4% increase in employment (2008-09) compared with an annual average growth rate of 2.8% in the five years to September 2008. Unemployment has also increased, up from 4.3% in September 2007 to 5.8% in September 2009.

However, employers’ willingness to reduce employee hours as a strategy to avoid redundancies also had a positive impact on levels of unemployment. Government investment in public infrastructure and demand for mining exports also mediated the effects of recession.

Recent trends suggest further strengthening in the labour market with increased employment (+2.8%), reduced unemployment (down from 5.3% to 4.9% and increased participation rate, up 0.5 percentage points to 65.8%, in the period between March 2010 and March 2011.

Industry structure

Australia’s industry structure is shifting from dependence on agricultural produce and manufactured goods to growth in employment in service-based industries. Three out of every four Australian workers are now employed in service industries. Health care and social assistance are the sectors driving growth in this sector, due in large part to population ageing. Technological change and investment has also driven growth in employment in the Professional, Scientific and Technical Services industry. Accommodation and Food Services is a key employer for young workers who combine work with study. This sector is particularly strong in regional Australia, especially in popular tourist destinations.

Long term drought and changing technologies that reduce demand for unskilled labour are key drivers of change in agriculture. Manufacturing was the largest employing industry two decades ago, it is now the fourth largest employer, accounting for 9% of total employment. Drivers of the change in this industry include greater competition from low cost economies.

Changing job opportunities, 2010 (DEEWR, 2011)

New job sectors / Sectors with declining employment
Health care and social assistance (up by 275 200)
Construction (179 400)
Professional, Scientific and Technical Services (136 100)
Education and Training (120 800)
Transport, Postal and Warehousing (84 000) / Manufacturing (down by 33 800
Information Media and Telecommunications (23 700)

Below highlights the disproportionate strength of employment in service industries relative to other key industry sectors in Australia over the past two decades.

Share of Total Employment, Selected Industries, 1990 and 2010 (%) (DEEWR, 2011: 14)

Source: ABS Labour Force Survey

Around one in five Australian workers are employed as professionals (the largest occupational group in Australia. The other key occupational groups are Technicians and Trades Workers (15%), Clerical and Administrative Workers (15%) and Managers (13%). Over the past five years employment growth has been strongest for occupations in the following classifications: Community and Personal Service Workers (up by 24%), Professionals (19%) and Managers (15%) (DEEWR, 2011: 24)

Skill shortages remain for the following occupations: engineers, resource professions, child care occupations, therapy professions, nurses, automotive trades, some engineering and electrotechnology and food trades. Employers cited low levels of ‘employability skills’ and a combination of appropriate qualifications and post-qualification experience (Labour Market Research and Analysis Branch, 2012[2]).

Where there are skill shortages there are government incentives and assistance for training to upskill, to relocate for work or an apprenticeship to those in areas of labour shortages.

There are also expectations for growth in a range of occupational categories, particularly those that operate in the Health sector as illustrated below.

Projected Employment Growth to 2015-16, Top 20 Occupational Clusters (‘000) (DEEWR, 2011: 25)

Source: DEEWR employment projections

More than half of this projected growth is expected to be in the highly skilled occupations that require a tertiary level of education at Diploma level or higher.

The Australian workforce is becoming more qualified, as appropriate for future demand for higher skilled workers. Those who do not attain a post school qualification are at a significant disadvantage in this labour market.

Educational Profile (% of total employed), May 2010

Educational Profile (% of total employed, May 2010 (DEEWR, 2011: 28)

Highest level of post-school qualification / %
Postgraduate degree / 5.1
Graduate Diploma / Certificate / 2.5
Bachelor Degree / 18.8
Advanced Diploma/Diploma / 10.1
Certificate III / IV / 19.6
Certificate I / II / 3.8
Certificate not further defined / 1.0
No post-school qualification / 39.1

The average annual salary for graduates with a qualification through VET who were in full-time work six months after completing their qualification also illustrate the benefits of higher levels of education for individuals (DEEWR, 2011: 29). The average annual salaries for this group were:

-Diploma or higher ($54 600)

-Certificate IV ($54 400)

-Certificate III ($45 500)

-Certificate II ($42 200)

-Certificate I ($42 000) (DEEWR, 2011: 29).

[1]Department of Education, Employment and Workplace Relations (2011) Australian Jobs. Canberra: DEEWR, p. 5.

[2]Labour Market Research and Analysis Branch (2012) Skill Shortages Australia 2011. Canberra: DEEWR.