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Increasing Vacancies and Strengthening Demand for Workers Confront Employers in Australia

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(The following excerpt from Allegis Group’s latest research report, “Global Workforce Trends 2018,” focuses on Australia, where the workforce trends include a dependence on exports to China, recovery from softness in mining and manufacturing, plus increasing vacancies and strengthening demand for workers.)

Recently, Australia hit a nine-month unemployment high as GDP growth remained sluggish. Nevertheless, the total number of employed persons is up approximately three percent since 2017, as Australia experiences record labor force participation, according to the Australian Bureau of Statistics. At the same time, job vacancies are at all-time highs, with a particularly severe upswing in the past year.

A combination of trends is driving the economy and the demand for skills. Australia’s struggling manufacturing industry, still affected by China’s lower demand for commodities imports, contributed to the country’s elevated unemployment rate. Seventeen percent of Australia’s non-farm jobs are in manufacturing, a high number when compared to the U.S., where it is only 8.5% of all jobs, per the U.S. Bureau of Labor Statistics.

For the last year, the high-end professional services sector was the strongest performing industry in hiring. The three fields with the most job openings include administration and support (e.g., receptionists or lower-skilled office workers), retail, and healthcare. Australia’s other unique dependency is in oil and gas (mining), which was still struggling through 2017, although that may change given the sharp rebound in the U.S. in the past year.

A look at two main regions in Australia reveals differences in skills supply and demand. In Sydney and surrounding regions, employment growth surpassed labor force gains. While employment overall was up by over 86,000 jobs in 2017, this growth was fueled by healthcare and lower-skilled industries, such as construction, wholesale, and manufacturing. Most notable in this market is a shift in the professional and technical services industry (IT staffing and consulting), a previous market leader that leveled off. Administrative support and finance are also seeing lighter demand for workers.

In Western Australia, mining and manufacturing experienced a decline in demand for talent over the year, with momentum indicating little change is expected soon. This may be good news for hiring key skill sets in this region, as hiring competition seems to be light. Construction, professional, technical services, and media and telecom have added jobs at an accelerated pace, increasing the demand for talent in those areas.

The supply of talent across Australia is feeling less pressure than in some other parts of the world. Almost half of Sydney’s workforce is in highly skilled occupations. With the downturn in demand for skilled talent and contract labor, recruiting challenges should be light except in very niche roles. Western Australia finds strength in most types of skill sets including managers, professionals, trades workers, machine operators, and laborers. The supply of skills is promising for recruiting in the oil and gas sector, especially given the lack of hiring in the market.

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