Candidate Market Snapshot
A deep dive into Australia's talent shortage.
Thanks for taking the time to view Fuse Recruitment's Candidate Market Snapshot. We created this document to provide our customers with information regarding the current talent shortage in Australia.
Below I have detailed candidate trends; the effect of COVID-19 on the economy; how to overcome candidate short markets; the National Skills Commission's Priority Skills List, as well as graphs depicting the staffing outlook in Australia, and the reasons for difficulty to retain employees per industry. To jump to a particular topic, please use the navigation menu in the top right-hand corner.
If you are looking for more information, please let me know, we are always happy to take a deep dive at a sector level.
I'd love to know what you have been experiencing in this candidate short market.
Mathew Westcott
Managing Director
About the candidate short market
As the economy recovers from the coronavirus pandemic, businesses push to expand their operations and build their workforces to meet new demands. In addition, candidates have learnt about what the candidate short market means for them and are using it to their advantage to negotiate potential benefits. Due to the abundance of vacancies and increased candidate negotiating power, hiring managers are seeing candidates who are more careful about what roles they apply for and the difficulty to recruit peaks at an all-time high.
Research from SEEK shows that the top three important factors to candidates are job security, less stress, and flexible working arrangements to spend more time with their families. Candidates are prioritising these drivers over a higher paying salary, which has historically been the number one driver across all industries.
- 63% would opt for job security
- 66% would choose less stress
- 61% would rather have more time with their families
According to the National Skills Commission, the recruitment difficulty rate in October 2022 sat at an average of 70% for businesses in Australia. The recruitment difficulty rate was 38% in February 2021.
With borders previously closed, Australia saw a large drop in the number of skilled migrants available in the market. As a result, the country lost 600,000 people from their workforce and businesses are still seeing the effects despite borders having reopened.
What are the trends?
While the COVID bounce back continues for many businesses and job seekers display selective behaviour, the strong demand for workers stretches the available supply pool.
Hiring Managers and Recruiters are struggling to get the candidate application rate we’ve been used to. As a result, we need to adjust the way we recruit.
Key trends to note:
- Pay Rates and Counter Offers – There has been a significant improvement in the number of clients wanting to employ casual staff, driving rates higher. Even while candidates are ‘engaged’ in the hiring process, we find that many are receiving counter-offers as a retention strategy from their existing employers. Companies are willing to do what it takes to hold on to their current talent as they are finding it difficult to source new employees themselves.
- Employee priorities have shifted - People are changing jobs to search for a role that they enjoy or that is meaningful to them. Job seekers are changing jobs to chase their career aspirations and lifestyle desires.
- Loyalty to current employers is stronger - COVID has taught many to realise what they have and be grateful for it. For example, when the pandemic hit, working and paying for living expenses was considered lucky as many were made redundant or stood down in their roles. As a result, employees feel a stronger sense of loyalty to their employers who have provided them with work throughout the pandemic.
What are the effects of COVID-19 on the Australian employment market?
In 2018-2019, 12.9% of all overseas migrant arrivals were skilled migrants on temporary or permanent visas. An additional 9.3% were on temporary working holiday visas.
The pandemic halted overseas migration, which undermined economic recovery due to a drop in population growth. Overseas migration into Australia usually accounts for almost two-thirds of population growth annually. In 2018-2019, Australia’s population increased by 239,600 people due to net overseas migration. Now, because of the pandemic, net overseas migration levels are expected to be in the negatives until 2023.
By the time migration is estimated to return to normal levels (post-2022), there will be 600,000 fewer people in the country than if the pandemic had not existed.
The Federal government will only focus on attracting skilled migrants once most international borders reopen.
How can we overcome the candidate short market?
We’re finding that mid-tier workers are being promoted to senior positions which would have otherwise been filled by international talent. This creates openings in junior and entry-level roles which need to be filled.
Fuse Recruitment has found graduates to be great candidates for such roles where it is difficult to source talent with a specific skill set. We talk about the benefits of hiring graduates here. In short, graduates offer their loyalty and great work ethic to employers who invest in their learning and development.
We have built a reputation for hiring high-quality grads for our clients through our Future Insure Graduate Program. Our team have a keen eye for picking out graduates who possess desirable behavioural traits and the right cultural fit for our clients and their needs. The result is high-performing, loyal graduates who may have otherwise not been considered for such roles.
While job seekers are selective and many migrant workers are unable to enter the country, businesses should consider investing in graduates and upskilling our local workforce. While this is not a quick process, the long-term benefit is that we build the talented skills base in the Australian workforce.
Given current conditions in the market, our customers have found value in partnering with our team to create marketing campaigns to attract skilled talent. Whether they are on the lookout for skilled manufacturing workers or highly qualified insurance professionals, our customers have found success in reaching out to a wider audience and larger talent pool.
Skills Priority List
The National Skills Commission's latest 2022 Skills Priority List highlights shortages by occupation and predicts future demand for these skills.
We've compiled a summary of roles we commonly recruit for our clients, that show a current shortage, as well as strong and moderate future demand.
Where shortages are present, (S) is listed against the occupation. Where shortages are restricted to regional areas, this is shown as (R), and (NS) is shown when there are no shortages.
Current Candidate Shortages
Manufacturing
Occupation | AUS | NSW | VIC | QLD | SA | WA | TAS | NT | ACT | Future Demand |
Quality Assurance Manager | S | S | S | S | S | S | S | S | S | Strong |
Electrical Engineer | S | S | S | S | S | S | S | S | S | Strong |
Mechanical Engineer | S | S | S | S | S | S | S | S | S | Strong |
Metal Fabricator | S | S | S | S | S | S | S | S | S | Strong |
Welder (First Class) | S | S | S | S | S | S | S | S | S | Strong |
Electrician (Special Class) | S | S | S | S | S | S | S | S | S | Strong |
Baker | R | R | R | R | R | R | R | R | NS | Strong |
Biochemist | S | S | S | S | S | S | S | S | S | Moderate |
Meat Inspector | S | S | S | S | S | S | S | S | S | Moderate |
Fitter and Turner | S | S | S | S | S | S | S | S | S | Moderate |
Utilities
Occupation | AUS | NSW | VIC | QLD | SA | WA | TAS | NT | ACT | Future Demand |
Metallurgist | S | S | S | S | S | S | S | S | S | Moderate |
Infrastructure
Occupation | AUS | NSW | VIC | QLD | SA | WA | TAS | NT | ACT | Future Demand |
Civil Engineer | S | S | S | S | S | S | S | S | S | Strong |
Quantity Surveyor | S | S | S | S | S | S | S | S | S | Strong |
Construction Project Manager | S | S | S | S | S | S | S | S | S | Moderate |
Project Builder | S | S | S | S | S | S | S | S | S | Moderate |
Engineering Manager | S | S | S | S | S | S | S | S | S | Moderate |
Civil Engineering Draftsperson | S | S | S | S | S | S | S | S | S | Moderate |
Civil Engineering Technician | S | S | S | S | S | S | S | S | S | Moderate |
Electrical Engineering Draftsperson | S | S | S | S | S | S | S | S | S | Moderate |
Electrical Engineering Technician | S | S | S | S | S | S | S | S | S | Moderate |
Backhoe Operator | S | S | S | S | S | S | S | S | S | Moderate |
Bulldozer Operator | S | S | S | S | S | S | S | S | S | Moderate |
Excavator Operator | S | S | S | S | S | S | S | S | S | Moderate |
Grader Operator | S | S | S | S | S | S | S | S | S | Moderate |
Loader Operator | S | S | S | S | S | S | S | S | S | Moderate |
Future Potential Shortages
While there are no shortages for some roles mentioned below, future demand indicates that there is potential for shortages to occur. As our economy recovers, the demand for these roles is expected to increase.
Insurance
Occupation | AUS | NSW | VIC | QLD | SA | WA | TAS | NT | ACT | Future Demand |
Insurance Agent | NS | S | NS | NS | NS | NS | NS | NS | NS | Strong |
Call or Contact Centre Team Leader | NS | NS | NS | NS | NS | NS | NS | NS | NS | Strong |
Call or Contact Centre Operator | NS | NS | NS | NS | NS | NS | NS | NS | NS | Strong |
Call or Contact Centre Manager | NS | NS | NS | NS | NS | NS | NS | NS | NS | Moderate |
Customer Service Manager | NS | S | NS | NS | NS | NS | NS | NS | NS | Moderate |
Insurance Broker | NS | NS | NS | NS | NS | NS | NS | NS | NS | Moderate |
Insurance Consultant | NS | NS | NS | NS | NS | NS | NS | NS | NS | Moderate |
Insurance Investigator | NS | NS | NS | NS | NS | NS | NS | NS | NS | Moderate |
Insurance Loss Adjuster | NS | NS | NS | NS | NS | NS | NS | NS | NS | Moderate |
Insurance Risk Surveyor | NS | NS | NS | NS | NS | NS | NS | NS | NS | Moderate |
Wealth Management
Occupation | AUS | NSW | VIC | QLD | SA | WA | TAS | NT | ACT | Future Demand |
Finance Manager | NS | NS | NS | NS | NS | NS | NS | NS | NS | Strong |
Financial Investment Advisor | NS | NS | NS | NS | NS | NS | NS | NS | NS | Strong |
Financial Investment Manager | NS | S | NS | NS | NS | NS | NS | NS | NS | Strong |
Finance Broker | NS | S | NS | NS | NS | NS | NS | NS | NS | Moderate |
Increases in Skill Shortages Between 2021 and 2022
The National Skills Commission's latest 2022 Skills Priority List highlights how skill shortages have worsened between 2021 and 2022.
- 129 occupations that were considered as in shortage in 2022 were not in shortage in 2021
- There were an additional 127 occupations that were in shortage in both years
- Only 17 occupations were no longer in shortage in 2022 after being in shortage in 2021
Major Occupation Group | 2021 (%) | 2022 (%) | % Change |
Managers | 12% | 11% | -1% |
Professionals | 19% | 39% | +20% |
Technicians and Trades Workers | 42% | 47% | +5% |
Clerical and Administrative Workers | 0% | 5% | +5% |
Sales Workers | 0% | 5% | +5% |
Machinery Operators and Drivers | 17% | 29% | +12% |
Labourers | 0% | 26% | +26% |
All occupations | 19% | 31% | +12% |
What does Australia's staffing outlook look like?
Source: National Skills Commission, July 2022
Why is it difficult to hire employees post-pandemic?
Hiring post-pandemic? You’ll be competing for talent with more businesses expecting to hire than before the pandemic. For one, Australia’s talent pool of those unemployed is very small with the unemployment rate at a record low of 3.4%.
In addition to that, according to the Australian Government’s Labour Market Insights, retention difficulty has become more common, especially for larger employers. The proportion of employers who had difficulty with retention increased from 9% between June and December 2021 to 13% in 2022 to date.
Difficulties with retention are more significant for medium and large businesses, with retention difficulty for employers with 20 to 99 employees increasing from 15% in 2021 to 22%, and difficulty for businesses with 100 or more staff increasing from 26% to 38% in the same time period.
Source: National Skills Commission, July 2022
Employment Hero’s survey also found that 55% of managers and senior executives were more likely to seek a new role within the next year. The government’s latest Recruitment Insights Report stated that employers found it more difficult to recruit for Higher Skilled positions than Lower Skilled positions.
There are ways to avoid facing this difficulty yourself; improving employee engagement and retention, or booking a free consultation with us to source top talent fit for your business.
Have questions, thoughts, or just want to chat?
