As of April 2024, labour skills shortages remain a significant concern for Prime Minister Albanese, impacting Australia’s ongoing economic recovery.
Australia’s skill shortages have become a persistent problem since the global shutdown and continue to be a key issue for the Australian manufacturing industry at both state and territory levels.
Current labour market rating, around 850,000 Australians are employed within the manufacturing sector and there is a high demand for more employees with a skills priority list.
The years 2020-2021 saw a significant reduction in experienced workers due to skill shortages in overseas migration, affecting the construction sector across every state. However, reopened borders mean migration is set to increase and alleviate some pressure placed on the employment of current labour market rating.
To assist with the kick-start of the job market, the incumbent Albanese Government has promised change and subsequently announced its plans to address the skilled migration and visa backlog that is slowing the process of economic recovery for the future demand rating and promises for subsequent government policy responses.
Read more about how the industry’s employment projections and how DayJobs can help you here.
Key Takeaways
- The Albanese Government recognizes skilled labour shortages as a major obstacle to Australia’s economic recovery post-pandemic, particularly within the manufacturing and construction sectors.
- Plans to amend skilled migration and visa backlogs have been announced to combat these shortages, acknowledging the critical role skilled migration plays in economic recovery.
- The Australian construction industry, contributing significantly to Australia’s GDP, faces a potential growth setback due to skilled labour shortages, highlighting the urgency of the government’s response.
- Comparatively, labor shortages are a global issue, with countries like the United States, Germany, Canada, and the United Kingdom adopting various strategies, such as enhancing immigration policies and investing in domestic workforce development, to mitigate the impact.
- The Albanese Government’s initiatives, including a $15 billion manufacturing fund, aim to revitalize the Australian workforce and manufacturing sector, addressing both immediate and long-term challenges.
Albanese Government Announcement
In his first National Cabinet meeting, Anthony Albanese announced plans to amend the skilled migration and a visa backlog.
The Prime Minister acknowledged the need to assist companies struggling to run their businesses and infrastructure projects due to labour skills shortages. Efforts are underway to clear the backlog of 140,000 skilled visa applications, recognizing the significant role of skilled migration in economic recovery. The government has also allocated a $15 billion manufacturing fund and an additional $750 million in the 2022-23 budget to support the Modern Manufacturing Initiative, which indirectly benefits the construction sector by ensuring a steady flow of skilled workers.
The Labor leader said there is an “extraordinary backlog” of visas. He continued to announce that some skilled visa applicants have been waiting between 12 to 18 months to be able to join the workforce, negatively affecting all stakeholders..
Working with Dayjob Recruitment
Premiers in Western Australia and South Australia have voiced their concerns about labour shortages and the impact it has on the state’s economies, noting that skilled migration is key to economic recovery in relations to the labour market analysis.
South Australian Premier Peter Malinauskas said, “there needs to be a reopening of skilled migration as a country.”
As the manufacturing industry contributes around $100 billion to the Australian Gross Domestic Product (GDP) annually, a further skills shortage could see a cataclysmic impact on the nation’s economic growth and in the Australian labour market.
Addressing these issues is at the forefront of the Albanese government’s agenda, as construction delays caused by skilled labour shortages pose a significant challenge to the nation’s economic recovery.
Mr. Albanese has suggested more short-term migration to fill the supply and demand gap in Australia, particularly addressing the needs of construction companies facing skilled labour shortages.
Australia’s Push to Address Skills Shortage: A Focus on Visa Backlog and Domestic Manufacturing
According to the Australian Bureau of Statistics, as of April 2024:
- Unemployment Rate: 4.1%
- Participation Rate: 66.7%
- Employment: 14.3 million people
- Underemployment Rate: 6.6%
- Monthly Hours Worked: 1,962 million hours
The manufacturing industry remains a key focus, with ongoing efforts to address skill shortages through government initiatives and investments.overnment has taken proactive measures to address the persistent labour and skill shortages that have been
In current labour market data analysis, 140,000 skilled visa applications are waiting to be processed, according to the Department of Home Affairs.
The backlog of visa applications presents a significant challenge to filling the need for skilled professionals, prompting the Albanese government to temporarily move staff into the department to address this issue.
Immigration Minister Andrew Giles says processing the “backlog” of visas is at the forefront of the Albanese government’s plans to help the economy recover from Australia’s skills shortage.
Mr. Albanese has also recognised the skills shortage in manufacturing over the past few years and has vowed to “rebuild” and domesticate the industry for skilled workers such as personal service workers and construction managers.
Global Perspectives: How Australia’s Labor Shortage Compares to Other Nations
Australia is not alone in facing labour shortages. Other countries have adopted various strategies:
- United States: Increased wages, training programs, and streamlined visa processes for specific sectors.
- Germany: Youth apprenticeship programs and eased immigration policies for skilled workers.
- Canada: Expanded immigration policies and better integration of immigrants into the workforce.
- United Kingdom: New points-based immigration system and domestic worker training post-Brexit.
While each country’s situation is unique, the common themes of balancing immigration with domestic workforce development, and the need for flexible, responsive policies, are evident. Australia’s response to the labor shortage can draw on these international experiences to develop a multifaceted approach that ensures the resilience and growth of its industries.
Future Projections
Workforce Share in Manufacturing
The manufacturing industry accounts for approximately 6.3% of Australia’s workforce.
Employee Numbers (2019-2021)
The Australian Parliament data indicates that from February 2019 to February 2020, the number of employed people in the manufacturing sector increased from 866,000 to 922,800. However, from February 2020 to February 2021, there was a decrease to 902,000 employees, a 2.3% drop. This doesn’t exactly match the mentioned figures of 14,000 fewer employees in 2019-2020 and a recovery of 9,000 more staff in 2020-2021.
Labour market data analysis claim about a decrease in employment is substantiated by ABS data showing a 1.3% or 11,600 workers’ reduction in manufacturing employment over the year to August 2020.
Structural Steel and Welding Growth
There is a projected growth of 2.1% in Structural Steel and Welding for the next year, according to the Labour Market Insights. This opens for more trade workers and opportunities for training funding as well as apprenticeship incentives for suitable applicants.
Funding and Resources for Recovery
- The Albanese Government has passed a $15 billion manufacturing fund to help the Australian workforce.
- In the 2022-23 budget, an additional $750 million was invested into the Modern Manufacturing Initiative, along with $200 million as part of the Regional Accelerator Program to bolster the industry.
- The government committed $15 billion to the National Reconstruction Fund to support the manufacturing sector, marking one of the largest investments in manufacturing in Australia’s history.
- Additionally, $500 million in unspent manufacturing grants were redirected to a $15 billion industry fund by the Albanese Government.
Conclusion
The Albanese Government continues to take significant steps to address the persistent labour and skill shortages, crucial for Australia’s post-pandemic economic recovery. Australia aims to build a robust and resilient economy by balancing skilled migration and domestic workforce development. Recognizing the significant role of the manufacturing sector in the nation’s economy, the Albanese government has prioritized clearing the visa backlog to facilitate skilled migration and boost employment.
If you are open to sponsoring international employees, Dayjob will source applicants and assist with the entire process – from screening interviews to visa applications. If you have any questions about our service, please visit our website or contact our friendly team here or explore the latest trade jobs and stone industry jobs in Australia!
FAQs
Is there a shortage of skilled labour in Australia?
Yes, Australia is experiencing a shortage of skilled labour across various industries, including construction, healthcare, IT, and manufacturing. This shortage is driven by factors such as an aging workforce, rapid industry growth, and reduced immigration during the COVID-19 pandemic.
Which country is facing labour shortage?
Many countries are facing labour shortages, including the United States, Canada, Germany, and Australia. These shortages span various sectors, particularly in healthcare, construction, manufacturing, and IT.
What is the main reason for the labour shortage?
The main reasons for the labour shortage include demographic shifts such as aging populations, declining birth rates, and the impact of the COVID-19 pandemic, which disrupted workforce availability and reduced immigration. Additionally, rapid technological advancements have increased demand for specific skill sets that are in short supply.
Is there a shortage of IT skills in Australia?
Yes, there is a significant shortage of IT skills in Australia. The demand for professionals with expertise in areas such as cybersecurity, software development, data analysis, and cloud computing far exceeds the current supply, creating challenges for businesses seeking to innovate and grow.
Interested in how we can support your role as an employer? Click below to learn more.
