Job postings continue to rise as skills shortages persist

Executive summary

  • The Australian Job Index rose 4.4% in the March quarter and now stands at 155.09. While this not a record high, job vacancies are at a very high historical level.

  • As a leading economic indicator, this upward trend suggests that employment will rise, and unemployment will fall in the next quarter.

  • On the demand side, many employers are confident as the economy opens and the impact of the pandemic recedes.

  • We see acute skills shortages across many sectors and occupations. International sourcing of talent has recommenced. We may yet see a net exit of talent overseas.

  • The Permanent market rose 6.5%. Flexible job postings fell 2.3% in the first three months of 2022. Employers are recalibrating their workforce composition towards permanent head count to lock in scarce talent.

  • Job postings in Accommodation and Food Services rose by an astronomical 47.7% in the last quarter.

  • Health Care also enjoyed a very bullish start to the year. Job opportunities rose 9.3% in the quarter. The resumption of non-elective surgery placed some additional strain on resources in the sector.

  • A slow start to the year for Manufacturing and Distribution (down 1.4%) belies a very resilient performance during the pandemic. Global supply chain challenges have helped local manufacturers.

  • Distribution is a sector that had shortages prior to the pandemic. These have only increased in the last two years.

  • Health, Education & Community Professionals topped the occupational table with a 12.5% rise in just three months.

  • Job opportunities for Business Professionals were plentiful in Q1 2022, up 11.8% on December 21.

  • Service and Community Workers are also in high demand. Demand rose by 4.5% in the quarter. Difficulties in finding staff in areas such as Aged Care and Child Care persist.

  • A 11.5 % quarterly rise in New South Wales dominates regional analysis. It is benefiting from an early boost in business confidence and hiring.

  • The Victorian market is showing encouraging signs of recovery after a tumultuous 2021. Job opportunities rose 4.1% in the first three months of 2022.

Australian Jobs Index

Chart 1: National job index (seasonally adjusted)

Job Type Analysis

  • The employment market has started 2022 very strongly. The Australian Jobs Index rose 4.4% in the March quarter and now stands at 155.09 (Base 100 – June 2018). While this not a record high (that was achieved in October 2021) job vacancies are at a very high historical level. As a leading economic indicator, this upward trend suggests that employment will rise, and unemployment will fall in the next quarter.
  • The continued strength in job posting volumes is the consequence of two complimentary factors. On the demand side many employers are confident as the economy opens and the impact of the pandemic recedes. Neither an unstable global political situation, Omicron nor the prospect of a Federal Election appears to have tempered that hunger for more staff.
  • This is exacerbated by acute skills shortages across many sectors and occupations. Roles are hard to fill. These shortages have been building for some time whilst international borders were closed. Employers have been desperately waiting for a relaxation in these rules. Whilst international sourcing of talent has recommenced this may be a twin edged sword. We may yet see a net exit of talent overseas as other nations, suffering similar shortages, lure our talent away.
  • One noticeable feature of the last three months has been the relative strength of the Permanent jobs market. Postings for permanent roles rose 6.5%. By way of comparison Flexible job postings fell 2.3% in the first three months of 2022. This is a continuation of a trend observed last year. In the last twelve months Permanent job vacancies have risen 16.2% while Flexible opportunities (Temporary and Contract) rose a mere 1.0% over the same period.
  • Employers are recalibrating their workforce composition towards permanent head count. This is a deliberate attempt to lock in scarce talent.

Job Trends by Industry

Chart 4: Change in sectoral job indices on prior quarter (1)

  • Job postings in Accommodation and Food Services rose by an astronomical 47.7% in the last quarter. This sets a new record high level. Quarter 1 is normally a quieter period after the seasonal peak over Christmas and summer break. That is no longer the case. The sector has been particularly hard hit by the shortage of international workers. Many left the sector during lockdowns and closed interstate and international borders.
  • Health Care also enjoyed a very bullish start to the year. Job opportunities rose 9.3% in the quarter. Unsurprisingly the sector has been one of the strongest performers throughout the pandemic, rising 17.8% year on year.
  • Professional, Public Administration and Education all recorded modest declines during the March quarter. These must be seen in context. All hit record levels of demand in October 21. While demand have softened since then all remain at very high historical levels.
Quarterly job changes by industry (2)

Chart 5: Change in sectoral job indices on prior quarter (2)

  • There were some surprising contractions amongst this cohort in the March quarter. Mining, Construction and Utilities combined to record an aggregate fall of 6.6%. Breaking this down we saw Construction and Utilities contract while Mining achieved a small rise.
  • Mining is particularly susceptible to global commodity prices. The war in Ukraine has lowered production and pushed prices up for many commodities. This is having a positive impact on demand for staff. The easing of interstate boundaries for WA will allow greater mobility.
  • The Financial Services sector has been weak for the last twelve months, one of the few sectors to record a year-on-year decline in job opportunities. Fintech is booming but it is not a large creator of employment. Larger traditional lenders and insurers have not been recruiting at their pre pandemic levels.
  • A slow start to the year for Manufacturing and Distribution (down 1.4%) belies a very resilient performance during the pandemic. Global supply chain challenges have helped local manufacturers. Distribution is a sector that had shortages prior to the pandemic. These have only increased in the last two years.

Job Trends by Occupation

Quarterly job changes by Occupation – Managers and Professionals

Chart 6:  Change in occupational job indices on prior quarter

  • Professional job vacancies represent over 40% of all job postings in Australia. For the first time we are now able to analyse this ANZSCO group into different professional occupational categories.
  • Every Professional occupational group achieved increased job postings in the March quarter. Health, Education & Community Professionals led the way with a 12.5% rise in just three months. This was driven by Health where demand for nurses, doctors and many associated professionals has risen as Omicron patient numbers increase and elective surgery plays catch up.
  • Roles in Education are starting to improve once more. The Tertiary Education sector cut early and deep when Covid 19 hit. As international student numbers rise universities and private colleges are returning to the jobs market in search of talent.
  • Demand for Technology Professionals was relatively muted, up just 1.8%. Demand was strong throughout 2021. Shortages remain. The hopes of many employers rest on the ability to source international candidates now that borders are open.
  • Business Professionals cover a range of occupations across law, accounting, engineering and marketing. Opportunities were plentiful in Q1 2022, up 11.8% on December 21.
  • Executive and Management level opportunities were stable during 2021. Demand peaked in October then contracted by year end. The year has started very well with new job opportunities rising 11.8%.
Quarterly job changes by Occupation – Non-Professional

Chart 7:  Change in occupational job indices on prior quarter

  • Among “Non-Professional” occupations we saw a surprisingly strong rise in job vacancies for Labourers, Drivers and Operators. Drivers are in particularly high demand. This can be seen across the market from local delivery to long haul.
  • Service and Community Workers are also in high demand. Demand rose by 4.5% in the quarter. Difficulties in finding staff in areas such as Aged Care and Child Care persist. These are areas receiving Federal Government attention to encourage fresh talent.
  • Trades and Services underperformed the market and expectations. We saw an unexpected 5.1% contraction in Q1. Over the medium-term demand has risen steadily and peaked last November. We do not consider this a pivoting but rather a short-term aberration that should reverse during 2022.

Job Trends by Region

Quarterly job changes State

Chart 8: Change in state / territory job indices on prior quarter

  • An 11.5 % quarterly rise in New South Wales dominates regional analysis. NSW was early to reduce Covid 19 regulations and end lockdowns. It is benefiting from an earlier boost in business confidence and hiring.
  • The opposite can be seen in Western Australia where demand shrank by 5.6% in the quarter. Travel restrictions are being removed slowly. Employers may simply have been waiting for the interstate borders to open before venturing back into the employment market. With the Mining and Resources sector a net beneficiary from upheaval in global commodity markets we anticipate a return to growth in the next quarter.
  • The Victorian market is showing encouraging signs of recovery after a tumultuous 2021. Job opportunities rose 4.1% in the first three months of 2022 turning around a sizeable decline in the last quarter of 2021.

About The Jobs Report

The Jobs Report explores where job opportunities exist in the Australian employment market.  To create the report, data is collected from over to 6,000 employer, recruiter, and niche job boards across Australia. Repeat advertisements on one site or across multiple sites are de-duplicated to avoid double counting. Artificial intelligence is used to code every job advertisement into a wide range of key fields, from which detailed analysis is possible.

The charts, data, detailed analysis, and commentary on The Jobs Report are developed by Hro2 Research. Raw data is seasonally adjusted and trended using X-13ARIMA then indexed by Hro2 Research. These services are provided to RCSA Australia and New Zealand under license.

Raw data is provided under license to Hro2 Research Pty Ltd by EMSI Burning Glass.

All data in this report is Seasonally Adjusted. Trend analysis has been suspended during Covid 19.