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2023 Skills Priority List (SPL) Report: What You Need to Know about Australia’s Job Market

2023 Skills Priority List (SPL) Report: What You Need to Know about Australia's Job Market

The Jobs and Skills Australia published the annual Skills Priority List (SPL) 2023 Report. This report is a crucial resource for policymakers, analysing job shortages nationally and in each state and territory and predicting future demands. It provides essential insights for policymakers, educators, and job seekers.

Understanding the Skills Priority List

Crafted annually by Jobs and Skills Australia, the SPL provides a detailed labour market snapshot. It assesses occupations under the Australian and New Zealand Standard Classification of Occupations (ANZSCO) at the six-digit level and Skill Levels 1 to 4, strategically focusing on their link to post-secondary education and training.

The report employs various methods to gauge occupation shortages, including data modelling, statistical analyses, employer surveys, and stakeholder engagement. The 2023 SPL delves into its nuanced methodology, emphasising collaborative efforts from diverse stakeholders.

State of the Labour Market 2022–23

As of June 2023, the job market remains competitive, with a surge of 409,900 employed individuals in the past year, keeping the unemployment rate historically low at 3.5%, prompting employers to heighten talent acquisition efforts.

A nuanced analysis reveals fluctuations in fill rates and a slight dip in the Internet Vacancy Index, highlighting challenges in finding suitable candidates despite the low unemployment rate. This underscores the delicate balance between demand, supply, and workforce utilisation.

Key Findings from the 2023 Skills Priority List

A Surge in National Shortages

The 2023 Skills Priority List (SPL) highlights a significant increase in shortages, now affecting 36% of occupations—an uptick of five percentage points from the previous year. The heightened scarcity results from persistent challenges in recruitment, intensified by a tight labour market since late 2021. This data emphasises the pressing issue of shortages in various occupations.

Supply-Side Constraints and Cumulative Impact

In the last 12 to 24 months, supply-side constraints have led to backlogs in consumer demand, exacerbating shortages. The 2023 Skills Priority List (SPL) assessments underscore a more pronounced cumulative effect on businesses’ capacity to fulfill consumer demands than the previous year.

Comparative Analysis with 2022 SPL

A detailed comparison reveals 66 newly identified occupations experiencing shortages, mainly in high-skilled professional categories. Professionals, as well as Technicians and Trades Workers, consistently grapple with shortages, highlighting the dynamic nature of Australia’s labour market.

Skill Shortages in Major Occupation Groups

Professionals Occupations

Overall Shortage: 48% of Professional group occupations face shortages (up from 39% in 2022).

Health and ICT Impact: Health and ICT professionals are significant contributors to the shortage, with over 82% of Health Professional occupations and nearly 69% of ICT Professionals grappling with challenges.

Driving Factors: Increased demand for health services due to an aging population, compounded by the strains of the COVID-19 pandemic and the digitalisation surge across the economy.

The SPL report noted widespread shortages in health professionals, including medical practitioners, registered nurses, specialists, and allied health professionals.

The health sector’s skill shortages are acute, with a 44% fill rate and 1.3 suitable applicants per vacancy during the 2023 SPL, significantly lower than the 2022–23 average rates. Specific roles, such as general practitioners, psychiatrists, speech pathologists, and sonographers, experienced notably low fill rates, indicating heightened shortages.

Technicians and Trades Workers

Occupational Shortages: Half of the technicians and trades workers sectors face shortages, especially in construction and food trades workers.

Persistence in Construction: Even with a substantial downturn in the construction sector, numerous construction roles are expected to remain in shortage. Fill rates for construction-related occupations have significantly decreased from 54% in the 2020–21 fiscal year to 29% in 2022–23.

Broader Impact: Shortages extend beyond construction to other major non-construction works, including chef, motor mechanic (General), fitter (General), hairdresser, and metal fabricator. Employers cite lack of experience, qualifications, or registration as primary reasons for considering applicants unsuitable.

Community and Personal Service Workers

Growing Shortage: The percentage of Community and Personal Service Workers facing shortages grew by 24% in 2023, particularly in the health, care, and support sectors.

Health Sector Challenges: Demand in the health sector, driven by an aging population and the aftermath of the COVID-19 pandemic, outpaces the supply of skilled workers.

Consistent Shortages: Roles such as enrolled nurses, ambulance officers, diversional therapists, residential care officers, carers and aides, aged or disabled carers, childcare workers, and personal care assistants consistently faced shortages across all three SPLs from 2021 to 2023. Nursing support workers and out-of-school hours care workers also experienced scarcity in 2023.

Long-term Solutions Needed: Historical analysis suggests that childcare workers faced shortages as early as the late 2000s, indicating the need for comprehensive, long-term solutions. Inadequate working conditions contributing to low staff retention may contribute to skill shortages in the care sector.

More 2023 SPL Report Insights and Impact

Large Employing Occupations

Significant Representation: The top 20 occupations in demand, spanning various sectors, make up 22% of all SPL-focused employment, showcasing the widespread impact of skill shortages.

In 2023, SPL identified notable shortages in aged or disabled carers, retail managers (general), primary school teachers, and secondary school teachers, constituting 8% (731,800 people) of total SPL employment.

Economic Implications: Addressing shortages in these occupations is crucial due to their economic significance, influencing various sectors. Newly identified shortages in roles like sales and marketing managers, waiters, and solicitors are challenging employers, impacting business growth, customer service, and legal services. Strategies for recruitment and retention are crucial in addressing these gaps.

Long-term and Persistent Shortages

Ongoing Challenges: Persistent shortages since 2021, affecting occupations like aged or disabled carers, electricians (general), childcare workers, and carpenters, demand comprehensive, long-term solutions.

These solutions should consider factors like education, working conditions, pay, and government policies to address the root causes of enduring shortages effectively.

Unlocking Opportunities for RTOs

For registered training organisations (RTOs), the 2023 SPL Report is a game-changer, offering crucial insights into prevalent skills shortages. Here’s a concise breakdown of what it means for RTOs:

  • Identifying Priorities: Streamline training efforts by focusing on occupations in high demand.
  • Tailoring Courses: Align courses with specific skill gaps to address industry needs effectively.
  • Strategic Planning: Make informed decisions to stay agile and responsive to dynamic labour market trends.
  • Partnerships: Explore collaboration opportunities with industries facing skill shortages.
  • Government Funding: Leverage support by aligning with funding priorities influenced by the SPL.
  • Adapting to Changes: Stay ahead of industry shifts, enabling proactive adjustments in course offerings to meet emerging needs.

Key Takeaway: Navigating Australia’s Job Market Landscape

The 2023 Skills Priority List (SPL) sheds light on crucial skill shortages in Australia, emphasising the intricate balance between demand, supply, and economic factors.

Addressing these shortages requires a tailored, occupation-specific strategy, reflecting the dynamic nature of the job market.

The SPL, crafted by Jobs and Skills Australia, serves as a guide, assisting policymakers and stakeholders in making informed decisions to strengthen the workforce.

For more industry news and updates, check out our blogs!

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