New positions or staff replacement: why are businesses recruiting?
By the NSC's Recruitment and Employer Needs Analysis team.
The opinions expressed in this staff-authored blog are those of the author/s and do not necessarily represent the position or policy of the National Skills Commission or the Australian Government.
The number of job vacancies in the Australian labour market has increased significantly since the onset of COVID-191. But to what extent do job vacancies occur to replace staff, as opposed to filling a new position?
The NSC’s Recruitment Experiences and Outlook Survey (REOS) can shed some light on the topic. While REOS data won’t tell us what proportion of vacancies are new, it can give us a proportion of recruiting employers2 that recruited for new positions, as well a proportion of recruiting employers that recruited to replace staff who recently left.
In the REOS, employers who were recruiting at the time of being surveyed or who had recruited in the past month (“recruiting employers”) are asked whether their recruitment was to fill a new position or replace someone who left the business.
Throughout 2021, most recruiting employers recruited only to replace staff. The most recently available data (December 2021) shows that 57% of recruiting employers recruited only to replace staff, with 33% recruiting only for new positions. The remaining 10% of recruiting employers were both trying to fill new positions and replace staff who had left.
These proportions have remained relatively stable over the past year, which was noted in a recent NSC blog which looked at evidence (or lack-there-of) for the Great Resignation.
Figure 1: Turnover vs New positions - as a proportion of recruiting employers
The share of recruitment to replace staff vs hiring for new positions varies substantially by industry. Employers most often recruited only for new positions in Construction (49%), Manufacturing (43%) and Other Services (42%). On the other hand, the industries in which employers most often recruited only to replace staff were Health Care and Social Assistance (64%), Arts and Recreation Services (64%), and Accommodation and Food Services (63%).
Figure 2: Turnover vs New positions by selected industries - as a proportion of recruiting employers, August 2020 to December 2021
When looking at the Skill Level3 of the occupation that employers recruited for, recruitment for new positions was most common for Skill Level 3 jobs (which require a Certificate IV or Certificate III with experience and include trades occupations). Some 41% of the employers who recruited for these jobs were trying to only fill new positions in their recent recruitment, and a further 10% recruited for both new and replacement positions. In part, the high rate of recruitment for new positions at Skill Level 3 is driven by apprenticeships for trade occupations.
Recruitment which was only to replace staff was most common for Skill Level 2 (requiring a Diploma or Advanced Diploma) and Skill Level 4 (requiring a Certificate II or III) occupations (both 61%).
Figure 3: Turnover vs New positions by skill level of occupation - as a proportion of recruiting employers, August 2020 to December 2021
Looking at specific job categories (3-digit ANZSCO) provides a more detailed picture of where there are new positions being recruited for and where there is high turnover of staff.
Receptionists (72%), School Teachers (71%), and Food Trades Workers (68%) were the occupations with the highest replacement-only rates. Interestingly, two industries which commonly employ Food Trades Workers - Pubs, Taverns and Bars, and Accommodation - are amongst the most likely to report having difficulty retaining staff, suggesting that high turnover of Food Trades Workers is a problem for these businesses.
Employers trying to recruit Checkout Operators and Office Cashiers and Personal Carers and Assistants were often trying to fill new positions in addition to replacing staff (both 18%).
The occupations for which employers were most often recruiting to only fill new positions were Technicians and Trades Workers. As shown in the following chart, the top two occupation categories where recruitment was to only fill new positions were for Electricians and Bricklayers, and Carpenters and Joiners. Both these trades also saw large increases in apprenticeship commencements in the year to June 2021.4
Figure 4: Turnover vs New positions by occupation - as a proportion of recruiting employers, August 2020 to December 2021
Note that REOS results are based on employers with 5 or more employees and exclude many Government organisations. They are also subject to seasonal factors and sampling variability and should therefore be interpreted with caution.
The Skill Level of a job is defined by the ABS’ ANZSCO classification. Skill Levels range from Skill Level 5 (commensurate with a Certificate I or secondary education) to Skill Level 1 (commensurate with a Bachelor Degree or higher).
National Centre for Vocational Educational Research, Apprentices and Trainees – Quarterly: June 2021, VOCSTATS.