Skill shortages and labour market tightness: a global perspective

Skill shortages and labour market tightness: a global perspective

Each quarter, the NSC will be releasing a Labour Market Update, featuring an overview of changes over the previous quarter along with more in-depth analysis.

The following article contains information from the December 2021 quarter update. Read the full update here.

The December 2021 quarter was characterised by a significant pick-up in Australian labour market activity. While employment growth has been particularly strong in Australia, some of the characteristics seen in the labour market in recent months can also be seen overseas. Two key examples of this are job demand (via strong growth in job vacancies) and assessments of skill shortages.

Job vacancies have grown significantly beyond their pre-COVID-19 levels in all of Australia, New Zealand, the United States and the United Kingdom. This suggests that all four economies are currently facing increased labour market tightness.

Figure 1: Job vacancies in Australia, New Zealand, United Kingdom and United States, 2020 to 2021

While methodologies for assessing skills shortages vary between countries, numerous recent international findings also align well with the NSC’s most recent Skills Priority List assessments and Internet Vacancy Index findings.

For example, the UK conducts a regular survey of more than 80,000 employers to identify skills needs. The most recent survey from 2019 Footnote: 1 shows that the most challenging occupation group to fill vacancies was in the Skilled Trades. In Australia, the NSC’s most recent Skills Priority List found that 42% of Technician and Trade Occupations are currently in shortage, compared to 19% of all assessed occupations being found to be in shortage.

The European Foundation for the Improvement of Living and Working Conditions and the European Commission analysed skill shortages after the start of the COVID-19 pandemic Footnote: 2. The pandemic exacerbated shortages in nursing and ICT occupations in the European Union, and occupations in sectors that have been severely affected by the pandemic, including hospitality and transport, have seen worsening shortages. By comparison, the NSC’s most recent Skills Priority List found that occupations such as ICT project manager, ICT security specialist, software engineer and enrolled nurse were all in shortage.

Many of the challenges facing the Australian labour market are reflected elsewhere. Monitoring the impacts of labour market tightness overseas, including the effectiveness of different responses, will be an important part of understanding where similar responses may (or may not) help to help drive positive labour market outcomes in Australia.



UK Department for Education (2020), Employer Skills Survey 2019: Skills Needs, UK Department for Education.


Eurofound (2021), Tackling labour shortages in EU Member States, Publications Office of the European Union, Luxembourg.