Overview

2022 Skills Priority List Key Findings Report

Overview

1.1 Introduction

The Skills Priority List (SPL) provides a detailed view of occupations in shortage, nationally, and by state and territory, as well as the future demand for occupations in Australia. The list is a single source of intelligence on occupations in shortage. While the SPL helps inform advice on the targeting of policy initiatives, it is important to note that it is not the only input into any such advice.

The SPL is released annually as a point-in-time assessment of the labour market. The list and occupation assessments are determined through extensive statistical analysis of the labour market, employer surveys, and broad stakeholder engagement with peak bodies, industry groups, professional associations, unions, regional representative bodies and major employers in the Australian labour market, combined with consultations with federal, state and territory governments.

The use of various sources of evidence and stakeholder consultations ensures the SPL represents a comprehensive assessment of occupational shortages. The NSC thanks all participants for their input and their expertise in developing the SPL. In particular, we thank state and territory agencies for their insights into the occupational shortages that are specific to their jurisdictions, including points of difference in their labour market when compared to the national picture.

This Key Findings Report provides readers with a high-level overview of results from the 2022 SPL, focussing on the themes that emerged during its production. A common pattern uncovered was that occupation shortages were most acute in Professional occupations, requiring higher level qualifications and experience, and Skill Level 3 occupations among Technicians and Trades Workers.

The past year has shown a significant tightening in the Australian labour market, and the findings of the 2022 SPL reflect this, with a large proportion of diverse occupations in shortage. The ongoing effects of COVID-19, along with the changing economic landscape have influenced a range of challenges in many occupations, including Health Professionals and Teachers, while ongoing issues in the labour market remain, such as persistent shortages of Technicians and Trades Workers.

For further detail on how the 2022 Skills Priority List was produced, please refer to the Skills Priority List Methodology (v 1.2).

1.2 A tight labour market has implications for skill shortages

This section of the paper outlines what the strength of the labour market means for skills shortages.1 An important conclusion is that a tightening labour market will generally indicate that employers will increasingly compete for workers, resulting in a greater number of occupations in shortage as employers are unable to fill advertised vacancies.

ABS data shows that the labour market has tightened significantly since 2021.2 The tightening can be gauged from the unemployment rate, which fell to 3.4% in July 2022 – the lowest rate recorded since August 1974. Further, the employment-to-population ratio stands at 64.2%, slightly down from a record high the previous month. These developments suggest the supply of workers available to employers is constrained.

At the same time, the demand for workers has increased rapidly over the past two years to 2022. The number of jobs advertised in Australia reached 309,900 in August 2022, a 42% increase from the same time last year. This figure is among the highest levels on record since the inception of the Internet Vacancy Index (IVI) series in January 2006.3 This growth in labour demand has contributed to a reduction in the number of unemployed persons per job vacancy, a trend which can be seen since June 2020 (see Figure 1).

Figure 1: Unemployed persons per job vacancy, July 2006 to July 2022

Source: NSC, Internet Vacancy Index, July 2022; ABS, Labour Force, Australia, July 2022, ABS, Job Vacancies, Australia, May 2022, all seasonally adjusted data.

Moreover, Figure 2 shows that the surge in online job advertisements seen in 2022 – also apparent in 2021 – is reflected in increases in the recruitment difficulty rate during those periods.

Figure 2: Recruitment difficulty (3-month moving average) and IVI job ads (seasonally adjusted), September 2020 to July 2022

Source: NSC, Recruitment Experiences and Outlook Survey, August 2022; Internet Vacancy Index, August 2022, seasonally adjusted data.

Additional evidence of recruitment difficulty can be found in the Survey of Employers who Recently Advertised (SERA), which shows that employers have received fewer suitable applicants per vacancy in 2021-22 compared with 2020-21, and more vacancies remained unfilled. Specifically, the vacancy fill rate declined for 51 out of 63 six-digit ANZSCO occupations surveyed in both 2020-21 and 2021-22.4 On average, across these occupations, the fill rate declined by 13 percentage points from 61% to 48%.

Consistent with the aforementioned developments, the 2022 SPL shows that, overall, more occupations were in national shortage compared to 2021 (Figure 3 and Table 1).

At a macro level, in the 2022 SPL, 286 out of 914 (or 31%) of occupations assessed were in shortage compared with 153 out of 799 (or 19%) of assessed occupations in 2021. This reflects occupations that were rated nationally as either ‘S’ (for shortage in both metropolitan and regional areas nationally) or ‘R’ (for shortage in regional areas nationally). The remaining 628 occupations were rated nationally as ‘NS’ (no shortage), noting that some of these occupations were assessed as being in shortage in some states and territories.

Figure 3: Proportion of occupations in shortage on the 2021 and 2022 SPL, by Major Occupation Group

Source: NSC, 2022 Skills Priority List.

Table 1: Count and proportion of occupations in shortage on the 2021 and 2022 SPL, by Major Occupation Group

 

2021 SPL

2022 SPL

Major Occupation Group

Occupations assessed

Occupations in Shortage (No.)

Occupations in Shortage (%)

Occupations assessed

Occupations in Shortage (No.)

Occupations in Shortage (%)

Managers

83

10

12%

94

10

11%

Professionals

283

54

19%

324

127

39%

Technicians and Trades Workers

167

70

42%

203

95

47%

Community and Personal Service Workers

86

7

8%

91

18

20%

Clerical and Administrative Workers

62

 

0%

65

3

5%

Sales Workers

20

 

0%

21

1

5%

Machinery Operators and Drivers

70

12

17%

77

22

29%

Labourers

28

 

0%

39

10

26%

All occupations

799

153

19%

914

286

31%

Source: NSC, 2022 Skills Priority List.

Comparisons of the findings of the 2021 and 2022 SPL fell into three broad categories: occupations that were newly in shortage in 2022, those that were in shortage in both years and those that were no longer in shortage compared to 2021.

The tight labour market is reflected in the year-on-year changes in the SPL, with 129 occupations being assessed as in shortage in 2022 that were not in shortage in 2021.5 Additionally, there were 127 occupations that were in shortage in both years.6 Finally, there were only 17 occupations that were no longer in shortage in 2022 after being in shortage in 2021.7 Of the 286 occupations in shortage in 2022, 30 occupations were not assessed in 2021, due to a change in the ANZSCO classification.8

The occupations which were in shortage in both years were concentrated in Professional occupations and Technicians and Trades Worker occupations.

Labour market statistics that reflect employment in each ANZSCO six-digit occupation are only provided once every five years, via the ABS Census. Table 2 below presents the top 20 largest employing six-digit occupations on the SPL, based on 2016 Census data.9 From this list, 11 are in shortage, nationally.10 These 11 occupations also cover around 1.3 million workers and represented about 12% of total employment (of around 10.7 million) in 2016. However, all occupations in shortage on the SPL in 2022 comprised 3.5 million workers and 32% of total employment based on 2016 Census data.11

Table 2: Top 20 largest employing occupations on the SPL, by 2022 SPL ratings

2021 ANZSCO Code

Occupation title

Labour Market Rating

Future Demand

Employment size (in the 2016 ABS Census)

531111

General Clerk

NS

Moderate

219,800

142111

Retail Manager (General)

S

Moderate

170,300

241213

Primary School Teacher

S

Moderate

148,500

241411

Secondary School Teacher

S

Moderate

137,300

733111

Truck Driver (General)

S

Moderate

137,200

423111

Aged or Disabled Carer

S

Strong

132,300

221111

Accountant (General)

NS

Moderate

130,100

512111

Office Manager

NS

Moderate

115,600

341111

Electrician (General)

S

Strong

111,900

741111

Storeperson

NS

Strong

108,200

431511

Waiter

NS

Strong

106,400

131112

Sales and Marketing Manager

NS

Moderate

100,600

421111

Child Care Worker

S

Strong

96,300

542111

Receptionist (General)

NS

Moderate

93,700

551111

Accounts Clerk

NS

Moderate

93,300

331212

Carpenter

S

Soft

92,500

511112

Program or Project Administrator

S

Strong

88,500

351311

Chef

S

Moderate

80,700

551211

Bookkeeper

NS

Soft

79,200

321211

Motor Mechanic (General)

S

Moderate

73,500

Source: NSC, 2022 Skills Priority List; ABS, 2016 Census of Population and Housing.

Figure 4: Proportion of occupations in shortage on the 2021 and 2022 SPL, by Skill Level12

Source: NSC, 2022 Skills Priority List.

The proportion of occupations in shortage also rose across every Skill Level between 2021 and 2022 (Figure 4). Skill Level 3 occupations, which are occupations generally needing a Certificate III or IV – and includes traditional trade occupations – recorded the highest share of occupations in shortage (46% in 2022, up from 38% in 2021).

On the other hand, the largest increase in the share of occupations in shortage was for Skill Level 1 occupations, which are occupations generally needing a bachelor degree or higher and are predominantly Professional occupations. The share of these Skill Level 1 occupations in shortage rose from 19% in 2021 to 35% in 2022.

Footnotes

1

An occupation is considered to be in shortage when employers are unable to fill or have considerable difficulty filling vacancies for an occupation or cannot meet significant specialised skill needs within that occupation, at current levels of remuneration and conditions of employment, and in reasonably accessible locations. Based on this definition, the primary measure of an occupational shortage is the ability of employers to fill vacancies (known as the vacancy fill rate).

2

ABS, Labour Force, Australia, July 2022, seasonally adjusted data.

3

NSC, Internet Vacancy Index, Preliminary, August 2022, seasonally adjusted data

4

Only includes those occupations with sufficient sample sizes across both periods.

5

The full list is in Appendix A.

6

The full list is in Appendix B.

7

The full list is in Appendix C.

8

Different sets of occupations were assessed for the 2022 SPL compared with the 2021 SPL. This is a result of changes to the ABS ANZSCO classification structure and changes to the NSC SPL Methodology where not elsewhere classified (nec) occupations were included in the SPL this year. A comparative sample was created to enable direct comparisons between 2021 and 2022. The sample composed of 780 occupations.

9

The ABS Labour Force Survey does not provide estimates of employment at the 6-digit level. Labour force related variables from the 2021 Census will not be released by the ABS until October 2022.

10

Occupations in shortage also includes occupations in regional shortage.

11

This calculation is based on the 2013 ABS ANZSCO structure.

12

Skill Level 5 occupations are excluded from the SPL. Skill Level 1 occupations are commensurate with a bachelor degree or higher educational attainment level. Skill Level 2 occupations are commensurate with an advanced diploma or diploma educational attainment level. Skill Level 3 occupations are commensurate with a certificate IV or III educational attainment level. Skill Level 4 occupations are commensurate with a certificate II or III educational attainment level. Skill Level 5 occupations are commensurate with a certificate I or secondary education attainment level.