Vacancy fill rates as an indicator of skill shortages

2022 Skills Priority List Key Findings Report

Vacancy fill rates as an indicator of skill shortages

This segment presents the connection between the estimated vacancy fill rates from the SPL model  and the final labour market ratings of occupations.14 While the final labour market rating for occupations is based on a holistic assessment of all available sources of information and evidence, the fill rate is the primary measure of shortage in an occupation, as it aligns to the definition of shortage used in the Skills Priority List.

The estimated fill rates have been formulated to create a predicted percentage of vacancies that will be filled for a particular occupation over the 12-month research period.

A key conclusion from this section is that an occupation is generally in shortage when the estimated fill rate shows that employers are unable to fill or have considerable difficulty filling vacancies. Additional factors, such as skill level or experience requirements, can influence the ability of employers to fill vacancies, and ultimately the labour market ratings.

Figure 6: Count of occupations on the 2022 SPL, by three estimated fill rates categories

Source: NSC, 2022 Skills Priority List.

Generally, lower estimated fill rates imply a tighter labour market for that occupation and therefore more likelihood that the occupation will be in shortage. On the other hand, higher estimated fill rates suggest that employers are having less difficultly filling vacancies, and these occupations are less likely to be in shortage. The shortage ratings for occupations on the SPL generally follow this pattern (Figure 6).

There are 149 occupations with estimated fill rates below 50%. Of these, most (or 115) were in shortage on the SPL. For these occupations, the number of suitable applicants per vacancy was also generally quite low. SERA data shows roughly four-fifths of applicants were found unsuitable for these vacancies, with applicants most commonly being found unsuitable due to a lack of experience and/or a lack of qualifications. A large proportion of employers (around 30%) advertising vacancies for these occupations required specialised skills or experience, with a lack of specific skills or experience being the third most common reason applicants were found unsuitable.

Consistent with the overall findings reported previously, most of the low estimated fill rate occupations found in shortage were concentrated in the Professionals and Technician and Trades Worker occupation groups. Examples include Educational Psychologist within the Professionals occupation group and Motor Mechanic within the Technicians and Trades Worker occupation group. Data from the SERA show that across both major occupation groups, the number of suitable applicants received per vacancy was around or below the average for all occupations. The most common reason that employers considered applicants unsuitable was a lack of experience in the occupation, followed by lack of qualifications or registration.

Of the 34 occupations with low estimated fill rates (i.e. less than 50%) that are not in shortage, the majority generally require a lower qualification, such as a Certificate I or II, or equivalent experience, indicating a relatively low barrier to entry. Of these, most are within the major occupation groups of Machinery Operators and Drivers, and Labourers. Occupations that were higher in Skill Level in other major groups had very low levels of employment and limited data availability, including stakeholder information or other sources of evidence, resulting in a limited ability to detect shortages.

There are 156 occupations with fill rates of 70% or above. The majority (131 or 84%) were not in shortage. Again, worth noting are those that were found to be in shortage. Of the 25 that were in shortage, most (about 15) were all nursing occupations, including Registered Nurses, Nurse Practitioners and Enrolled Nurses. Others included teaching professions or ICT professionals. A common thread among these occupations is that they require high level of skill, qualification, and experience. In these instances, a large number of diverse stakeholders presented evidence of shortages.

There are a group of occupations that fall between the high and low vacancy fill rates. Indeed, 537 occupations that fell into this category with 411 (or 77%) estimated to be not in shortage.

In instances the estimated vacancy fill rate does not necessarily provide a strong indication, other factors can determine whether the occupation is in shortage or not.

For example, Pet Groomer and Kennel Hand were not in shortage in either 2021 or 2022 while still having relatively low estimated vacancy fill rates. These occupations do not appear to have been affected by developments in the labour market. Partly explaining the finding could be that these occupations generally do not require extensive experience and have low formal qualification requirements, posing few barriers to job entry.

Of the remaining 126 occupations that had a fill rate of between 50% and 70% and were found to be in shortage, a large portion (40% or 51 occupations) were higher skill level Professional occupations, while a further 26% (or 33 occupations) were among the Technicians and Trades Worker group.

Footnotes

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The estimated fill rate incorporates many labour market indicators (for example, internet vacancy numbers, unemployment rates, employment figures) and also includes SERA data, when available, to further enhance the robustness of this research.