Labour demand insights

Labour Market Update March 2022 quarter

Labour demand insights

Recent growth in employment and labour demand is shifting back towards capital cities, after a period of stronger growth in regional areas

The majority of recruitment activity remains concentrated in capital cities despite average job advertisement growth in regional areas (of 98.6% compared to pre-COVID levels) outpacing capital cities (62.2% compared to pre-COVID levels). March 2022 IVI data show 74.8% of all job advertisements were recorded in capital cities.

As Table 2 shows, growth in both employment and job advertisements were stronger in regional areas than in capital cities during the first 18 months of the pandemic. However, over the past six months and particularly the last three months, growth rates have been strongest in capital cities.

Table 2: Growth in employment and internet job vacancies – March 2020 to March 2022


Employment growth

Internet job advertisement growth

Capital Cities

Rest of State areas

Capital Cities

Rest of State areas

March 2020 to September 2021





September 2021 to March 2022





December 2021 to March 2022





Source: ABS, Labour Force, Australia, Detailed, March 2022, 6-month averages of original data; NSC, Internet Vacancy Index, March 2022.

Figure 10: Difficulty by region type (as a proportion of recruiting employers)

Source: NSC, Recruitment Experiences and Outlook Survey, March 2022. Please note: Disaggregated recruitment difficulty data was not publishable in January 2022.

Figure 11 shows that recruitment difficulty (for employers who are recruiting) has become more common in rest-of-state areas over recent years, with notable increases occurring from 2016 to 2018, and from 2019 to early 2022. 2020 marked the first time that employers in rest-of-state areas experienced more difficulty than those in capital cities since records began. However, with lockdowns having eased and activity in the major cities picking up, recruitment difficulty in the capital cities has been just as pronounced as in regional areas over 2022 to date. And in both cases the rate of recruitment difficulty over 2022 has (to date) exceeded that seen in prior years.

Figure 11: Proportion of recruiting employers who experienced difficulty with their most recent recruitment, 2016 to 2022

Source: NSC, Survey of Employers' Recruitment Experiences (2016-2019), Recruitment Experiences and Outlook Survey (2020-2022). 2020 data covers the period from August 2020 to December 2020. As a result, it does not reflect recruitment conditions at the height of the restrictions that were put in place in response to the pandemic. 2022 to date covers the period January 2022 to March 2022.

Rates of recruitment and recruitment difficulty vary by individual rest-of-state and capital city areas. For each region, Figure 12 shows not only the regional variation that we have seen on average over the past 12-months but also that there tends to be a correlation between the share of employers that are looking to recruit and recruitment difficulty.

Figure 12: Rates of recruitment and recruitment difficulty by region (12 months to March 2022)

Source: NSC, Recruitment Experiences and Outlook Survey, 2021 and 2022

It is important to note that recruitment difficulty doesn’t necessarily mean that positions go unfilled. Of those employers that cited recruitment difficulty3:

  • 18% of employers filled vacancies within a month
  • 23% filled vacancies but it took longer than a month
  • 18% had not yet filled vacancies but had been looking for less than a month
  • 40% had unfilled vacancies for more than a month.

That said, recent results from the NSC’s Survey of Employers who have Recently Advertised (SERA) highlight that increased recruitment difficulty is having some impact on the filling of job vacancies. Figure 13 shows that over the year to March 2022, employers:

  • filled a smaller proportion of advertised vacancies (59%, compared with 62% over the year to March 2021)
  • attracted fewer applicants (11.8 per vacancy, compared with 12.9 over the year to March 2021).
  • considered fewer applicants to be suitable (2.1 applicants per vacancy, compared with 2.9 over the year to March 2021) with respect to the qualifications, skills and experience they had to do the job.  

These results are consistent with a recent SEEK employment report4 that highlighted declines in candidate applications per job advertisement - both recently and compared to 2019.

SERA data also suggests that the labour market continued to tighten for both Professionals and Technicians and Trades Workers, with employers filling a smaller proportion of advertised vacancies across both occupation groups compared with the previous year.

Figure 13: Proportion of vacancies filled (%), average number of applicants and suitable applicants per vacancy (no.), year to March 2021 and year to March 2022

Source: NSC, Survey of Employers who have Recently Advertised, March 2022

Over the year to March 2022, around three quarters of employers surveyed required a qualification for applicants to be considered for their advertised role – most commonly a Bachelor degree or a Certificate III/IV. Despite this, more than 60% of all qualified applicants were considered unsuitable. Employer feedback indicates that these applicants commonly lacked experience, did not possess the specific technical skills required, present poorly at the job interview or lacked the communication skills needed.

Overall labour demand and recruitment difficulty remain highest for the higher Skill Levels

Some of the recent trends in the percentage growth (or in some cases, decline) of IVI job advertisements should be viewed in the context of overall job advertisement volumes and employment growth.

For example, the percentage level of job advertisement growth compared to pre-COVID is lowest for Skill Level 1 (up by 44.5%) and highest for Skill Level 5 (up by 130.8%). However, as Table 3 highlights, Skill Level 1 remains by far the most frequently advertised (making up just over one-third of all advertisements) and has seen employment growth of 11.8% during the pandemic (see Figure 4 above).

Table 3: Internet Vacancy Index job vacancies by Skill Level – March 2022


change (%)

change (no.)

change (%)

change (no.)

Number of job

Skill Level 1 - Bachelor degree or higher






Skill Level 2 - Advanced Diploma or Diploma






Skill Level 3 - Certificate IV or III* (Skilled VET)






Skill Level 4 - Certificate II or III






Skill Level 5 - Certificate I or secondary education












Source: NSC, Internet Vacancy Index, March 2022. The skill level of an occupation is based on the level of educational attainment/experience normally required to work in the occupation according to the Australian and New Zealand Standard Classification of Occupations (ANZSCO). *Includes at least two years of on-the-job training.

Figure 15 shows that higher-skilled occupations also remain more difficult to recruit for compared with lower-skilled occupations, with difficulty rates for recruiting employers of 69% (for Skill Level 1 to 3 occupations) and 59% (for Skill Level 4 and 5 occupations) respectively.

Figure 15: Difficulty by skill level of occupation (as a proportion of recruiting employers)

Source: NSC, Recruitment Experiences and Outlook Survey, March 2022 Please note: Disaggregated recruitment difficulty data was not publishable in January 2022.



Based on REOS data collected from May 2021 to March 2022.


SEEK employment report, March 2022