The shape of Australia's post COVID-19 workforce
2.1 Impact of COVID-19 on occupations
Insights into future job opportunities can support education policy, career decisions by job seekers and students, course offerings by education providers and broader policy and program design. These insights are vital to supporting Australia’s economic recovery from the impacts of COVID-19.
While forecasting is difficult when underlying conditions are highly volatile, the need for data and insights about the performance of occupations in the labour market is often greatest during such periods of volatility (such as the current situation).
As noted in the Australian Government’s 2020–21 Budget (6 October 2020), ‘…the economic outlook has been significantly affected by the COVID-19 pandemic. The pandemic is still evolving and the outlook remains highly uncertain. The range of possible outcomes for gross domestic product and unemployment in particular is substantially wider than normal’.
To support policy responses such as the Australian Government’s JobTrainer initiative and broader labour market analysis, the NSC has developed an occupational resilience framework.
The framework ranks the relative employment growth prospects of 358 occupations. It is based on available evidence about labour market dynamics and the ongoing experiences of different occupations through the pandemic. It applies 3 main components – pre-pandemic employment growth expectations, the COVID-19 employment shock, and the COVID-19 recovery so far – to study different occupational effects at the 4-digit level3 of the Australian and New Zealand Standard Classification of Occupations (ANZSCO).
The 3 components studied for the occupational resilience framework are:
This measure captures the extent to which employment in an occupation was expected to grow over the 5 years to May 2024, based on employment projections4 developed prior to COVID-19. Occupations with the highest projected employment growth rate are ranked highest (closest to 1), while occupations with the lowest projected employment growth rate are ranked lowest (closest to 358).
This measure captures the extent to which employment in an occupation has been resilient to the impacts of the pandemic and associated policy responses by assessing the negative impact on employment and labour demand since February 2020. It separately ranks occupations from 1 to 358 according to the change in:
- employment between February and the lowest subsequent point observed in the detailed quarterly ABS Labour Force Survey data
- hours worked between February and the lowest subsequent point observed in the detailed quarterly ABS Labour Force Survey data
- online job advertisements between February and the lowest point in the vacancy series between February and August 2020, as observed by the NSC’s IVI.
Occupations that experienced increases or small declines in employment, hours worked and job advertisements are ranked highest (closest to 1), while occupations that experienced the largest declines in employment, hours worked and job advertisements are ranked lowest (closest to 358).5
This measure captures the extent to which employment in an occupation has recovered from, or held its own against, the initial impact of COVID-19. It ranks occupations from 1 to 358 according to the overall change in vacancies between February and August 2020, as measured by the NSC’s IVI. Occupations with the highest rate of growth, or lowest rate of decline, in job advertisements are ranked highest (closest to 1), while occupations with the highest rate of decline in job advertisements are ranked lowest (closest to 358). When sufficient data are available, this will be supplemented with an employment change indicator, measuring the change since February 2020.
These 3 components are then summarised into a single ranking of occupations according to their occupational resilience, or relative employment growth prospects.
Each occupation is ranked by each of the 3 components and assigned a score based on that ranking. The top 20% of occupations are assigned the highest score of 5, while the bottom 20% of occupations are assigned the lowest score of 1.
The overall combined occupation resilience score is an aggregate of the scores for each of the 3 components, and ranges from a lowest score of 3, to the highest score of 15.
The Jobtrainer Fund and resilient occupations
The JobTrainer Fund will provide up to 340,000 additional training places that are free or low fee, in areas of identified skills need for job seekers and young people.
The NSC has used the resilient occupation framework as the starting point for discussions with the state and territory governments on training courses that could be subsidised under the JobTrainer Fund.
State and territory governments supplemented the NSC’s analysis with their own intelligence on local labour market needs and skills requirements.
Information on courses subsidised by each state and territory under the JobTrainer Fund will be published at myskills.gov.au.
Characteristics of the most resilient occupations
The 110 (approximately the top one-third) most resilient occupations as a group are notably different to the remaining occupations, especially in several key characteristics. For example:
- Young people are proportionally less represented in the resilient occupations. The resilient occupations represent 25.4% of youth employment, compared with 33.9% of employment for all ages, again reflecting the greater impact COVID-19 has had on young workers6.
- total of 41.3% of the science, technology, engineering and mathematics (STEM) occupations7 are on the resilient occupations list, compared with 30.7% of occupations overall, indicating the importance of these skills to the economy.
Further, skill levels 1 and 4 account for above average shares of resilient occupations and of employment in these occupations, while skill level 3, with close to an average share, has a greater representation than either skill level 2 or 58.
- Skill Level 1 is commensurate with a Bachelor degree or higher qualification.
- Skill Level 2 is commensurate with an Advanced Diploma or Diploma.
- Skill Level 3 is commensurate with a Certificate IV or III (including at least 2 years on-the-job training).
- Skill Level 4 is commensurate with a Certificate II or III.
- Skill Level 5 is commensurate with a Certificate I or secondary education.
These observations reinforce the importance of education beyond school to secure employment and move between jobs.
Figure 15: Share of resilient occupations by skill level (%)
Resilient occupations are more likely to be found in the following broad occupational groups:
- Professionals (examples of resilient occupations in this group include Speech Professionals, Audiologists, Other Medical Practitioners and Midwives).
- Community and Personal Service Workers, such as Aged and Disabled Carers and Security Officers and Guards.
- Machinery Operators and Drivers, such as Agricultural, Forestry and Horticultural Plant Operators and Delivery Drivers.
In contrast, no occupations from either the Sales Workers or Clerical and Administrative Workers broad occupation groups met the definition of resilient occupations (that is, with a score of 11 or more on the occupational resilience framework). This is due to the relatively low projected employment growth pre-COVID-19 for occupations in these groups (4.0% and 1.4% respectively over the 5 years to May 2024) and the slower recovery in related online job advertisements.
- Online job advertisements for Clerical and Administrative Workers and Sales Workers were 30.2% and 20.6% lower respectively, compared with an 18.1% drop across all occupations.
Managers are less likely to be found in the resilient occupations. This is because they had below average growth expectations pre-COVID-19 (6.2% compared with the national average of 8.3%) and recorded the largest drop in related online job advertisements, with August online job advertisements for Managers 31.8% below the February level.
It should be noted that occupational resilience is an analysis framework that provides an indication of the relative employment strength of occupations. Jobs growth is not confined to occupations ranked as most resilient and, as the economy continues to recover, more and more occupations are likely to see solid and sustained increases in employment.
Figure 16: Share of resilient occupations by broad occupation group (%)
The original group of resilient occupations, by definition, exhibited better employment outcomes and dynamics on average, compared with the average of all occupations. However, there is a significant difference across a broad range of labour market indicators between resilient occupations and other occupations.
Between February and August, total employment fell by 438,000 or 3.4%9. However, the resilient occupations recorded growth, or smaller reductions, in employment, with 60.0% of resilient occupations recording employment growth over this period (compared with 45.3% on average).
A total of 53.6% of resilient occupations experienced increased hours worked over the 6 months, compared with only 35.9% for other occupations. In addition, a total of 73.6% of resilient occupations recorded higher levels of online job advertisements in August than in February, compared with only 20.6% for other occupations.10
Industries with resilient occupations
By using ABS Labour Force Survey data to explore the distribution of occupations within industries, we can understand the resilience of industry employment to COVID-19 impacts. Six industries have an above average share (33.9%) of employment in resilient occupations. They are:
This employment snapshot highlights that resilient occupations are concentrated in certain industries. More than half of employment in resilient occupations is accounted for by just 3 industries:
- Health Care and Social Assistance (26.6%),
- Construction (14.5%)
- Education and Training (13.0%).