Employment projections provide insights into future job opportunities that can support education policy, career decisions by job seekers and students, education provider course offerings, workforce planning and broader policy and program design. These insights are vital to answer the lingering questions on Australia’s economic recovery from the impacts of the COVID-19 pandemic such as:

• How many jobs will return or be created?
• Where will the jobs be?
• What education, training and skill levels will be required?

The NSC’s employment projections by industry, occupation and skill level help answer these questions. Although there is significant volatility in the Australian and global economies, the Australian labour market is recovering well from the impacts of COVID-19. This means it is appropriate to use traditional approaches to forecasting employment to provide data and insights about the performance of sectors and occupations in the labour market, albeit with a greater degree of uncertainty than usual because of the ongoing shifts occurring in the underlying data.

The NSC’s industry and occupation employment projections are based on a well-established time series forecasting methodology that has been used within the Australian Government since 2013. The occupation projections are aggregated, applying the ABS concordance between occupations and skill levels, to provide employment projections by skill levels. To provide additional insights, the occupation projections have been mapped to the ASC to generate outlooks for specific skills.

These employment projections are a part of the suite of analysis undertaken by the NSC to understand future workforce dynamics. The employment projections have been informed by computable general equilibrium modelling work the NSC undertook in 2020 and published in The shape of Australia’s post COVID-19 workforce. That said, the nature of these exercises means that there are differences between them. The NSC believes that having a range of techniques assessing future skills trends is one way of mitigating the risks of error inherent in any single forecasting exercise.

The NSC’s employment projections provide a foundation for many analyses within this report, and enable analysis to be undertaken with traditional and new data sources. The employment projections primarily use time series data taken from the ABS Labour force survey, which provides high quality estimates of employment from a large sample survey which has been run quarterly for almost 40 years. The projections are then derived from time series models applied to the Labour force survey data by combining forecasts from autoregressive integrated moving average (ARIMA) and exponential smoothing with damped trend (ESWDT) models, adjusted to take account of NSC research findings and expected industry and occupation developments.

The NSC’s employment projections are based on forecast and projected total employment growth rates published in the 2020−21 Mid-year economic and fiscal outlook (MYEFO) and labour force employment data to November 2020 ⁵¹. Figure 50 shows that total employment is projected to increase by 991,600 (or 7.8%) over the five years to November 2025.

Figure 50: Employment level, past growth and projected growth to November 2025

The NSC’s five year employment outlook projects that the long-term structural shift in employment towards services industries will continue. Four services industries – ‘health care and social assistance’, ‘accommodation and food services’, ‘professional, scientific and technical services’ and ‘education and training’ – are expected to generate more than three-fifths (or 64.4%) of the total projected employment growth.

However, future employment growth is not just confined to these areas, with further increases projected across a range of industries. Employment in 17 of the 19 broad industries is expected to increase, reflecting a diverse and resilient labour market.

Figure 51 shows that health care and social assistance is projected to make the largest contribution to employment growth over the period (increasing by 249,500), followed by accommodation and food services (139,900), professional, scientific and technical services (131,100), and education and training (118,600).

Employment is projected to increase in 17 of the 19 broad industries over the five years to November 2025. Employment in 10 of these industries already exceeded pre-COVID-19 pandemic levels in November 2020 and is projected to exceed this level in a further five industries. Small declines in employment are projected for manufacturing (down 5,900) and information media and telecommunications (down 7,500).

Figure 51: Industry contribution to projected employment growth, five years to November 2025

The continued long-term structural shift in employment towards services industries is reflected in the distribution of projected employment growth across occupations. The ‘professionals’ and the ‘community and personal service workers’ occupation groups combined are expected to account for 63.1% of the total growth in employment over the five years to November 2025.

The increasing importance of tertiary education and skills development beyond secondary school is highlighted by the data showing that more than nine-in-ten new jobs are projected to require post-school qualifications. Employment in STEM occupations (using science, technology, engineering and maths skills) is projected to grow by 12.9%, well above the average of all occupations (7.8%) and more than twice as fast as non-STEM occupations (6.2%). Employment is projected to increase across all eight of the broad occupational groups and all five of the skill levels over the five years to 2025.

As Figure 52 shows, very strong employment growth is projected to continue for professionals (up by 439,500 or 13.2%) and community and personal service workers (up by 186,400 or 14.6%), consistent with strong projected growth in the service industries that are leading employers of these occupational groups.

Together, these two occupational groups are expected to account for 63.1% of the total growth in employment over the next five years.

Below average employment growth (7.8%) is projected for all other broad occupation groups. Managers are projected to grow by 98,300 (6.1%), technicians and trades workers by 96,300 (5.4%), labourers by 51,700 (4.4%), machinery operators and drivers by 36,100 (4.4%) and clerical and administrative workers by 61,500 (3.5%), while the lowest rate of employment growth is projected for sales workers (21,800, or 2.0%).

Figure 52: Projected employment growth to November 2025, by major occupational group

As shown in Figure 53, projected employment growth in skill level 1 occupations (up by 523,100 or 11.8%) alone accounts for more than half (52.8%) of the projected total employment growth over the five years to November 2025 ⁵². While all skill level 1 occupations fall within the ‘managers’ and ‘professionals’ occupation groups, over four-fifths (82.8%) of employment growth in skill level 1 occupations is delivered by the ‘professionals’ occupation group.

The importance of skills and training in the labour market is also evident, with projected employment growth for skill level 4 occupations (up by 233,400 or 7.7%) making the second largest contribution to total employment growth. Skill level 4 occupations are found in all broad occupation groups except ‘managers’ and ‘professionals’. The community and personal service workers occupation group makes up almost two-thirds (59.8%) of employment growth in skill level 4 occupations.

Robust growth is projected for skill level 2 occupations (102,300 or 6.6%). Almost half of employment growth (49.6%) at this skill level is delivered by the technician and trade workers occupation group.

Subdued employment growth (67,900 or 3.6%) is projected for skill level 3 occupations, almost two-thirds (65.3%) of which is delivered by the technician and trade workers occupation group. The weakest employment growth is projected for skill level 5 occupations (64,600 or 3.3%), most of which (74.7%) is delivered by occupations from the labourers occupation group. At both these skill levels, employment growth is moderated by projected employment declines in clerical and administrative workers, resulting in negative contributions from this occupation group.

Figure 53: Projected employment growth to November 2025 for skill levels, by occupation

The two occupations projected to have the largest increases in employment – the skill level 4 occupation ‘aged and disabled carers’ (projected to grow by 54,700 or 24.7%) and the skill level 1 occupation ‘registered nurses’ (46,500 or 15.6%) – almost all work in the health care and social assistance industry. The majority of the skill level 3 occupation ‘child carers’ (13,300 or 10.2%) and the skill level 4 occupations ‘welfare support workers’ (11,000 or 17.7%) and ‘social workers’ (4,600 or 15.2%) also work mostly in the health care and social assistance industry. ‘Registered nurses’ are in the ‘professionals’ occupation group while the rest of these occupations belong to the ‘community and personal service workers’ occupation group.

Occupations largely employed in the accommodation and food services industry include waiters (projected to grow by 42,300 or 42.3%), cafe and restaurant managers (21,300 or 35.0%), chefs (18,300 or 19.4%) and bar attendants and baristas (10,300 or 10.2%). ‘Waiters’ and ‘bar attendants and baristas’ are skill level 4 occupations in the community and personal service workers occupation group. ‘Cafe and restaurant managers’ and ‘chefs’ are skill level 2 occupations in the managers and technicians and trade workers occupation groups respectively.

Almost all of the skill level 4 occupation education aides (projected to grow by 14,500 or 14.6%) and the skill level 1 occupation primary school teachers (11,000 or 6.5%) are employed in the education and training industry, along with most of the remaining child carers.

In addition, a number of skill level 5 occupations are projected to record strong employment growth over the period, including commercial cleaners (13,400 or 7.8%) – half of whom are employed in the administrative and support services industry, sales assistants (11,300 or 2.2%) – mostly employed in retail trade, and kitchenhands (8,700 or 6.9%) – mostly employed in accommodation and food services. The strong projected employment growth of such occupations, along with fast food cooks, checkout operators, and cashiers and handypersons, reflects the many opportunities available in skill level 5 occupations, providing career platforms for those seeking to enter the labour force.

Figure 54: Projected employment changes by occupation, group level, skill level and percentage growth

The occupations with the weakest projected employment growth, in the bottom left quadrant of Figure 54, face ongoing challenges, such as from globalisation and technological change ⁵³. Some of these occupations are from the clerical and administrative workers and skill level 2 groups, where work is routine and susceptible to automation. These include secretaries (projected to fall by 8,000 or 25.7%), retail managers (7,200 or 3.5%), personal assistants (6,000 or 11.3%) and call or contact centre and customer service managers (4,800 or 17.6%).

Within skill level 3, occupations projected to decline in employment include bank workers (projected to fall by 2,500 or 5.9%), plasterers (1,900 or 6.1%), telecommunications trades workers (1,100 or 4.6%) and printers (1,100 or 11.2%).

The impact of continuing structural change on manufacturing industry is expected to sustain the pre-existing trend of falling employment in occupations such as engineering production workers (projected to fall by 1,600 or 8.0%), plastics and rubber production machine operators (900 or 10.8%), timber and wood process workers (800 or 14.9%), metal engineering process workers (800 or 10.1%), clothing trades workers (800 or 7.7%), wood machinists and other wood trades workers (600 or 14.2%) and print finishers and screen printers (400 or 11.2%). These occupations range across skill levels 3, 4 and 5.

In November 2020, employment remained below pre-COVID-19 levels for six of the eight major occupation groups, with only professionals and managers exceeding pre-COVID-19 levels. Figure 55 shows that over the five years to November 2025, employment is projected to exceed pre-COVID-19 levels for five of the eight major occupation groups, with machinery operators and drivers at about the same level and only ‘sales workers’ and ‘labourers’ remaining below pre-COVID-19 employment levels.

Figure 55: Employment levels by major occupation group, Pre-COVID-19, projection base, and projected

At a more detailed level, November 2020 employment exceeded pre-COVID-19 levels for 169 out of 358 occupations. Over the five years to November 2025, employment is projected to exceed pre-COVID-19 levels for 197 occupations, despite total employment being projected to exceed pre-COVID-19 levels by 854,300 (or 6.6%). This is because employment growth is concentrated in higher skilled occupations.

It is important to note that the employment projections are a point forecast for November 2025 and provide no data for employment in the intervening five-year period. That is, the recovery path of employment for occupations can only be implied by the NSC’s employment projections. Low projected employment growth may indicate a slow recovery. However, it is entirely possible that employment will exceed pre-COVID-19 levels in the five-year period before settling at a lower point as longer-term trends unrelated to COVID-19 impact employment levels.

That said, the trends seen in the recovery from COVID-19 are having a large impact on projected employment growth by occupation. Of the 214 occupations that experienced decreases in employment over the May 2020 quarter (the quarter which saw the largest impact from COVID-19 and related restrictions), over two-thirds (70.1%) have employment projected to grow and nearly a third are projected to grow at a faster rate than the average across all occupations (7.8%). For example, waiters experienced the largest decline over the May 2020 quarter, declining by 73.7%, but employment for this occupation is projected to increase by 42.3% over the five years to November 2025 near to its pre-COVID-19 level.

In occupations projected to have employment fall the fastest over the five years, the impact of COVID-19 has compounded existing negative structural trends. Employment in these occupations has been subject to long-term declines as these occupations are particularly exposed to structural trends such as automation and globalisation. The fastest projected declines are for graphic pre-press trades workers (projected to decline by 30.2%), followed by secretaries (down by 25.7%), street vendors and related salespersons (down by 21.4%) and switchboard operators (down by 20.2%). Employment for each of these occupations has declined by 30% or more over the 10 years to February 2020 (pre-COVID-19).

By mapping the five year employment projections with the ASC to translate occupations into skills, the NSC has produced five year skills projections.

The skills cluster families in the ASC provide a helicopter view of demand for specific skills over the next five years. Although, on balance, demand for most skills is expected to grow, the NSC expects substantial divergence in growth rates across skills cluster families. Demand for some skills is expected to grow much faster than others, reflecting changes in the occupational composition of the labour force, broader transitions occurring in the economy and shifts to new ways of carrying out functions and tasks.

The findings explored below flow logically from the analysis undertaken in Chapter 4; they suggests there are skills currently important in the labour market that will be even more critical into the future. To add depth to the common reference of STEM occupations being important for the future, the fine-grained skills-based analysis undertaken in this report suggests a more nuanced selection of skills across different disciplines is needed for the future.

Some of the major skills needed for the future can be summarised as the ‘Four Cs’:

• care, the group of skills responding to demographic and health challenges
• computing, a group of specialised technical skills needed to respond to the digital world
• cognitive abilities, the group of advanced reasoning and higher order skills computers cannot replace
• communication, the group of skills needed to collaborate and engage within and across workplaces.

Figure 56 shows the projected growth in demand in both percentage terms and the number of additional hours per week expected to be spent on each skills cluster family across the workforce. The size of the bubbles represents the number of hours Australians currently spend on each family in a week.

The large bubble represented on the far right of the figure is the ‘health and care’ skills family. This family is expected the see the largest increase in hours worked, although the ‘food services’ cluster family is projected to experience the fastest growth (15.2%) over the five years to 2025 among the 29 skills cluster families. This family includes skills which are required for occupations in both food services and health and care related occupations. Many occupations using food services skills have been disproportionately affected by the COVID-19 pandemic, and some of the growth represents a recovery in these sectors.

‘Computer and electronics’ (15.0%) and ‘performance evaluation and efficiency improvement’ (14.7%) are the next fastest growing families. Skills in these families are associated with many professional occupations.

The ‘business operations and financial activities’ family currently makes up the largest amount of work time across the economy (74.4 million hours each week) and is expected to grow by 5.6% by 2025. This widely used family is associated with 224 different occupations. Many Australians use these skills as part of their day-to-day work but may not use them very intensively. The second largest amount of current work time is spent on skills in the ‘health and care’ family (39.6 million hours each week), but this family is projected to experience significantly higher growth (14.1%). Health and care skills are also more specialised; they are associated with 68 occupations. People with health and care skills tend to spend much of their time on them.

The ‘teaching and education’ and ‘communication and collaboration’ families are already a significant focus in today’s workforce and are projected to continue to grow (at 10.2% and 9.2% respectively). On the other hand, the ‘records, documentation, reports and research’, ‘human resources’ and ‘customer service’ families take a similar amount of time today but are expected to grow more sedately (at 6.9%, 7.7% and 5.2% respectively).

Skills in the ‘science and mathematics’ skills cluster family are quite specific and while important, only make up a small proportion of many Australians’ day-to-day work. For example, the ‘operate and maintain laboratory or field equipment’ skills cluster within this family is used by science technicians, life scientists, chemists and agricultural technicians but only makes up between 5% and 18% of their work. Broader STEM skills are spread across the ASC and contribute particularly to the growth in the ‘data, analytics and databases’, ‘environmental management’, ‘computers and electronics’ and ‘health and care’ families.

Several skills cluster families are of declining prominence in the labour market. These families, such as ‘archiving, recording and translating’, ‘agriculture and animals’ and ‘material transportation’, comprise a low share of workforce time. While growing in absolute terms, they are growing more slowly than the average skills family and will form a smaller share of the workforce’s time in 2025 than they do currently.

Other skills cluster families are growing quickly from a relatively low base, such as ‘performance evaluation and efficiency improvement’, ‘security and emergency services’, ‘environmental management’, and ‘data, analytics and databases’. While currently the skills in these families take up a lower share of the workforce’s time than the average skills cluster family, these families are projected to grow at an above average rate and will be more prominent in 2025 than they are today.

Figure 56: Demand for skills by skills cluster family, projected growth

Drilling into the next level of detail in the ASC, the skills clusters level, we see significant divergence in the growth rates of skills clusters within and across the skills cluster families. Figure 57 shows the 40 skills clusters that are projected to experience the most growth in hours. The ‘undertake food services activities’ skills cluster is expected to see the largest growth (1.3 million additional workforce hours per week by 2025, an increase of 20.8%). It is joined in the top 40 by two of the three other clusters from the food services family, reflecting the recovery from the COVID-19 pandemic.

Figure 57: Skills clusters with the largest growth over the next five years, level increase, total hours per week

The second largest increase will be in the ‘communicate and collaborate’ cluster (1.2 million additional workforce hours, an increase of 9.7%) which includes liaison, relationship and information sharing skills. This skill set is associated with a wide range of occupations from senior executives to technical roles and customer facing positions and reflects the growing importance of collaboration across the workforce. While it is part of the ‘customer service’ skills cluster family,
the third largest increase, the ‘provide customer service and communicate information’ skills cluster (1.1 million additional hours) also reflects this trend.

Six of the skills clusters with the largest growth are from the ‘health and care’ family, with the largest being ‘provide health care or administer medical treatment’ (713,000 additional hours) followed by ‘assist and support clients’ (569,000 additional hours), reflecting increasing demand in the care workforce.

A further five growing skills clusters are from the ‘computer and electronics’ family including ‘ICT support, design and management’ (587,000 additional hours), ‘develop websites or software’ (450,000 additional hours) and ‘test computer or software performance’ (417,000 additional hours), which was the fastest growing cluster, predicted to increase by 28% on current use levels. Skills in this cluster are used in 10 occupations, of which nine occupations are projected to grow more than 12% to 2025. Much of the growth is driven by ICT ‘support and test engineers’ (growing by 34%), ‘computer network professionals’ (30%), ‘software and applications programmers’ (30%), ‘ICT business and systems analysts’ (28%) and ‘multimedia specialists and web developers’ (25%).

While the ‘testing computer or software performance’ skills cluster is strongly associated with IT occupations, the ‘develop websites or software’ cluster is required in a wider range of occupations across both the IT and non-IT sectors. This cluster includes the specialist task ‘develop software or applications for scientific or technical use’, a STEM skill which is required in the occupational category ‘geologists, geophysicists and hydrogeologists’ (projected growth of 15%) who spend about 5% of their time on this work. Another STEM related specialist task in the cluster is ‘design computer modelling or simulation programs’, which is required by ‘actuaries, mathematicians and statisticians’ (projected to grow by 7%), who spend about 2% of their time on it. The cluster also includes the specialist task ‘create computer-generated graphics or animation’, which is required in occupations like ‘multimedia specialists and web developers’ (growing by 25%), ‘graphic and web designers, and illustrators’ (13%), ‘visual arts and crafts professionals’ (11%) and ‘film, television, radio and stage directors’ (9%).

Many Australians use skills from the ‘business operations and financial activities’ skills cluster family in their day-to-day work, but demand for this family is projected to grow more slowly than average. However, this family is far from homogenous and significant growth is expected in some of its clusters. Figure 58 shows projected growth for skills clusters within the family.

Business and operational skills with the lowest projected growth, such as ‘verify and maintain financial records’ (projected to grow by 2%), ‘estimate costs of goods or services’ (3%) or ‘count finished products or work pieces’ (3%) are common to a range of clerical and process roles and are more routine and automatable. Conversely, skills requiring higher order strategic or planning skills such as ‘establish organisational policies or programs’ (11%) and ‘operational specifications design and reporting’ (13%) are projected to experience more significant growth. Chapter 8 discusses skills and automation in greater detail.

Figure 58: Projected growth in skills clusters in the ‘business operations and financial activities' skills cluster family to 2025

Of the 279 skills clusters, only 16 are projected to decline in absolute terms. Figure 59 shows the 40 skills clusters with the lowest projected growth.

The largest decline is projected for the ‘process animal carcasses and meat skills’ cluster (a reduction of 22,000 workforce hours per week by 2025, a decrease of 2.5%). A decline is also expected in the related skills cluster ’capture or kill animals’ (-3,000 hours, or -1.2%). It is likely that these declines reflect automation in the meat processing industry.

Figure 59: Skills clusters with the lowest growth over the next five years, level increase or decrease, hours per week

Seven of the 16 declining skills clusters belong to the ‘production, processes and machinery’ family. This reflects a continued shift towards services and the automation of manual roles in the manufacturing industry, with the largest projected decline in the ‘produce metal products’ skills cluster (-8,000 hours per week or -8.3%). Declines are also expected in the ‘undertake textile production’ (-6,000 hours per week or -1.3%), ‘repair parts or components’ (-4,000 hours or -0.9%) and ‘operate textile production equipment’ (-4,000 hours or -1.1%) skills clusters.

Low or negative growth is expected in skills associated with labouring work such as ‘operate material handling machinery’ (-2,000 hours or -0.3%), ‘cut or replace glass’ (-1,000 hours or -1.5%) and ‘build or utilise forms or moulds’ (expected to grow by 3,000 hours per week or 0.5%). These skills and occupations are at risk of automation over the medium to long term. The issues arising from automation are discussed further in Chapter 8.

Some skills associated with routine clerical and customer service work, such as ‘respond to customer queries’ (-8,000 hours or -0.2%) or ‘undertake library activities’ (expected to grow by 4,000 hours or 1.5%) are expected to be in low demand.

Four skills clusters from the art and entertainment family are projected to have low growth. These include ‘create or perform music’, ‘audition’, ‘choreograph or perform dances’ and ‘entertain the public with creative performance’. These skills are associated with music professionals occupations such as musician and singer which are expected to decline slightly. Some niche skills clusters are also expected to experience lower growth because the skills are highly specialised. For example, the ‘pilot aircraft’ skills cluster, which is only used by air transport professionals, is projected to grow by 2,000 hours per week or 1.5%, matching the projected growth in this occupation, from 12,200 to 12,400 people. Similarly, ‘interpret cultural or religious information’, a skills cluster only used by ‘ministers of religion’, is expected to decline by 1,000 hours per week or 0.8%, matching the decline in employment in this occupation.

While the ‘make legal decisions’ cluster is expected to grow by 5,000 hours per week, this is actually an increase of 8.4%. This cluster is only associated with judicial and other legal professionals (such as judge and magistrates), accounting for the low hours across the labour market.

The ‘provide tourism services to patrons’ cluster, which is used by only four occupations, is expected to grow by 3,000 hours or 1.6% over the five years to 2025. Employment in the largest occupation using this skills cluster, ‘gallery, museum and tour guides’, is projected to remain at the same level over the next five years, while some of the smaller occupations using the skill will experience limited growth. Overall, this results in a low level of total growth for this skills cluster.

Common across many (but not all) of the more slowing growing skills clusters (including some that are expected to decline in coming years) is the non-cognitive and routine nature of those skills. By contrast, there is a tendency for non-routine cognitive skills and occupations to have stronger future growth prospects.

Production processes and machinery skills are particularly relevant in the manufacturing industry. Although, as a whole, this family is expected to have low growth (3.5%), strong growth is expected for some skills clusters within it, as Figure 60 shows. These clusters are typically associated with advanced manufacturing and design and include ‘designing, repairing or fabricating medical equipment’ (11.2%), ‘technical design and processes development’ (9.6%), ‘performing maintenance or inspections’ (6.6%) and ‘repairing equipment and electronics’ (6.6%).

Figure 60: Projected growth in skills clusters in the ‘production processes and machinery’ skills cluster family to 2025