Australia’s Labour Shortage Challenge: Insights from Our Latest Webinar

Australia’s productivity potential is being held back by a challenge that’s become all too familiar: a shortage of workers across critical industries.

In a recent webinar, Senior Industry Analyst Nicholas Larter joined Head of APAC Research Julia Saladino to unpack the findings from our latest white paper, ‘The Bottleneck of Australia’s Productivity Potential’. The discussion explores structural drivers of labour shortages, the sectors most under pressure and what government and business can do to respond.

Click here to read the full white paper, and watch the webinar below for a detailed discussion of its key findings and what they mean for Australia’s long-term workforce capacity.

What does the webinar cover?

Nicholas breaks down three central forces behind Australia’s labour shortages:

An ageing population

Declining birth rates over several decades have shifted the population balance, with a growing proportion now beyond working age.

Reliance on migrant labour

Without overseas workers filling key roles, shortages would be even more severe, particularly in health, aged care and construction.

Skills imbalance

A push towards university degrees over vocational training has reduced the pipeline of skilled tradespeople, adding to cost pressures and delivery delays in construction and infrastructure.

Key sectors under strain

While every sector feels the impact, two stand out:

• Healthcare and social assistance: Demand continues to rise alongside an ageing population, but vacancies remain elevated, especially for migrant-dependent roles.
• Construction: Meeting housing and infrastructure targets requires more skilled tradespeople than the current training pipeline can supply.

Risks of inaction

If left unaddressed, Nicholas warns of:

• Even further reduced economic complexity, leaving Australia vulnerable to shifts in commodity demand and prices.
• Continued housing affordability pressures, potentially discouraging family formation and worsening demographic trends.
• Shortfalls in essential services, from healthcare to infrastructure delivery.

Policy and business responses

Government initiatives such as fee-free TAFE and major TAFE site upgrades aim to encourage vocational training uptake, while exchange programs are helping fill health sector gaps.

At the business level, Nicholas highlights the importance of retaining and upskilling existing staff, offering career pathways, and supporting flexible work arrangements to improve work-life balance.