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The Future of the Australian Workforce

The Australian labour market is on the brink of change. Powerful forces are emerging that will completely transform employment and industries as we know them. In the last 40 years, Australia has experienced numerous changes in its economy, shifting from agriculture and manufacturing to a service-based workforce that relies heavily on global trade and investment.

Now, we're facing another crucial moment. Demographic shifts and global trends are coming together to reshape our economy once again. An aging population is increasing the demand for care services, while the digital revolution is rapidly unfolding and driving us towards the future. On top of that, there's a worldwide commitment to combat climate change, which is further impacting the way we work in Australia.

In this blog post, we'll explore what lies ahead for Australia's labor market. We'll focus on two key areas of transformation:

  1. Technology: We'll look at how technology has historically been a driving force behind economic growth and improvements in our lives. Specifically, we'll examine the growing importance of digital skills and how automation is set to change job responsibilities while also creating new opportunities for safer and more efficient work environments.

  2. Net Zero Transition: We'll discuss the implications of transitioning towards net zero emissions on various industries and the workforce. This includes understanding the need for innovation and adaptability in order to meet environmental goals. Moreover, we'll explore how this transition is expected to impact skill requirements and generate employment opportunities in "green" sectors such as renewable energy.

Throughout this journey, we'll also touch upon other significant developments shaping Australia's labor market:

  • The expanding care and support sector

  • The evolving mining industry

  • The shift towards specialized manufacturing

By examining these emerging trends, we hope to shed light on how Australia can effectively embrace sustainability and digital integration, leading to a strong and well-prepared workforce for the future.

The Impact of Technology on Australian Jobs

Technological change has driven unprecedented economic growth and rises in living standards over the past 40 years. Workers became more productive, working conditions improved, and wages rose. Technology, especially the ongoing digital transformation, is expected to keep increasing incomes and quality of life in the next 40 years.

The Growing Demand for Digital Skills

Technology is advancing rapidly, leading to an increased need for specific skills like:

  • Computer network professionals

  • Database and system administrators

  • ICT security specialists

More and more job advertisements in Australia are mentioning emerging technology, and this trend is likely to continue if the demand for digital skills continues to rise.

As the digital transformation continues, there will be a growing demand for skills related to the digital economy. Projections from Victoria University indicate that digital and technological jobs will increase by 21% by 2033. JSA (Job Services Australia) also estimates that businesses will require an additional 44,700 workers with data and digital skills (spending over 50% of their time on these tasks) by May 2028, bringing the total to 411,000 workers.

Changing Job Tasks and Automation

Besides the need for specialized technical skills, new technologies are also changing job tasks and how people interact with technology. As robots and artificial intelligence become more capable of automating routine tasks, businesses can take advantage of technology to:

  • Create safer workplaces

  • Reduce administrative work for employees

  • Provide better access to information and decision-making tools

It is predicted that automation will have a greater impact on how tasks are performed within each job rather than on the existence of jobs themselves. Before the Covid-19 pandemic, most changes in the tasks performed by Australian workers were due to changes within their occupation category rather than switching to completely different occupations. It has been estimated that around 60% of jobs have activities suitable for automation, but less than 10% of occupations can be fully automated. This increased automation could potentially save the average Australian worker two hours per week on manual and routine tasks.

The Future of Work

Overall, technological advancements have resulted in long-term job creation and improved productivity instead of reducing employment opportunities. Many experts believe this trend will continue with the next wave of technological changes. However, occupations that mainly involve repetitive tasks are more vulnerable to automation and may require assistance in adapting to the evolving nature of work.

By anticipating these impacts and helping individuals transition to similar roles or acquire new skills, we can minimize the disruptions caused by automation, support workers, and effectively utilize the talents of Australian workforce.

Climate Change and the net zero transformation

Governments around the world have committed to transitioning their economies to net zero emissions by 2050, which is bringing one of the most significant shifts in the global economy since the industrial Revolution. This transformation will have a significant impact on Australia's industry mix, and the economy more broadly. It is changing the energy infrastructure needed to realise industrial opportunities and requires greater innovation and adaptability to reduce emissions. These changes are generating pronounced shifts in demand for particular skills, including an increase in tradespeople and technicians, such as electricians, plumbers, grid connectors, and wind farm operators.

Projections produced by Deloitte show that the occupations key to the clean energy workforce will need to increase by 30% by 2033 to deliver the net zero transformation. This represents an increase of 213,000 workers.

The potential growth of a new, greener economy can lead to labor market shocks and the adoption of new ways of working, resulting in a need for increased reskilling in the workplace. The transition to net zero will have four impacts on the labor market and employment:

  1. Creation of new jobs in technology management and consulting services.

  2. Replacement of some jobs due to the shift from fossil-fuel-based energy production to renewable energy.

  3. Disappearance of certain types of employment without replacement.

  4. Redefinition or transformation of existing jobs to align with greener skill sets and operational procedures.

To take advantage of these opportunities in green technology, Australia must support the development of a highly skilled workforce and provide competitive work conditions. Skills training will play a crucial role in capitalizing on the diverse job market that emerges, with experts predicting a greater impact on skills than on employment and job stability. In addition to general skills like problem-solving, technology literacy, and communication, specialized areas such as sciences, engineering, data analysis, construction, and project management will also require skill development.

Key characteristics of a net zero workforce:

  1. Purpose Led and Focused on sustainable outcomes: Individuals who are passionate about delivering business outcomes aligned with the organization's purpose and sustainability goals, incentivized and rewarded accordingly.

  2. Flexible and Adaptable: Demonstrates flexibility and adaptability in terms of where, how, and what work is delivered. The net zero workforce should possess advanced communication and collaboration skills to leverage resources from the organization's wider talent ecosystem.

  3. Digitally driven: Proficient in digital skills and equipped to enhance capabilities through innovative technology solutions. Additionally, the workforce should be able to learn using enhanced teaching methods such as simulation and virtual reality.

  4. Harnessing Human Capabilities: Solution-oriented, innovative, and utilizes human ingenuity, critical thinking, and deep relationships.

  5. Equipped with transferable technical skills: Supported in acquiring a set of technical and soft skills that enable collaborative and agile work with other energy sectors.

Future Growth Industries

The Care and support sector

The Care and Support including health, aged and disability care – is expected to continue to grow, driven by a range of factors. Meeting the demand for care will require ongoing investment and improvements in delivery.

Factors Driving Growth in Care Services

  1. Expansion of healthcare services, technology and treatment options

  2. Expansion of Aged Care Services driven by an ageing population and rising demand for improved quality in residential and home care.

  3. The establishment of the NDIS for people with significant and permanent disability.

Based on Victoria University projections, it is estimated that the care and support workforce will grow from around 657,000 today to 801,700 in 2033. The demand for workers is likely to be higher than this. In particular, strong demand is likely for workers with skill Level 4 qualifications, commensurate with a Certificate II or III, who already make up half of the workforce. The significant opportunities for lower-skilled workers will benefit those looking to enter the workforce, re-enter or shift sectors because the training required for entry for many roles is likely to be less demanding than other higher skill level occupations.

However, there will remain a significant number of higher-skilled roles within the care and support sector that will need trained workers. This will require greater collaboration between higher education and VET sectors, as well as leveraging on-the-job training. Additionally, a wide range of actions will need to be taken to meet this demand:

  1. Improving attraction and retention in the sector

  2. Expanding training opportunities

  3. Investing in technology and new models of care to enable careers to spend more of their time on care

The starting point for building the future care workforce is ensuring the jobs are secure and fairly paid. Turnover in the care workforce is high. For example, 59% of personal care workers spent three years or less in the occupation. This is due to a range of factors, including high workloads, concerns about service quality, pay, work conditions and concerns about career progression opportunities. To address retention issues and encourage workers who have left the sector to re-enter, the care workforce needs top create jobs which offer safe workplaces, secure work and opportunities for a rewarding career.

Additionally, the ageing population in regional areas, combined with thin markets, means tailored solutions will need to be developed to meet growing care needs. It will be critical to attract more workers in regional areas, deliver more training in regional locations and enable people who can and want to work more hours in regional areas to do so. There are also opportunities to make more efficient use of existing care and support workers, by allowing them to deliver more multidisciplinary care. In addition, technology-enabled service delivery such as telehealth is an effective way of improving access to healthcare professional in regional areas.

This rising demand for care and support services is expected to underpin a continued shift in the industry composition of Australia's economy towards services. This will increase demand for additional workers with the right skills, in vocational and highly specalised roles.

The Mining Sector

With the demand for critical minerals in the clean energy transition surging, the mining sector is experiencing unprecedented growth. However Miners also face a plethora of internal and external challenges.

Internally, scarcity of skilled labour has led mining companies to adopt automation and digitisation to improve operations. Externally, fluctuations in global resource prices affect the industry, requiring mining to adapt quickly to meet diverse mineral extraction demands.

In response to these constant changes, mining operations are proactively embracing digital transformation, leveraging technologies such as automation, unmanned systems and AI for image recognition to enhance operational efficiency and safety.

Technology is changing work: Robotics and automation are becoming more widely adopted across mining enterprises through sensors, drones, remote controlled systems and cloud computing. While these innovative technologies help enhance efforts in exploration, and make mining operations, processing, transportation and trade more efficient and safer, they also have a profound impact on all mining occupations and the skills needed to perform them. Change management skills, advanced system development and integration skills, data science and digital literacy skills, higher level operations and planning skills, business information systems operations and analysis skills are among the new core skills that mining companies are looking for. The ability to work alongside and effectively incorporate artificial intelligence, machine learning, augmented reality tools and robotics into day-to-day activities is also expected to become critical for mining companies.

The future of energy is changing the work of miners. They will need to shift their focus from supply chain to asset ownership, meaning they will own and operate renewable energy assets. Miners will also need to establish digital nerve centers to manage energy flows and workflows in more integrated ways. This will require artificial intelligence and a skilled workforce. The use of digital technology can also have a higher environmental impact, such as using digital twins for exploration and planning. Creating digital twins and virtual models require new skill sets.

Location of work is changing: Mining companies have quickly adapted to the new normal during the COVID-19 pandemic. Now, they have an opportunity to make some of these changes a permanent part of their business operations. These changes not only help the environment by reducing carbon emissions but also contribute to sustainable practices. Here are some practical examples:

  • Using mixed reality technologies to access specialized expertise and advisory services remotely (e.g., engineering advice or troubleshooting)

  • Embracing virtual conferencing technologies for both strategic and operational meetings instead of traveling to a single location

  • Improving shift schedules by using real-time updates to manage resources and tasks more efficiently

  • Minimizing travel time for site meetings and daily updates through virtual communication

However, it's important to find the right balance between in-person interactions and remote work. This will ensure that employees have a positive experience and are equipped with the necessary skills for effective virtual collaboration and management.

In summary, the mining industry is undergoing a major transformation driven by technology, global shifts, and sustainability concerns. While this will undoubtedly alter job roles and require new skills, it also opens doors for innovation, greater efficiency, and a more sustainable future for the sector.

Manufacturing Sector

The manufacturing sector is expected to continue shifting towards specialized products and processes that align with Australia's strengths. This means that more workers in the manufacturing industry will require higher skills. Additionally, the transition to net zero emissions could open up new opportunities for manufacturing in areas such as renewable energy technologies.

Australia's manufacturing industry is varied and includes sectors like food and beverage, machinery and equipment, petroleum, coal and chemicals, metal products, and others. While the actual output of the manufacturing sector has grown by around 40% over the past four decades, its contribution to the overall economy has been decreasing.

There has been a decline in employment within the manufacturing sector, resulting in a smaller workforce consisting of highly skilled individuals who earn higher wages. These changes can be attributed to the fact that Australia, along with other advanced economies, has been focusing more on services rather than goods production that are heavily reliant on international trade. In response to this shift, Australian manufacturers have become more export-oriented and have moved towards specialized production that requires advanced skills and adds greater value.

Looking ahead, the manufacturing sector will continue to transform itself in response to various factors such as global supply chains, technological advancements, and the need to address climate change. It is likely that manufacturing will concentrate on areas where Australia has a comparative advantage, such as research and development, design, intellectual property ownership, and marketing. Furthermore, emerging technologies like artificial intelligence (AI) and 3D printing could potentially revolutionize the way manufacturing processes are carried out.