The key economic success story emerging from the pandemic has been the enormous jobs rebound, driving the unemployment rate down to 3.5%, a nearly 50-year low. As a result, the buoyant labour market has also given workers more incentive to switch jobs.
The latest job mobility data from the ABS shows that job changes in Australia are now occurring at a considerably faster rate than average job mobility seen over the last decade. In the year to February 2022, 1.3 million Australians (9.5% of all employed people) changed jobs. This is the highest annual job mobility rate since 2012. And, job mobility expectations have grown particularly among higher skilled occupations and full-time workers.
The increase in job mobility has been a swing from pre-COVID trends. Leading into the pandemic, job mobility in Australia was low relative to historical levels. The share of workers switching jobs declined further in 2020, as economic activity was restricted due to the pandemic and the demand for labour decreased.
However, as pandemic-related restrictions have eased, we have seen a significant rise in job mobility as firms have resumed hiring and demand for labour has soared. Workers no longer have the uncertainty associated with pandemic restrictions and have resumed planned job changes or taken new opportunities among increased competition for workers.
The latest data also reflected a drop in the retrenchment rate, which was 1.5% in the year to February 2022, the lowest annual rate on record in Australia. So, the higher rate of job mobility shows that workers are changing jobs because they want to (not because they have to), due to an abundance of opportunities for workers at present.
Chart: Change in rate of job mobility by industry (2022 compared with 2021)
Source: Australian Bureau of Statistics (ABS), Job Mobility February 2022
Unlike usual trends in job mobility, the increases in the job mobility rate have been particularly evident in the professional, scientific and technical services industry as job mobility increased from 7.4% in 2021 to 11.7% in 2022.
Historically, industries with younger workers with lower earnings have been associated with higher job mobility. However, current trends have seen increases in job mobility being driven by job churn of professional workers (where workers change jobs but remain in the same sector). Skilled workers are in an environment of increased bargaining power as employers struggle to fill skill gaps.
While workers benefit from such a tight labour market, attracting skilled labour has become a key concern for businesses as employers face difficulties retaining or hiring new workers. Hence, there is rightfully a significant focus on skilled migration at present – both unblocking visa processing constraints, and the even more important task of genuinely putting the welcome mat out once again to entice skilled workers to come to Australia.