Hiring conditions in manufacturing in 2023

There are several factors driving more than 50% of Australian businesses to return to manufacturing jobs onshore over the next three years, further stressing the need for increased recruitment efforts in 2023.

A recent study conducted by AI-based pricing firm PROS found that overseas market and supply instability, the increased trend in consumer preferences for Australian manufactured products since 2020, and government funding and incentives are driving more than 50% of Australian businesses to return manufacturing jobs onshore over the next three years.

This, coupled with Australia’s historically low unemployment rate of 3.4% and labour shortages across all industries, will make recruitment very difficult for manufacturers in 2023 and beyond. 

Australia’s production levels have been falling in recent months, despite increasing demand for Australian-manufactured products. Skill shortages have been a critical factor constraining output, and to increase production levels, manufacturers will need to increase employment levels.

In 2023, demand for labour will be particularly high in specialised manufacturing positions and in manufacturing sectors that require specialised knowledge, such as pharmaceuticals, medical devices, and chemicals. According to AISC, STEM occupations will have high demand and are predicted to grow by 12.9% by 2025, well above the average projected employment growth for all role types of 7.8%.

Demand will be lower for roles that consist of routine tasks that can be automated, such as process workers. The production process and machinery skill group are expected to have low growth of only 3.5% until 2025 due to technological advances that can replace jobs using this skill set.

Upskilling employees whose work consists greatly of routine tasks that can be automated will be key to overcoming talent shortages. When businesses invest in technology that can replace labour, they should invest in training existing employees to use that technology instead of letting them go. 

Manufacturers who don’t invest in upskilling could see a large reduction in the size of their workforce. Whilst this will help to cut costs, there will be a huge lost opportunity of not upskilling current employees to improve efficiency.

If you’re looking for a specialist to partner with to overcome the market challenges, contact our team today to learn what a tailored recruitment solution would look like for your business.

If you’re looking for hiring advice in 2023, take a look at our hiring guide below.