Australia’s labour market is undergoing significant structural change, with growing demand for higher-skilled roles and emerging technologies reshaping work. Through our engagement with industry and training leaders, we continue to hear the pressing need for improved matching between the skills Australians bring and the opportunities available to them, particularly for underrepresented groups.
The Jobs and Skills Report 2025 – Connecting for Impact: Aligning Productivity, Participation and Skills – was released recently and provides evidence-based insights to guide coordinated action across government, education and industry, ensuring our workforce is equipped to thrive in the jobs of today and the opportunities ahead
The report explores how productivity and participation are shaped by shifting skill demands, technological change, and structural barriers, identifying where better alignment between education, migration and workforce planning can deliver stronger, fairer outcomes.
Here’s our five-point summary:
- Improved matching between workers and jobs is critical for lifting productivity and participation. The report emphasises that when individuals have the right skills for their roles, they work more effectively and remain more engaged. This alignment reduces labour market inefficiencies and supports both individual wellbeing and economic output.
- Structural barriers to inclusive participation persist for First Nations people, people with disability, women, and younger workers. These groups face occupational segregation, skills mismatches and underemployment. The report shows that First Nations women experience the highest gender pay gap in Australia at 35.3%, while people with disability have a participation rate of just 60.5% compared to 84.9% for those without disability.
- Generative artificial intelligence is augmenting work rather than replacing it, but risks remain for vulnerable cohorts. JSA’s Gen AI Capacity Study shows AI is more likely to enhance productivity through time savings and improved output quality. However, women, older workers, First Nations people and people with disability may face disproportionate risks due to occupational exposure and digital access barriers.
- Australia’s labour market is shifting toward services industries and higher-skilled roles. Over the past decade, service industries have accounted for nearly 90% of employment growth, while traditional producing industries like manufacturing and agriculture have declined. Employment projections indicate this trend will continue, requiring investment in digital, AI and foundation skills.
- A joined-up tertiary education system is essential to support responsive skills development and lifelong learning. The report highlights the need for better coordination between vocational education and training and higher education, including the development of a National Skills Taxonomy, improved credit transfer systems, and qualification design that anticipates fast-evolving digital and AI skill requirements.
Jobs and Skills Australia (JAS) has recently published several other pieces of work, some of which are now open for consultation:
- Contribute to the development of the National Skills Taxonomy by having your say on the discussion paper: ‘Building a system that puts people and skills first’ (open until 5 Dec).
- Participate in JSA’s work to support the VET Workforce Blueprint National Actions, by providing input on the ‘Building a better understanding of the VET workforce’ discussion paper (open until 11 Dec).
- Read the third and final paper for the Gender Economic Equality Study, ‘Speeding up progress towards gender economic equality’, including 10 key steps to progress to gender economic equality.