The Victorian Skills Plan for 2024 into 2025 projects employment growth, retirements and new workers expected over the next 10 years using modelling from the Department of Jobs, Skills, Industry and Regions (DJSIR) and the VSA.
- Employment is the estimated number of workers employed in an industry, occupation and/or region.
- Employment growth is the projected change in employment between years in an industry, occupation or region. Employment growth (or decline) comes as business, government and other employers expand (or contract) their operations.
- Employment growth rate is the projected annual rate of growth in employment. It is calculated as a compounded annual growth rate (CAGR).
- Retirements is the number of workers over 50 years of age projected to leave the workforce.
- New workers expected is employment growth plus retirements. It is an estimate of how many workers will enter the workforce across industries, occupations and regions. New workers fill new jobs created by employers, and as employers look to replace retirees who leave the workforce.
Employment growth and new workers expected are not estimates of labour demand or skill shortages. Rather, they are measures of how much labour supply (from workers) is projected to meet demand (from employers). Some labour demand will be unmet and some labour supply will not be taken up by employers (this is also known as unemployment). The presence of skill shortages depends on how much labour demand is unmet. It is measured separately and may be present in jobs with both high or low numbers of new workers expected.
Employment, employment growth and the employment growth rate come from DJSIR’s employment projections. DJSIR uses an exponential smoothing (ETS) model to project changing industry and occupation shares of employment. The ETS technique takes weighted averages of past observations, which decay exponentially as observations get older. DJSIR then distributes the projected shares across industry, occupation and region matrices using iterative proportional fitting.
The projections are benchmarked to aggregate employment forecasts in the 2024/25 Victorian Budget and Victoria in Future 2023 population projections. Some adjustments were made to better reflect expected employment, including the impacts of key policies such as the Housing Statement and Best Start, Best Life reforms.13
Retirements and new workers expected come from the VSA’s Employment Model. The VSA estimates retirements, and other labour market flows using econometric analysis of linked ATO income tax data and longitudinal census data from the ABS Person Level Integrated Data Asset (PLIDA) showing the changes in employment and occupation status between years.
Industries are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC). Occupations are based on the Australian and New Zealand Standard Classification of Occupations (ANZSCO). Regions are groupings of local government areas (LGAs) that align to the Victorian Government’s Regional Partnerships and former Metropolitan Partnerships. Estimates reflect the place of work of the employee, rather than the place of residence.
The projections benefited from extensive consultation across the Victorian Government. They incorporate the feedback and expertise from a variety of departments including the Department of Treasury and Finance, Department of Premier and Cabinet, Department of Education, Department of Energy, Environment and Climate Action, Department of Health, and the Department of Transport and Planning.
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