Professionals and tradespeople throughout the design and construction sector in Australia are still in massive demand, new data shows.

And pressure on salaries and remuneration is intense.

Published by Jobs and Skills Australia, April monthly Internet Vacancy Index data shows that job vacancies across architecture, engineering and construction are still very high.

According to the data (refer charts below):

• Vacancies for construction managers remain at near their highest level since before the Global Financial Crisis (GFC).
• In professional roles, vacancies for most categories of engineer (civil, electrical, mechanical, industrial, mining etc.) are at their highest level since the mining boom. Vacancies are also high for urban and regional planners. However, vacancies for architects, landscape architects and interior designers remain below levels seen during the apartment building boom of the latter part of the last decade.
• In trade roles, vacancies for plumbers and electricians remain near all-time highs. Meanwhile, vacancies for carpenters and joiners remain above historic levels despite having eased from recent peaks whilst those for painting trades workers are still near historic highs. However, the previously severe shortage of bricklayers has eased.
• In labouring roles, vacancies for most types of crane, earthmoving and machine operators remain at near-record highs.

The latest data comes as the FY 2023/24 edition of the Hays Salary Guide published last week by recruitment and workforce solutions specialist firm Hays indicates that hiring intentions remain strong and that salaries are likely to rise.

Among employers who were surveyed for the report, the number who say that they intend to increase their permanent staff levels over the next twelve months exceeds those who intend to reduce permanent headcount by three to one in architecture, seven to one in engineering and four to one in construction.

Turning to remuneration, almost three quarters of construction employers (72 percent) indicated that they will offer pay increases of three percent or more during the next financial year.

However, a discord remains between the magnitude of increase that workers are seeking and that which employers intend to offer.

Whereas almost six in ten construction workers (59 percent) say that an increase of 7 percent or more would reflect their value and performance, only 16 percent of employers plan to award increases of this magnitude.

The latest data comes as demand for design and construction workers remains hot.

Over the three months to February, the seasonally adjusted number of people employed in Australia’s construction sector rose to a record high of 1.322 million.

Such demand is being driven by several sources.

In detached home building, a record pipeline of work is keeping builders and tradespeople busy for now notwithstanding a rapid slowdown in new project volumes.

According to Housing Industry Association, all thirteen of the residential trades which it measures as part of its HIA Trades Report remain in shortage.

In public infrastructure, meanwhile, a dashboard from Infrastructure Australia indicates that the nation likely has a shortage of 102,800 workers to deliver upon Australia’s record pipeline of road and rail projects.

Simon Bristow, Senior Regional Director at Hays, said that the situation on the ground is consistent that inferred by the data.

“We echo the sentiment of the Jobs and Skills Australia data …” Bristow said.

“… In general, demand remains high with a continued shortage of quality and reliable professionals and trades.”

According to Bristow, particular demand hotspots include:

• Construction: Project Managers, Project Engineers, Contracts Administrators, Forepersons and Estimators.
• Engineering: Senior Civil Engineers, Structural Designers, Electrical Engineers, Geotechnical Engineers and Principal Engineers.
• Architecture: Project Architects, Interior Designers, Landscape Architects, CAD/Revit Technicians and Graduate Architects.
• Trades and labour: Formworkers, Commercial Carpenters, Electricians, Concreters and HVAC Technicians.

Going forward, Bristow says that the six-to-twelve-month outlook is difficult to predict with certainty.

Nevertheless, skills shortages are likely to remain a dominant theme and many employers are likely to face difficulty in meeting their needs from the available pool of workers.

As a result, pressure on wages and salaries will continue.

Already, Bristow says that more than three quarters of employers across the AEC sector have offered higher salaries compared with those which they originally planned to offer in response to the current skills shortage.

With around two-thirds of AEC professionals and just over half of trade/labour workers intending to ask for a rise over coming months, meanwhile, workers are confident in their bargaining power.

For these reasons, Bristow expects salary outcomes to be favourable for workers.

“We’re calling this ‘the year of the raise’, where the promise of higher salaries reflects the intensity of the skills shortage in today’s jobs market,” Bristow said.

“Despite the increased salary boost, employer and employee expectations still fail to align. Many professionals feel undervalued and underpaid. They feel their current salary doesn’t reflect their individual performance and the rising cost of living is the top factor driving turnover in the industry.

“Given this, employers are doing all they can to stretch their salary increase budget for valued staff.”

(Source: Hays Salary Guide 2023)

Asked about strategies which employers and workers can adopt to deliver best possible outcomes, Bristow encourages action in several areas.

“(For employers,) The current recruitment and salary intentions of employers are notable. In response to the skills shortage, many employers are looking at how they can stand out in the race for talent, with salary an obvious starting point,” Bristow said.

“But employers also need to review the benefits on offer. Consider what else you can offer to attract and retain talent, such as opportunities for growth, wellbeing days, additional annual leave, improved recognition, work-life balance or a more positive work environment.

“(For candidates,) With skills in demand you still have some bargaining power, but it’s important not to price yourself out of consideration.

“Yes, employers are investing in salary increases, but margins remain tight. The commercial reality dictates that salary increases can only stretch so far.

“So, consider the whole package when you negotiate a new job or your next pay rise. Benefits can go a long way to bridging a possible financial expectation gap, so think about what you’d really value and what could make a difference to your life and career long-term.”