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The critical role of labour mobility

Labour market mobility

Dynamism within and across industries due to a range of global factors (such as restructuring post-COVID-19 and building new sovereign capabilities) and local factors (new industries such as clean economy) will require workers to develop and upgrade skills so they can move to fill new opportunities.

Labour market mobility helps workers move to where new jobs are available and helps the economy adjust to economic shocks and structural change. In particular, it gives workers the freedom to move into jobs that provide better pay and working conditions (for example, more suitable hours of work and better workplace flexibility, job satisfaction or job security). It also underpins the efficient operation of the labour market and improves productivity by allowing for better job matching to fit the preferences and skills of workers, as well as increased labour reallocation to more productive firms.39

Labour market mobility is linked to the business cycle. In a weak labour market, a person may move for more stable employment, while in a strong labour market employers may use incentives (such as better pay and conditions) to influence labour mobility. Changes across industries and regions push individuals and businesses to look for new opportunities in new areas. Individuals may also change jobs for personal reasons.40

Over the year to February 2023, 327,800 people changed jobs in Victoria, accounting for 9.2% of employed Victorians. While this rate has declined from 10.1% in 2022, job mobility remains elevated compared with rates since 2015. This has coincided with the strong labour market conditions and relatively weak wages growth, which encourages employees to look for other jobs in pursuit of better wages and conditions (Figure 4.4).

Figure 4.4: Proportion of employed Victorians who change jobs over the past 12 months (2015 to 2023)

Australian Bureau of Statistics (ABS) Job Mobility, February 2023.

Of the Victorians who changed jobs over the year to February 2023, around half changed industry and around three in 10 changed occupation. This characteristic of worker mobility has been broadly consistent since 2015 (Figure 4.5).

Figure 4.5: Proportion who changed industry or occupation for Victorians who changed jobs over the past 12 months (2015 to 2023)

Australian Bureau of Statistics (ABS) Job Mobility, February 2023.

Accommodation and food services, information media and telecommunications, electricity, gas, water and waste services, administrative and support services, and retail trade had the highest proportion of employed Victorians who changed jobs over the year to February 2023 (Figure 4.6). For most industries (13 out of 19 industries), the proportion of employed Victorians who changed jobs is above their 3 year pre-COVID-19 average.

Figure 4.6: Proportion of employed Victorians who changed jobs over the past 12 months by industry (2023)

Australian Bureau of Statistics (ABS) Job Mobility, February 2023.

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Notes

39 Black S and Chow E (2022), Job mobility in Australia during the COVID-19 pandemic(opens in a new window), Reserve Bank of Australia, Bulletin, June.

40 Atkinson G and Hargreaves J (2014), An exploration of labour mobility in mining and construction: who moves and why(opens in a new window), National Centre for Vocational Education Research (NCVER) occasional paper.

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