New research from Jobs and Skills Australia (JSA), Recent trends for displaced workers in Australia, is an important study for the VET sector to contemplate as technology like AI changes how work is done in some jobs and industries, and as the Reserve Bank contemplates further increases in inflation which may result in higher levels of unemployment in Australia. VET’s role in supporting displaced workers through economic transitions is often vital.
Displaced workers are those who lose their jobs involuntarily because of factors such as business closures, insufficient work, restructuring or technological change. Pleasingly the JSA study shows that worker displacement declined as Australia’s labour market strengthened between 2015 and 2025. The national displacement rate fell from around six percent to four percent over that period, while the proportion of all workers leaving a job who had been displaced declined from 39 percent to 30 percent. The number of occupations classified as having high displacement also more than halved, from 41 in 2015–16 to just 14 in 2023–24.
While the overall trend is positive, the profile of displaced workers has also changed. Displacement has become less concentrated in mining, manufacturing, construction and utilities, and has increased in accommodation and food services, administrative and support services, and other service industries. It has also towards professional and managerial occupations in areas such as ICT, media, finance and human resources.
Geographically, high displacement has become more concentrated in greater Sydney and Melbourne; and while these larger metropolitan labour markets generally offer a wider range of alternative jobs, the study’s findings demonstrate that workers with higher-level qualifications and professional expertise are not immune to disruption.
Outcomes following displacement have improved, but they remain uneven. Among workers displaced through redundancy in 2022–23, 74 percent were employed one year later. Workers who returned to employment after displacement in 2015–16 experienced a median real earnings reduction of 26 percent after one year, compared with just a six percent loss for the 2022–23 cohort. Outcomes improved particularly strongly for practical, operational and frontline occupations in construction, transport, hospitality and personal services. By contrast, outcomes weakened for several professional, managerial and administrative occupations. This highlights that successful transition cannot be measured only by whether someone finds another job: the quality, security and earnings of their new role also matters.
JSA also identifies an increase in displacement caused by businesses becoming insolvent, particularly among people working for small businesses. These workers may be especially vulnerable because they can have limited access to redundancy payments and may not be reached by programs designed for large, highly visible retrenchments. For VET providers, this creates a need to work closely with employment services, industry bodies and local employers so that affected workers can access support quickly. Responses typically need to include career guidance, foundation and digital skills, recognition of prior learning, and targeted skill sets or full qualifications, depending on the worker’s existing capabilities and the requirements of available jobs.
The research suggests that retraining responses may also need better targeting. Traditional structural-adjustment programs have often focused on groups of workers leaving the same employer or industry, but future learners may be dispersed across small businesses, professional occupations and metropolitan areas. Providers will need the capacity to identify transferable skills, offer flexible and timely training, and help people understand how their existing experience can be applied in a different occupation.
JSA describes its findings as a baseline against which the effects of AI, offshoring and other technological and structural changes can be monitored. For the VET sector, the challenge is to use that emerging labour-market evidence early, before displaced workers experience prolonged unemployment, financial pressure and an avoidable loss of skills and confidence.
