Australia Recruitment Market Update October 2026: Unemployment, Job Vacancies and Skills Shortages

Australia’s labour market is cooling, but the hiring challenge has not gone away. Unemployment has risen to 4.7%, job vacancies have fallen for a second quarter, and the RBA has lifted interest rates again. Yet the new 2026 Occupation Shortage List shows more than a quarter of occupations are still in national shortage. This monthly Australia recruitment market update brings together the latest ABS, Jobs and Skills Australia and RBA data, and explains what it means for employers, talent acquisition teams and recruitment agencies in Sydney, Melbourne, Brisbane, Perth and across Australia.

Last updated: 26 October 2026. Our next Australia update follows the ABS Labour Force release on 19 November 2026.

Australian labour market statistics: the key numbers

What is happening to unemployment in Australia?

The unemployment rate increased 0.1 percentage points to 4.7% in September 2026 in seasonally adjusted terms. Employment fell by 39,300 people to 14,782,700, as part-time employment dropped by 73,700 while full-time employment rose by 34,400. There were 732,000 unemployed people, 55,200 more than a year earlier, and the underemployment rate rose to 6.3% (Source: ABS, Labour Force, Australia, September 2026).

What it means: more people are looking for work, and many more are looking for extra hours. For volume roles, employers should expect more applications per job ad. For skilled roles, a bigger pool of applicants does not guarantee a bigger pool of suitable ones.

Are job vacancies and job ads falling in Australia?

Job vacancies fell 0.9% (3,000) to 325,000 in the three months to August 2026, and are now 31.2% lower than the series peak in May 2022. The fall was driven by the private sector, where vacancies dropped 2.0% to 286,300, while public sector vacancies rose 7.8% to 38,700 (Source: ABS, Job Vacancies, Australia, August 2026).

Online job ads are holding up better. The Internet Vacancy Index held steady at 211,500 in September 2026, up 1.5% on the year and around 25% above the 2019 monthly average. Western Australia (up 8.3%) and South Australia (up 5.2%) saw the strongest annual growth. Regional job ads rose 1.9% over the year, while capital city ads were flat, although 69.9% of all job ads were still in capital cities (Source: Jobs and Skills Australia, Vacancy Report, September 2026).

The ANZ-Indeed Australian Job Ads series rose 2.2% in September and was 24.4% above its 2010s average. But ANZ expects job ads “will gradually trend lower over the coming months” as higher interest rates flow through the economy (Source: ANZ, Job Ads up again, October 2026).

Which occupations are in shortage in Australia in 2026?

Jobs and Skills Australia released the 2026 Occupation Shortage List on 21 October. It found 279 occupations in national shortage, or 27% of those assessed, down from 29% in 2025 and a peak of 36% in 2023. Shortages remain concentrated in skilled roles: almost half of Technicians and Trades Workers and 37% of Professionals were assessed as being in shortage (Source: Jobs and Skills Australia, October 2026).

Some gaps are long-running. 127 occupations have been in shortage continuously from 2021 to 2026, concentrated in construction, engineering, electrotechnology and telecommunications trades, health, early childhood education, and engineering and science. Jobs and Skills Australia identifies three drivers: training pipeline constraints, a lack of suitable applicants and retention challenges. For example, training was the main driver for Motor Mechanics, while suitability was the main driver for Registered Nurses (Source: Jobs and Skills Australia, October 2026).

What it means: the reason a role is hard to fill should shape your talent attraction approach. A training gap calls for early careers and apprenticeship messaging, a suitability gap calls for clearer job ads and better screening, and a retention gap is an employer brand and EVP problem. Our guide to filling hard-to-fill roles in Australia covers each in more detail.

Interest rates, non-compete reforms and key dates for Australian employers

• Interest rates. The RBA increased the cash rate by 25 basis points to 4.60% on 29 September 2026, following three increases earlier in the year. The Board said labour market conditions “have eased broadly as expected in recent months” (Source: RBA, Monetary Policy Decision, 29 September 2026). The next meeting is on 2 to 3 November 2026 (Source: RBA, Board meeting schedules).
• Non-compete clauses. On 7 September 2026 the government released draft legislation to ban non-compete clauses for workers earning under $190,100 a year, the Fair Work Act high-income threshold. It says more than three million Australian workers are constrained by a non-compete clause (Source: Minister for Employment and Workplace Relations, 7 September 2026). The bill is not yet law, but it would make it easier for skilled people to move, which raises the stakes for retention and employer brand.
• Jobs and Skills Month. The first national Jobs and Skills Month runs from 20 October to 20 November 2026 (Source: Jobs and Skills Australia).
• 19 November 2026: next ABS Labour Force release, with October data (Source: ABS).

What this means for recruitment marketing in Australia

• Target shortage roles, not every vacancy. With 27% of occupations in shortage and more people looking for work, put most of your talent attraction budget behind the roles that are genuinely hard to fill.
• Look beyond the capital cities. Regional job ads grew faster than capital city ads over the year, and Western Australia and South Australia led growth. Location-specific campaigns and messaging help candidates picture the move.
• Strengthen your EVP before non-compete reforms arrive. If restraints become harder to use, keeping good people will depend more on pay, progression and culture. An employer branding and EVP review is a good place to start.
• Make your job ads work harder. More applicants means more screening. Clear requirements, pay and working patterns help unsuitable applicants rule themselves out. Recruitment advertising optimisation can improve quality and reduce cost per hire.
• Be visible in search and AI answers. Australian candidates use Google and AI assistants to research employers, so your careers site needs strong SEO and AIO.

Conclusion

The Australian recruitment market in October 2026 is softer but far from easy. Unemployment and underemployment are rising, private sector vacancies are falling and interest rates are higher, yet job ads remain above pre-pandemic levels and more than a quarter of occupations are still in shortage. Employers who focus on hard-to-fill roles, regional talent and a strong employer brand will be best placed as conditions change. Looking for a specialist partner? See our guide to choosing a recruitment marketing agency in Australia and New Zealand.

Hiring in the UK too? Read our UK Recruitment Market Update, October 2026.

Hiring in other markets? Read our UAE Recruitment Market Update, October 2026, European Recruitment Market Review, Q3 2026 and Global Recruitment Market Review, Q3 2026.

Sources

• ABS, Labour Force, Australia, September 2026
• ABS, Labour Force, Australia, release dates
• ABS, Job Vacancies, Australia, August 2026
• Jobs and Skills Australia, Vacancy Report, September 2026
• Jobs and Skills Australia, 2026 Occupation Shortage List and Occupation Shortage Drivers
• Jobs and Skills Australia, Introducing Jobs and Skills Month
• ANZ, ANZ-Indeed Australian Job Ads, October 2026
• RBA, Monetary Policy Decision, 29 September 2026
• RBA, Board meeting schedules
• Minister for Employment and Workplace Relations, Banning unfair non-competes, September 2026

Planning your recruitment marketing in Australia for 2027? Get in touch with RMG to talk about your employer brand, job ads and talent attraction plans.