Picture this: Europe’s economic powerhouse, Germany, is facing a shortage of 7 million workers due to demographic changes. Meanwhile, entry-level job opportunities have collapsed by 45%. It sounds like an economic paradox, but it’s real and it’s happening right now.
What does that mean for companies on home soil, particularly those in the HVACR and Manufacturing game? Every employer in Australia should be asking the hard questions about their succession planning. Read on if you’re grappling with rising workloads and thinning resources.
Entry-Level Jobs Crisis
StepStone analysed 4 million job ads and found:
- Sales roles are down 56%
- HR positions are down 50%
- Admin roles are down 34% (since 2022)
Youth unemployment has ticked up from 5.7% to 6.4%, which is still low for Europe, but heading the wrong way. Germany’s graduates in mostly white-collar roles are sending more CVs, waiting longer for responses and competing harder for fewer jobs. This is not just a German problem; in fact, the UK’s Big Four accounting firms have cut graduate and school-leaver intake by up to 33% over the past two years.
In Australia, ABS data shows the steepest drops in graduate and entry-level office roles in over a decade, while job ads for trades and technical positions remain strong. The data does not lie. It tells us that attitudes around entry-level roles are changing dramatically and drastically, due to the acceleration of AI and tighter budgets resulting in cost-cutting measures.
AI Acceleration Effect
This is not just about a softer economy. AI and automation are wiping out proving-ground jobs such as sales assistants, junior administrators and entry-level coordinators. Why hire three juniors when AI can process invoices, generate reports and handle routine communications?
But here’s the thing: AI cannot commission a hospital HVAC system, troubleshoot a manufacturing line at 2am, or manage stakeholder chaos on a live site. The human problem-solving and relationship skills needed in these roles cannot be automated. People-facing roles are more in demand than administrative work, and guess what? Vocational education and training (VET) had the edge.
Microsoft cofounder Bill Gates has advice for recent graduates: “Embrace AI tools, but don’t expect any stability when it comes to the job search.” As Geoffrey Hinton, the Godfather of AI, so bluntly put it: “Learn to be a plumber.”
Starter Job Pipeline
Traditional starter jobs like McDonald’s cook, retail cashier or office junior taught young people punctuality, customer service, teamwork and basic workplace behaviour. These roles are disappearing. McDonald’s now needs only a handful of staff to assemble pre-prepared components instead of a dozen to cook from scratch, only to pass the order to the Uber Eats guy.
Colesworth has replaced rows of staffed checkouts with self-service stations and direct-to-boot overseen by a couple of people. And you can guarantee Banking and Consulting Big 4, as well as every corporation on the Fortune 500 list is following suit (pun intended).
When these jobs vanish, where do young people learn the fundamentals? And without those foundations, how do they build the experience to eventually step into senior technical roles?
That’s where manufacturing and HVAC step in. Not only future-proof against the onslaught of AI, these robust on-the-tools industries offer plenty of opportunities to train as an apprentice, upskill and gain industry-specific training (think medical, commercial, residential and so on). It’s a great time to make ‘tradie’ a viable career choice.
Succession Planning
Look around your business. How many of your senior engineers, project managers or skilled tradespeople are 10 to 15 years from retirement? Data tells us that 40% of current HVACR technicians are nearing retirement, indicating a pressing need to onboard and train approximately 40,000 new technicians each year. If your replacement pipeline relies on entry-level admin or generic graduate roles, you have a gap problem.
While the same technological and economic forces are already at play here in Australia, there are silver linings in HVAC and Manufacturing – and they are plentiful. Funding for newcomers in blue-collar trades is on the table for Aussies. Consider the Federal and State financial incentives for both apprenticeships and their employers. Overcome the red tape malaise and check how much cash is on offer for you and your entry-level employees.
Skills vs Credentials
For decades, graduates have been told to earn their stripes in office roles before touching technical work. In today’s market, that is not just outdated, it is a talent drain.
In both Germany and Australia, skilled trades and technical roles are growing the fastest. Australia’s sustained demand for HVAC technicians, electricians and fitters is clear, while office hiring has flattened or fallen. Australia is facing a significant shortage of skilled tradespeople across various sectors, driven by a combination of factors such as a surge in population and an ageing workforce.
Australia’s trade industries are at the heart of its economy, playing a critical role in building and maintaining the country’s infrastructure. As a company, consider how you can partner with education and training organisations (think TAFE and VET) so you’re building a pipeline of tech talent coming through the ranks. With more school-leavers pursuing tradie work over office jobs, you’ll be ready to roll in the newbies.
Automation Loop
Here is the economic reality every CEO and MD should be thinking about: If businesses eliminate entry-level positions, who will be their customers in 15 years? Young people without jobs today become adults without spending power tomorrow. Cost-cutting now creates revenue problems later and, overall, is an economic disaster for Australia.
Our economies depend on people earning and spending. The companies that survive will understand their role in keeping the economic ecosystem alive – not just squeezing out short-term efficiencies – by acquiring, inducting and onboarding trainees. People are one of the best investments a company can make to ensure its future viability (our opinion at TMR is that it is #1). When organisations prioritise people over profit, they seek to make gains long-term while putting cash back into the economy.
3 Actions to Take Now
- Audit your people pipeline: If a senior technical leader left tomorrow, how quickly could you replace them? If the answer is years, you need to act now.
- Rethink entry points: Stop making technical roles the end prize after years in admin. Bring people in directly and train them on the tools from day one. Even better: take on mature-age career-changers!
- Sell the career path: If your best graduates see technical careers as second-tier, you are already losing. Position them as premium, high-value roles from the outset that are future-proof against AI.
Sources:
Australian Bureau of Statistics
Apprenticeship Support Australia
At TMR Recruitment, we’re not your typical recruiters. We don’t just find people jobs; we get them excited about their careers again. So, whether you’re ready to make a move or need someone who is, let’s chat. No fluff, just real opportunities. Get in touch to find out more.
