Workforce and education trends we can’t ignore in 2026

If the last five years have taught us anything, it’s that we’re no longer talking about future workforce trends, they’re already here. A volatile job market and rapid technological change are reshaping how we live, work and learn.

These concepts aren’t abstract. They show up in everyday moments like trying to book an EV service only to discover a workshop has two EV-certified mechanics and 40 traditionally trained ones. That ratio mirrors what many industries now face, a supply of skilled workers that is nowhere near meeting demand.

After five years of evaluating workforce development initiatives and providing strategic public policy and program recommendations, it’s become clear to us that Australia is trying to navigate skills challenges with systems designed for a different era.

What are the workforce and education trends that matter right now?

Regional Development and Renewable Energy

Australia’s renewable energy zones rely heavily on regional, FIFO and DIDO workforces. These workers must continually adapt their skills across electrical, mechanical, digital and environmental domains to meet project demands. Findings across state and federal planning documents from Jobs and Skills Australia demonstrate regional skills pressures and rapid job change associated with the clean energy transition.

Regional Connectivity Gaps

There is a consistent narrative around ‘keeping young people in regions’ yet transport barriers such as access and affordability remain the biggest inhibitors to employment and training. Multiple program evaluations we’ve conducted across the education including vocational education sectors highlight that access to a driver licence, vehicle or reliable public transport are non-negotiable foundations for workforce and education participation. These findings mirror broader evidence that regional transport is a structural barrier to labour mobility and training uptake. No amount of programming is going to solve the workforce issues if this systemic issue of transportation isn’t rectified - and not just for young people, but for all workers and job seekers.

Government Interventions: Well-Intentioned, Poorly Coordinated

Many government programs aim to build skills so people can secure jobs but overlook the enabling conditions that make training accessible. We’ve seen this firsthand across initiatives with short funding cycles, fragmented deliverables, and limited alignment to other programs. Typically this has stemmed from reactive or rushed program design and a lack of communication between department financiers and delivery partners. 

Trades Are Under Intense Pressure as we Search for Productivity Gains

Despite high demand for housing and infrastructure and a need to help ease housing prices, Australia is not doing enough to boost labour productivity in the construction sector. Federico Moreno captures this succinctly in Why Australia’s productivity depends on tradies, not just tech, highlighting that governments and industry are overly focused on tech roles while underestimating the productivity impact of trades.

Our own experience through the Trade Pathways Program and regional economic development projects highlights similar trends. Demand continues to outpace supply, and training pathways and innovation in key sectors are not keeping up.

The Disappearing Entry-Level Roles in Knowledge Work

Hiring for administrative, clerical and early career roles have been significantly reduced due to automation and AI-enabled systems. AI is already influencing sectors such as travel, HR, customer service, tourism and professional services. The question is not whether AI will reshape entry level roles, it already has. This is supported by Jobs & Skills Australia insights and global labour market data (e.g. World Economic Forum’s Future of Jobs Report) showing a decline in routine cognitive roles.

Australia’s Skills Investment Gap

The Getting Skills Right OECD report makes the case plainly. Australia invests less in skills (both government and employer-led) than the OECD average. It also shows:

• Lower participation in adult learning

• Insufficient support for mid-career transitions

• Limited incentives for lifelong learning

This aligns with what we see on the ground. Employers want job ready candidates but often do not have internal systems to grow them or appetites for investing in the workforce of tomorrow. This is particularly the case with small businesses. With 97% of businesses in Australia being small enterprises and the growing operational costs on small business, training is not simply able to be prioritised.

Education Pathways Are Shifting

The Australian Catholic University's (ACU) newly announced harmonisation and fast tracked degrees for VET graduates represent an important shift towards flexible pathways. Tertiary harmonisation is an emerging trend that will only grow. The last four decades have focused on driving university education, leading to an over-extension. Vocational education and training, despite government intervention and programming, has a branding issue with parents, young people and their peers. We need to recognise that vocational and university education should be part of the same tertiary system and that knowledge and skills can be gained and refined across all institution types.

As highlighted in our Career Pathways Discussion Paper, perceptions of vocational training remain outdated. At the same time, home schooling is increasing, with the number of homeschooled students in Queensland doubling since 2020. Parents are homeschooling their children for a number of reasons with key factors including a dissatisfaction with the traditional schooling system, in response to rising costs of school education (including public schooling) and to enable the family to travel (e.g. the great lap of Australia). In fact when undertaking stakeholder engagement through Outback Queensland in November this year, we met with several homeschooling cohorts doing just that.  

What does this Means for Employers, Industry and Government?

Navigating all of these system changes can be extremely difficult and mind-bending. We’ve unpacked the system complexity and distilled it to five considerations to put into practice in 2026.

Hire for aptitude, not the perfect CV

This shift is already happening in leading organisations. Aptitude, adaptability and willingness to learn are becoming more valuable than specific skills that may become obsolete within years. This is the way we have always recruited at Sparrowly Group which has not only led to an excellent mix of transdisciplinary skills, but higher job satisfaction and retention.

How are you enabling candidates to demonstrate critical thinking, adaptability and aptitude, not just skills and experience?

Build internal development pathways

With skills shortages unlikely to resolve quickly, prioritise:

• Upskilling existing staff

• Investing in AI and emerging technology readiness

• Building internal pathways rather than relying solely on external recruitment

• Creating learning cultures.

Technology is the tool. People are the differentiator.

Connect training, transport and job access

Programs cannot be designed in isolation. Workforce development requires:

• Transport and licence solutions to complement workforce initiatives

• Training that matches and responds to real regional and industry demand

• Evaluation that is designed early, not at the end

• Industry partnerships that transcend funding cycles.

Shift perceptions of work and education pathways

We need a cultural reset. All forms of work and educational pathways matter in tomorrow’s economy. Young people need consistent reinforcement that vocational, technical and professional pathways in cities and regions hold equal value.

Invest in human capability as a productivity driver

Australia’s future productivity will not be driven by technology alone. It will come from:

• People who can harness technology

• People who can collaborate

• People who can solve complex problems

• People who can innovate inside their roles

These human skills must become central to workforce design to power our workforce of tomorrow.

A Final Challenge

Here's the uncomfortable truth. We can analyse workforce trends endlessly, publish reports, and fund programs, but none of it matters if we keep treating symptoms while ignoring the disease.

The real question isn't whether Australia can afford to invest more in skills development, transport infrastructure, or flexible education pathways. It's whether we can afford not to.

Every day we delay addressing these systemic issues, we're making a choice. We're choosing to watch young people leave regional communities because they can't access training. We're choosing to let small businesses struggle without the workforce they need. We're choosing to let outdated perceptions about vocational education limit the potential of an entire generation.

So here's the challenge for 2026

• If you're an employer, stop waiting for the perfect candidate to walk through your door. They don't exist. The perfect employee is the one you're willing to develop.

• If you're designing government programs, ask yourself, does this intervention address the real barrier, or just the visible symptom? And more importantly, who did you actually ask?

• If you're an educator or industry leader, challenge yourself, what outdated assumption am I holding onto that's limiting what's possible?

• The workforce of tomorrow isn't coming. It's already here. Working with mismatched systems, navigating impossible barriers, and adapting faster than our institutions can keep up.

The question is - are we brave enough to redesign those systems to match their reality?

What's one thing you'll do differently in 2026?

Not plan to do. Not discuss doing. Actually do.

Because the trends we've outlined aren't predictions, they're already your present. And your competitors, your communities, and your future workforce are already moving.

The only question left is…will you?