Australia’s construction and infrastructure sectors continue to expand. This pace has increased the demand for engineers and placed pressure on project timelines, budgets and workforce capacity.
Businesses are dealing with slower delivery, higher costs and growing competition for qualified talent. Understanding the scale of the shortage and the available responses can help owners plan better for the year ahead.
Why Australia's engineering skills is worsening
Engineers Australia estimates that the country will need around 60,000 additional engineers in the next few years across construction, energy and manufacturing. The shortfall has been developing since the 1980s, influenced by border closures during COVID-19 and an ageing workforce. About 70,000 engineers are expected to retire within 15 years.
Here's a quick snapshot of the numbers shaping 2025:
- Demand and supply gap: Engineering jobs are projected to grow, requiring new professionals by year's end. However, only 8.5% of university graduates qualify in engineering, the sixth lowest rate in the Organisation for Economic Co-operation and Development (OECD).
- Diversity and participation: There are only 14% of female engineers in the workforce.
In tertiary education, encompassing both universities and vocational education and training (VET), the underrepresentation of females in information technology (IT) and engineering programs is especially noteworthy, given that these competencies will grow increasingly vital as Australia shifts toward a digital and technology-led economy. - Economic effects: Skills shortages are already causing project delays of large-scale builds, pushing costs up more in some cases.
What does the next 5 years look like?
With shortage worsening, looking at things like diversity, upskilling etc. could be a way businesses tackle this. It will be interesting to see how this pans out.
There is no single fix, although several approaches can strengthen workforce pipelines and stabilise project delivery.
- Promote diversity and inclusion initiatives: Efforts that expand participation can grow the talent pool. Targeted campaigns, flexible work arrangements and structured mentoring have helped lift female engagement in some sectors. Including First Nations people and other underrepresented groups also widens access to skilled candidates and supports better decision
- Invest in upskilling and retention programs: Rapid changes in renewables, AI and net-zero design require updated technical skills. Employer-supported learning, clear development pathways and consistent mentoring can help existing engineers stay current.
- Improve recruitment and industry collaboration: Data-driven hiring and early engagement with graduates can shorten recruitment cycles. Collaboration across universities, industry bodies and government has produced positive results. Networking events can place candidates into roles quickly and improve long-term workforce stability.
Why this matters to you and how Tank can help
Australia's engineering skills shortage touches us all.
Delays mean higher costs but they also open doors for innovation and new opportunities.
Here at Tank Insurance, we specialise in tailoring Professional Indemnity, Public Liability and Management Liability policies to fit these realities, helping you focus on growth without the worry of uncovered gaps.
If you want to review your current cover or understand how your policies respond to workforce-related risks, you can reach the Tank Insurance team at team@tankinsurance.com.au or at 02 9000 1155.
