How Human Resources can help Australian manufacturing lift productivity

Thu, 27 Nov 2025 12:39:15 +1100

Australian manufacturing is at an inflection point. The sector now contributes only a small share of national output, and output per person has shown weak growth for many years. In this context, Human Resources (HR) has a critical role in helping manufacturers lift productivity, not just cut cost.

According to ABC News, manufacturing now contributes just 5.1 per cent of Australia’s GDP, the lowest of all OECD countries (abc.net.au, 2025).

A Parliamentary report into advanced manufacturing confirms that structural change has driven down Australia’s manufacturing share (aph.gov.au, 2023).

The OECD’s latest Employment Outlook notes that unit labour costs affect competitiveness, especially when not matched by output gains (www.oecd.org, 2024).

Research from the Centre for Future Work reveals that Australia ranks last in manufacturing self sufficiency among all OECD countries and no country can be an innovation leader without a strong manufacturing base (australiainstitute.org.au, 2020).

How HR can help drive productivity in Australian manufacturing

Strategic workforce planning aligned to advanced manufacturing

HR can partner with operations, engineering and finance to map required future skills (automation, robotics, data, quality systems), identify critical roles (e.g., mechatronics technicians, maintenance planners), and develop internal talent pipelines via apprenticeships or mid-career transitions. This ensures high cost labour is deployed where it creates the greatest value.

Skills development and capability building

Manufacturing often demands multi-skilled and adaptable workers. HR can design competency frameworks linking skills to safety, quality, output and waste metrics, and collaborate with knowledge providers such as TAFEs, universities and equipment suppliers to develop and rollout training programs. This supports productivity premium wages.

Work design and employee engagement

Well designed work plus employee engagement via continuous improvement, lean processes and suggestion schemes can improve output, reduce rework and waste, and increase quality.

Frontline leadership and supervision capability

Strong supervisors ensure efficient production and guard against rework, downtime, and non-compliance. HR led leadership training can reduce avoidable cost.

Performance and reward systems aligned with productivity

Continue to adapt performance based incentives to align with future productivity metrics. Since manufacturing growth has stalled so to it seems has innovative incentive plans.

Employee relations as a productivity enabler

Enterprise bargaining with multi year wage commitments linked to flexibility, skills pathways and productivity can support competitiveness. Many Enterprise Agreements seem to lack real productivity requirements, and are close to agreements with not much more than providing new wage and benefit increases.

Data, workforce analytics, and continuous improvement

Measure workforce metrics with production outcomes to identify high performing teams and best practices can be continually developed.

Australia's manufacturing sector has experienced a long decline in its share of GDP. Labour cost remains relatively high but can be justified if value added per worker is strong. Through strategic workforce planning, capability building, performance structures and effective Employee Relations, HR can help make high-cost labour a competitive advantage.

At Linq HR, we help organisations cut through workplace complexity, transforming busyness into focused performance through tailored HR and employee relations solutions. Ph 1300134566.

Sources

ABC News 2025: https://www.abc.net.au/news/2025-08-06/the-race-to-shore-up-australias-remaining-industry/105617502

Parliamentary report 2023: - https://www.aph.gov.au/Parliamentary_Business/Committees/House/Former_Committees/Industry_Science_and_Resources/Completed_Inquiries_of_the_47th_Parliament/AdvancedManufacturing/Report/Chapter_2_-_The_Australian_and_international_landscape

Australia Institute 2020: https://australiainstitute.org.au/wp-content/uploads/2020/12/A-Fair-Share-for-Australian-Manufacturing-WEB.pdf

OECD 2024: https://www.oecd.org/content/dam/oecd/en/publications/reports/2024/06/oecd-employment-outlook-2024-country-notes_6910072b/australia_4d5a7a18/4f76e85a-en.pdf

OECD (n.d.) Unit Labour Costs: https://www.oecd.org/en/data/indicators/unit-labour-costs.html

Productivity Commission 1996: https://assets.pc.gov.au/research/supporting/changing-manufacturing/changman.pdf

The Future of Australian Manufacturing Jobs: Rebuilding with Private Investment

Thu, 19 Jun 2025 12:39:39 +1000

Australia’s manufacturing sector has reached a critical juncture. Once a major employer, supporting nearly one in four jobs in the 1960s, it now contributes just 5.1% to GDP, with employment steadily declining (MacroBusiness, 2025).

Recent closures of major manufacturing employers such as Qenos (plastics), Incitec Pivot (fertilisers), and Oceania Glass (glass) have resulted in the direct loss of thousands of jobs. Qenos’s 2024 closure alone affected approximately 700 workers across its Botany and Altona sites (Packaging News, 2024). Incitec Pivot shut its Gibson Island plant due to unaffordable energy, and will soon close its Geelong plant, impacting another 80 workers (Herald Sun, 2024). Oceania Glass’s 2025 collapse eliminated up to 250 jobs (Dandenong Star Journal, 2025).

A growing manufacturing sector not only creates full time roles for skilled trades, engineers, and production workers, but also delivers long term employment and skill development pathways through apprenticeships, cadetships, and technical training programs, particularly benefiting young Australians and regional communities.

While government programs such as Future Made in Australia have helped support strategic industries, Australia cannot rely too heavily on public spending to secure the future of industrial employment. A sustainable approach must focus on encouraging and enabling private sector investment, which is the true engine of job creation.

To reverse the employment decline in manufacturing, Australia needs to focus on:

Lowering energy costs to retain energy intensive employers
Tying government support to private co-investment and job creation outcomes
Improving access to capital for SMEs
Aligning migration and training policies with industry skills and labour demand
Simplifying employment

The Federal Government’s Productivity Roundtable in August 2025 offers a valuable opportunity to refocus industrial policy on supporting business led employment growth. Productivity reform, not perpetual fiscal stimulus, must drive the next phase of job creation.

📩 Contact Linq HR today to explore tailored support for your employee relations and workplace management.

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References

MacroBusiness. (2025) Why Australian manufacturing has no future. Available at: https://www.macrobusiness.com.au/2025/06/why-australian-manufacturing-has-no-future/

Packaging News. (2024) Qenos in VA: Botany plant shutdown confirmed. Available at: https://www.packagingnews.com.au/latest/qenos-in-va-botany-plant-shutdown-confirmed

Herald Sun. (2024) Incitec Pivot confirms the end of its Geelong manufacturing plant. Available at: https://www.heraldsun.com.au/news/geelong/incitec-pivot-fertilisers-confirms-the-end-of-its-geelong-manufacturing-plant/news-story/f7f1cee98846854fdf9ef570b639f4bf

Dandenong Star Journal. (2025) Union, SEMMA slam Oceania Glass closure. Available at: https://dandenong.starcommunity.com.au/news/2025-02-28/union-semma-slam-oceania-glass-closure/

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How Human Resources can help Australian manufacturing lift productivity

The Future of Australian Manufacturing Jobs: Rebuilding with Private Investment