Australia’s Manufacturing Revival Depends on Workforce Reinvention, New UKG Report Finds

Sydney

As the Federal Government launches the Future Made in Australia Act to rebuild national manufacturing capability, new research from UKG warns that deep workforce challenges could stall the sector’s revival unless flexibility, diversity, and skills development are prioritised.

The UKG 2025 ANZ Industry Insights: Manufacturing Edition reveals that 63% of Australian frontline manufacturing employees say flexibility is as important as pay, while 79% of manufacturers report difficulty finding or training skilled tradespeople. These insights come as Prime Minister Anthony Albanese calls for a “once-in-a-generation” effort to make Australia a strong manufacturing nation again, with major public investment in clean energy, batteries, and critical minerals.

“Policy momentum is building — but people will determine whether Australia’s manufacturing comeback succeeds,” said Mark Sands, senior director of go-to-market operations Asia Pacific at UKG.


“Our data shows that the future of manufacturing depends on flexibility, skills, and inclusion just as much as technology and investment.”

Flexibility Now Rivals Pay as a Retention Driver

The UKG report shows frontline workers want more say in how they work. 63% of Australian and 67% of New Zealand employees in manufacturing consider flexibility to be just as important as pay when choosing or staying in a job. Manufacturers are responding with new scheduling models, from compressed weeks to flexible shifts.

With operations in 85 countries and over 6,000 employees, Crocs, Inc. fosters a culture of wellbeing and flexibility. By introducing accessible scheduling tools, employees can more easily manage their work and personal lives with greater ease and confidence.

Flexible practices like these not only meet operational needs but build loyalty: 63% of Australian manufacturing employees say flexibility is a key reason they stay with their current employer.

The Manufacturing Institute also links flexible work to higher applicant rates, reduced absenteeism, and lower turnover — all critical advantages in a tight labour market.

Skills Shortages Demand New Hiring Approaches

Traditional recruitment models are being rewritten. Over 60% of manufacturers across Australia and New Zealand hired people with no previous industry experience in the past year to fill essential roles, according to UKG research.

Manufacturers are expanding their talent pipelines through apprenticeships, upskilling, and regional training initiatives.

In New South Wales, the Making It Real program connects high school students with local manufacturers through site tours and hands-on learning in fields like robotics and precision engineering.

Meanwhile, TAFEs and industry groups are modernising vocational training to align with advanced manufacturing skills needs.

Closing the Gender Gap in Australian Manufacturing

While women now represent 33% of Australia’s manufacturing workforce, only 31% of employers are actively recruiting women — a clear disconnect that limits access to critical talent. Workplace inflexibility remains a major barrier: women are 63% more likely than men to say that lack of flexibility negatively affects their experience at work.

Organisations like Women in Manufacturing and The Australian Women in Resources Alliance (AWRA) are leading the charge to address these barriers. UKG’s report argues that actively recruiting women, return-to-work candidates, and people from underrepresented backgrounds can help close persistent labour gaps while strengthening diversity and innovation.

Technology Should Empower, Not Replace Workers

As automation and AI reshape production, UKG’s findings reinforce that human-centred technology is key to building resilient, high-performing teams. Australian manufacturers are adopting digital scheduling tools, self-service payroll platforms, and mobile communication apps to empower their workforce.

Ingham’s, one of Australia’s largest poultry producers and food manufacturer, uses workforce management solutions to provide flexible scheduling and transparent communication,

Australia’s Manufacturing Moment

The Future Made in Australia Act signals a new era of domestic manufacturing — one that will depend on rethinking how Australians work.
To realise the government’s ambition, the UKG report urges leaders to:

  • Prioritise flexibility across all shift-based roles;
  • Invest in apprenticeships, upskilling, and second-chance hiring;
  • Actively recruit and promote women; and
  • Adopt people-centred technologies that empower the workforce.

“Manufacturing can be a powerhouse of national renewal,” Sands said. “But that power depends on how well we invest in our people.”

Key Findings from the UKG 2025 ANZ Manufacturing Report

  • 63% of Australian and 67% of New Zealand manufacturing employees say flexibility is as important as pay.
  • 79% of Australian manufacturers report difficulty finding or training skilled workers.
  • Over 60% hired individuals with no prior industry experience in the past year.
  • 54% of New Zealand manufacturers say staffing shortages are affecting operations.
  • Women make up 33% of Australia’s manufacturing workforce, yet only 31% of manufacturers are actively recruiting women.
  • Employee volunteerism is a medium-to-high priority for 56% of manufacturing organisations — underscoring a growing focus on purpose and culture.

About the Report

The UKG 2025 ANZ Industry Insights: Manufacturing Edition is part of a global UKG Workforce Institute™ series exploring manufacturing workforce trends across North America, Europe, and Asia. The ANZ edition draws on survey responses from over 600 frontline manufacturing employees and 150 senior leaders across Australia and New Zealand, gathered between late 2024 and early 2025. Australian participants accounted for around two-thirds of all respondents, ensuring strong national representation. Data were collected through structured online surveys and benchmarked against global insights from Great Place to Work®, The Manufacturing Institute, and Ai Group to provide regional context within global manufacturing trends.

About UKG

UKG is a leading global workforce management and human capital management platform that delivers crucial business insights to customers. Unifying award-winning solutions, with the world’s largest workforce data and AI, UKG delivers unrivaled insights into today’s workforce, helping organisations in every industry turn data into decisions that elevate productivity, culture, and ultimately customer experience. Trusted by more than 80,000 customers across 150 countries, tens of millions of employees from small businesses to global enterprises use UKG every day. To learn more, visit ukg.com.au. 


 

Media Contact:

Kathryn Lagua 
PR & Communications – UKG Australia & New Zealand 
www.ukg.com.au