*Australian youth face unemployment rate 1.3 times that of the general population
*AKG calls for action to bridge the gap between employer perceptions and the structural realities facing young jobseekers
A report released today by AKG, one of Australia’s largest employment, health and wellbeing, education and community services providers, has uncovered systemic barriers preventing young people (aged 15-24) enrolled in government employment programs from securing work, particularly long-term, non-casual employment.
Australia is facing a youth un- and under-employment* crisis. Youth are 1.3 times more likely to be unemployed, and 1.5 times more likely to be underemployed, than the general adult population**. The AKG 2026 Youth Employment Report reveals aspiration and perception gaps between employers and young jobseekers are trapping youth in these cycles of casual employment and joblessness.
The report, which captured data from both employers and young people enrolled in government employment programs (Workforce Australia, Transition to Work, NDIS School Leaver Employment Supports (SLES), and Parent Pathways) uncovered a ‘chicken and egg’ scenario where youth barriers are being misdiagnosed by employers as behavioural issues, impacting how they’re treated in the workplace:
- The Employer View: 62% of employers surveyed cited a ‘lack of commitment’ as their top challenge when recruiting youth, with 59% saying expectations around ‘work effort and focus’ aren’t met.
- The Youth Reality: 35% of young people struggle with transport issues (no driver’s license or access to reliable public transport), while 32% are battling mental health issues, social isolation, or low confidence.
Employers acknowledge that skills and confidence are best built before youth enter the workplace, with over a third (37%) saying they’d be more willing to hire young people who had undertaken pre-employment skills programs. The top skills that employers want young job seekers to improve on are time management and reliability (81%), communications (67%) and professional behaviour (54%).
The youth survey also reveals a lack of basic skills are impacting young people’s ability to find work in the first place, with only 22% saying they’d researched local job opportunities. AKG’s experience is that this often stems from a lack of awareness about the modern labour market and what specific roles entail, rather than a lack of initiative.
How an ‘aspiration gap’ creates a youth underemployment cycle
Our survey revealed one cause of this is a stark youth-employer disconnect. The employer survey showed that the typical reasons why organisations hire youth are:
- To handle busy periods and changes in workload (27%)
- To keep staffing flexible and manage costs (24%)
- And, to cover peak times, weekends or short-term needs (17%)
The reliance on casual contracts to manage workload fluctuations is creating an ‘aspiration gap’. 79% of employers surveyed believe their young staff have little to no interest in additional hours; while 79% of young people already in casual or part-time roles report they actually want more hours or a transition to full-time security. Half (49%) of employers also said casual employees rarely or never progress into permanent roles. This leaves many young people trapped in work insecurity, characterised by unpredictable hours and wages, and a lack of access to paid leave.
“What we are seeing is a tragic misalignment,” says Karen Massier, Executive General Manager at AKG. “Young people experienced a significant impact to their professional and social development because of COVID-19 lockdowns so are often entering the workforce with eroded confidence, a lack of workplace skills, and mental health challenges. When they then struggle to navigate the workplace, it’s frequently interpreted as a ‘bad attitude’ or ‘lack of commitment’. In response, employers hesitate to offer permanent roles, trapping these young Australians in a cycle of casual insecurity that further damages their mental wellbeing and long-term prospects.”
Beyond short-term placements
The report calls for the sector collaboration focusing on enablement of long-term career pathways for Australia’s young people. Key recommendations include:
- Early intervention: Addressing barriers like workplace readiness skills, transport availability and mental health challenges before a young person reaches the interview stage.
- A bespoke approach for every young person: Building a tailored runway to employment, specific to each young person’s circumstances, should be the foundation of all youth employment programs.
- Integrated wraparound services: Embedding clinical mental health support and professional mentoring as core program functions, not optional extras, reflecting the real-life complexity of young people’s barriers to employment.
- Employer co-design: Moving employers from ‘end-users’ to active partners who have an active role, and support, providing structured pathways from entry-level casual work to permanent stability. This includes building understanding that while casual employment plays an important role, particularly for young people balancing study or just entering the workforce, it should be positioned as a starting point, not an end point.
“We cannot fix a systemic pipeline failure by blaming youth motivation,” Massier says. “Success demands a coordinated effort to replace fragmented entry-level roles with supported pathways towards permanent stability. Australia’s future prosperity depends on whether we choose to bridge this gap now.”
*Underemployment in Australia can be defined as a form of labour underutilisation where an individual is currently employed but desires and is available to work more hours, primarily affecting casual and part-time employees.
** Data from the Australian Bureau of Statistics (ABS) for February 2026 reveals the youth unemployment rate (ages 15-24) is 10%, 1.3 times that of the general population unemployment rate of 4.2%. It also reveals the youth underemployment rate is 14.2%, 1.5 times that of the general population underemployment rate of 5.9%.
