Low job switching holding back wage growth

Barriers stopping workers switching jobs are holding Australia's labour market back and contributing to sluggish wages growth.

Employers have been struggling to source staff in an ultra-competitive environment, with the unemployment rate hovering around 50-year lows.

Research by Deloitte Access Economics shows a mismatch between the skills of workers and vacant jobs is partly to blame for extreme worker shortages.

As well, Deloitte partner David Rumbens says job seekers are often not located in the same places as vacancies.

In Tasmania during August, for example, there were 184 unemployed people for every 100 vacancies, whereas in the ACT, there were 62 per 100.

While Mr Rumbens said there were many reasons people chose not to relocate for work - such as proximity to family and friends - taxes and regulatory settings were also creating barriers.

Stamp duty costs, which hit home owners twice when they move to a new location, make relocating less financially appealing.

The ultra-competitive rental market also disincentives workers from relocating for jobs as renters fear they may not be able to access housing.

Mr Rumbens said Australia had lower labour mobility than other countries, including the United States, and this could mean a mis-allocation of labour across cities and a dampening of productivity.

It can also keep wages depressed as moving jobs helps workers conceptualise their worth and forces employers to ensure they are re-evaluating wages regularly.

The report said low labour mobility was partly responsible for stagnant wage growth over the past decade.

While training and upskilling boosts mobility in the long term and skilled migration can help plug gaps in the short term, the report's authors said more needs to be done.

As well as addressing housing affordability, Mr Rumbens pointed to issues like licensing, with different states and territories often failing to recognise qualifications from elsewhere.

Deloitte's quarterly report also said a slowdown in the labour market was inevitable after seven consecutive interest rate rises.

But Mr Rumbens said it wouldn't impact uniformly, with white collar workers likely to fare better than blue.

Industries affected by high-interest rates, such as construction and finance, are also likely to be hit harder.