Sydney CBD workforce hits 670,000 but faces skills and retention pressures

The workforce of Sydney's central business district has swelled to 670,000 workers in 2024-25, cementing its position as Australia's largest CBD workforce and outpacing Melbourne by 93,000, according to official sources. The jobs boom, however, brings a fresh set of headwinds: the City of Sydney is targeting 200,000 new roles by 2036, with 70 per cent concentrated in knowledge and innovation-intensive industries, yet the talent pipeline is showing signs of strain.

A workforce that earns more but skews older

Sydney CBD workers are the highest-valued in the country at $104 per hour, and 66.1 per cent hold a bachelor degree or higher, according to data from the City of Sydney's socio-economic context report. The productivity premium is clear, but the demographic profile is shifting. Workers aged 30-44 now dominate, accounting for 48.3 per cent of the CBD workforce. By contrast, the share of early-career talent aged 20-29 is declining as a proportion of total workers, raising questions about how the city will replenish its senior ranks in the long term.

The composition of employment is also evolving. The target of 200,000 new jobs by 2036 places enormous demand on education pipelines and training systems. With 70 per cent of those roles expected to be in knowledge-intensive fields such as technology, professional services and advanced finance, the city needs a steady stream of graduates and skilled migrants, as well as effective retraining programs for existing workers whose roles may be automated.

Workforce participation initiatives deliver concrete results

In response, the City of Sydney and state agencies have prioritised workforce development initiatives aimed at groups traditionally under-represented in the CBD economy. Aboriginal participation, women in construction, and apprenticeship pathways are key focus areas. One flagship example is the Crown Solicitor's Office fitout project, which delivered 518 Aboriginal participation days and 858 apprenticeship days, according to the NSW Government's workforce development plan.

Projects such as these are embedded in the broader Sydney Metro West workforce development strategy and the City of Sydney's Aboriginal and Torres Strait Islander Workforce Strategy 2023-2026. The strategies aim to create visible career pathways in major construction and fitout projects, which themselves are a major driver of CBD employment. The Crown Solicitor's Office fitout demonstrates that targeted procurement and training targets can shift participation metrics, even within the highly specialised legal and administrative sectors of the CBD.

Retention and recruitment pressures persist

Despite the headline growth, the labour market in the Sydney CBD faces persistent recruitment and retention challenges. The declining proportion of younger workers suggests that the city may be losing some of its appeal to graduates and early-career professionals, who are often priced out of inner-city rents and competing with the tourism and hospitality sectors for entry-level roles. The high concentration of knowledge-intensive jobs also means that when specialised talent is scarce, competition between firms drives up salaries and makes retention a constant operational concern.

Local employment plans produced by the Department of Employment and Workplace Relations for the Sydney East Metro region note that workforce development must keep pace with the physical transformation of the city. Major infrastructure projects, including metro stations and commercial towers, create temporary construction demand but also permanently alter the types of jobs available once they are complete. Without deliberate intervention, there is a risk that the workforce of 2036 will be larger but less diverse and less resilient than today's.

What comes next

The next phase for Sydney CBD workforce policy will likely focus on bridging the gap between the 670,000 baseline and the 200,000 additional jobs target, while simultaneously addressing the demographic drift away from early-career hires. Expanded apprenticeship and training programs, alongside continued Aboriginal and women-in-construction participation targets, are expected to remain central to council and state planning. For employers, the pressure is on to create attractive career ladders for younger workers, particularly in the knowledge-intensive sectors that will generate the bulk of new roles.

The data from 2024-25 provides a clear snapshot of where the CBD workforce stands today, but the most important question is whether the training and retention systems can scale quickly enough to meet the ambitions of 2036.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.