Imagine applying for more than 100 jobs, making it through to the final round of interviews in a third of those applications, and still having nothing to show for it.

Key points: Unemployment in December fell to 5.1 per cent, but underutilisation was stuck at 13.5 per cent

Unemployment in December fell to 5.1 per cent, but underutilisation was stuck at 13.5 per cent Underemployment is higher in many regional areas, with some areas' underutilisation rates well above 15 per cent

Underemployment is higher in many regional areas, with some areas' underutilisation rates well above 15 per cent Economists say large towns are growing faster at the expense of small towns, with large cities growing faster than regional areas

It has been well over a year since 44-year-old John Allie's job at Energy Australia was made redundant and he is still out there looking for work.

"I went for one role with an energy company and it was almost like the role was cut straight from my CV," he says.

"I was high-fiving out of that interview, I thought this is great: fantastic people; good organisation; role I could do with my eyes shut.

"I came home and I said to my wife 'I've got this, I've got this, how could I not have it?'

"And you know, one week went on, three weeks went on, four weeks went on and didn't hear anything back.

"And I just got told they went with somebody else."

Mr Allie has applied for more than 100 jobs, and sat through 20 to 30 final-round interviews.

He says, when he receives feedback, it's the same message each time.

"I keep getting told I'm not a good cultural fit," he said.

"They say you interviewed well, they really liked you but they just didn't feel you were a cultural fit for the role.

"And it's really hard to do anything with that sort of feedback because what does that even mean?

"It could mean that I'm too old or it's just a nice way of saying that there was somebody better, because there's nothing tangible with cultural fit."

He doesn't know for sure, but Mr Allie fears the new generation of workers have skills that employers want and, he believes, his generation lack.

"People who are not Gen Ys or digital natives or really computer literate are probably getting a little left behind."

Regional underemployment remains high

Mr Allie is not the only Australian worrying about being left behind in the jobs market.

He is one of the 1.8 million Australians who are either unemployed or underemployed in the workforce — together they are people the Australian Bureau of Statistics calls "underutilised".

Despite a fall in the unemployment rate to 5.1 per cent in December, the latest data from the ABS show the national underutilisation rate is stuck at 13.5 per cent.

Last year it pushed above 16 per cent in south-east Melbourne, and 18 per cent on the mid-north coast of NSW, with Coffs Harbour and Grafton both seeing underutilisation rates above 15 per cent.

Coffs Harbour-based psychotherapist and social worker Johanna Treweeke has her work cut out helping those who are struggling to cope with setbacks.

"The majority of people will reach for the phone and call me after they've really battled the problem long enough and on their own or with their families and at that point they come talk to me," she said.

And, she points out, simply finding any old job for someone is not going to help the job seeker, or the economy; in fact, she argues it may do more harm.

"What they do need is to feel meaningfully employed and involved but what actually happens is either they hold onto a job because they feel they won't be employable in any other situation, or they just can't keep up and the employment situations just don't suit their needs," Ms Treweeke explains.

"So they have to let go in a lot of situations or just not re-engage with the whole prospect of searching for a job."

Urban 'sponge effect'

While regional centres have been hit hardest by underemployment, smaller towns dotted around the country have been under enormous strain recently.

Deloitte Access Economics partner Nicki Hutley has been studying the jobs market and says the drought and recent bushfires are exacerbating the problem.

"But there's also a longer-term trend where we're finding what we call the 'sponge effect'," she said.

"So centres like Dubbo might be growing but it's at the expense of a lot of regional areas.

"The way city economics works is that people tend to get attracted to cities and Australia, of course, is highly urbanised where the jobs are concentrated — particularly higher-paying jobs — and so regional areas tend to lose people to the cities and that's been a trend that's been going on in Australia unfortunately for quite some time.

"It makes it very tough if you're in the regions, and it gets tougher the longer you stay out of full-time work."

Mr Allie says his confidence is now taking a hit, prompting him to do something he had never contemplated — going back to the employment drawing board.

"We're still in a bit of a tight fix, my wife's working two jobs at the moment," he says.

"I'm thinking of going back and doing another degree — more of a foundational degree, whether it be law or something like that.

"Because 44 is not old and I've got another 25 years of work left in me, so maybe this is a good time to completely re-skill and go do something else I'm passionate about."