A headline increase in employment for Aboriginal and Torres Strait Islander people is welcome, but ageing and limited data fails to fully capture "the reality of the present gap", according to the Centre for Indigenous People and Work.

The latest Closing the Gap employment data is based on the last census, carried out five years ago in 2021. It shows the proportion of Aboriginal and Torres Strait Islander people aged 25 to 64 in employment rose to 55.7 per cent in 2021, up from 51 per cent in 2016. The projection based on this trend puts Australia on track to reach the National Agreement on Closing the Gap goal of 62 per cent by 2031.

Centre for Indigenous People and Work (CIPW) Director Professor Nareen Young said the improvement is welcome, but the data is dated.

"Any increase in employment numbers for our people is a good one, but this data is only captured every five years, and the most recent set is about to turn five years old. The projection does not account for the multitude of factors impacting employment for Indigenous people since 2021," Professor Young said.

"In that time we've seen rising levels of racism towards Indigenous people, an unsuccessful Voice referendum, and the value of Reconciliation Action Plans called into question.

"Fortunately, we have also seen a shift away from the Coalition Government-era work-for-the-dole programs to Labor Government schemes which finally pay proper wages and superannuation. But without up-to-date data we have no idea how any of this is affecting employment numbers right now."

Professor Young said there needs to be "a move away from relying on census results for this target", and recommended the National Indigenous Australian Agency could provide more reliable and up-to-date figures.

She also highlighted the limitations of the data, calling for future reports to include figures on job retention; another key measure of successful, sustained Indigenous employment.

"There is a blind spot in that we don't how long mob are staying in any one job before feeling like they need to move on," Professor Young said.

"Without tracking retention, they're not tracking the quality of employment, which has huge implications for the trajectory of participation over time.

"Our Gari Yala 2 research shows that nearly 60 per cent of Indigenous workers experience racism in the workplace, and those who experience it regularly are nearly four times more likely to be looking for new work within the next year.

"If we don't address the policies and practices that shape these workplace experiences, there is no guarantee employment progress will stay on track."

CIPW's Gari Yala 2 (Speak the Truth) survey of more than 1,100 Aboriginal and Torres Strait Islander workers also found:

• 25 per cent of Indigenous workers report being in a workplace that is culturally unsafe, while 35 per cent say they are only moderately safe
• Workers in culturally unsafe workplaces are three times more likely to be looking for a new job within the next year than those in culturally safe workplaces (35 per cent compared to 11 per cent)
• Indigenous employees in workplaces with both a racism complaints procedure and anti-discrimination training are far less likely to experience racism (40 per cent compared to 66 per cent in workplaces with neither)
• They are more likely to be very satisfied with their job (33 per cent vs 22 per cent) and less likely to be looking for a new employer within the next year (24 per cent vs 38 per cent)
• Despite this, just 21 per cent of workplaces have both anti-racism training and a complaints procedure in place

CIPW also noted the ongoing challenge facing employment of young Indigenous people.

Nationally, 58 per cent per cent of Aboriginal and Torres Strait Islander people aged 15 to 24 were fully engaged in employment, education or training in 2021, up slightly from 57.2% in 2016. Despite the improvement, the target of 67 per cent by 2031 is not projected to be met.

CIPW's own Gari Yala findings suggest Indigenous workers under 25 are much more likely to be in casual and part time roles, in private companies and entry level positions. They are also less likely to take on roles only open to people who identify as Aboriginal or Torres Strait Islander, and more likely to keep their cultural identity private, or not actively talk about it.

CIPW Assistant Director Josh Gilbert said reaching the Closing the Gap Target requires a rethink on the pathways and support available for young Indigenous people.

"Most mainstream intake programs are built around creating identified positions for Indigenous workers, but our research suggests this isn't what every young person wants," he said.

"This is our future workforce, and to build it quickly and sustainably, we need to maintain those identifying roles, while ensuring our young people have a genuine choice and opportunity to build their careers independently of them."