October 2023 saw Jobs and Skills Australia publish its annual report for 2023, entitled ‘Towards a National Jobs and Skills Roadmap.’ It identifies three major megatrends shaping our economy and workforce. These are:
1. Digital transformation, which is seen as opening up “significant productivity enhancing opportunities, and brings with it a critical skills agenda.” The JSA’s paper notes that “some jobs will be lost, and many others will change in nature.” However, they note that (1) the whole workforce needs to be digitally literate and (2) that higher level digital skills are in increasing demand.
The JSA’s paper points out that “the power of artificial intelligence, as well as the associated risks, has come under particular scrutiny as its capability and applications unfold.” Further, “technology and associated digital skills are a key enabler in meeting the opportunities of this megatrend.”
2. The move to clean energy and the net zero transformation, where this transition “opens up significant opportunities for Australia with its abundant renewable energy resources and a significant construction effort required in the near-term. It also brings with it many challenges to confront, particularly for people and communities affected by the transition away from fossil fuels. The development of the skills required for successful transition is a key enabler within a broader transition policy framework. Stakeholders [to the JSA’s work] have consistently emphasised that Australia will need to lift the pipeline of VET-trained workers, including in regional areas, to meet the needs of the clean energy transition.”
3. The growth of the care and support economy, which is “associated with an ageing and increasingly diverse population, a transition from informal to formal care, and increased citizens’ expectations of government.”
The executive summary of JSA’s report notes that skills shortages remain elevated, most commonly in Technicians and Trades Workers, “with 50% of occupations in the category assessed as being in national shortage.” However, shortages are also pronounced in the Professionals group and also “shortages grew amongst Community and Personal Service Workers.”
In addition, the executive summary notes that “occupations that have a strong gender imbalance were more likely to be in shortage” and – in addition – “skills shortages were more pronounced in regional areas.”
Finally, JSA’s work points out that “conventional economics suggest that increasing wages is one lever that employers can pull to attract more workers.” However, they believe that this does not seem to have been borne out in practice, with “recent analysis by both Jobs and Skills Australia and the Reserve Bank of Australia highlight[ing] that wage adjustments are rarely used by employers as a short-term response to skills shortages.”
The ‘gaps’
Jobs and Skills Australia has adopted a typology of skills shortages based on research. The executive summary notes that there a number of identifiable training gaps:
First, longer training gap shortages are defined by where there are “few qualified applicants per vacancy and a long training pathway – a bachelor degree, Certificate IV, diploma or apprenticeship is required by successful applicants.” Solutions include “having a larger intake of students or higher completion rates” or “by upskilling people with some of the relevant skills, attracting back people who have left the occupation through improved remuneration and/or working conditions, or migration options.”
Second, there are shorter training gaps, which “arise when there are few applicants per vacancy and a Certificate I to III or less is required.”
Third, where there is a suitability gap, “where there are enough qualified applicants but too many are not hired because they are not regarded as suitable.”
In addition, there is a retention gap, “where there is above average job mobility (below average rates of retention) potentially reinforced by low numbers of new applicants per vacancy. A priori, the retention gap category is where low job retention appears to be the core driver of the problem.”
Tables in the report identify where the occupations in which each of these shortage types apply.
Finally, the paper looks at employment projections in the years ahead. JSA suggest, while all occupational areas are expected to grow, health care and assistance will be the biggie! In addition, demand for VET and higher education graduates is expected to grow strongly.
Reforming VET in response
The JSA’s report identifies a number of challenges for VET, including its status and perceptions relative to higher education, resourcing and funding, completion rates and the level of detail in competency standards and the extent to which they can “stifle innovation and flexibility in training delivery and hinder the recognition of transferable skills and increase upskilling and reskilling costs.” It also needs to be more ‘joined up’ with higher education.
There are also concerns about not only about “the time it takes to update VET courses to include new skills demanded by employers” but also the need to focus more on transferrable skills, resilience and adaptability.
