Yes, we know there is a ‘skills shortage’

Next Thursday, union, business and political leaders will meet in Canberra for the jobs and skills summit. One of the key issues Treasurer Jim Chalmers has listed for discussion is “addressing skills shortages”.

We hear the term “skills shortages” all the time in media and policy debates about jobs and the economy. But what skills do we need, and more importantly, how do we get them?

While Australia must also think about longer-term planning, we suggest some solutions to train people for the vacancies we have now.

What skills do we need?
Australia’s unemployment rate is only 3.4%, and is currently at a 48-year low. There are more than 480,000 job vacancies, and many employers struggling to find and retain suitable workers.

Both treasury’s pre-summit issues paper and National Skills Commission show the most in-demand jobs are in nursing, disability care, accounting, retail and cafe work. These have a wide range of skill requirements: nursing jobs need at least 18 months for the relevant diploma, it is possible to get a disability care qualification in 12 weeks, while you can train on the job for retail.

We also know, 42% of technician and trade occupations are facing a skills shortage compared to 19% of other occupations that require skills assessed by an outside body. In a worrying trend, completion rates for trade apprenticeships declined to 54% for those who started in 2017, five percentage points lower than completion rates for those who started in 2013.

How do we fix this?
Many of these issues are well-known. Two major recent reviews have looked at Australia’s skills and training system. The Morrison government commissioned the 2019 Joyce review into vocational education and in 2020, the Productivity Commission did a study on skills and workforce development.

When it comes to quick fixes about jobs, migration is often seen as the answer. We have previously argued this does not position Australia well for the mid- or long term, rather we need to make changes to our education and training systems.

With this in mind, here are three ideas or changes that can bring about quick change to fill immediate gaps, but do not rely on migration.

3 ideas to fix the skills shortage now

1. Micro-credentials

Based on our research, industry, vocational education and university providers should do “micro-credentialling”. These are mini qualifications that can meet the current, specific gaps in a shorter amount of time.

Both Australian universities and TAFEs have begun doing this in recent years. This could include topics from business leadership and coding to disability support. If the job and skill requirements are higher, these micro-credentialed offerings can be upgraded to micro-apprenticeships.

The summit should look at fast-tracking micro-credential schemes. Our research shows the lengthy process required to recognise and accredit training package skill sets – the formal mechanism for micro-credentials in the Australian VET system – makes it hard to adjust program offerings to meet changes in demand.

If we are going to respond quickly to market or technology changes, employers and managers also need to be flexible.

This may include changing their mindsets from only employing “fully qualified” employees, to hiring people that will require ongoing support for life-long learning.

2. Stop the tertiary education wars

While many education providers want a clear delineation between different skill levels and qualifications, and who can deliver what, these demarcations are artificial and restrict the ability to meet the needs of employers.

In many of the jobs facing shortages, there is not a clear line between what employees trained at different skill levels can and should do. For example, in hospitality and tourism, university graduates and VET sector diploma holders are all trained similarly in business operations and how to use industry-standard technology, while incorporating international and cultural perspectives.

Our research has shown that one of the largest challenges facing making the Australian skills and training system more flexible is the lack of cooperation between the vocational education and university sectors. Both often see each other as competitors for school leavers and government funding.

The TAFE and university sectors have already proven they can work together through a series of “test labs” that focus on manufacturing skills. The model could be applied for industries facing critical staffing and skills shortages such as health and disability care.

3. Stop the state wars

States and territories are also parochial and competitive when it comes to skills and this doesn’t help us fill shortages as a national level.

For example, the Western Australian government and mining sector have been enticing eastern states-based FIFO workers to relocate permanently to the west, with large financial incentives.

Meanwhile fee-free TAFE courses are set by state and territory governments, with a mind to which skills are needed locally, rather the bigger, national picture. This is in keeping with the traditional Australian view that skills training and education is mainly to meet local needs.

The Albanese government has already pledged to provide 465,000 fee-free TAFE places in areas with a critical skills gap. There is an opportunity here. If these places are created immediately, they will help states and territories train more workers for each other – instead of just for themselves.

Provided there is also a free flow of workers between states, this will reduce skill mismatches between employers and employees across the nation and boost productivity.

Originally published by The Conversation
Authors: Pi-Shen Seet, Professor of Entrepreneurship and Innovation, Edith Cowan University and Janice Jones, Associate Professor, College of Business, Government and Law, Flinders University