Investing in the VET Sector Makes Economic Sense: Here’s Why
Australia, like many of the world’s developed nations, is experiencing a skills shortage in the workforce.
This, in turn, is constraining our economic development. To make up this shortage, we need to invest heavily in upskilling and retraining our existing workforce, especially in areas of IT and computer literacy. The VET and University sector needs to expand by 3% yearly by 2020 in order to meet the qualification requirements that today’s workforce is demanding and optimise the workforce.
The VET Sector Can Help Address Australia’s Basic Skills Shortage
50% of Australians lack the basic IT skills required for most workplaces. The VET sector provides one of the most efficient pathways to upskilling in this area and is already proving to be a popular choice for mature age employees seeking a qualification to remain viable for a job. Over the past two years, our Student Urgency Index has found an encouraging trend in mature age students, especially those over 44 years old, showing a strong sense of urgency to begin studying again.
Jobs that in the past decade only required a minimal literacy rate now expect employees to be competent with IT, computers and have advanced numeracy abilities. These are skills that have only been in the workplace for the past 5-10 years, meaning that a large portion of the workplace missed out on learning them prior to employment.
Of the Workforce don’t have the IT skills needed for future jobs
Of employees are considering upskilling to remain competitive in the job market
The Education Sector Isn’t Designed to Meet Occupational Needs
At Candlefox we are keen to see any changes to the higher Education and VET sectors that have student outcomes in mind, and which can better answer skills shortages. At present, there are are too many students training for occupations where there are not skills shortages, with qualifications in the sciences and other sought-after skill sets going unanswered.
More courses than occupations in the Australian VET sector
“Despite Australia’s rigid approach where qualification design is tied closely to occupation– fewer than one in every three VET graduates ends up working in the occupation they trained for,” said Claire Field, who has over 20 years experience in the tertiary sector, in her submission to a Review of the VET system. “50 percent of students are studying in less than 3 percent of the qualifications available.”
Claire Field, a leading expert on the VET sector in Australia and the Principal of Claire Field & Associates, has been providing advice and strategic support for stakeholders in the VET and higher education sectors for over 20 years. Claire’s recent submission outlines the key changes that need to be made to improve the quality and outcomes of the sector.
Despite Australia’s rigid approach where qualification design is tied closely to occupation– fewer than one in every three VET graduates ends up working in the occupation they trained for
– Claire Field, Submission to the Review of the VET System
Increasing Workforce Participation is Crucial to Future Economic Stability
Raising the workforce participation rate from 65% to 69% would increase the Government’s operating balance by up to $24 billion annually, according to the Australian Workforce Futures Government report. Not only does this make economic sense, but it’s also a future workforce demand. As the average age of the workforce rises, so does the number expected to retire. The participation rate for the older workforce, especially those 65+ is on the rise, with an average of 67%. This rate has never been higher, but poses an even greater challenge. As this age group closes in on retirement, we’re expected to lose thousands of workers and demand to replace them with skilled employees will be high in the next ten years. Currently, 43% of the workforce comprises of Baby Boomers (born 1945-1964), 3.5 million of of whom will reach retirement age in the next 15 years. Australians need to have the skills expected from employers, which is why VET in particular is so crucial in our future economic ability. Through providing practical, work-ready skills from day one, VET could be crucial in addressing the skills shortage, especially through lower tier qualifications. To improve participation rates would require an expansion of lower level courses (Certificate III- Diploma level) that would need to see enrolments in both Higher Education and VET graduates increase by 3% per year, according to the recent submission to review the VET system.
A New Set of National VET Priorities Could Help Meet Demand for Workers
With an increase in workforce participation needed across the country, we believe that any reviews of the VET sector, its operating principles and primary purpose is important in skilling the Australian workforce. By prioritising VET qualifications like the Certificate III or Diploma courses, and making sure that VET graduates are recognised by different industry groups, our national shortage of workers could be addressed more efficiently.
As part of her review of the VET system, Fields proposed a number of changes which could be made to improve the health of the sector and ensure its future longevity. Some of these key recommendations include:
A closer look at the industry as a whole shows that in order to make the VET system as effective as possible, more funding and a more robust structure are needed. With 4 times more students than in higher education, vocational education is as important as ever in Australia.
A healthy and robust VET sector is crucial to ensuring the health of and future proofing our economy.
Get in touch today to hear more about how Candlefox is helping education providers in this changing future workplace landscape.