Why Young Australians Are Struggling to Find Work – A 2021 Update

Claudia Reiners
November 3, 2021

Why Young Australians Are Struggling to Find Work – A 2021 Update

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Young Australians have faced a tough year. COVID-19, Industry 4.0 and skills shortages have all amplified feelings of uncertainty in young people’s lives.

Australians under 25 have frequently cited mass job losses, travel restrictions and heightened mental health concerns as some of the difficulties affecting their education and career goals.

This article is an update of our older blog and further explores the key factors impacting young Australians in 2021 and what we – individuals, employers and educators – can do about it.

Times have changed – COVID has changed it

The pandemic has changed Australian lives forever – youth unemployment is now a major issue in Australia. Almost one in three young people are unemployed or underemployed, with this trend predicted to last another decade. 

Last year, the Australian Bureau of Statistics (ABS) reported almost one in three workers aged 18 to 24 lost their jobs between March and April, spurring a 23-year high youth unemployment rate of 16.4% in June. Further compounding this crisis is the high underemployment rate, which sat at over 18% in 2020. 

The pandemic severely affected sectors, such as hospitality, retail, tourism and arts. These are industries that historically employed a large portion of Australia’s young, casual or part-time workers. 

Despite plenty of young people and job seekers eager to join the workforce or secure more hours at work, they simply can’t. Between February and March alone, the number of young people with full-time jobs fell by 10.1% – to put that into perspective, it’s three times more than those aged over 25. 

A new study by the University of Melbourne found that young people who lost jobs during the pandemic or were on the cusp of entering the workforce, risked missing out on building vital skills and experiences during the crucial early stages of their careers.

The rise of the gig economy in Australia

While the pandemic stripped customer service industries to the bone, we’ve witnessed gaps appear in the labour market. More workers are breaking free of the 9-to-5 workday, with many turning to ‘on-demand’ or ‘gig’ work instead. 

The rise of the gig economy represents young workers’ shift of preference. Many young professionals are adopting a digital nomadic lifestyle, using new technologies to work while giving them flexibility they can’t get elsewhere. 

While ‘gig jobs’ is not a new concept, it has grown significantly popular among the younger generations post-COVID. Approximately 40% of the global digital workforce is engaged in some form of gig work – and this number is growing rapidly. 

The Foundation for Young AustraliansNew Work Order Report found 70% of under-34-year-olds use a digital talent platform, such as Airtasker and Fiverr, to find work. These on-demand platforms are predicted to create an additional 270,000 jobs by 2025. 

The growth of the gig economy will be tremendous. With more workers moving to this new way of working, policymakers and educators must find ways to support young people in reaching their employment goals – whether that’s full-time work or a successful freelance career.

Young people lack appropriate education and experience

There’s no doubt we are experiencing a period of profound change – jobs that have existed for decades have been displaced overnight, and new ones created in their places. The rise of automation, robotics and artificial intelligence (AI) are threatening the shelf life of many workers’ skill sets. 

In our previous blog, we unpacked the future of work, particularly the occupations at risk of displacement. Experts calculate that 40% of Australia’s job market will disappear in the next 10 years. Globally, 85 million jobs are estimated to be displaced by machines before 2025. 

This situation will only get more dire if we don’t change our approach. 

According to the FYA, 58% of university students and 71% of TAFE students are currently studying for an occupation that will cease to exist or transform dramatically in the next decade or so.

Further exacerbating this crisis is young people’s lack of relevant education or work experience. In fact, 33% of unemployed young Australians believe they lack the right education to obtain work in their field, even in an entry-level role. To add to this, 28% of graduates report they don’t use the skills they gained during their education or training in their current role. 

The lack of work-integrated learning or real-world applications makes it challenging for young people to enter the labour force as a graduate. It’s clear educators and governments must do better to enable an easier transition from study to work, reducing long-term unemployment.

How we will improve young people’s job prospects

Our governments are already tackling youth unemployment from a policy perspective, however, educators still have a role to play. Below are ways educators can help young people secure work post-study.

1. Utilise VET to address youth unemployment

The NCVER says: “VET offers valuable mechanisms to address youth unemployment if implemented in tandem with holistic support services.” 

VET is the bridge that connects qualifications to employment. It offers learners supportive training environments where they can complete training and develop real-world skills. 

NCVER’s 2020 Student Outcomes Survey reported 39% of young people who were unemployed before starting their qualification found work upon completion – this statistic sitting higher at 47% in 2019. These statistics demonstrate how well-placed our VET sector is in addressing youth unemployment

The NCVER believes VET offers young people pathways into vocational education, supportive training environments, individualised career guidance and work-based training – all of which protect young people from the scarring effects of unemployment. Workers with VET qualifications have improved outcomes in terms of “employment, income, hours worked and job quality”.

2. Push for industry-led courses with real-world applications

Changes in technology and labour market conditions are pushing learners to look beyond traditional schooling. The future of work calls for a skilled, adaptable workforce – and micro-credentials are the answer we need. 

Micro-credentials are short non-formal qualifications, typically designed in collaboration with industry experts, to help learners upskill in specific knowledge areas. They are a time and cost-effective way for professionals to upskill or enter a new industry.

Rumours about formally regulated micro-credentials have been circling our sector for years. However, it wasn’t until recently that the Australian Government announced a push to fast-track micro-credentials in VET

Bryan Palmer’s research report, ‘An Analysis of Micro-credentials in VET’, unpacks popular learning areas that exist outside of nationally recognised programs – particularly citing the large volume of students enrolled in micro-credentials in 2019.

In addition to offering industry-led short courses, providers have a unique opportunity to provide a well-rounded learning experience for students by incorporating work-based learning. Work-integrated or work-based learning, integrated into course curriculums, can help graduates transition into the workforce with more ease.

3. Establish pathways into the jobs of tomorrow

We are currently living through a megatrend of technological change. Automation, AI and big data are all affecting the quality and quantity of jobs available in our near future. 

The World Economic Forum’s research has found that our future of work will be varied, with diversity across emerging professions and industries. In saying that, the highest growth of new jobs will be in health and community services, data and AI, product development and digital marketing. 

Prospective learners who pursue study in industries considered in high demand are those who hold the highest chances of becoming employed post-study. 

Education providers can help Australia’s youth combat unemployment or underemployment by creating pathways into these jobs of tomorrow. 

It’s important to understand that the 9-to-5 life is not the only opportunity for learners. The digital nomadic or gig lifestyle will become an increasingly popular career pathway for younger generations. Those studying digital marketing or creative services may actually prefer flexible working and balanced working lives – prompting them to choose to pursue a freelance career. 

In any case, it’s important to recognise gig work as a viable career pathway and offer student support and employment services accordingly.

4. Offer flexible payments and funding support

The COVID-19 pandemic and lockdowns have had a devastating financial impact on Australians of all ages. Mass job losses and financial anxiety has spurred students to demonstrate higher sensitivity to education funding arrangements.

Our Student Sentiment Index revealed that prospective students are now less likely to pursue study without financial support or government aid. This has triggered the announcement of several national funding initiatives, such as JobTrainer and Free TAFE, which Australians have responded eagerly to. 

In Victoria alone, more students than ever were turning to Free TAFE to find a pathway into work. Enrolments in January 2021 were up 83% compared to the same time last year.

Flexible payment options can also provide your students with more flexibility and support while they kick start their learning journey. Payment options provide learners with more opportunities to pursue study without worrying about financial implications. There are several approaches typically adopted by providers, including interest-free payments and staggered payment schedules.

The pandemic has significantly affected young people’s education and career goals, with this set to have long-lasting ramifications.

However, employers, governments and educators are well-positioned to address youth unemployment through online learning, industry-led courses, work-integrated learning and flexible funding arrangements.

This article is an updated version of our previous blog

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Claudia Reiners
Head of Strategy
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