Principle 2: Equip Australians with in-demand skills and focus employment services on outcomes

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If Australia is to maximise employment and minimise the risk of future workforce shortages, we need to ensure Australians have the skills employers need.

To achieve this, our skills and education system must be flexible and able to quickly adapt to the changing jobs market. While the National Workforce Strategy focuses on post-school qualifications, education policy is a continuum, with each level from early childhood education to post-master's doctorates shaping Australia’s workforce.

Basic language, literacy, numeracy, and digital skills are important building blocks for the workforce and are critical in people’s ability to engage in work and social life.

The workforce is also progressively requiring higher skilled workers. The National Skills Commission projects 52.6% of employment growth over the five years to November 2026 will be in occupations requiring a university degree or higher.

However, all jobs are important in the workforce and there will continue to be opportunities for those without vocational or tertiary qualifications in a number of industries, such as tourism and hospitality.

Continued education and skills development through tertiary and vocational pathways will be critical as the structural shift towards higher skilled jobs continues at an increased pace.

Understanding barriers to education or fields of study for key cohorts is also important, such as the low uptake of STEM education by women in both VET and higher education settings.9 This issue is closely related to Principle 3 – reflecting the complexity of addressing these barriers, and that no sector can do this alone.

Workers need to be able to reskill and adapt as technology, tasks, jobs, and workplaces continually change.

Australia’s employment services system must also focus on better job matching and helping disadvantaged job seekers gain appropriate skills and access other support needed to find and keep jobs. Reform of employment services currently underway will be essential in achieving this.

The National Skills Commission projects that STEM occupations will grow around twice as fast as non-STEM occupations – by 14.2% over the next five years to November 2026, compared with 7.4% for non-STEM occupation.

Global insights

Training programs should be targeted at rapid reskilling for roles in high demand sectors, and likewise, employment support should be targeted to areas of highest demand, particularly for target cohorts. Embedding a lifelong training model enables reskilling throughout an individual’s career to match changing demand.

Sweden has an especially high re-employment rate after unemployment of 80%-90% within eight months. The Occupational Compass program provides career guidance for 200 professions, with the Employment Agency reducing skills mismatch. The Job Security Councils (partnerships between trade unions and employers) help employees who lose their job due to collective redundancy to reskill and find new employment. Long-term unemployed and newly arrived people can receive a tailored offer of VET occupations

The Government is leading key reform to build our Workforce Foundations

Skills Reform

An ambitious reform program is seeking to implement a funding model that provides national consistency for students and that is linked to employers’ skills needs; improvements to the quality of delivery and qualifications; a broader, more strategic role for industry; and strengthened arrangements for apprenticeships.

These efforts will also be underpinned by fundamental improvements to the collection, timeliness, and transparency of data across the VET system.

Higher education

The Job-ready Graduates Reform package will grow the number of university places for domestic students and encourage students to consider job-ready education pathways. The reforms reduce student fees in areas of expected employment growth and demand, particularly in science, technology, engineering, and mathematics (STEM), health care and teaching fields.

This reform complements the increased funding for vocational education and training and additional opportunities to reskill and upskill through enhanced micro-credential offerings.

Employment Services

The Government’s suite of programs under Workforce Australia is reforming how employment services will be delivered. From July 2022, the new service will improve job matching through better digital technology, focus more investment on those who need most help to get a job, and engage more closely with businesses to get them the workers they need.

Workforce Australia Providers will also work with employers and training organisations to support job seekers to develop in demand skills where they are needed to take up a job.

Disability employment services

A new disability employment support model will replace the current Disability Employment Services Program on 1 July 2023, when the current agreements expire. The new model will be aligned with Workforce Australia, and disability supports such as the National Disability Insurance Scheme. The new model will be tailored to better meet the needs of people with disability and employers.

Indigenous employment services

Design of a new remote engagement program is underway, scheduled to replace the existing Community Development Program in 2024. The new program will be developed in partnership with remote communities, service providers and all levels of government to ensure job seekers in remote Australia, including Aboriginal and Torres Strait Islander peoples and communities, have the best possible chance to share in Australia’s economy through improved pathways to employment. 

The new Indigenous Skills and Employment Program (ISEP) opened to Stage One applications from 22 March to 26 April 2022. ISEP will replace the existing Indigenous Employment Programs – Vocational Training and Employment Centres, Tailored Assistance Employment Grants and Employment Parity Initiative.

The program will increase economic opportunities for Indigenous Australians and drive actions that connect Indigenous Australians to jobs, targeted skills acquisition, and career advancement opportunities. The ISEP will be co-designed with Indigenous Australians, in consultation with key stakeholders.

Light touch employment support is currently available for Indigenous Australians through the Indigenous Business and Employment Hubs located in Western Sydney and Perth. Similar services will also be available through a third Hub opening in Darwin in early 2023. The Hubs facilitate connections between employment service providers, Indigenous job seekers and employers. Indigenous job seekers are supported with access to Hub facilities to prepare job applications, contact employers and participate in job interviews. The Hubs also support Indigenous Australians to enter the workforce and connect with employers that are delivering contracts to which Indigenous workforce and supply chain targets apply.

9 Australian Academy of Science, Women in STEM Decadal Plan, 2020