Recovering from the economic crisis: VET's role

Just how the current economic downturn will affect training is not entirely clear. A shortage of skills may emerge as the economy moves into a recovery phase but this is more an issue for the trades than most other occupations.

This was the view NCVER’s Managing Director, Tom Karmel, presented at the Melbourne Institute Economics Forum in March 2009, which focused on Australia’s current skill base and where this positions Australia in dealing with changing economic climates.

“Addressing skill shortages in the trades is most crucial because trade employment is very cyclical, trade training takes a long time and apprentices are the main source of entry into trades,” says Karmel.

The implementation of strategies by the Federal Government—such as the Securing Apprenticeships program, which aims to provide subsidies to employers, group training organisations or training providers to take on apprentices who have been made redundant part-way through their training—indicates their concern about the retention of apprentices during the downturn.

While most trade graduates find work in their trade, most VET graduates work in occupations other than the area in which they trained. This means that the bulk of VET, while vocational, is of a generic nature, with the skills being used in a wide range of occupations. In addition, we know that skills are also learnt on the job.

Karmel argues that the link between the VET sector and the labour market needs to be thought about, stating that it is too easy to simplify the relationship between training and the workforce.

“The VET sector is not as well understood as the school and higher education sectors,” he says. “People see it as giving individuals skills for work and meeting the skill requirements of business but many fail to realise that it is very broad and goes far beyond the traditional trades. Indeed, business and management is the largest area of activity within VET.”

A further issue is that not all qualifications are valued equally by the labour market. For example, a certificate III/IV in architecture and building commands a considerable premium relative to other fields. Similarly, high-level qualifications are not necessary in some occupations (for example, a degree has little value if you are a transport worker or a plant operator).

The contribution of VET to Australia's skills base is available at
www.ncver.edu.au/publications/2151.html