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The role of VET in workforce development: a story of conflicting expectations

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4 October 2011

ISBN 978 1 921955 28 0 print; 978 1 921955 27 3 web

Description

This final report from a three-year research program puts the focus on the ability of VET to respond to workforce development challenges, particularly in industries characterised as low-skill entry points to the labour market. The key findings highlight the lack of incentive for workers in the meat processing and childcare sectors to train beyond mandatory levels due to casualised working arrangements and little reward for upgrading qualifications. To improve workforce development, using the concept of a vocation implies the capacity to move literally between different skill clusters potentially removing some of the stigma attached to hierarchical structures.

Summary

About the research

This is the final report from a three-year program of research investigating the role of vocational education and training (VET) in workforce development. The research focuses on meat processing and child care, both of which are characterised by low-skill entry points to the labour market. The author pulls together the key themes emerging from the research and puts the focus firmly on the ability of VET to respond to the workforce development challenges within those industries.

The researchers have developed a four-domain model, which they use to understand the skills development of workers in each sector. The four domains are: the product or service (for example, child care or meat processing); the industrial organisation structure (for example, the role of internal labour markets); labour supply; and VET.

The VET system faces conflicting expectations and it is often criticised by industry for not being responsive to industry needs. However, rapidly changing conditions in the relevant industry and variation in the demands of individual employers make this a difficult task. Providing high-quality training is also made difficult by the high degree of casualisation in the workforce of those sectors and the lack of reward for upgrading qualifications. In the child-care sector, there is little in the form of increased pay for upgraded qualifications. In meat processing, training is typically focused on single tasks and the status of qualifications remains low — investing in high-level training is not worthwhile when labour turnover is high.

Thus, in both industries, we have an equilibrium characterised by low pay and relatively low levels of training. Bretherton argues that the way to move away from low levels of training is to improve the status of VET qualifications in these industries by creating the notion of 'vocation' based on the idea of groups of skills, thus playing down skill development alone as a means for upward mobility.

This is a provocative suggestion and emerges from the idea that we can compensate for low status and low wages by promoting child care and meat processing as 'noble callings'. A more conventional economic view would be that the only way of moving away from a low-skills equilibrium would be to provide greater rewards for higher skill levels. However, this will not happen in the child-care industry unless governments or parents are prepared to pay a lot more for child care and, in the meat-processing industry, consumers a lot more for their meat. This is unlikely to occur for the simple reason that both industries, while complaining about the extent of labour turnover, have not had any real difficulty in recruiting workers prepared to work at current wage levels. Some low-skill and low-paid jobs are inevitable and individuals typically undertake education and training to move on from them.

Irrespective of whether we agree with Bretherton's viewpoint, she and her colleagues have made us think about the complex relationships between industry structure and levels of training.
Readers are directed to the NCVER website for the previous reports from this program of research.

Tom Karmel
Managing Director, NCVER

Executive summary

A 'productivity agenda' underpins economic and social policy in Australia (Australian Government 2008). This agenda argues that economic prosperity, and an associated high standard of living, can only be maintained through high levels of workforce participation, and development of this workforce through education and skill enhancement. Investment in learning, in particular, is identified as a core priority for both public infrastructure and the private sector, and indeed for individuals themselves (affirmed in the form of the lifelong learning principle). Historically, the productivity agenda has clearly defined the significance of school education (retention rates) and tertiary education (high rates of completion) as important foundations for maintaining economic growth and for meeting the needs for a flexible economy. More recently, the key role that early childhood learning can have in establishing the foundation for high levels of workforce participation has also been identified (Swan 2010). The role of VET, however, has remained defined by somewhat contradictory expectations.

The key question guiding this research program is: how can VET contribute to enhancing productivity and increasing workforce participation? The research has sought to explore this question from both supply and demand standpoints. On one hand, the research program asks how might VET initiatives contribute to workforce development and enterprise performance in the current environment? On the other hand, the project explores the issues surrounding the development of underutilised labour pools and asks: are VET initiatives, job networks and labour market intermediaries responsive to the intensifying labour supply constraints on economic growth?

The insights from this paper have emerged from three years of research exploring these questions. In order to test the validity of the findings of this program, a national roundtable of VET experts was held in Sydney in October 2010. This paper represents the culmination of the analysis, identifies some key themes and outcomes to arise from the program overall and goes further to note the strategic importance of these findings in the context of VET policy. The deliberations from the roundtable have also been incorporated into this paper.

This paper first identifies that workforce development studies are enhanced by broader, comparative modes of analysis. In the early stages of the research program, four domains were identified as critical to the form and trajectory of workforce development at the sectoral level. These four domains are: product or service of interest; deployment; labour supply; and VET. These domains have been explored in two case study sectors of interest: meat processing and child care. The four-domain approach is important because it broadens the focus and purview of workforce development analysis beyond qualification and skill alone.

A number of key points of interest arise from the application of the four-domain model to the analysis. The paper identifies that a comparative analysis of VET can be insightful, even across sectors or industries of seemingly dissimilar focus or activity. The paper draws on the observations of meat-processing and child-care sector participants to distil the core strategic challenges of workforce development for each sector. Interestingly, both sectors define these challenges in similar ways. Both make a distinction between internal (actual) and external (potential) labour market challenges. Perhaps the most powerful comparison that might be drawn between meat processing and child care is that 'reputation' directly shapes the difficulties faced in sourcing and maintaining good labour flows for both of the sectors. In terms of the VET response, both sectors face some common training and development challenges, despite their radically different fields of activity. In addition, VET also appears to be an 'instrumental' force in both sectors, in the sense that VET activity can play a role in either reducing or reinforcing the poor reputation of a sector, particularly amongst prospective employees.

Secondly, this paper identifies that possible VET responses to common workforce development challenges are constrained by conflicting expectations. This paper argues that tensions in the VET response arise from two distinct labour challenges at the sectoral level — challenges to retain and develop labour already within the sector (termed 'internal' labour for the purposes of this paper) and challenges to attract and develop potential labour (labelled 'external' labour). Both meat processing and child care indicate a need for a bedrock or stable pool of labour which requires sector-relevant and appropriate skill development. On the other hand, both sectors have historically been unwilling to establish systems (sector-wide permanency) which might facilitate continuity of training and therefore a more streamlined approach to the skill development needs of labour. The role of VET in both sectors is also conflicted. On one hand, VET appears to offer workers the opportunity to develop (through career development and longer-term engagement with a sector); on the other hand, the low status typically associated with VET activity in both meat processing and child care serves to reinforce the low status of both sectors in labour market terms. The paper notes that perceptions of skill can play a critical role in changing perceptions of work itself.

Both sectors also recognise a deep contradiction associated with the VET sector itself, for slightly different reasons. The VET sector is chartered with the responsibility to upskill, in line with a broad policy agenda to reshape the composition of the labour market; however, this broad policy agenda is not consistent with the immediate needs of either of the case study sectors. In meat processing, this is because the need for entry-level labour is essential for ongoing efficiency. In child care, the role of VET is uncertain; the sector argues that VET has generally performed poorly in delivering sufficiently skilled labour.

The paper concludes with a discussion of alternative ways whereby skill development and conceptual frameworks for understanding skill might be utilised by both of the sectors in this study. In particular, the notion of a vocation, with a supporting 'continuum of skill', is raised as a possible alternative structure. A 'vocation' houses or nestles groups of skills in a way that offers the opportunity to develop offshoots of specialisation, but it does not promote skill development as a means for upward mobility in the conventional sense. This notion of a vocation may present both meat processing and child care with a more viable framework on which to structure and understand skill development. Adopting new paradigms of skill development, however, would require significant collective change at the societal, workplace and systemic level, and most certainly at the level of individual.

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