Cross-occupational skill transferability: challenges and opportunities in a changing economy

Industries, and the occupations encompassed by them, are susceptible to many influences, such as fluctuations in the Australian dollar, trade agreements and the emergence of new technologies and ways of working. A recent example of these changes is the decline of the auto manufacturing industry in Australia; closures in this industry have resulted in increasing redundancies leading to many people seeking work. In order to better understand where individuals in these situations can find work, this research looks at the transferability of skills between occupations at the same skill level. In order to do this, the research identifies growing and declining occupations across Australia, assesses how the vocational education and training (VET) system develops transferable skills and explores how workers facing retrenchment understand their transferable skills.

Key messages

• The transferability of a retrenched, or soon-to-be retrenched, worker’s skills depends on their ability to identify specific skills as transferable. Many individuals focus on their technical skills when applying for jobs and do not consider other skills they may have developed, such as communication and knowledge of workplace health and safety. Transition programs and job support agencies should help these workers to better understand their transferable skills.
• Improvements could be made to the Australian VET system to encourage more transferability across occupations. The research points to employability skills being made more applicable to all workplace contexts. Currently, employability skills are embedded into training packages to ensure the development of these soft skills; however, they are often developed in an occupation-specific way, thus limiting their transferability. Another suggestion for training packages is to establish a common language to describe competencies, skills and knowledge to make the content of training packages easier to understand.
• The research findings argue the need to reconceptualise how occupations are classified in Australia, such that the transfer of skills is better acknowledged and encouraged. It is important to know how other occupations draw upon the skills inherent in a particular occupation. An occupational cluster framework would enable the mapping of skills across occupations within a ‘family’ cluster and encourage more movement within this cluster. This is a similar concept to vocational streams, whereby occupations are grouped according to their shared knowledge, skills and practices, rather than on specific workplace tasks and roles, the aim being to promote a more adaptable workforce (Wheelahan, Buchanan & Yu 2015).

For further research in the area of structural adjustment, see Victor Callan and Kaye Bowman’s publication, Industry restructuring and job loss: helping older workers get back into employment, and John Stanwick et al.’s The end of car manufacturing in Australia: what is the role of training?. Both reports were published by NCVER in 2015.

Dr Craig Fowler
Managing Director, NCVER

Background and research aims

This study arose from concerns in policy and academic debates relating to the most appropriate means of responding to Australia’s rapidly changing economy. The major industrial transformation that has taken place in this country in recent decades has resulted in the decline of some established industries (for example, manufacturing) and the growth of others (for example, health and community services), simultaneously causing job loss and skills shortages. It has been argued that in situations such as this cross-occupational mobility provides the vital flexibility that enables employers and workers to meet varying employment demands (Bernhardt et al. 2001; Sabirianova 2002). Such a perspective calls for a clear understanding of the concept of and potential for cross-occupational skills transferability between declining and growing occupations, as well as an awareness of how it currently works in practice. This study, therefore, has aimed to highlight the barriers and enablers to skills transferability, while exploring the potential benefits from its effective development and utilisation.

A particular emphasis of the study is on the role of transferable skills (that is, those that can be adapted to different jobs, occupations and industry settings) in cross-occupational mobility during times of industrial restructuring. All workers possess transferable skills to some degree but their awareness and understanding of these skills varies considerably, which limits their ability to see how these skills can be applied to different occupational contexts. The study also explores how effective skills transferability can be managed during employment transition and the ability of the vocational education and training (VET) system to produce transferable skills.

Study methods

The study adopted an integrated multi-method, multi-stage approach, comprising both qualitative and quantitative instruments. The primary intention was to capture:

• changing occupational and skills demand in the Australian economy in the prevailing context of economic transformation
• the capability of the VET system to facilitate the development of the transferable skills needed for cross-occupational mobility
• retrenched workers’ understanding of the potential of their skills and how they can be used in other occupational contexts
• the processes undertaken by those that play a role in training and in employment facilitation in transitioning retrenched workers to new occupations and how these actors apply the concept of transferable skills.

Data were collected and analysed in three integrated stages. In the first stage a secondary analysis of data from the Australian Bureau of Statistics (ABS) Census and labour force surveys was conducted to determine how the Australian economy has changed over the past decade, with specific reference to declining and growing industries and occupations. Stage two involved an in-depth examination of the design and content of selected qualifications associated with the identified declining and growing occupations, the aim being to determine the extent to which the VET system facilitates or impedes cross-occupational skills transfer. In stage three a qualitative case study analysis was conducted and involved documentary analyses and semi-structured interviews with workers, employers and representatives from unions, the training system and job support agencies (for example, Jobactive) to examine how skills transferability works in situations where workers are confronting uncertain occupational futures. 

Study findings

A number of key findings emerged from the investigation into the three broad areas of research interest: the occupational consequences of recent industrial restructuring; the role and capacity of the VET system in cultivating transferable skills; and the role of transferable skills in assisting disadvantaged workers to access new occupational opportunities.

Key findings: stage one 

The Australian economy has undergone significant transformation and industrial restructuring in the past two decades. The analysis of the 2006 and 2011 ABS Census data reveals that many traditional industries, especially in manufacturing, have declined and are increasingly being replaced by service-oriented sectors such as health care, education, hospitality and retail. This transformation has resulted in employment loss and the need for new work in vastly different occupations; for example, automobile manufacturing workers seeking new employment in hospitality. Furthermore, the decline and growth in the various sectors and occupations varies between regions, presenting different types of cross-occupational mobility challenges. 

The cross-occupational mobility that involves little or no additional training is typically horizontal occupational mobility. A skills level analysis of the declining and growing occupations, utilising ANZSCO (Australian and New Zealand Standard Classification of Occupations), indicates a general upskilling of the Australian labour market. The implication of this development is that workers employed in unskilled and semi-skilled occupations will find occupational mobility more difficult without retraining or upskilling.  

Key findings: stage two 

The analysis of the content and design of VET qualifications and their parent training packages reveals that the VET system possesses a reasonable capacity for supporting the development of transferable skills — those skills with the potential to facilitate the occupational mobility of workers, providing them with the flexibility to change jobs across a wide range of occupations. However, the specific ways by which the key employability skills are interpreted and built into different qualifications may limit the extent of their transferability. 

The study, however, finds that, in addition to employability skills as the determinant of transferability, the system also embeds certain key competency units whose application cuts across a broad range of qualifications. Ultimately, greater skills transferability and employment mobility could be achieved with more generically constructed employability skills, combined with flexible technical skills specific to occupational clusters.
The importance of ‘soft skills’ (ability to operate effectively in the workplace) and generic skills, as well as personal attitudes and work ethics, was confirmed by employers and employment facilitation agencies. These skills were recognised as perhaps being the more important transferable skills in recent times.

Key findings: stage three

In stage three of the study, two regional case studies (Geelong, Victoria, and the Latrobe Valley, Victoria) were conducted to determine how workers who confronted uncertain occupational futures understood their transferable skills, and the role of the training sector and employment facilitation agencies in assisting these workers identify the transferable skills that enabled their access to cross-occupational mobility opportunities. The majority of the workers interviewed did not have a comprehensive understanding of the full range of their skills and their transferability. Most of these workers tended to be unskilled or semi-skilled, had known only one employer throughout their entire working lives, had little if any formally accredited training, and had previously never had to consider finding another job.

Workers who did have an understanding of their transferable skills tended to belong to higher-skill occupations (see support document 1 for ANZSCO skill levels analysis), often held a variety of qualifications and had worked for different employers. Skilled workers employed on short-term contracts for contract firms could more easily identify and differentiate their transferable skills (that is, both soft skills and generic technical skills) and specific technical skills. 

The dominant challenges in transitioning the displaced workers studied therefore include a lack of formal qualifications, poor understanding of their skills and their transferability value, leading to a general assumption that their skills are not transferable, and they have a lack of basic job market navigation skills. 

A wide range of actors often become involved in the efforts of transitioning retrenched workers into new jobs. However, how well these players understand and apply the concept of skills transferability when designing their assistance to displaced workers is questionable. In the cases studied, only one company (Ford Australia) provided a comprehensive transition program which included skills transferability elements. 

Key conclusions 

The findings from this report lend further support to the view that transferable skills perform an invaluable role in an employee’s cross-occupational mobility (Partridge, Chapman & O’Neil 2009; European Commission 2013; Mayer 1992; Misko 1998; National Quality Council 2010; Skills for Jobs 2013; Sweet 2009). However, a number of factors must be taken into consideration when understanding skills transferability and cross-occupational mobility, including:

• Transferable skills are somewhat determined by the training system and the way in which workers and employers engage with the training system. An employee who only acquires specific skills sets, for example, is unlikely to develop transferable skills in a similar way to those who receive full qualifications. 
• Transferable skills tend to be soft skills (non-job-specific skills relating to an individual’s ability to operate effectively in the workplace) and generic hard skills (technical and job-specific abilities that can be applied effectively in almost all jobs and personal life) and are applicable to a range of occupational contexts. However, the differences associated with the particular skills and knowledge required to perform the different tasks attached to specific occupations mean that some skills are more transferable in some occupational contexts. A wood machinist, for example, is going to find it much easier to become a carpenter and joiner than to become a chef as they share more similar tasks.   
• Occupational clusters have the potential to facilitate skills transferability and cross-occupational mobility. These clusters contain certain elements, such as skills, knowledge, tasks, activities and desirable employee attributes, which are common to ‘groups’ of occupations across industries. Aligning training packages to occupational clusters could contribute to the development of generic competencies, which can also be used across any occupation.
• The local labour market demand for particular skills and types of occupations have significant implications for a worker’s prospects for applying the skills developed in one occupational context to another occupational context. If a worker’s transferable skills are aligned with growing occupations in similar occupational clusters, they would be in a much better labour market position. 
• The ability to make use of transferable skills for cross-occupational mobility is highly dependent on how well the worker — and those who assist them to find employment —understands their skills and the role they perform in occupational mobility.

Key policy considerations

For the development of policy in this area, the study suggests:

• greater recognition and promotion of transferable skills to enhance flexibility in cross-occupational mobility. This includes a role for training providers and employment facilitators to help workers and job seekers recognise and understand their transferable skills 
• promotion of the full accreditation of skills and competencies to better assist workers in credential-sensitive labour markets and in understanding and identifying the range of skills they have acquired 
• prioritising of partnerships between the VET sector and industry to systematically recognise skills and competencies in vulnerable businesses and the implementation of better processes for the formal recognition of skills gained on the job 
• improvements to the training system and, more specifically, to training packages, such that the skills developed are not only transferable within closely related occupations, but more broadly within the economy. Additionally, the establishment of a common language to describe competencies, skills and knowledge could make qualifications and training packages easier to understand across industry boundaries, educational institutions and training bodies, and among policy-makers and employers
• increased awareness and understanding of occupational clusters by workers, training providers and job support agencies. This would ensure that decisions made during employment transitions, as well as advice given, are appropriate and relevant
• extensive and locally sensitive occupational and labour market analyses is required to provide a better understanding of where displaced workers are likely to find appropriate employment that can utilise their transferable skills and potentially technical skills. This should be undertaken alongside a comprehensive analysis of workers’ existing skills, both accredited and otherwise 
• well-articulated processes are required for establishing and managing effective worker transition programs particularly in situations of retrenchment. Such processes should clearly identify and specify the roles and expectations of different actors in the transition.