Vocational education's variable links to vocations

This report is part of a wider three-year program of research, Vocations: the link between post-compulsory education and the labour market, which is investigating the educational and occupational paths that people take and determining how their study relates to their work. Previously the authors theorised that vocational streams, whereby people study for a field of practice rather than a specific job, could support occupational progression; for example, a ‘care’ vocation could include workers within aged care, mental health, child care and disability care.

This report looks specifically at mid-level qualifications, such as diplomas, advanced diplomas and associate degrees, and how they assist entry to and progression in the labour market. In order to explore these issues, the authors analyse data from the Student Outcomes Survey and the Survey of Education and Work. In addition, they undertake case studies of mid-level qualifications in engineering and finance and also examine the roles of physician assistants in health, and veterinary technologists in agriculture, to see how mid-level qualifications can be strengthened.

Key messages

At a time when the vocational education and training (VET) sector is designing entitlement models and introducing contestability to improve the outcomes of learning, this report identifies a number of key issues.

• Generally, there is a weak link between education and work for students in most mid-level qualifications and fields of education. The exceptions are in occupations where there are licensing requirements or strong regulations.
• Employment outcomes for graduates improve as the level of study increases from certificate I to certificate III. However, only 37% of graduates obtain employment in their field of education, although this result does differ by field.
• Mid-level qualifications have three main roles, either as a labour market qualification (entry or upgrade), a transition to a higher-level qualification, or to widen access to higher-level qualifications.
• Training institutions could play a vital role in constructing and offering qualifications differently to suit the purpose they serve.
• Improving outcomes requires encouraging industry bodies and intermediaries to focus on improving the relationship between work and education.

Rod Camm
Managing Director, NCVER

This report and the accompanying support document are part of a three-year project entitled Vocations: the link between post-compulsory education and the labour market. The investigation is being conducted in three strands over three stages. This report considers the roles that tertiary education qualifications, in particular mid-level qualifications, play in assisting their graduates to gain entry to and progression in work and how they may be strengthened. Statistical data from the 2011 Student Outcomes Survey, conducted by the National Centre for Vocational Education Research (NCVER), and the Australian Bureau of Statistics (ABS) Surveys of Education and Work from 1998 to 2012 are used in this investigation. The report explores how the role of qualifications may be strengthened by examining four cases in which tertiary institutions have introduced new qualifications to meet a new or emerging work role.

The study found that graduates of vocational certificates III and above had similar employment rates after training — of over 80% — which were markedly higher than the employment rate for certificate II graduates (67%), which in turn was markedly higher than the rate for certificate I graduates (58%). However, these differed substantially by field of education. In engineering and related technologies and in veterinary studies, certificates III and IV graduates had higher employment rates than graduates of diplomas and above. In nursing, diploma graduates (91%) had a higher employment rate than graduates of certificates III (87%) and IV (86%), reflecting the new requirement of a diploma for registration as an enrolled nurse (see the support document accompanying this report). In banking and finance, graduates of diplomas and above had a modest employment rate of 69%. This may reflect students’ use of the diploma as a path to higher education qualifications, which employers use as entrance screening for higher-level work in finance fields (Yu, Bretherton & Schutz 2012, p.22).

We also note from the Student Outcomes Survey that, for all fields, only 29% of graduates of certificate III proceeded to further study, presumably reflecting the strong employment focus of apprenticeships and traineeships, which are offered at certificate III. For all other qualifications, relatively similar proportions, of around 33%, proceeded to further study. Again, these outcomes differed significantly by field. The proportions of graduates of all levels proceeding to further study were relatively high in creative arts (48%), information technology (47%) and banking and finance (43%) and relatively low in agriculture (23%), and process and resources engineering (22%).

For all fields, at all levels of qualification, only 37% of vocational education and training (VET) graduates were employed in the same field as their qualification. This also differs by level of qualification, with the proportion of certificate III graduates employed in the same field (55%) being more than double that of graduates of diplomas and above (26%). The proportion of VET graduates working in the same field as their qualification varies even more by field of education, with the proportion for nursing (72%) and electrical and electronic engineering and technology (64%) at least two to three times that for information technology (25%) and creative arts (10%). In many fields the proportion of graduates working in the same field differs significantly by qualification level. For example, in electrical and electronic engineering and technology, 84% of certificate III, but only 30% of diploma and above, graduates worked in the same field, whereas in agriculture only 34% of certificate III, but 52% of diploma and above, graduates worked in the same field as their qualification.

Lastly, from the Student Outcomes Survey, we examine the proportion of vocational graduates who were employed six months after training and who were working at a higher skill level than before training. Again, there was considerable variation by qualification level within field. For example, in nursing, 47% of certificate IV graduates and 41% of diploma graduates worked at a higher level after training than before training, but the proportion for certificate III graduates was only 11% (with a relative standard error of more than 50%). In contrast, in society and culture, 21% of certificate III graduates were working at a higher level, but only 14% of certificate IV and 16% of graduates of diplomas and above were. As would be expected, a higher proportion of graduates working in the same occupation as their qualification were working at a higher skill level (25%) after training than those who were employed in a different occupation (13%).

We extend our investigation of the role of tertiary education qualifications in assisting their graduates to gain entry to and progression in work by examining the ABS Survey of Education and Work from 1998 to 2012. These data do not provide strong evidence that people whose highest qualification is a bachelor degree are being employed at lower-level occupations; nor do they provide strong evidence that people whose highest qualification is a bachelor are displacing people whose highest qualification is a diploma or advanced diploma from employment in management, professional or lower-level occupations. Although the ABS changed the classification of occupations used to report results from the Survey of Education and Work in 2007, it seems that the proportion of diploma and advanced diploma graduates employed as managers or professionals has fallen since 2010 and the proportion of bachelor graduates employed in these occupations fell from 2011 to 2012. But these changes are within the bounds of historical variations and have subsequently recovered. From this we conclude that bachelor graduates may be displacing diploma graduates in the workforce, but data from future Surveys of Education and Work will be needed to confirm this.

We consider how the role of tertiary education qualifications in assisting their graduates to gain entry to and progression in work may be strengthened by examining the development of mid-level qualifications in engineering and finance, as well as for physician assistants (health) and veterinary technologists (agriculture). The minerals industry national associate degree is sponsored by the Minerals Council of Australia, with support from the Australian Government and in collaboration with tertiary education institutions. It was developed by the Minerals Tertiary Education Council, established in 1998 by the Minerals Council of Australia, following a review in which problems in both tertiary education and industry were identified.

While the Financial Services Reform Act 2001 requires a diploma for those providing independent financial advice, since 2007 the Financial Planners Association has required a bachelor degree for membership. This has effectively set the requirement for entry to practice and is undermining the viability of the Diploma in Financial Services (Financial Planning). It is now less possible for people to enter financial services at a modest level and work their way up the profession.

The programs for physician assistants and veterinary technologists are examples of educational institutions taking the initiative in establishing programs that prepare graduates for the paraprofessions. They have achieved only modest success so far, largely because of trenchant opposition from competing professionals. The case studies for physician assistants and veterinary technologists suggest three conditions by which educational institutions could introduce mid-level qualifications that will be accepted:

• Identify a role in the workforce.
• Convince employers of the benefits of the new role.
• Understand workforce structure and dynamics.

The report concludes that there is limited scope for tertiary education institutions alone to foster links between qualifications and work. Tertiary education institutions are mostly limited to following rather than initiating structural change in the workforce. New qualifications can play an important role in building links between lower- and higher-level qualifications and in professionalising and upgrading the skills of particular industries, but this is most effective when it is done collaboratively by the education and industry social partners — employers, unions and government.