Changing forms of employment and their implications for the development of skills

This report concentrates on changing employment patterns by examining the shift away from the standard of full-time permanent employment which occurred between 1992 and 2005. It describes the effects of changing employment modes on the amount and type of training received by employees and considers the implications for the vocational education and training (VET) sector. This research is part of a larger suite of research undertaken by the National Institute of Labour Studies, Flinders University, and the Centre for Post-compulsory Education and Lifelong Learning, University of Melbourne.

The focus of the study was on the ways in which people learn, particularly on the job, to be productive workers. It asked whether part-time, casual and labour hire forms of work have affected the development of vocational skills.

Key messages

• Since 1992, there have been substantial changes in men’s employment patterns, with a decrease in the number of permanent full-time jobs (new and existing) and a large increase in casual jobs, both full- and part-time.

• Women have seen strong growth in permanent jobs, both full- and part-time.

• Growth in permanent jobs has been concentrated among both men and women aged 45–59 years, while the absolute number of permanent jobs for men aged 20–30 years has fallen.

• Growth in permanent jobs has been concentrated in occupations that mostly require higher education, rather than vocational education.

• From 2001 to 2005, the total hours of employer-sponsored training fell by 15% for permanent workers and by 27% for casual workers. In total, casual workers get about half the employer-provided internal training and a mere fraction of the employer support for external courses that permanent workers get.

• The shift away from full-time continuing employment is likely to put skill development on the job at risk, placing the onus on VET providers to offer courses that are accessible to full-time, part-time and casual workers.

• The reduced employer support for training means that skills development will increasingly need to be funded by the workers themselves and the taxpayer.

For a synthesis of the consortium’s entire program of work, see A well-skilled future by Sue Richardson and Richard Teese.

Tom Karmel
Managing Director, NCVER

This report is a component of the research program entitled A well-skilled future: Tailoring VET to the emerging labour market, in which the evolving labour market and changing work organisation and management in the contest of the vocational education and training (VET) sector are examined. The research has been undertaken by a consortium of researchers from the National Institute of Labour Studies, Flinders University, and the Centre for Post-compulsory Education and Lifelong Learning, University of Melbourne.

Vocational skills comprise any ability that can be learned and that is valuable in the production of goods and services. Considered in this way, it is easy to see that they are not only learned from formal vocational education and training (VET) (or higher education) providers. They are also learned by formal and informal instruction on the job. People learn to be better, more efficient and more productive workers in the process of doing their jobs. They also learn new skills incrementally, thus keeping abreast of developments in technology. Some of this learning is gained from the advice and informal instruction of fellow workers. Some arises from more formal instruction on the employer’s premises, organised and paid for by the employer but not leading to formal educational qualifications. Some is learned from formal instruction that does lead to a qualification, which may or may not be funded by the employer. The informal ways of learning add considerably more to the stock of worker skills than does formal instruction in accredited courses.

This study focuses on these work-based ways in which people learn how to be productive workers. It asks three questions.

• How does the way in which people are employed affect the level of skills development they acquire as a result of their employment?

• How have the ways in which people are employed changed over the past decade or so?

• How do the changing ways in which people are employed affect their opportunities for the development of vocational skills?

We contrast the ‘non-standard forms of employment’—part-time, casual, labour hire and self- employed workers—with the ‘standard’ form of employment—full-time continuing jobs.

Changes in how people are employed

There have been major changes in the ways in which people are being employed. These changes are strongly away from the standard form of employment and towards all the alternatives and were especially pronounced for men. In 1992, 70% of all jobs were full-time and permanent, so it was appropriate to view such a form of employment as the norm, or standard. But since then, only 41% of the 1.9 million extra jobs created were full-time permanent jobs. Growth has been particularly strong in casual employment and a new trend has developed—the full-time casual. All the changes are more pronounced for men than they are for women.

In brief, since 1992:

• Only 20% of all new jobs were for men employed full-time on a permanent basis.

• Women have seen strong growth in permanent jobs, both full- and part-time.

• Men have seen a large fall in permanent full-time jobs and a large rise in casual jobs, both full- and part-time.

• Growth in permanent jobs has been concentrated among both men and women aged 45–59 years; the absolute number of permanent jobs for men aged 20–30 years has fallen.

• Growth in permanent jobs has been concentrated in occupations that mostly require higher education rather than vocational education.

• Up to 2005 the vocationally important trades occupations and advanced clerical occupations have seen particularly large shifts away from permanent full-time employment.

• Labour hire has been growing rapidly, from a small base, and now comprises over 3% of all employment.

• Most of the growth in the share of non-standard forms of employment occurred prior 2001.

Forms of employment and the acquisition of vocational skills

Do these changes in forms of employment matter for the acquisition of vocational skills? We show that:

• Most types of training acquired on the job are systematically and substantially less for casual employees compared with permanent employees. The one exception is training that is not supported by the employer. Casual workers are less likely to experience employer-provided training and the training they do get is more likely to be basic induction and safety training. The total hours that they spend in training is about two-thirds that of permanent workers.

• The total hours of employer-sponsored training have fallen over the four years to 2005, by 15% for permanent and 27% for casual workers. In total, casual workers get about half the employer-provided internal training and a mere fraction of the employer support for external courses that permanent workers get.

• It is very likely that the levels of job-related training received by labour hire and self-employed workers are also less than those experienced by full-time continuing workers, although evidence on this is scarce.

Overall, it is the expectation that the employee will have continuing employment with the firm, rather than the number of hours worked, that seems to be the powerful force influencing the extent of job-related training. This is what is to be expected. Firms recover the cost of the training they provide to workers only if the workers continue the job.

Is the low level of training for casual workers merely a consequence of the occupations, industries or personal characteristics associated with a casual contract? The limited evidence shows that, even when controlling for a wide range of personal and job characteristics, casual employees were still much less likely to have undertaken employer-supported training.

Men have been more adversely affected by the trend to casual and part-time employment than have women. The gender difference is amplified by the fact that, for men, casual employment, even if full-time, offers particularly low levels of job-related training, The category of employment growing fastest for men (casual, including full-time casual) is also the one that is least likely to offer opportunities for skills development on the job.

Implications for VET

The shift to casual employment for full-time (especially male) workers highlighted in this study is a new and substantial development. It has very significant implications for the ways in which vocational skills are acquired. In particular, the contribution made by employers, through the provision of training on the job, is almost certainly diminished by this development. The implications for training are reinforced by the fact that such growth in continuing jobs as there was for men was not in the key learning ages of 20–30 years, but in the established ages of 45–60 years. Employment growth for 20 to 30-year-olds, such as it was, was almost entirely in casual employment, especially for men. This is a very significant development. Earnings profiles show that the age group 20–30 years is when formal and informal learning on the job is especially strong.

The shift away from full-time continuing employment is likely to put the informal and semi-formal processes for vocational skill development seriously at risk. Learning on the job has always been a fundamental part of the way in which the less educated enhance their skills (and job opportunities and wages.) This group is likely to be particularly hard hit by the shift to casual, labour hire and labour-only contracting that is such a part of recent Australian labour market history.

If the trends we have identified persist, then Australia must look to other ways of ensuring the continuing enhancement, refreshment and adaptation of its stock of vocational skills. In particular, it is likely that the task of such skills enhancement will shift increasingly to the formal VET providers. There will need to be more VET courses, geographically accessible to the entire vocational workforce. These courses will need to cater for people at many points in their career, and from a wide variety of backgrounds. The reduced employer support for training means that, if it is not to fall, skills development will increasingly need to be funded by the workers themselves and the tax payer.

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