Employers and qualifications: At a glance

Over the past decade, the Australian vocational education and training (VET) sector has focused on the outcomes of training in terms of qualifications and competencies. Up until this time there had been little information available on the value that employers place on qualifications and how they use them to contribute to the success of their business.

This publication summarises a body of recent research analysing how employers view and use vocational qualifications.

• Employers have a different view of qualifications from that of those working in the VET sector, particularly regarding what actually constitutes a qualification. To employers, a qualification not only includes school, vocational and university credentials, but also documentation such as tickets and licences.
• Employers value qualifications, but they value skills more highly.They will use accredited training leading to qualifications only under certain circumstances. Employers believe that qualifications provide three main benefits.
  • In the recruitment process: qualifications are used as a 'screening' tool but are not the determining factor in choosing a candidate. Employers give more weight to personal qualities and direct industry experience as signs of immediate competence, especially in lower-level occupations.
  • In meeting compliance requirements: qualifications are particularly important for jobs where certain credentials are mandatory. For example, formal qualifications are required in many jobs in the occupational health and safety area, and the trades.
  • In providing career development for existing workers: some employers encourage the pursuit of further skills through qualifications to increase morale, and promote a learning culture within the workplace.
• Employers use and value qualifications differently according to occupation, and enterprise type and size. Employers value qualifications most in those people working in higher-level occupations. Big businesses or enterprises in traditional industry areas (such as manufacturing) value qualifications more than employers in small businesses and enterprises in new, emerging industries (such as information technology), or those undergoing major structural change.
• Research using data from the Australian Bureau of Statistics (ABS) shows a difference between employers? beliefs and their actual practices. Although they may indicate that qualifications are not important to them, evidence reveals that employers are not only more likely to take on employees with qualifications, but also tend to pay them higher wages.This research also shows that those with a certificate level I or II qualification do not seem to experience these same advantages as those with higher-level qualifications.
• The following measures are likely to encourage employers to view qualifications more favourably.
  • VET providers need to show employers that existing training packages contain most of the competencies that employers identify as important for performing jobs well. In addition, VET providers need to be aware that employers place more value on some competencies than others in terms of whether they need to be assessed formally.
  • Providers also need to find a way of linking qualifications with actual skills gained through work experience, to enable employers to recognise that candidates who hold qualifications have skills and abilities which will be valuable in the workplace.