Qualifications use for recruitment in the Australian labour market

The use of qualifications by employers is poorly understood and documented. This study explored how employers use qualifications in their recruiting processes.

• The study found that about half of the 359 employers surveyed used qualifications as a screening mechanism and minimal requirement in their selection processes, while a quarter used them as a sorting or ranking mechanism. Employers valued qualifications as a signal of greater potential for further learning and skills acquisition.
• As a signal of immediate competence, employers placed a high priority on previous work experience and experience in their industry. Employers also considered personal qualities in their recruitment decisions.
• These uses of qualifications by employers do not apply across the board to all positions within the enterprise. They apply more to professional, managerial and clerical employees. Employers typically rely on networks and local contacts and work experience for operator level and technical trades positions. The growth of casual employment has not altered these behaviours.
• The detailed results suggest that qualifications are embedded in employers' recruitment decisions. However, there is room to build stronger currency of vocational education and training (VET) qualifications by linking them with industry and work experience to reflect the behaviours and experiences that are most valued by employers.

There has been a high level of national and international interest in qualifications and qualifications systems over a number of years, and some nations, including Australia, have invested in national qualification frameworks. These developments are an expression of the increasing roles of qualifications, especially in the context of the industrial and social demands of knowledge-based industries and lifelong learning. This, in turn, has given a stronger role to government in the design and management of qualifications.

The history of the education and training sectors in Australia has led to the different constructs of qualifications for the school, vocational education and training (VET) and higher education sectors, and to the different governance arrangements within these three sectors. These different constructs and governance arrangements continue to restrain policy options for qualifications. One prominent feature is the high degree of institutional separation between the school, VET and higher education sectors.

The use of qualifications by tertiary education providers is well documented and can be demonstrated statistically on an annual basis. The use of qualifications by employers, however, is poorly documented. Yet, employment outcomes remain a primary purpose of most qualifications.

Qualifications as testimonies of individual learning carry intrinsic and economic or exchange value. Intrinsic value can be associated with status and, traditionally, has been important for academic qualifications within educational hierarchies. Exchange value has been associated with the utility of the learning, especially in industrial settings. These values are present in most qualifications, and the extent of this value is influenced by a variety of factors.

The study examined the use made of qualifications in recruitment (external and internal) processes by employers through an interview-based survey of 359 employers across Australia. Employers were classified into six industry types and they were asked to respond to a range of questions relating to four categories of employees. The survey was administered using regional coordinators from the Enterprise and Career Education Foundation (ECEF) as enumerators. It was designed to represent industry areas, geography and firm size; however, difficulties encountered in the administration of the survey resulted in a bias of returns from Victoria.

Employers were asked a series of questions about their use of qualifications for searching and selecting employees, the attributes that are signalled by qualifications, the relevance and value of these attributes within selection criteria, and the factors that influence their trust in qualifications.

The study acknowledges the wide range of variables that influence the features of recruitment and selection processes. It locates these behaviours in two sets of searching and selection activities: those of graduates and those of employers. These activities vary, for both graduates and employers, with the types of qualifications. They also vary with environmental factors, including those that are associated with national and regional institutions and cultures.

To an extent the survey confirms the findings of previous Australian studies. It verifies that employers place a high degree of value in personal qualities of their workers, and that they place a high priority on previous work experience and experience in their industries. It indicates that about half of all employers use qualifications in their selection processes and most regard qualifications as important assets for potential recruits. Given the number of employers that experienced difficulties in finding suitable recruits these levels could be regarded as significant.

The variations in the use of, and attitudes towards, qualifications across types of firms and categories of employers are consistent with overseas findings about the different industry and occupational search and selection patterns. Employers typically rely upon networks and more localised contacts for operator-level positions, and search more widely for managerial and clerical employees. These behaviours do not appear to be greatly affected by the growth of contingent employment.

Employers' concepts of, and reliance upon, qualifications are relatively subjective. What constitutes a qualification is what is relevant to them and their recruitment and skills needs. The secondary role of qualifications, behind industry and general work experience as criteria for selection, is not primarily an expression of relative trust. Rather it is related to employers' views of what provides the better preparation and background for recruits, together with a high value placed on risk minimisation. Most employers acknowledge that qualifications signal greater potential for learning and skills acquisition, but they see them as weaker signals for more immediate workplace competence. This is further validated by the overall preference of employers for vocational education and training compared with upper secondary and university qualifications, although university qualifications obviously have stronger currency in some sections of the labour market.

In general, qualifications in the Australian labour market play both a sorting and a screening role although it would seem that the sorting role is stronger. The sorting role is where qualifications are used to allocate different applicants as potential recruits for different types of jobs or occupations. A screening function is where qualifications are used to eliminate or screen out applicants for positions or occupations.