Upskilling and reskilling: the impact of the COVID-19 pandemic on employers and their training choices

The COVID-19 pandemic has exerted a profound impact on Australian employers as a result of the social and economic restrictions imposed by governments to control the spread of the virus. To address this, governments have adopted a range of measures to support individuals and businesses. The initiatives most relevant to employers were the JobKeeper scheme, funding for infection-control training, a wage subsidy to support apprentices and trainees, an incentive to boost apprenticeship commencements and the JobTrainer scheme.

In the initial stages of the pandemic, many businesses had to adjust rapidly to changed operating conditions and the reduced demand for their products and services. Data collected by the National Skills Commission (2021a) indicated that between 40 and 50% of businesses in all states and territories were substantially impacted by the pandemic and associated restrictions during the April to June quarter in 2020. Impacts varied widely by industry, for example, Australian Bureau of Statistics (ABS; 2021a) data revealed that 80% of businesses in the accommodation and food service industry were significantly impacted by COVID-19 restrictions, followed closely by arts and recreation services, at 70%.

Businesses of all sizes reported needing to modify their operations due to the pandemic. The most prevalent adjustments related to the way in which they provided their products and services, along with changes to staff roles or duties. Employers in the industries impacted most severely looked to pivot their operations, for example, restaurants moved from in-house dining to home deliveries (O’Dwyer 2021).

For many employers, the changes induced by COVID-19 in the way products and services are provided have accelerated the digitalisation of business operations. Data collected by the National Skills Commission (2021a) reported that around a third of businesses in Australia adopted new technology due to the pandemic, although this varied according to the industry. Factors driving this change were the increased use of digital technologies as a consequence of social restrictions; increased online shopping; businesses increasing their online footprint; and an increased proportion of the workforce working from home or remotely.

One of the most significant impacts of the pandemic on employers was the sudden transition to remote-working arrangements for their employees. The Productivity Commission (2021) reported that it is unlikely that Australia will return to pre-pandemic levels of working from home due to shifts in perspective on this approach to work on the part of both employers and employees. The Productivity Commission (2021) also highlighted that one of the potential costs to employees of remote working was fewer training, development and promotion opportunities as a result of their decreased visibility to managers.

In the second half of 2020, as restrictions eased in all states and territories apart from Victoria, the proportion of employers recruiting rose from 22% to 45% (National Skills Commission 2021). This corresponded with an increasing proportion of employers experiencing difficulties in finding suitable staff, particularly larger employers (ABS 2021a). These difficulties were mainly due to a lack of applicants for jobs, followed by applicants not having the necessary skills or qualifications (ABS 2021a). The closure of international borders, limiting access to the global labour market, was also a significant issue for large employers (ABS 2021a).

The impact of COVID-19 and the resulting restrictions not surprisingly had a flow-on effect on employers’ training requirements. Following the end of the initial lockdowns, employers were faced with a significantly changed operating environment, one that included infection-control measures, employees working remotely, ongoing social restrictions, and, for many states and territories, intermittent lockdowns. Over 40% of employers in the 2021 Survey of Employer Use and Views of the VET System (NCVER 2021c) reported the emergence of new training requirements due to the impacts of the COVID-19 pandemic, with higher proportions of larger employers than smaller ones indicating this. The industries hardest hit by the pandemic, such as accommodation and food services and arts and recreation services, had the highest proportions of employers with new training requirements resulting from COVID-19.

The main reason given by employers for these new requirements was to enable them to operate effectively and safely in the COVID environment (83.6%) (NCVER 2021c). The next most common responses related to the requirement to train staff to undertake new tasks and responsibilities (32.8%) and the need to access training to help manage business operations in the COVID environment, for example, switching to online ordering of products (30.8%).

The new training requirements were predominately in the areas of health and safety (70.8%) and infection-control skills (68.0%) (NCVER 2021c). This was especially so for employers in industries that involve a high degree of social contact, such as accommodation and food services and health care and social assistance. A smaller proportion of employers also reported new training requirements in sales and customer service (25.1%), and computer and data literacy (18.6%).

To meet these new training needs, employers tended to use informal or ad hoc training (55.5%)
and unaccredited training, which was provided either in house by the organisation (50.3%) or delivered
by an external provider (22.0%) (NCVER 2021c). Employers chose the type of training they used because of an immediate need to respond to rapidly changing training needs (52.1%) and because of its availability (34.4%).

COVID-19 restrictions forced employers to rapidly transition training to online forms of delivery (Bowman & Callan 2021) and registered training organisations (RTOs) to transition a considerable amount of face-to-face training online (Hume & Griffin 2021). The consensus among employers was that the increase in this form of training delivery was here to stay — they viewed it as a time- and cost-effective way to skill their workforce (Bowman & Callan 2021; O’Dwyer 2021). However, concerns were raised over whether it could be as effective for those forms of training that were traditionally delivered in person, for example, training in the use of tools and equipment (O’Dwyer 2021).

An analysis of longer-term training trends by NCVER (2021c) revealed that the proportion of employers using nationally recognised training or had jobs that require vocational qualifications is currently at the highest level in 10 years. The proportion of employers with apprentices and trainees is also at its highest since 2011, reversing a steady decline over the past decade, with employers taking up the apprentice and trainees wage subsidies on offer from the government.  The proportion of employers using unaccredited training is also at its highest since 2009.

Around one in five employers had changed training priorities for the coming 12 months compared with the previous 12 months due to the impacts of COVID-19 (NCVER 2021c). The main reasons given were: to catch up on missed training; to meet COVID-19 regulations; and to continue upskilling their staff. Just over 30% of employers expected the amount of training they will provide in the next 12 months to increase, with fewer than 5% expecting a decrease. The main reasons for increasing training were:

• they were hiring more staff or looking to expand their business
• they needed to upskill or provide additional skills to their employees
• the workplace had changed due to the COVID-19 pandemic.

Both employers and training organisations have shown themselves to be remarkably adaptable and innovative in their ability to provide training to the workforce, despite the challenges of the pandemic. During the pandemic, employers required training that could respond to their rapidly changing operating environments, with a large proportion utilising unaccredited and informal training to meet their needs. The findings of this report and other research indicate a sizeable proportion of businesses are now looking to training to help them to recover and grow in the post-pandemic economy.

The challenge for the vocational education and training (VET) system in Australia will be to ensure that it continues to adapt and innovate its services in a responsive way, one that meets employer skill needs. We know from NCVER (2021c) that a large proportion of employers are satisfied with the training they use. However, for those businesses who are not satisfied with accredited training, the consistent reasons cited are:

• the relevant skills are not taught
• there needs to be more focus on practical skills
• the quality of the training needs to be improved (NCVER 2021c).

The nation’s post-pandemic economic recovery, with the transition to new ways of working, offers opportunities for the VET system to address these ongoing concerns of employers, as well as meet new requirements such as:

• the need for employers to meet COVID-19 safe operating regulations
• new skilling needs due to technological change and the accelerating digitalisation of the workplace
• blended methods of training delivery (striking the right balance of online and face-to-face).

The VET sector’s ability to respond to these challenges will play a key role in determining the future competitiveness of Australian employers in a post-pandemic world.