Increasingly, the economy needs workers with higher-order and transferable skills.
A need for higher-order skills
Higher-order skills in demand across the workforce call for deeper learning and skills acquisition and need to be supported by new forms of vocational education and training (VET) qualifications.
National training arrangements for the last three decades have been effective in codifying via competencies the requirements of over 80% of Australian occupations. This has been comprehensive and, in some regards, complete. For example, more than 16,000 units of competency operate within the funded VET system in Victoria (Victorian Skills Authority and NCVER (2023), Analysis of Units of Competency).
The one-size competency-based approach and associated regulation across VET struggles to cater for the broader equity and social purposes often called upon through the VET sector. With an increased focus on lifting the education capital of more Australians through foundation learning in literacy, numeracy and basic digital capabilities, nuanced approaches are needed.
The approach to how these competencies are packaged up for delivery in the context of an occupation along with their specification of skill
make them appropriate for some occupations but not for others. At a national level, over half of these national units of competency available for funding are not used. As a result, the National Qualifications Reform processes currently underway are specifically reviewing this issue to reduce duplication and make the VET system easier to understand and navigate for learners, employers and training providers. Employers also call for micro-credentials in response to what they see as skills needs not available in VET.
VET faces new demand pressures, such as higher-level skills for initial vocational education, lifting participation for people in need of foundation and work skills, transferable skills to build workforce mobility, and greater alignment in learning recognition between VET and higher education to smooth credit and progression in learning to build career options. These changes place new requirements on VET qualifications.
High levels of prescription tied to an occupation stifle flexibility and innovation in supporting the skills needs of employers. Skills framed for the needs of only one industry limits their recognition across others and dampens the movement of workers. This needs to be balanced with the needs of specialisations (entailing deep knowledge) which is a feature of advancing industries.
A greater focus on the transferability of skills will assist in the delivery of local responses to local skills challenges. Stakeholders note that having broader qualifications which deliver transferable skills across sectors will increase engagement of learners and open up more job opportunities in industries. This is particularly critical in regional areas.
Australian skills ministers are exploring new approaches to VET qualifications. The mix of industry-specific, transferable and core (capability) skills is an important design consideration, as are the needs of learners. An industry qualification which defines technical skills narrowly limits the number of providers to deliver the course (due to cost to delivery ratios), as well as candidates and new entrants to the industry. Equally, if the focus on technical skills ignores the learning needs and life circumstances of learners, both employers and learners miss out.
In this context, micro-credentials can be harnessed to complement entry level vocational education, especially for upskilling existing workers.
Recommendations
Through skills ministers’ work on VET qualification redesign, explore options to streamline the number of units of competency and advocate for VET qualifications to better reflect the aspirations of learners, and transferable skills to support wider career options.
Trial new approaches to designing VET qualifications through local accreditation arrangements.
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