COVID-19 has been a once in a lifetime phenomenon. It has unfolded rapidly and in addition to the effects on health, its profound impact on the labour market cannot be ignored. Despite efforts to cushion the blow, the immediate effects have been devastating on employment and Australia is entering its first recession in more than thirty years.

However, despite the gloom it provides a unique opportunity for structural economic, employment and education reform to ensure Australia’s future economic and employment prosperity.

This will be greatly strengthened if labour market analysis, employment, education and training, regional development and innovation are considered together. The risk in considering these elements in isolation is that we rebuild what we had, rather than something better.

Industry lens first port of call

Analysis of the economic and employment impacts of COVID-19 by governments around the world has looked at employment at an industry and in some cases, size of business level. This has told us what we expected to see – that small businesses have been struggling more so than larger ones, and that industries most impacted are arts and recreation, accommodation and food services. [1]

While this is useful knowledge, it is limited in what it tells us as a nation in terms of how to grow employment, what to focus on to grow our prosperity, and what we need to do to support job creation.

We need deeper insights at the intersections of key areas:

• labour markets,
• occupational corridors,
• skills,
• business rebuilding timeframes,
• regional context, and
• predictions of the future impact of things like public perceptions of desirable occupations.

Occupational focus addresses more complexity

Part of the need for the occupational lens is recognition of the complexity of the intersection between industry sectors and occupations, with occupations not mutually exclusive to industry sectors.

Occupational level analysis helps to identify workforce transition opportunities that exist with adjacent labour markets. For example, social workers and counsellors are employed in the child and family sector. However, this sector has strong intersections with the disability, health, education, welfare and youth justice sectors, all of which also employ social workers and counsellors. Identifying synergies such as these help to identify areas of employment opportunity in other industries.

In addition, occupational data can help to identify occupational corridors that support career pathways either vertically (such as the Enrolled Nurse and Registered Nurse pathway) or horizontally (such as recognition of prior learning between related occupations such as the Enrolled Nurse and Anaesthetic Technician).

Employment driving the skilling conversation

“A nation’s human capital endowment – the skills and capacities that reside in people and that are put to productive use – can be a more important determinant of its long term economic success than virtually any other resource. This resource must be invested in and leveraged efficiently in order for it to generate returns – for the individuals involved as well as an economy as a whole.” World Economic Forum, Human Capital Index

While there are key strengths of Australia’s current education and training system and our global reputation in the tertiary sector, there will now need to be a strengthened emphasis on education and training pathways that support employment outcomes, a challenge faced by the National Careers Institute and the National Skills Commission.

A key part of this is ensuring that skilling investment and efforts aligns to industry’s needs. This may result in challenges to our traditional university, VET and apprenticeship models towards micro-credentialing and lifelong learning.

Skilling of the future workforce needs to better align to labour market opportunities identified in labour market occupational analysis. Without the occupational analysis, there is a tendency to guess at skilling areas of need and opportunity. Data and evidence on area of employment demand would assist both future students and education and training providers.

 A failure to recognise regional difference

Regional development plans should link to changes expected into the future, such as future of work impacts for the key industries of the region. In addition, the linkage between education and training pathways and employment pipeline will be key so that regions are not reliant on a fly-in fly-out workforce for the skills and capabilities they require.

This needs to be balanced with an assessment of critical occupations and skills that are required for the industries in the region to thrive, including consideration of the suitability of remote working arrangements and labour market competition within the region, particularly where key industries are able to offer significantly higher wages.

 Starting a national conversation

If thoughtfully planned, the post COVID-19 Australia could see a rebuilding of labour markets based on a detailed understanding of occupations, a reorienting of education and training to align to jobs, and an embedding of innovative regional economic development that strengthens our global position, leads to greater prosperity, and supports employment for generations to come.

We have the opportunity now to start a national conversation about what is working well, and what needs to change across labour markets, education and skilling, and regional development. Planned wisely, this will ensure Australia’s future economic and employment prosperity.

 

Adam Norden, is the national Employment Lead Partner at KPMG, and Michelle Baulderstone is an Associate Director specialising in workforce planning. For a full version of this discussion paper contact anorden@kpmg.com.au.

[1] Australian Bureau of Statistics. 2020. 5676.0.55.003 –  Business indicators, business impacts of COVID-19, week commencing 30 March 2020.

[2] Jobs Queensland. 2019 Lifelong Learning