Addressing Australia's skills shortage with Peter Dawkins AO

Peter Dawkins AO, interim director of Jobs and Skills Australia, the federal government’s new skills and training agency, says thorough workforce planning, with more timely, accurate data, is essential to respond to current and future trends.

Professor Peter Dawkins AO was enjoying semi-retirement in Melbourne after a 40-year career when he got an offer he couldn’t refuse.

With a chronic skills shortage blocking economic growth and Australia lagging on productivity and innovation, Dawkins took on a defining role as the interim director of the federal government’s new agency, Jobs and Skills Australia (JSA).

This statutory body replaced the National Skills Commission (NSC) last year, following the passage of the Jobs and Skills Australia Act 2022.

As a key element of the Albanese government’s economic architecture, the JSA is designed to provide independent advice and more timely analysis and forecasting of the labour market, plus current, emerging and future skills and training needs across the nation.

“Our core role is to advise the government and others in the skills systems about Australia’s skills needs,” says Dawkins. “That involves analytical work on the gaps — short, medium and longer term — and what levers to pull to meet those gaps.”

The JSA approach will follow the classic tripartite model — working closely with business and unions, higher education, and vocational education and training (VET).

As Minister for Skills and Training Brendan O’Connor told parliament in March, establishing the JSA as a trusted national source of data, analytics and workforce forecasting and planning is a government priority.

“[The JSA will operate] with unions, employers and state and territory governments brought in as partners, informing and resolving the skills and labour market crisis we are facing in building the workforce we need for Australia’s future,” he said.

On the agenda

The JSA has a big remit and expectations are high. There is already a long to-do list.

One of the first tasks is to get a decent fix on the nation’s current state of skills. The agency is leading a national study of adult literacy, numeracy and digital skills to provide current data on the levels of foundation skills among Australian adults, including those in regional and remote areas. Foundation skills are the competencies that underpin workforce participation, productivity and social inclusion. They include language, literacy, numeracy and digital literacy.

Dawkins points out there is no current single data source measuring levels of foundation skills across Australia and while there is a range of data and reports that provide some understanding of the sector, data that measures literacy, numeracy and digital literacy is out of date and lacking detail.

“The last study, conducted around a decade ago by the Australian Bureau of Statistics through an OECD survey, identified that three million adults of working age didn’t have the numeracy and literacy skills to participate meaningfully in the workforce,” says Dawkins. “It would be good to be able to see if things are better or worse — and to get a bit of in-depth understanding of the problems and potential solutions.”

Another job on the list, a First Nations people workforce analysis, was completed in June.

In addition, the agency is undertaking a capacity study on the workforce needs to support Australia’s transition to a clean energy economy.

“This is one of the big dynamics in terms of structural change for the economy, depending on how rapidly we transition,” says Dawkins. “That will bring big changes in the different types of skills we need.”

He notes this will involve doing detailed scenario analysis, region by region, and assessing what the different occupational and training needs are.

Migration system

The JSA also has a role providing data on what’s happening with skills and the migration system. In April, Home Affairs Minister Clare O’Neil told the National Press Club that the JSA would be given a formal role to use facts and data to “prove out where skills shortages exist and help us properly integrate the needs in our jobs market, our training and education system, and our migration system for the first time”.

This is a complex topic and Dawkins says the agency is “working hard to work ourselves up to give the best possible advice we can — that’s a very important role”.

Understanding the issues requires a change of mindset by employers. He says the NSC found areas of significant skills shortages had doubled in recent years.

“For a long time, between the mid-1970s until fairly recently, we had significant levels of underemployment — so skills issues and hiring was less of an issue. Of course, when the demand for labour goes up, people think, ‘Gosh, where am I going to get my labour?’ It’s good for society that it’s bringing more people into jobs and I guess employers are thinking they have to be more proactive to make the skills meet the needs of their work. When the labour market isn’t so tight, there’s a risk employers can be a bit lazy and sometimes have a surplus of labour. That’s not true anymore and it means there is a premium on getting it [labour].”

Dawkins adds that as a basic step, employers should be doing workforce planning. “Many businesses do this very well, others probably need to enhance it. They need to think about how their industry is changing, how the skills they’re using are changing, and their future needs. It’s not just that different occupations have changed. There’s an increased need for digital skills, interpersonal skills and for workforces that can solve problems and are adaptable.”

According to Dawkins, if you want to understand what’s happening in jobs you need to understand what’s happening in occupations. “What an accountant does now is completely different to what they did 20 years ago. So what we’re doing with our skills classification is [factoring in] how the skills needs change over time.”

How it will work

The consultation mechanism through which employers, peak bodies and unions interact with the VET sector is also being overhauled through 10 Jobs and Skills Councils. These range from agribusiness, arts and energy to finance and technology, manufacturing, mining, transport and automotive. The broad brief is to identify skills and workforce needs for the sectors, map career pathways across education sectors, develop VET training packages, support collaboration between industry and training providers to improve training and assessment practice, and to act as a source of intelligence on issues affecting their industries.

Dawkins says the councils have been reduced from 67 organisations in the previous system, albeit those had a narrower function. “The informal discussions really enrich our understanding of what’s going on around Australia. It will be a major success factor to have those resources,” he says.

While still in the establishment phase, a number are building from strong foundations. For example, the Finance Technology and Business Skills Council grew out of the Digital Skills Organisation.

“They have already done a lot of analysis of digital skills across the economy and their analysis gives a picture of the extent to which employers need people with expert digital skills and the extent to which other employers just need digital literacy,” says Dawkins. “It’s really a whole-of-economy need.”

The councils are developing their sectoral plans, which Dawkins says will be helpful as reference points.

“I think of it as a joined-up approach to skills — and also joined up in the different levers to pull. There has been a tendency for these different parts of the skills system to operate as different silos. The industry intelligence, combined with our work, will provide a stronger picture of our skills needs… It is indicative planning that identifies where the issues and pressure points are and gives early warning. It’s got a lot of potential and we’re gearing up to give it our best shot.”

A Lifetime of Experience

Migrating to Australia from the UK in 1984, Peter Dawkins AO became Curtin University’s first Professor of Economics in the 1990s and was the Ronald Henderson Professor and director of the Melbourne Institute of Applied Economic and Social Research at Melbourne University from 1996 to 2005.

For the following six years, he moved to the public sector as Victoria’s Deputy Secretary of the Department of Treasury and Finance, and Secretary of the Department of Education and Early Childhood Development.

He was then recruited as vice-chancellor of Melbourne’s Victoria University, retiring in late 2020 after a decade in the role.

Dawkins helped establish the West of Melbourne Economic Development Alliance, which he now chairs, as well as being a non-executive director of UniSuper. In 2021, Dawkins co-led a review of university-industry collaboration in teaching and learning for the federal government.

The Jobs and Skills Australia Amendment Bill 2023, currently before federal parliament, provides for the permanent governance arrangements and functions of the JSA, including a commissioner and ministerial advisory board, plus a review of the Act’s operation. Dawkins is adamant his JSA role is an interim appointment.

Top 10 Occupations in Demand

1. Registered nurses 8377 (job ads)
2. Software and applications programmers 6269
3. Aged and disabled carers 4642
   
4. Child carers 4277
5. Construction managers 4230
6. Motor mechanics 3924
7. Retail managers 3777
8. Chefs 3725
9. Generalist medical practitioners 3352
10. Metal fitters and machinists 3137

This article first appeared under the headline 'Skillset in Motion’ in the August 2023 issue of Company Director magazine.