Australian governments have responded quickly to COVID-19, flattening the infection curve. Now it is time to consider our economic recovery – particularly the role of vocational education.

National, state and territory governments are all designing COVID-19 responses across the economy, including considering changes to national training package products to meet critical workforce needs. For now, short courses in infection control, food hygiene, cleaning, first aid, and aged and disability care are all becoming available. Wage subsidies and labour market programs are also prominent.

The recovery is likely to be slow. After the 2008 Global Financial Crisis, the unemployment rate never returned to the previous level. In the case of COVID-19, recovery will go beyond a short-term challenge given social distancing, industry lockdowns and global supply chain disruptions have hurt consumer and business confidence, and some employers’ viability.

The labour market is undergoing a major shift

Last decade the big task for the vocational education sector was to address skill shortages and meet new demand; now we are likely to have a surplus of skilled workers and job shortages.

Workers with transferable skills are likely to seek to migrate from higher-impacted to lower-impacted sectors. While this is logical, many employers fear that standing down skilled workers or reducing their hours will mean losing them to another industry (such as from residential construction to civil construction). This exacerbates the challenge for industry after the crisis.

Many displaced workers will turn to education to find new opportunities in a competition for scarce work. Others, particularly young people, women and older men, will likely leave the labour market. People with poor language, literacy and numeracy (LLN) skills will be at the greatest risk of unemployment.

Foreign workers have filled critical skills shortages in some businesses. If travel restrictions halt this key labour supply, those workers will be nearly impossible to replace. The impact? You lose your chef, you have lost your restaurant. The loss of skilled workers will make Australia’s recovery much harder, particularly in regional areas.

Short-term responses are unlikely to be a panacea. The downturn will be longer than the duration of short courses and most qualifications. That means students could complete their studies and enter a highly competitive job market. As experience will usually trump qualifications, people may not be able to find employment despite new knowledge and skills.

This poses challenges for governments and for our tertiary education system.

Demand brought about by changed economic conditions may put pressure on an already strained tertiary system. Rapid growth, particularly in vocational education and training, will expose the short-term limited availability of VET trainers and quality placements in key disciplines.

The recovery depends on deep thinking about responses, rather than trotting out initiatives from the past, and on speed and flexibility from a training system that, despite its strengths, can be complex, bureaucratic and riddled with barriers to flexibility.

Policymakers need to consider the medium and long term

So what should we do?

Governments’ response so far has rightly been short and fast, but the unprecedented investment by governments at all levels needs to consider the medium and long term. The best results will come if people can make considered decisions on where to retrain without facing pressure due to arbitrary timelines on, say, the availability of free courses.

Most concerningly, displaced people will have far greater challenges than what to study or what is next in their career. This creates the risk of uninformed decisions exposing them to long-term unemployment. Comprehensive and individualised career advice is required to support a person’s ability to meet their short-term need for a job and long-term need for a career.

Support must include investing in workers most at risk to prevent a new generation of long-term unemployed. Training will need to include LLN, employability and industry-specific skills. Programs must extend beyond wage subsidies and look to developing employees to be productive early in their new careers.

Short courses will help people in low- or semi-skilled roles hold onto their jobs and will help workers with transferable skills to bridge to industries or roles less impacted by COVID-19.

But longer qualifications will be essential to keep students engaged in education and training during the worst of the crisis and will deliver benefits in recovery as they emerge as higher-skilled workers. Further, recognition of prior learning will be important in encouraging workers to change industries.

These critical choices come at a time when the VET sector is beginning a major reset, including the piloting of new approaches to industry engagement, through skills organisations, and to qualifications themselves. Stakeholders assert that the training product development process itself is no longer fit for purpose, meaning many qualifications do not meet the needs of employers.

Many employers value the core of the training system (particularly apprenticeships), though are seeking streamlined approaches to developing micro credentials and qualifications and improved consistency across jurisdictions. The core will need to be preserved, strengthened and broadened to help bring Australia through the period of recovery, while the new VET architecture, such as the National Skills Commission, works on the priorities for reform.

Now is the ideal time to strike new ground in tertiary education. New models need to incentivise higher-level learning and skills development and enable part-time workers to engage and prosper. That means new integrated higher education and VET programs, new employment-based pathways spread across the economy, quality higher education and VET programs focussed on future jobs, and implementing new approaches to industry-relevant qualifications and courses.

On the jobs front, regional areas have recently experienced record low rates of unemployment (the six regions with the lowest unemployment rate are all regional). While Australian workers are surprisingly static, there is an opportunity to incentivise workers to move to regions where their skills are needed.

We know the recovery from COVID-19 will not be easy, but to get the economy on track we will need the right workers with the right skills in the right jobs. The vocational education system has a big role to play.

Get in touch to discuss how we can support the right policy settings for vocational education.

An abridged version of this article was first published in The Australian.

Co-authored by Rod Camm during his time as a Nous Principal. Prepared with input from James Rendoth.