The debate over the necessity and merit of university degrees has been re-started after comments from the head of a leading education research body, which is soon to host a debate on the topic that degrees may be “grossly overrated”. So do young people need to pursue degrees to achieve the best career, and do employers need university-taught graduates?

Dr Tom Karmel, managing director of the National Centre for Vocational Education Research (NCVER), said this week there was a risk in greater numbers of people pursuing university degrees who wouldn’t get a “good return” from it.

The NCVER is staging a debate on the topic in Adelaide in July, asking if increased number of Australians with a degree makes us a “clever country, or merely a “credentialed country”?

It’s an interesting debate to explore, especially from an employer perspective, with many practical skills commonly taught in vocational education or through apprenticeships currently highly in demand.

Data from the 2006 census shows the employment participation and unemployment rates for people with bachelor degrees and people with Certificate III or IV qualifications to be remarkably similar. In fact, the employment participation rate for vocational education graduates was marginally higher.

While the average graduate wage in some degree-qualified industries is higher, such as medicine, dentistry and legal, many Certificate III or IV graduates still do favourably in areas such as plumbing, electrical and engineering than many other university-educated professions.

The Federal Government currently has a target of increasing the proportion of 25 to 34-year-olds with a university degree to 40 per cent by 2025 (currently the level is about 35 per cent). But it must be careful at the same time that by increasing university enrolments and, in some cases, lowering entry requirements that a glut of students are introduced to the university system that would be better off pursuing other types of qualifications.

With a great strain on university student services and careers support, this could potentially lead to higher rates of deferrals and drop outs.

To answer the question originally posed, while we would disagree with the sentiment that university degrees are “overrated”, the question is a reminder that degrees may not always be the most appropriate qualification for many young people, and attractive career paths can be achieved through vocational education.

Our workforce must continue to be a diverse mix to ensure we have the right knowledge and skills to address economic challenges, and we must continue to balance and promote diverse further education pathways – as well as the vital importance of staying in school, which is instrumental to our future.

What’s your opinion on the university degree debate? Let us know.

The Gonski review of funding for schooling has been two years in the making and eagerly anticipated, and the early reaction from stakeholders and Government has been mixed.

The key recommendations propose a revised funding model which will have significant funding implications for all governments, as the report identifies at least $5 billion is required to address issues around student disadvantage and performance issues. At the same time the Commonwealth is stipulating that no school loses a dollar in funding.

The report will now be referred to the Council of Australian Governments to consider how modelling of a new funding system will work in practice. Feedback will be sought from principals, parents and unions whilst public forums will engage parents and the community.

There are several concerns for business and industry in the final report.

The major one is that the terms of reference did not mention engagement with industry to consider business concerns with the outcomes of the education system. None of the recommendations or key findings relate to business issues.

The closest recommendation to do so is the last one, which relates to how schools can engage more closely with individuals or business in how more funding can be accessed to build on the $11 billion currently contributed to the education system through philanthropy.

The report does acknowledge that over the last 10 years Australia has slipped dramatically in comparison to OECD countries in student performance in literacy & numeracy, science and maths. The latest National Assessment Program for Literacy and Numeracy (NAPLAN) results for 2011 indicate that Australian and Victorian performance is not improving.

Indeed, analysis indicates that results have been flat for four years and are in fact regressing. Reduced enrolments in maths, sciences and second languages are also of concern because of the implications in meeting workforce skill needs in the years ahead.

This is not a tolerable situation. The push over the last four years for national curriculum reform has not had any impact and will not be fully implemented for several years. Meanwhile, the adverse impact of a dysfunctional education system continues to leave its mark on the Victorian workforce with around 56 per cent of workers having Language, Literacy & Numeracy (LLN) difficulties. The illiterate worker of today is the illiterate school leaver of yesterday.

VECCI is also extremely concerned about youth disengagement from school education.  The report does not address this crucial issue in its 41 recommendations, but in Finding 25 it notes “schools are responsible for supporting students who are unable to remain within a school, and should have welfare policies that seek to find the most appropriate learning environment for their needs”. This is just not acceptable. The report does not address the key issues around how our education system can be radically reformed to achieve better outcomes.

A system that does not focus curriculum frameworks on meeting both potential employer and student needs is a system destined to keep repeating the mistakes of the past – as a society we will continue to see school leavers populating the workforce with significant deficiencies in LLN skills.

The report does not address how Vocational Education & Training contributes to either student capability or how it underpins better student outcomes. It does not raise the role of Trade Training Centres and the millions of dollars invested in these resources to see them sitting idle. And it certainly does not address the need for improved career development strategies, which will lead to improved student outcomes.

A highly competitive, skilled and innovative workforce is required to ensure the ongoing growth of future jobs. A strong and responsive education system is crucial to meet this outcome. Employers and industry must be involved in future discussions to ensure these crucial and fundamental issues are addressed.

Your input to these issues will ensure that the voice of Victorian industry is heard.

Further comment can be provided to Andrew Rimington, Senior Manager, Policy at arimington@vecci.org.au - or have your say below in comments.

The Labor Party’s state election launch event in Bendigo yesterday had a key focus on education, with significant announcements targeting Year 9 students with the Education for Life program, additional support for apprentices and new pre-school initiatives. Will these initiatives improve education outcomes, or is it, as the Coalition has labelled it, purely a ‘Brumby boot camp’?

There needs to be some understanding of the facts and issues behind these announcements to determine if these initiatives will address the underlying concerns. The key issue facing Year 9 students is canvassed in the recent ABS review of Primary & Secondary Education. The key challenge facing Australia is that the apparent retention rate for Year 7/8 students progressing to Year 12, as at 2008, was only 75 per cent.

This figure has improved from around 70 per cent, so there has been an improvement, however the retention rate is still far too low to be allowed to continue at that level. It is simply a huge waste of young talent.

The Victorian situation

Across Victoria, the early school leaving rate is significantly higher in low socio-economic areas, as reflected in Commonwealth unemployment data. At a national level, the unemployment rate for 16 to 19-year-olds is running at nearly 25 per cent, but it is far worse in specific regions in Victoria, with some of the highest youth unemployment rates in Australia. Youth unemployment is well over 50 per cent in Broadmeadows, around 45 per cent in Dandenong and at similar levels in Sunshine, Eaglehawk and other low socio-economic areas.

This reflects the disengagement of many young people from the education system. The current curriculum framework, teaching delivery and support services do not meet these students’ needs, so they decide to leave the education system. This in turn creates other problems such as an increasing incidence of juvenile crime including assaults, drug & alcohol problems, and related youth mental health problems.

To label Year 9 students as troubled kids that require special treatment misses the point. The entire system requires  transformational change. This cohort has lower levels of achievement as measured by NAPLAN testing which means that language, literacy and numeracy capabilities are lower, a strong factor in the high youth unemployment numbers.

The Education for Life initiative has the potential to act as a circuit breaker for this age group, but the intervention and support requirements needs more than a one term shot in the arm of alternative curriculum and leadership development. It will require a holistic review of current education practice to make a difference.

Increased focus on education welcomed

Recently Professor Ruth Lister was hosted in Australia by the Brotherhood of St Laurence. Professor Lister is the Emeritus Professor in social policy at Loughborough University in the UK and is internationally recognised for her work on social inclusion and welfare reform.

Whilst here she commented that to achieve higher levels of social inclusion, we needed to value children more as one of the country’s prime assets and that Government needed to invest more in children to create a good childhood model.

Therefore the announcements by the Labor Party to invest $100 million to provide 10,000 kindergarten places, as well as additional funding for resources and workforce development, can be seen with the Education for Life initiative as very positive steps in investing in Victoria’s young people. It is a solid start to ensure that student capability is enhanced, that self-esteem can be improved and that school retention increases as a result.

These initiatives, as well as the additional supports to increase the apprenticeship completion rates, are welcome signs that Government is taking these issues seriously. And the key reason business has championed for these issues to be addressed is to ensure that the Victorian economy can continue to grow and provide jobs for all young Victorians.

Tony Abbott has proposed a cash bonus to long-term unemployed people under 30 for finding and keeping work for 12 months and then two years, but will cash incentives alone solve the issue of youth unemployment?

The proposal builds on Mr Abbott’s earlier suggestions to remove the dole for under 30s made in a radio interview in Western Australia last April, in response to the emerging skills shortage in the resources sector.

The idea of a cash bonus to get off welfare is a radical approach compared to past policy approaches. However, what the issue does raise goes to the heart of the problem facing Australia’s economy as it continues to sluggishly gain momentum out of the shadows of the Global Financial Crisis.

There is enormous frustration that while many sectors of the economy are struggling to find appropriately skilled staff, we are hovering at a touch over five per cent unemployment. Even the Department of Treasury & Finance is predicting this will drop to 4.75 per cent (or ‘full employment’) by the end of next year as we emerge from the GFC.

So will cash incentives be enough to motivate the unemployed to get and keep a job? For some it might work, but for others there will be real challenges. 

While there is around 11.5 per cent unemployment in the 15 to 24 age group, it also includes around 24 per cent unemployment in the 16 to 19 age group, which in some disadvantaged regions of Melbourne and Sydney can exceed 40 per cent. What these statistics tell us is a story of complex barriers to these groups getting work, as they don’t have the skill sets to gain and keep a job.

There are a considerable number of people who left school early, have never worked and have language, literacy and numeracy problems. Both sides of politics have recognised this with promises to put more funding into education and support for vocational skills.

Employers can’t be expected to pick up the cost and potential risks of employing someone with little work experience or productive skill capacity. There has to be a balance to ensure there is incentive and support for both the employer and the unemployed person. Paying the cash bonus may not happen for many as their entry to work will simply not be sustainable.

To address this, there must be a strong policy approach to provide the support upfront to address the barriers the long-term unemployed and disadvantaged groups face. Forcing the issue of taking on training also does not provide the solution.

A qualification does not equal solving the skills shortage: many of the jobs in demand now are highly skilled and technical, and the available unemployment pool simply does not have the capability yet to meet industry demand.

So bring on the debate and let’s see how a common sense solution will emerge.

VECCI welcomes the commitment from both Federal Labor and the Federal Coalition to address Australia’s crippling skills shortage, after both parties committed to initiatives designed to encourage Australians to study a trade.

It is encouraging that both political parties have recognised the pressing issue of Australia’s skills shortage. Well-designed, effective policies that can help address Australia’s skills shortage, which is holding back the growth of businesses and their productivity are welcomed.

The Federal Government’s plan to give apprentices financial incentives to finish their training, and the Federal Coalition’s plan to bring back technical colleges, are both commendable policies.

Australia already has a skills shortage but with the youngest of the Baby Boomers reaching retirement age within the next 15 years, we also have an ageing workforce. Many of these Australians will retire from a career in a trade.

Incentives that help to address an ageing workforce and the country’s future skills needs are good news for Australians and business.

With Australia’s labour force set lose a third of its most experienced workers over the next 15 years to retirement, the Federal Coalition’s plan to offer employers incentives to give older Australians jobs is welcomed.

The Coalition’s planned $3,250 payment to employers who help 50 to 65-year-old Australians off Centrelink benefits and into jobs would do a great deal to help ease the country’s skills shortage and rapidly ageing workforce.

Australia has a population of 5.3 million Baby Boomers, making up 34 per cent of the workforce. However, this group will make up just 11 per cent of the workforce in 2020, therefore leaving a massive gap that Australia’s smaller number of younger workers will not be able to fill.

VECCI welcomes well designed initiatives that help employers recruit, retrain and retain older employees. The incentive offered by the Federal Coalition will help employers cover training costs to update the skills of older employees and will help cover costs associated with any potential loss of productivity while new employees are trained.

Employers may also put the incentive payment towards the cost of updating technology or work processes that may be required to meet the needs of older employees.

Many of the people set to benefit from this scheme are keen to learn new skills, and are reliable, punctual and committed individuals. This incentive supporting employers to address an ageing workforce and their future skill needs is good news for older Australians and business.

In an effort to address issues relating to skills shortages, the Federal Government has revised the skilled migration program and cut the Skilled Occupations List (SOL) from 400 down to 180 “highly valued occupations”.

While this latest development aims to meet the needs of Australia’s labour market, it also has the potential to adversely affect small business and the overseas student market.

As recovery is still building, this new approach may adversely impact on small business and retard growth. Furthermore, it is important for balance to be maintained between local trade-qualified roles (i.e. cookery, hairdressing, etc) and an inadequately prepared local labour force to take these jobs. VECCI supports a demand-led and skills-focused approach, and believes that processing should be expedited to ensure employers get the skilled workers they need.

The rationalisation of skills lists and a greater emphasis on employer sponsorship is welcomed, but we must be mindful of the message that is being sent, particularly to potential overseas students.

There should be greater recognition given for the fact that Australia would benefit more from accepting migrants that have lived and undertaken study here and trained to Australian standards; rather than in overseas institutions and work environments.

While every occupation on the new SOL is a recognised skill shortage occupation, there are still questions over why others didn’t make the list. By subjectively deciding that skill shortage occupations like cooks and hairdressers are no longer highly valued, what is to stop a future Minister deciding that other skill shortage roles are also no longer of value?

The SOL should reflect industry demands to meet long term skilled labour needs, and not value judgements over what are desirable occupations.

What do you think of the latest developments in the area of skilled immigration? Will these changes have an impact on your business? Let us know by leaving a comment.

According to The Age, the Rudd Government has gotten tough those seeking to gain permanent residency via the skilled migration scheme – which will result in an estimated 20,000 people having their visa applications cancelled.

While tightening the reins on the skilled migration scheme is important for meeting Australia’s current and future skill needs, great care must be taken to reassure potential migrants that they are still welcome in Australia.

Furthermore, the changes announced to Australia’s migration system have been long overdue and are welcomed, but the key thrust must be to ensure that current and future industry skill needs are met.

The decision to rationalise the various skill and occupation lists into a single new Skilled Occupation List will make the process clearer for potential applicants and employers.

In addition, the emphasis on prioritising migration driven by employer-demand is important to ensure that industry needs are met and that migrants will have employment certainty.

However, this issue must be handled with a degree of sensitivity as there is the danger of migrants getting the wrong message and incorrectly assuming that they are not welcome in this country.

Whether they are skilled individuals from abroad or international students considering Australian employment after the completion of their studies – we must ensure that these individuals are not discouraged from calling Australia home.

Australia must aim to be a destination of first choice for the best and brightest graduates and professionals particularly when international competition for them is only going to intensify into the future.

The changes announced to Australia’s migration system have been long overdue and are welcomed, but the key thrust must be to ensure that current and future industry skill needs are met.

In The Australian:

UNIVERSITIES Australia has warned this year’s big expansion of places is unsustainable and the sector will face a challenge to maintain quality and expand unless backed by additional teaching and infrastructure money.

Universities can currently enrol 10% above their existing approved student enrolment level and have been doing so for some time demonstrating that they can do more for less. However, the issues of quality remains a major concern where universities are driving down costs by reducing the range of subject offering, “dumbing down” assessment requirements and reducing support services and resources for students.

Additional investment is required to ensure that as the Higher Education system moves to a demand-led approach that disciplines linked to skill shortage areas are supported to ensure an increased supply of graduates is maintained.

Details on the number of applications and first-round offers for university places in 2010 highlight the gap in our higher education system with 11,600 people missing out on a place at a Victorian university.  It is disappointing that thousands of people who are ready and willing to pursue further education are locked out of our universities, particularly when current skill shortages pose an ongoing challenge for Australia’s future.

However, what the figures also show is that there is continued demand for higher-level education with significant growth in demand for health related courses and science, up by 22 and 21 per cent respectively. This is important if we are to meet the projected high demand for health services and science and engineering professionals into the future.

Combined with overall university demand up by 6 per cent for the second year in a row, it is clear that if we expand the number of places available we would achieve the Government’s target of 40 per cent of 25-34 year olds obtaining a Bachelor or higher-level qualification by 2025.

The priority for government is to:

• open up our higher education system to greater flexibility and choice;
• provide more funding to improve teaching quality;
• ensure it can fund additional places to meet demand under its uncapped places plan;
• allow institutions the flexibility to pursue alternative funding options; and
• encourage innovation and collaboration with industry.

Lastly, people who have missed out on a place should not be discouraged: with a growing economy, employer demand for vocational and technical skills is recovering strongly. TAFE, community and private vocational providers – as well as apprenticeships and traineeships – are alternative pathways to a post-compulsory qualification and to enter the labour market.