Cracks in the Foundation: Exploring barriers to successful sectoral programs for young workers

September 18, 2023

Work and Workers

The IT industry says yes to sector programs to solve its skills shortages and give young people a go at better quality jobs

Young people aged 15 – 25 have for decades been the generation most at risk of unemployment and underemployment. The industries this generation are most likely to enter – most notably the retail trades and accommodation and food services – are characterised by precarity, with poor prospects for certified skills training and progression. 

The chances of young people accessing decent work with good prospects are significantly lower for those who have not completed secondary school or are not at university or other higher education. That disadvantage is compounded by the current Australian system of employment services, because mutual obligations policy requires people on income support to look for jobs and take available work or risk losing their income support. Careers information and vocational skills training are not well coordinated, and wage subsidies by themselves are not sufficient incentives for employers to hire inexperienced candidates. 

At the same time, some industry sectors are suffering from serious skills shortages. These sectors have scope to offer entry level jobs backed up by industry-relevant, workplace-based skills training, with pathways to formal qualifications and opportunities to progress, within firms or on to other roles in growing industries. These are not skills shortages that can – or should – be met through skilled migration, when unemployed young people in Australia could be connected and supported into quality employment. This would return broader benefits to the Australian economy while achieving greater social inclusion, diversity in workplaces, and equity of employment outcomes across generations and for those at risk of being left behind. 

This paper reports on interviews with executives and managers in the rapidly expanding IT sector, who are struggling to find the talent they need, and recognise the need for a sustained and systematic approach to finding, placing, training and retaining employees. The interviews reveal the need for the IT sector to take fresh approaches to attract that talent, and to design recruitment and education pathways that will support staff to flourish and progress into the skilled jobs that need to be filled. 

The programs described in the interviews reveal a diverse range of formal and informal learning models adopted by firms to support the learning pathways of new recruits. Interviews also illustrate the ways that workplace-based supports can be provided through partnerships with community organisations, to ensure that wrap-around social and educational services maximise each individual’s chances of success. 

The paper compares these promising directions with the nature of existing services and resources in Australia’s current employment services systems. It finds that most IT firms lack the employment support services they need: the in-house capacity to recruit from a more diverse candidate base; to manage government wage subsidies; to aggregate and broker formal qualifications with Registered Training Organisations; and to support employees with the broader social supports they might need. 

There is opportunity and urgent need for the IT sector to take a more coordinated approach to recruitment and skills development, through collaboration between the IT industry, government, skills training providers, and community organisations. This calls for intermediary organisations to manage and support workforce development, as an effective way to realise inclusion and diversity goals for firms. These findings are not unique to the IT sector. Other expanding industry sectors are experiencing skills shortages, and future growth and productivity will call for increased development of higher-level skills. This report points to the opportunity to extend sector-based programs to industries beyond IT, to improve equal access to quality jobs and realise goals for stronger productivity and full employment. 

Summary of recommendations 

  1. Consider the intermediary structures that can bring government funding and wage subsidies together to support industry-sector based coordination of recruitment, skills pathways and wrap around supports for young people to access quality jobs with progression prospects. 
  2. Reform the design of employment services to enable sector-based programs. 
  3. Ensure that outcome measures for funded employment services, including wage subsidies, take account of job security, income growth, and skills qualifications. 
  4. Boost the representation of diverse candidates into quality jobs in growth sectors.