Vocational trajectories within the Australian labour market

This report is part of a wider three-year program of research, 'Vocations: the link between postcompulsory education and the labour market', which is investigating the educational and occupational paths that people take and how their study relates to their work. This report is specifically interested in exploring the movements workers make in the labour market. The authors consider whether these movements can be characterised as vocational pathways, which they describe as movement between linked occupations, those which share an underlying field of practice, such as the health workforce.

The authors look at these pathways by interviewing individuals about their employment and study history, career progression and reasons for any movements. This work builds upon a previous working paper, which used quantitative data to explore these movements. The finance, primary, health and electrical trades/engineering industries were used as case studies.

In that work, three pathways were distinguished:

• high-skill trajectories: those accessing high-skill occupations, often including long tenures in the occupation
• low-skill trajectories: those characterised by entrenchment in low-skill work
• marginal attachment: clusters of activity outside the labour market, interspersed with periods of paid employment.

Key messages

There are two ways that workers progress within medium- to high-skill roles. They either move upwards to roles with greater leadership or organisational responsibilities, or they move laterally into related roles, where they expand their technical skills and knowledge.

Within low-skill roles, movements are associated with ensuring an ongoing livelihood rather than a career pathway. There are also fewer opportunities for skill formation than in higher-skill roles.

The way employers recruit, develop and promote skills within different industries is diverse. The variation across industries means that any attempts to promote vocational pathways through educational policy need to take account of labour market structures, including industrial and economic settings.

Tom Karmel
Managing Director, NCVER

This is a report of the first year of a three-year project entitled 'Vocations: the link between postcompulsory education and the labour market'. The project's aim is to research how pathways can be improved within education, within work, and between education and work. There are three strands in the project; the first strand is researching entry-level vocational education and training (VET), particularly VET in Schools; the second is researching the role of educational institutions in tertiary education in fostering vocations; and the third is researching how to improve flows within work and how to improve occupational pathways and vocations within the labour market. This report outlines Strand 3's initial findings.

The research seeks to understand the presence of vocational pathways in core sectors of the Australian labour market — agriculture, financial services, engineering and trades, and healthcare and community services. A vocation emerges from fields of practice where there are commonalities; for example, the commonalities between nursing, aged care and childcare. A vocation groups together related clusters of knowledge and skills that allow individuals to progress and/or specialise within a field of practice or to move laterally into linked occupations.

The nature of these vocational pathways, or the connections between educational and labour market progression, are not well understood, and the research questions were formulated as follows:

• How do individuals move into and through the labour market? Can this movement be characterised as vocational pathways?
• What are the commonalities in the trajectories of workers in the labour market?

This report follows an earlier working paper (Yu et al. 2012), which produced a quantitative analysis from the Household, Income and Labour Dynamics in Australia (HILDA) Survey dataset. The working paper sought to empirically derive patterns of movement through study, and into and upwards within the labour market. The analysis found that the overarching theme of worker experience could be described as occupational segmentation. We characterised this as occupational stasis, whereby individuals tended to spend long episodes in the one occupation and entrenched in either high-skill or low-skill roles. In each of the case studies we distinguished three broad pathways:

• High-skill trajectories: these were defined as those accessing high-skill occupations, and was often evidenced by long tenures in occupations that in all likelihood required specialised training over long periods of time (for example, farm managers and health professionals). Where upward occupational mobility was observable, this tended to occur within the higher-skill occupations only, with clearer pathways from higher education studies to professional work and from professional to managerial roles.
• Low-skill trajectories: these were characterised by entrenchment in low-skill work. 'Mobility' for those working in low- to semi-skilled roles, such as labourers and clerical workers, was defined by significant turnover, with little movement into higher-skilled roles. These workers were likely to move frequently between these jobs, with little evidence of sustained career progression and with some spells in unemployment or outside the labour force. Alternatively, these low-skill trajectories were also characterised by long tenures in low-skill roles, with little engagement with further study or access to higher skill roles.
• Marginal attachment: this third pathway is characterised by clusters of activity outside the labour market. The term 'marginal attachment' is used to describe these pathways because they can incorporate periods of paid employment, but these episodes appear to occur on the margins of the labour market. Marginal attachment includes the unemployed and also affected women moving in and out of the labour force, as well as older workers with decreasing attachment to the labour market.

These different pathways suggest distinct destination points for the workers identified in these clusters of activity and variance in how they engage with both the education system and the labour market. The analysis in this paper highlighted the way in which businesses choose to compete and how this determines the way in which they engage with their workforce. This in turn drives prevalent forms of employment, types of skill formation and job design. These elements of demand for labour and skill are critical to the availability of vocational pathways and must be engaged with as much as the supply of labour, skills and graduates in the economy. The results of this phase of research are summarised below:

The commonalities in the experience of low-skill workers were characterised by the absence of vocational identity and pathways. Lack of employer support, resource constraints and lack of confidence were prominent barriers to career development and were exacerbated by precarious terms of employment and/or periods of unemployment.

The research saw little evidence of vocational attachment amongst low-skill workers in primary industries, engineering and financial services. The experience of these workers (especially labourers in trade-related work or agriculture) was often characterised by high turnover between unrelated roles, with little opportunity to define or pursue career progression, and frequently interspersed with periods of unemployment. These workers were likely to be employed on precarious terms (for example, seasonal, casual or part-time), thereby reducing the incentive for employers to invest in their skills.

The one clear exception to this absence of career direction were low-qualified care workers in community services, who reported a clear vocational identity located around the notion of patient care, consistent with their counterparts in higher-skill roles. Despite these aspirations, business and institutional settings severely constrained their ability to progress along a clearly defined pathway.

The commonalities in the experience of medium- to high-skill workers were characterised by a combination of horizontal as well as vertical career transitions, which were viewed very differently across the four sectors. In some cases, vocational pathways were characterised more by a broadening of the technical skills and knowledge bases and lateral movements into related roles; in other cases, pathways reflected vertical movements into managerial/supervisory positions. In all cases, interviewees reported autonomy and diversity in their work and the presence of learning opportunities as integral to their development and satisfaction.

All forms of career progression reported in the study leveraged some degree of horizontal movement, characterised by a broadening of technical skills and knowledge bases, either through formal study or on-the-job learning. This form of development enabled individuals to transition laterally between roles or to widen their responsibilities, such that there appeared to be a broad sense of career and vocational identity. For example, in the engineering trades this included undertaking the various 'tickets' required to operate different machinery or work with hazardous substances.

Vertical career progression was available to varying degrees and was characterised by growing staff, project and organisational management responsibilities. This form of development was less concerned with the expansion of technical skills and more with leadership and management experience. While for some, such as nurses, vertical career progression was associated with high levels of stress, work intensification and detachment from clinical practice, others such as those in engineering trades engaged enthusiastically with greater supervisory and organisational responsibilities. In all cases, however, there was a strong sense of vocational attachment.

Distinctive business and institutional settings in each sector ultimately mediate the definition and accessibility of vocational pathways.

The relative dominance of various business and institutional settings in each vocational stream had strong implications for the nature of horizontal and/or vertical career pathways. While educational institutions have a very strong role to play in supporting these pathways, factors such as dominant models of skill formation, recognition of informal versus formal training and the level and forms of employer support are critical and vary from sector to sector. Indeed, Keep (2005) argues that certain sectors of the economy are likely to demand large and growing numbers of unskilled workers rather than more qualified workers. Keep's study reviewed research that concluded that qualifications play very different roles across the occupational spectrum. This was certainly borne out in our research, which found that:

• Vocational pathways in primary industries are likely to be enhanced by informal modes of skill formation, low-entry barriers and high levels of on-the-job learning. However, they are significantly inhibited by a high prevalence of seasonal and contractor workers with little access to training and promotion opportunities and by the high financial barriers to entering farm management. Despite strong reports of broad learning opportunities and the need to be a 'jack of all trades', it appeared very difficult to progress vertically, as farm management has historically been attached to land ownership and family succession.
• Vocational pathways in healthcare and community services, as they relate to care work, are clearly defined by educational and occupational institutions, with the existence of articulation arrangements between vocational education and training and university studies and clear occupational standards of entry. Yet resource constraints in the sector manifest themselves by limiting the opportunities of lower-skilled workers for accessing training and development, while acting as broad deterrents for those interested in progressing vertically.
• Different learning models between VET and university engineering studies make articulation paths difficult, and there is some evidence that the wage premiums attached to professional engineering roles (relative to trades roles) are not incentive enough for undertaking this arduous path. Most importantly, clear career prospects, in terms of earnings, training and promotion opportunities for both qualified trades workers and professional engineers, enforce strong occupational segmentation between the two.
• Financial services is characterised by dynamic labour markets with a premium on generic skills such as problem-solving skills and the capacity to learn. Entry to a high-skill pathway is typically available to those with higher education qualifications, after which career progression is linked primarily to on-the-job learning, performance and experience. Those in low- to medium-skilled roles are constrained by these high entry barriers and are more likely to experience career progression into roles such as financial planners, mortgage/insurance brokers, middle managers and accounting bookkeepers.

The key finding from this analysis is that enabling vocational pathways is not simply about promoting articulation pathways within education and building a more highly qualified workforce. Rather, the greater issue is one of how employers recruit, develop and promote skills in their organisation and in markets. Given these diverse settings, we suggest that a uniform policy approach would not be possible for supporting vocational pathways in different areas of the economy. Moreover, any differentiated policy response would need to integrate elements of not only educational policy, but also industrial relations, industry and other economic policies, all of which have direct and indirect effects on labour market demand and supply.