Creation of First Jobs
12 Mar 2021
How many true entry-level jobs are there for young people?
The answer is most definitely not enough.
Each month the Internet Vacancy Index (IVI) collects data on online vacancies across the country for more than 350 different occupations. While the IVI does not track every vacancy it does provide a useful snapshot of the number of entry-level jobs. Every job recorded in the IVI is categorised based on the Australia and New Zealand Standard Classification of Occupations (ANZSCO). This gives each job a skill level based on the level of educational attainment or experience needed for the job. There are currently five skill levels:
- Skill Level 1 – Bachelor degree or higher
- Skill Level 2 – Advanced Diploma or Diploma
- Skill Level 3 – Certificate IV or III* (includes at least 2 years on-the-job training, and Skilled VET)
- Skill Level 4 – Certificate II or III
- Skill Level 5 – Certificate I or secondary education
Most young people looking for their very first job would fall into Skill Level 5. In June 2021, only 12% of jobs or just under 30,000 vacancies on the IVI fit into that category. At the same time there were 118,000 15 to 19 year olds in Australia who were unemployed in June 2021 and these young people would not be the only ones applying for those jobs. The number of entry-level jobs has also been declining. Since 2006, when the IVI collection started, the proportion of vacancies tracked that were classified as Skill Level 5 has dropped from 21% or 44,000 jobs to its current level. Even once a young person moves up a skill level there is likely a continued lack of obtainable first jobs where extensive experience as well as a qualification is required.
It is for these reasons that the My First Job 2.0 Working Group recognised that there needs to be a commitment to creating opportunities for young people to engage in the world of work. If there is not a commitment to creating those opportunities for young people then the work in other areas, particularly improving access to first jobs, would be undone. Young people would be better prepared and qualified to find their first job, but if the pool of available jobs did not increase the only outcome would be increased competition for the same number of jobs.
The Working Group developed the following recommendations to help aid the Creation of First Jobs:
1. Sign and Implement a National Agreement for a Targeted Improvement in Young People’s Economic Participation
Align Government investment and strategies around improving outcomes for young people and send a clear signal to business and the community that young people are important and valued and show that there is a pathway to success.
Adapt the process undertaken for the National Agreement on Closing the Gap to improve the lives of Aboriginal and Torres Strait Islander Australians. Federal, State and Local Governments should develop and sign a National Agreement for a Targeted Improvement in Young People’s Economic Participation as part of a Youth Advantage Strategy. This would include setting a target level of engagement in education, employment and training for young people.
2. Set targeted private sector goals for youth employment, which aid the National Agreement for a Targeted Improvement in Young People’s Economic Participation
There is a role for the private sector in improving outcomes for young people because government does not hold that responsibility alone. Setting clear targets for youth employment in the private sector that are aligned with the national strategy would show the leadership and responsibility of the private sector and create a framework for improved co-ordination.
Elements of good practice were seen in the Employer Coalition models utilised in America and Canada. These models bring together employers, foundations, and community organisations to reinvent hiring, retention, and advancement practices to provide more opportunities for young people. Importantly, the model sets clear targets for jobs which partner employers commit to achieve. An Australian Employer Coalition would be able to drive a national campaign around youth employment.
3. Young people become a targeted cohort in government and non-government procurement practices, particularly by using social enterprise businesses
Government and large private employers employ significant numbers of people indirectly through their procurement practices and supply chains. This was identified as key lever that could be better utilised to improve employment opportunities for young people, particularly when direct employment opportunities might be limited.
Targets for the number of young people employed on large government infrastructure projects should be implemented at all levels of government. Examples were seen in NSW with the NSW Government Action Plan (Infrastructure Skills Legacy Program) for projects valued over $100 million where 8% of the total project workforce needs to be under 25 years old. Increasing this to 10% and creating a nationally consistent benchmark for youth employment in government infrastructure spend would boost employment.
Adding young people to Government and Private Sector procurement targets would also create job opportunities. Working Group members identified they currently have targets to achieve Disability and First Nations employment outcomes but not youth targets. A target of utilising 1% of other procurement spend to achieve youth employment outcomes would create significant opportunities for young people.
4. Enhance the tracking of youth appropriate entry-level jobs
To achieve the stated aims of improving the number of jobs available for young people accurate data is needed on the number of jobs that are available. This would provide a truer indication of the current supply in the market and the level of new supply that needs to be created through the Government and Private Sector commitments to meet demand.
Develop additional classifications of jobs that complement the ANZSCO model. This would add sub-categories to the ANZSCO model to, for instance, how many Skill Level 1 positions that require a Bachelor Degree are suitable for a recently graduated young person with little to no industry experience. These figured would then be widely reported and distributed to provide all stakeholders, including young people, with accurate information on the youth labour market.
5. Financial support to create new first jobs should be available long enough and at a high enough level to provide a benefit to both the young person and the employer
Research presented to the group highlighted that financial support provided to employers can improve long-term employment outcomes for young people, but only when the incentive is provided for long enough and at a high enough amount. This contrasts with the current model implemented in Australia, which the literature17 would suggest is not long enough and does not provide a high enough incentive.
The most effective model provided a subsidy for two years and covered 40 per cent of the young person’s wages. Importantly, employers agree to conditions when using the wage subsidy, mainly that if the young person was dismissed during the subsidy period or within a period equal to half the length of the subsidy after the subsidy ran out, they were obliged to pay back half of the subsidy.
6. Make Opportunities to Earn and Learn Easier for Young People and Employers
Growing the range of opportunities for young people to earn and learn would create more pathways into employment and help to address employer needs for key skills, but there are barriers to providing these opportunities. These include financial barriers as well as the administration requirements of the programs that can make them difficult to offer and manage.
The introduction and expansion of the Supporting Apprentices and Trainees wage subsidy and the Boosting Apprenticeship Commencements wage subsidy have provided needed financial support to enable Australian businesses to take on apprentices and trainees. Removing the cap on the number of places available, extending the time period for enrolments and introducing targeted measures for certain industries or roles, such as the tech sector, aged care and nursing, could help to address current and future skills gaps. Compliance and audit requirements should also be streamlined with Commonwealth and State government adopting common standards to avoid duplication and the administrative burden.
7. Support the creation of more apprenticeships and traineeships aligned with new and developing industries
Australia has a strong history of developing apprenticeship and traineeship programs based on trades, hospitality and certain areas of the service sector there are a range of emerging industries and roles that could benefit from the model. Specifically, the Working Group saw opportunities to meet the future skills shortages in technology and care roles by introducing new apprenticeship and training models. These would address the challenges of ever-shortening shelf-life of technical skills, a well-known digital skills gap, a desire to broaden their recruitment pool, and a need to de-risk the employment of a first job worker so they can provide more opportunities.
A reframed apprenticeship model, sometimes called Higher Apprenticeships, was flagged as one option. Higher Apprenticeships have been implemented widely in the United Kingdom and have also been piloted by employers like PwC in Australia. They operate in a similar way to trade apprenticeships with students employed in a job related to their education, but they expand the breadth of roles available to include non-trade positions in information technology as well as business management.
Adopting the recommendations outlined would help to ensure there are enough sustainable jobs for young people matched by young people who have the skills and desire to work. Education to employment pathways would also be strengthened and fewer young people require employment-related welfare support.