Executive Summary

Increasing the achievement of advanced trade, technical and professional qualifications

The Tertiary Education Strategy 2007-12 includes a key priority to "increase the achievement of advanced trade, technical and professional qualifications to meet regional and national industry needs". Success of this priority will be seen through more people achieving these qualifications, particularly in areas of long-term skill shortage. Progress will be measured through monitoring the performance of a representative set of qualifications.

This report is the second in a series of three reports that aim to set up monitoring of this priority. The first report assessed the demand for skills and qualifications across the professional, technician and associate professional, and trades worker occupations. This second report looks in more detail at the demand for particular qualifications across those occupations. The final report will establish a list of qualifications and specialisations that will be monitored over time.

Approach to linking qualifications to skill shortages

Skill shortages arise and can persist over time for a number of reasons. These can include both insufficient supply of people with the required skills and lack of attractiveness of work within certain occupations and industries. The link between increasing the number of qualified people and meeting industry skill needs is indirect and dynamic.

The key to understanding the contribution of tertiary education to alleviating ongoing skill shortages is to monitor the link between changes in the supply of graduates with occupationally relevant qualifications and the level of unmet demand within those occupations.

The overall purpose of this work is to provide a broad basis for understanding the areas that the tertiary education system should concentrate on to address skill shortages. In each of these areas, further detailed work will be required to understand issues of quality, quantity and timeliness of supply. This requires providers and industry to work together to understand and address these issues.

The first report in this series identified the occupations that are experiencing ongoing skill shortages and require advanced-level qualifications, and broadly identified the qualifications that enable entry to those occupations.

This second report starts from the identified qualifications and checks the extent to which they are in demand in the occupations experiencing skill shortages. It examines the match of qualifications to occupation, levels of unemployment by qualification field and level, and evidence of income premiums being paid for specific qualifications.

Areas of unmet demand for qualifications

The first report found that the broad areas of study with high unmet demand for advanced qualifications are information technology, engineering, building and health. Other areas identified with similar demand are early childhood education, architecture, accountancy, financial and business management services, psychology, social work, and food and hospitality.

Having looked at the indicators of occupational match, unemployment and income for each field of study, this report concludes that there are a limited number of areas where there is a clear case that increasing the number of people attaining qualifications would contribute to reducing skill shortages. These areas are mostly in engineering, building and medical professions.

A few other areas are identified where increased numbers of people attaining qualifications may contribute to reducing skill shortages. These cover bachelors degrees in information technology, architecture, building, nursing and accountancy, and diplomas in nursing and other health-related studies. However, in several of these areas, the quality and relevance of provision may also be important to address. In the remaining areas, increasing the number of people attaining qualifications is unlikely to make a particular contribution to easing skill shortages, unless there are also improvements in attractiveness and conditions of employment.

The underlying drivers for demand for increased numbers of people with advanced qualifications have been the boom in construction, increased use of technology and increasing demand for health services.

The growth in the construction industry peaked in 2005, and therefore the current demand for related qualifications is likely to be overstated by the data used in this report, which reflects the situation in early 2006. Recent forecasts confirm that while the domestic housing boom has ended, there is likely to be renewed growth in commercial construction and infrastructure development over the next few years. The key issue will be to ensure that there is a steady supply of new graduates in the building- and construction-related areas with the skills required as the technology evolves and develops.

It should be noted that education was not examined in this report due to limitations on the available data. The first report highlighted shortages of early childhood teachers and science, mathematics and technology secondary teachers. It is likely that these are both areas where increased supply of graduates may help.