The future of work for Australian graduates: The changing landscape of university-employment transitions in Australia

The report begins with a general overview of the major forces driving disruption and change in the Australian labour market. One, of course, is technology: rapid evolution in the scope, capacities, and employment impacts of new innovations like artificial intelligence, advanced robotics, and big data analysis. But technology is not the only disruptive force at work. Dramatic changes in work organisation, business models, and employment relationships are also changing jobs and how we perform them. And all this change occurs in the context of a world grappling with other structural change: from demographic change, environmental change, globalisation, and more. By considering this more complete context, we find that an undue focus on technology as the fundamental and supposedly inexorable driver of change is inappropriate – all the more so given that technology itself is neither neutral nor uncontrollable. Shifting focus back to the social and institutional influences on the world of work, and the collective capacity of society to regulate and shape that world, empowers society to take the future of work more actively into its own hands. Section 2 of the report considers the ongoing evolution of employment patterns (by sector, occupation, and skillset) – both historically and prospectively. It turns out that dramatic structural change in employment patterns is hardly a new phenomenon In Australia. To the contrary, enormous shifts in the nature of employment have already occurred in past decades: with a marked shift from agriculture, and later manufacturing, into services, an equally dramatic shift from manual to cognitive labour, and the revolutionary growth of women’s labour force participation. Australia’s labour force adapted to these changes – and while the transitions were painful at times, they occurred without epochal crisis. Looking forward, all projections anticipate further change. But understanding structural change as a normal feature of the labour market helps defuse the undue hype and even panic that often accompanies current discussions about the future of work. Section 3 dives deeper into changing requirements for skills in the future labour market. It directly challenges certain myths and fads regarding the evolution of skills requirements – including claims that demand for STEM skills will be both insatiable and dominant, claims that lack of “employability” is holding back Australian graduates, and even far-fetched arguments that university degrees themselves will lose their value. Often surprising evidence quantifying skills needs and shortages is presented, confirming that narrow technical and business skills are not, in fact, the ones in shortest supply. A more balanced and nuanced description of the evolution of the skills and capabilities required of future graduates is presented. It turns out that more subtle and flexible skills – including communication, problem-solving, and teamwork – may prove to be the most valuable for a workforce that will have to confront never-ending fluidity in employment, technology, and workplace relationships. Section 4 documents the daunting range of challenges facing young workers, including university graduates, in today’s increasingly precarious labour market. For young people, the prospect of finding a decent, permanent, full-time job with normal entitlements (like paid leave and superannuation) is increasingly far-fetched. Young workers have been the “shock troops” of the precarious labour market: the ones sent in first to confront insecure positions, inadequate and irregular hours, contingent status, and low pay. Even university graduates are experiencing these hardships, as evidenced by the significant deterioration in employment outcomes for graduates since the Global Financial Crisis hit in 2008. Ample evidence attests to the widespread underutilisation of skills possessed by young workers today – who are the besteducated generation of workers in Australia’s history. This leads us to question the very existence of a “skills shortage” in any general sense. To the contrary, rhetoric about the inadequate skills of workers (whether specific occupational skillsets, or broader base capacities) seems more motivated by a desire to blame young workers for their own hardships, rather than an accurate depiction of the real condition of the labour market. Section 5 presents more granular data regarding the employment outcomes of university graduates by field of study, sector, and program. It identifies major trends and shifts in employability. It highlights a particular concern with the increasingly long periods of time required for graduates (especially those holding general degrees) to obtain full-time work – and documents the substantial and lasting costs incurred by graduates as a result. The existence of potential mismatches between the abilities and attributes of new graduates and the needs of employers is investigated. The penultimate Section 6 of the report considers the strengths and weaknesses of current education-to-jobs policies and programs in Australian universities. Clearly more ambitious and flexible efforts are required to anticipate future higher-level skills, adjust curricula accordingly, and then assist graduates in the transition from university to employment. Several promising new initiatives to improve outcomes in this regard are considered, including experiments in expanded work-integrated learning, and the redevelopment of curricula and program design to reflect the increasingly fluid and interdisciplinary nature of many modern occupations. Finally, the report concludes by considering how all stakeholders in Australia’s university system – including universities, governments, industry, the research community, trade unions, and of course students themselves – could collaborate more effectively. Working together, they can construct a system that does a better job of tailoring university offerings to the broad needs of the economy and society (not just specific training requirements of employers), and assist graduates to attain meaningful, decent employment which makes full use of their skills and dedication. Ten specific policy recommendations are presented, drawing directly on the evidence presented in earlier sections of the report. An overarching recommendation is the creation of a national-level higher education policy framework, together with a commitment to building the institutional capacity to implement sector-wide initiatives and undertake comprehensive planning around education-to-jobs processes. It is clear from the evidence assembled in this report that the tasks of anticipating future skills requirements, adjusting curricula and programs accordingly, and then facilitating the movement of students through the higher education process and into productive employment, cannot be left to the supposedly prescient market forces of demand and supply. To the contrary, Australia’s future needs for top-quality university graduates, making their maximum potential contribution to both production and to society in general, are too important to be left to chance. A more deliberate, pro-active approach is needed to ensure that the future of work can be a great one for Australian university graduates.