Work-related training plays an important role in improving productivity and benefits both employers and employees, those who attended Australian Industry Group Centre for Education and Training’s (CET) first webinar of the year heard.
Workers who undertake relevant training generally receive a higher salary the following year, while employers are rewarded with higher retention.
“A skilled and agile workforce aligned to employer needs is critical for Australia's productivity uplift,” the CET’s Executive Director Caroline Smith said.
“Employers, individuals and governments all have a role to play in sharing the costs and benefits of work-related training.
“There is a critical role for government policy at both national and state levels to prioritise these issues and unlock barriers to participation and investment in work-related training. Public policy settings matter.”
During the webinar, Dr Smith and panellists explored two key reports released late last year that provide an evidence base for boosting work-related training in Australia.
The connection between education, training and the workplace is essential to drive productivity, yet the focus on workforce training in VET policy settings and associated funding arrangements in Australia has diminished over the past decade.
While significant reforms have progressed in recent years, these have generally focused on expanding institutional-based delivery.
“This has potentially occurred at the expense of workplace delivery models that enable work-related training,” Dr Smith said.
Australian Industry Group, through much of our advocacy in 2025, called for a rebalancing to recognise the importance of both institutional and workplace training delivery.
The CET’s Learning That Works report was released in November.
“In the report, we say quite clearly that in the context of productivity as a national priority and in the context of a rapidly changing labour market and the importance of skills uplift across the economy, we need to aim higher for work-related training in Australia,” Dr Smith said.
The report looks at longitudinal data based on the HILDA (Household Income and Labor Dynamics in Australia) survey.
“HILDA is one of the most robust sources to understand what's happening with work-related training in Australia,” the CET’s Brett Hall said.
The survey defines work-related training as any structured learning activity related to respondents’ current or future employment undertaken in the past 12 months.
The data, based on information reported by individuals rather than employers, shows just over a third of the workforce was undertaking work-related training in 2023.
About 86% of respondents said their training was fully sponsored by employers, and about nine in 10 said they had undertaken training in paid work time.
Employees and employers both benefit from work-related training.
“People who complete work-related training generally see an uplift in their income in the following year,” Mr Hall said.
“In 2023, that represented an average income uplift of about $2400 compared to the previous year.”
Employers benefit from higher retention.
“When an employee undertakes work-related training in any given year, they are 40% less likely to have changed employers 12 months on, indicating that work-related training is linked to workforce retention,” Mr Hall said.
While governments are not solely responsible, there's an important role for policy settings that provide a coordinated and system-wide approach, particularly to unlock barriers to participation and investment.
Our report makes four recommendations:
Dr Smith also welcomed Catherine de Fontenay, a Commissioner at the Productivity Commission, to share insights into the final report of the Commission's Building a Skilled and Adaptable Workforce Inquiry, released in December.
Australian Industry Group actively engaged with the Commission as this inquiry was undertaken.
“We made a number of recommendations that government could start implementing right away,” Ms de Fontenay said.
These include:
“Barriers such as educational or licensing requirements have made it difficult for people to enter the occupation they're best suited to,” Ms de Fontenay said.
“These recommendations will help us acquire more skills and use those skills to the greatest extent possible.”
Jobs and Skills Australia estimates more than 90% of forecasted jobs growth over the next 10 years will require a qualification, either from university or VET.
“An important part of the puzzle is making it easier for people to return to formal education if they left secondary school and did not continue into post-secondary education or if they dropped out of vocational education or university and come back to it later in their work life,” Ms de Fontenay said.
“Then there are those who change occupation and need a new qualification.”
It can be challenging because credit transfer processes in universities tend to lack transparency and be inconsistent across providers.
“RPL can be very expensive in the vocational sector, and there are concerns fraud is undermining trust in the RPL system,” Ms de Fontenay said.
Those seeking RPL are more likely to be mature-age students or equity cohorts: students with a disability, First Nations students, women who have taken time off to have children or students whose parents have a lower level of education.
“Improving credit and RPL processes will help reduce the barriers to going back to study and the amount of learning duplication,” Ms de Fontenay said.
“If people with a diploma could finish their university degree faster because their diploma was properly recognised, that alone would save us a billion and a half each year.
“In tight budgets, that’s a big deal. More importantly, it's going to boost people's willingness to go back to study and get more formal qualifications.
“More skills mean more productivity.”
While Australia's rates of work-related training are improving, they’re low by international standards, particularly in smaller firms.
About 40% of employers say cost is the main barrier to funding more training, while not enough time or too much work are the main deterrents for employees.
Personal reasons or a lack of employer support are other barriers.
“Employers and employees want flexible training options that, ideally, can be delivered at work,” Ms de Fontenay said.
“Well-designed financial incentives for firms (especially SMEs) can boost training, but it's important to avoid the risk of waste and courses that aren’t work-related.
“We recommend the Australian Government runs a pilot to provide SMEs with co-funded vouchers that support training that focuses on areas where there are real gaps, such as management and digital skills.
“It should also fund advisory support to help firms diagnose their skill needs and to co-design short-training plans.”
“It’s also important to continue working on initiatives such as the National Skills Passport, which would be a verifiable record of the training you've undertaken and the formal qualifications you have,” Ms de Fontenay said.
There are benefits for workers and firms.
Workers might be more likely to undertake training if they know it will be recognised by future employers.
Such a passport would help employers better assess job applicants; it’s proof candidates have the competencies they claim to have on their CV.
In our recent pre-budget submission to the Australian Government, Australian Industry Group supports the Commission's recommendations.
Employers need to be clear from the start about what they’re trying to achieve through training.
What's the outcome you're looking for?
“You need to communicate that to the workforce undertaking the training — why it’s important and how it’s going to lead to benefits and improvements —and to the training provider, if you’re using an external provider,” Mr Hall said.
Consider which type of training is most suitable.
There are nationally recognised qualifications, short courses and micro-credentials.
Consider delivery options, too.
“Sending staff to offsite public training where they can share experiences with people from other firms or industries might be a great option,” Mr Hall said.
“Other times, a trainer visiting your workplace to deliver something that’s bespoke and targeted to the day-to-day reality of the workforce might be more suitable.”
Some types of training attract government funding.
Ms de Fontenay added: “Think carefully about the quality of the provider.
“Nothing will turn your staff off more quickly than a bad training experience with someone who looked good on paper but had little industry knowledge or common sense.
“Choosing the cheapest provider is not the way to go.”
If you have a hybrid or fully remote workforce, lean into training as an opportunity to get people together and create bonds, Ms de Fontenay said.
“Work-related training is a key form of lifelong learning,” Ms de Fontenay said.
“In the world of AI and other technological change, we all need to continue to learn over the course of our lives.
“The burden of regulation needs to be pared back to allow firms to achieve their productive potential.”
Dr Smith added: “It's important to think not only about skills development but also skills utilisation.
“That’s when the rubber hits the road in getting that productivity uplift.”
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