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Executive summary

A skilled, agile and productive workforce aligned to employer needs is critical for Australia’s economic and social prosperity. Investment in staff training and development is a major priority for Australian businesses.

In our modern and dynamic labour market, a focus on lifelong learning across the entirety of Australia’s workforce is more important than ever. Work-related training is not the only component of successful lifelong learning, but it is a vitally important one.

Much of the recent public commentary on work-related training has focused on a fall in reported participation in this training when comparing 2007 and 2022.

With the more recent 2023 data now available, the picture has changed notably. Rates of participation in work-related training rebounded significantly between 2022 and 2023 and are now above the long-term average.

The investment by employers in work-related training is large — and growing. Since 2020, employers have consistently fully sponsored the highest share of work-related training since collection of this data began.

More than a third of the Australian workforce engaged in work-related training in 2023, representing over 183 million hours of training. But in an environment of global competition, workforce shortages and tepid productivity, we can and should aim higher. A sharp focus on the forms of work-related training most likely to drive productivity and competitiveness is needed.

Employers have an important role to play, but this is not an issue for employers alone. Employers, governments and individuals themselves all have a role in sharing in the costs and benefits of work-related training.

These are complex issues that require multifaceted solutions and a mature, collaborative discussion with a sharp focus on maximising the effectiveness of existing investment. Government policy can play a vital role in driving a coordinated and system-wide approach that unlocks barriers to participation and investment in work-related training.

Drawing upon available data and Australian Industry Group’s deep engagement with employers across abroad range of industries, this report lays out four priority actions for boosting work-related training in Australia. These actions are the building blocks for boosting lifelong learning in the workplace context so that Australia’s human capital can drive our prosperity for many years to come.

Key findings

Rates of work-related training in Australia are above the long-term average

• More than a third (35%) of Australia’s workforce undertook work-related training in 2023 - on par with the rate recorded in 2007
• 8 hours of work-related training took place for every 1000 hours worked – the highest ratio in a decade.

A vast and growing majority of work-related training is fully sponsored by employers
The number of employees undertaking
work-related training fully sponsored by
their employer is at the highest level in
more than a decade
• Around 9 in 10 individuals undertaking
work-related training report having done
so in paid time – representing billions of
dollars in paid training time annually.

The pandemic triggered a structural shift in employer investment in training
Since 2020, employers have consistently
fully sponsored the highest share of
work-related training since collection of
this data began (86%).
• The most significant increases have
been experienced by those among the
least likely to be fully sponsored prepandemic
– including young people,
women and low-income earners.

Work-related training is associated with higher incomes and employee retention
In 2023, the average annual increase
income of those who had undertaken
work-related training in the previous
year was over $2400 higher than for
those who had not.
• An employee who had undertaken
work-related training in the previous
year was nearly 40% less likely to have
changed employers.

Priority Actions

Priority action 1: System-wide approach

Australian Government, working with States and Territories and industry, develop and implement a comprehensive national strategy for lifelong learning which includes:

• A strong focus on productivity enhancing training delivered in the workplace;
• Improved data collection on work-related training; and
• A clear policy framework for quality careers information and advice.

Priority action 2: Barriers to investment

Review specific federal and state policy settings that may be constraining investment by individuals and employers in work-related training. This should include, at minimum, consideration of the impact of the collective weight of compliance training, Fringe Benefits Tax liabilities on employers and low uptake of self-education tax deductions.

Priority action 3: Skills policy

Australian Government and State and Territory Governments increase investment in VET to deliver the skills uplift Australia needs, with a focus on encouraging and enabling training in the workplace context. This should include, but not be limited to:

• Creating and encouraging workplace delivery options within relevant existing funding settings and programs
• Re-introduction of programs that directly support productivity-enhancing workplace training
• Ensuring policy and regulatory settings are conducive to viable Enterprise-based Registered Training Organisations; and
• Driving more widespread use of Recognition of Prior Learning.

Priority action 4: Strengthening foundation skills

Improve availability and accessibility of training focussed on developing foundation skills in the workplace context. This should include, but not be limited to, wider promotion and support for employers to access the Skills for Education and Employment Program and all States and Territories including workplace delivery options in foundation skills initiatives aligned to the National Skills Agreement.

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