Regional Skill Leadership Groups (RSLGs) and Workforce Development Councils (WDCs) are tasked with understanding skill needs in their regions and industries, and communicating this back to tertiary education providers to ensure that local education and training provision is shaped to meet those needs.

But New Zealand’s suite of skills data simply isn’t sufficient to inform education policy. We tend to rely on forecasts of occupational employment to estimate skill needs because occupations give us a rough approximation of the skills needed in jobs. We need more detailed information about the particular skill needs of each occupation. The Australian Skills Classification (ASC) gives us this. And while it has its limitations, it is a vast improvement on what we currently have and will only get better.

The ASC includes skills profiles for ANZSCO occupations, comprising: core competencies, specialist tasks, and technology tools. It is based on the O*Net system in the US and has been adapted to the Australian labour market.

There are ten core competencies. Occupations are assessed as requiring basic, intermediate or high proficiency for each competency. Each competency is also scored between 1 and 10 - with 10 being the highest proficiency.

There are over 2,000 specialist tasks which describe day-to-day work within an occupation. Specialist tasks are grouped into 284 specialist clusters which in turn are grouped into 29 specialist families. Each occupation includes a list of the specialist tasks it requires as well as the percentage of time spent on each task.

There are also 74 technology tools which describe the software, hardware and equipment types (not specific products) used within occupations. Each occupation has a list of the technology tools it requires.

Specialist tasks and technology tools can also be flagged as ‘emerging’ or ‘trending’. Trending skills are skills that have grown in demand over the past five years. Emerging skills are trending skills that are also new to an occupation.1

In this article I will compare specialist skill needs across two sectors and two regions.

Chart 1 shows a breakdown of skill needs in engineering and creative & cultural sectors based on specialist families in the ASC. The two sectors are based on the Australia and New Zealand Standard Classification of Occupations (ANZSCO) occupations commonly found in those sectors. Unsurprisingly, even at this broad skill level, the skill needs of the two sectors are quite different. In the engineering sector:

• all jobs require production process and machinery skills,
• 94% of jobs need quality control and inspection skills, and
• 86% of job require construction skills.

In the creative & cultural sector:

• 96% of jobs require communication and collaboration skills,
• 81% require records, documentation, reports and research skills, and
• 78% require operating procedures and processes skills.

The top engineering skills don’t come as any surprise given that engineers generally work in manufacturing or construction environments. For example, many engineering roles such as chemical engineer and mechanical engineer require the ability to design technical methods or processes, which falls within the production process and machinery skills family. Engineers are also often responsible for inspecting finished products for flaws, and facilities or sites to ensure they meet standards – skills which fall within the quality control and inspection family. In the construction environment, engineers are responsible for designing structures or facilities, and directing installation activities.

It is also unsurprising to see communication and collaboration are top skill needs for creative occupations as many creative projects such as film, theatre and photography require collaboration with colleagues or clients. This is by no means exclusive to creative jobs. Communication and collaboration are key skill needs across a broad range of occupations.

You might not expect to see records, documentation, reports and research skills in such high demand among creative occupations. But these are key skills for conference and event organisers, photographers, architects, and journalists. So too for operating procedures and processes skills which would seem to be at odds with the free-thinking, experimental nature of creativity. However, these are common skill needs across a broad range of creative occupations such as graphic designers, architects and photographers.

A limitation of the ASC is that it does not yet cover all ANZSCO occupations but will do in future. For example, of the 993 ANZSCO 6-digit occupations (the most detailed level of the ANZSCO hierarchy), the ASC currently has specialist task information for 606 (61%) of them. Based on my list of engineering and creative/cultural occupations, the ASC covers 88% of employment in the engineering sector and 74% of employment in the creative and cultural sector.

The ASC also has specialist task information at the 4-digit ANZSCO level. To extend the coverage, we could combine the skills information at both 4-digit and 6-digit levels. If a 6-digit occupation has no specialist task information, but its ‘parent’ 4-digit occupation does, we could apply the 4-digit skills information to the 6-digit occupation. We don’t know how accurate this would be. But, in those cases where there is specialist task information for both a 6-digit occupations and their 4-digit parent, we compared the specialist tasks information. There was a match 53% of the time.

Over time, this coverage issue will be less of a concern. The ASC is currently in its build phase with additional 6-digit and 4 digit skills information being added all the time and new releases planned every 6 months. Ultimately, the plan is to have coverage across all 6-digit and 4-digit occupations.

Chart 2 shows a breakdown of common skill needs in the Tasman and Wellington Regions based on specialist task families in the ASC. I chose these two regions because they have quite different economies. Tasman has large agriculture and food processing industries whereas Wellington has large professional, scientific and technical services and public administration industries.

Despite these differences in economic activity, across broad skill families, the two regions have remarkably similar skill needs. Wellington has a greater need for communication and collaboration skills, human resources skills, and records, documentation, reports and research skills – all testament to the prevalence of professional, office based, service sectors in the region. But these types of skills are also in reasonably high demand in Tasman.

Tasman needs production processes and machinery skills, quality control and inspections skills and agriculture and animals skills. But again, these skills are also in demand in Wellington.

You might expect agricultural and animal skills to be in greater demand in Tasman. According to our calculations, 7% of jobs in Tasman require these skills. This is a consequence of the coverage issues outlined above, with a number of large agricultural occupations such as fruit and nut growers, and beef cattle and dairy farmers not currently covered in the ASC.

Chart 3 emphasises the degree of similarity of skill needs across New Zealand’s regions. For each of the specialist families, I calculated the number of jobs needing these skills as a percentage of regional employment for all 16 regions. Then I looked at the minimum and maximum values to get a sense of regional variation.

For skills such as communication and collaboration there is a reasonable degree of variation with a minimum 48% of jobs needing this skill in Southland Region and a maximum of 60% in Wellington Region. Similarly for records, documentation, reports and research skills (minimum 33%, maximum 45%), business operations and financial activities skills (minimum 50% and maximum 60%), and human resources skills (minimum 40%, maximum 50%).

But that is the extent of the variation. This is because our regional economies arguably have more in common than they have differences. All regions have hospitality, construction, health, education, public services etc and the size of these sectors do not differ much as a proportion of total regional employment. The key differences between regions tends to be in the size and mix of their agriculture and manufacturing and knowledge-intensive services sectors.

What does this mean for regional skill needs? It means that all regions require the same basic skills profile, which can be identified and qualified to a reasonably high degree by the ASC. This leaves RSLGs the task of identifying the skill needs that are unique to their region, based on their unique industrial footprint. Something the ASC can help with as well.

For workers with these core skills, our analysis suggests that there is a reasonable degree of transferability across regions. For someone working in health, education or hospitality, for example, this will come as no surprise. A café, hospital or school in Tasman will have many similar characteristics to those in Wellington. It also means that for workers with skills that are in more limited demand, or varying demand across regions, some regions will offer better employment prospects than others.

Finally, it is also worth noting that the increasing prevalence of working remotely, and the growth of sectors such as professional services and technology that just require someone to work on a computer with an internet connection, means that these kinds of regional skill needs analyses need to be tempered with the understanding that, for a growing number of workers, the idea that you need to live close to your employer is becoming increasingly outdated.

Skills and occupations are difficult to classify and quantify at the best of times. Jobs requiring similar skill sets can have quite different titles. When occupation data is collected, such as through the New Zealand Census, Stats NZ has a challenging time classifying what people say is their job title on their Census form to one of the 993 ANZSCO occupations.

When you add skills information into the mix, things get even more challenging. There’s a level of detail at which you have to say no two jobs are exactly the same. Different businesses in different industries create different contexts which in turn create different skill needs. Even within a single business, jobs are also shaped by the person in that role. Adding skills information to occupations is definitely a worthwhile endeavour. You just need to moderate your expectations of how accurate it is going to be when you get right down to the details

The Australian Skills Commission is putting considerable resources into building and reviewing the ASC, and ensuring it adequately reflects skill needs in the labour market using feedback mainly from industry and occupation associations. The conclusion I keep coming back to is that the ASC is a significant improvement on what we currently have in New Zealand.

Are the skills required in the Australian labour market similar to those required in New Zealand? New Zealand is probably more similar to Australia than any other country but there will be differences. Australia has higher labour productivity than New Zealand so they must be utilising their labour differently and therefore using different skills.

This is not a deal breaker. The ASC gives us a framework to work within. A Workforce Development Council, for example, could consult its stakeholders on the skill needs relating to the occupations within its coverage and adapt the ASC as necessary.

The degree of accuracy required depends on what the skills information is going to be used for. I wouldn’t expect a qualification to be reviewed purely on the basis of data from the ASC. My view is that as long as the ASC is capturing the topmost frequently used skills in the jobs grouped under an occupation, that is a big improvement on what we have currently.

The ASC gives us a contemporary picture of skill needs. It is tempting to apply the ASC to historical employment data and employment forecasts to see how skill needs have changed over time and how they are likely to change in future. This would be a very useful, albeit partial, picture of changing skill needs over time. It would tell us how skill needs have changed because of the changing occupational makeup of the workforce. It wouldn’t tell us about changes in skill needs resulting from changes in the tasks and tools involved in occupations. Technology related skills in particular are likely to change over time.

The Australian Skills Commission wants the ASC to be a dynamic dataset that is responsive to changes to occupations in the Australian labour market.2 So far, there have been three releases each containing additional information and reviews to existing information. The ASC will continue to be reviewed regularly and once the build phase is complete, more focus will be put on capturing changing skill needs. We could apply versions of the ASC to the years they were released. This would capture some of those changing tasks within occupations depending on which occupations have been reviewed.

Taking on board the potential uses and limitations of the ASC, are you interested in working with Infometrics to apply it to a sector or region? We are keen to see how well the ASC works on the ground. So, please get in touch: rob.heyes@infometrics.co.nz

1 Source: National Skills Commission, Australian Skills Classification Release 2.0 – March 2022

2 Source: National Skills Commission, Australian Skills Classification Release 2.0 – March 2022