Related articles
Dive deeper into the key themes, bold ideas, and policy recommendations shared at the ACS 2025 Election Forum.
ACS 2025 Election Forum / Productivity – Building a Pipeline of Skills
Productivity – Building a Pipeline of Skills
Introduction
Australia’s current approach to ICT skills and certification is fragmented and outdated. Inconsistent definitions make it hard for workers to prove what they can do and hard for employers to find the talent they need. The result is lost productivity, stalled tech adoption, and a growing disconnect between education and employment. We’re not alone in this: the OECD’s 2025 Economic Outlook highlights the need for structural reforms in education and digital skills to boost productivity, close digital divides, and futureproof workforces against rapid change.
It’s time to bring our skills system out of the industrial era and into the digital one. A unified national skills framework could create a common language for recognising skills across sectors, supporting more flexible learning pathways and a more agile, productive economy. The groundwork has already begun but the next government will need to accelerate progress and ensure the system works for everyone.
In the lead-up to the 2025 Federal Election, the Australian Computer Society (ACS) hosted a panel of experts to explore how to build a national skills recognition system that’s fit for a digital economy. This policy analysis draws on that discussion and four practical recommendations for the next government.
Recommendations:
Fast-track the development of a National Skills Taxonomy to reduce mismatches between jobs, roles, and skills.
Invest in lifelong learning and fast-track a National Digital Skills Passport to recognise learning wherever it happens.
Fast-track harmonisation between VET and higher education with a focus on job-ready, stackable qualifications.
Expand the use of skills frameworks like SFIA and formalise skills-based professionalisation in critical areas like cyber security.
Closing the Skills Matching Gap
In a 2023 paper, the Productivity Commission noted two critical elements of labour market productivity: increasing the supply of skilled workers and improving the way those skills are matched with jobs.
But matching is hard when organisations lack a shared language for describing skills. Without a common taxonomy, overlapping or adjacent needs go unnoticed. Teams might recruit or train for capabilities they already have in-house, wasting time and resources. Terms like “data analysis” can mean wildly different things – from basic spreadsheet use to advanced machine learning – depending on the who is using them. This inconsistency clouds workforce planning, making it reactive rather than strategic.
These mismatches are playing out in real time. LinkedIn’s 2025 Work Change Report found nearly 40% of job seekers are applying to more roles than ever but hearing back less. Meanwhile, 76% of Australian employers report persistent talent shortages, and the Hays 2025 Skills Report shows 85% of hiring managers in Australia and New Zealand see skills gaps hurting performance. A 2024 survey from the Australian HR Institute found that 57% of respondents believe current skills gaps are harming productivity. The biggest investment areas? Practical and technical skills. The biggest cause of those gaps? Evolving business needs. In other words, the skills system that once served us is now out of sync with how we work.
These problems don’t just affect employers. Workers suffer too. When skills and roles are defined inconsistently, employees can’t easily prove what they’re capable of. People with valuable skills may be overlooked for projects or promotions simply because there’s no system in place to recognise them. Mismatched early career roles can leave lasting scars: an IZA World of Labor study found that periods of being under- or over-skilled depresses productivity and wages long-term.
Skills mismatches also contributes to inefficiencies in Australia’s skilled migration system. A 2024 report from CEDA found that nearly a quarter of permanent skilled migrants were working in jobs below their skill level. Ensuring we have a way of recognising the qualifications and experience of skilled migrants could go a long way to making the most of skilled migration.
Poor matching doesn’t just feel bad – it shows up in the numbers. A recent study found that companies with higher “Job Assignment Quality” scores also had significantly higher productivity. When people are in the right roles, everyone benefits.
In response, 86% of hiring managers say they are adopting skills-based hiring practices to better address talent shortages, according to Hays. This is about trying to measure and understand what a candidate can actually do, rather than looking mostly at their formal qualifications and job titles. Part of a skills-based approach to hiring involves re-writing job descriptions to capture expected capabilities.
Diagram of the different aspects that contribute to professional capability. Source: SFIA
Capability is a more holistic way of viewing professional skills, knowledge, and experience as a set of interrelated qualities. One common capability model distinguishes between professional/technical skills (like the ability to write code), general workplace skills, behaviours (like soft skills), experience, and knowledge. In this view, qualifications and certifications are ways of demonstrating that a worker has one or many aspects of capability.
The capability view recognises that many skills and experience can be gained outside formal training, like by taking on new work responsibilities or contributing to community projects. For the many alternative pathways into tech jobs, this shift in thinking is crucial if we are to give Australia’s workforce the kind of flexibility that can adapt to sudden market shocks.
Jobs and Skills Australia is currently developing a National Skills Taxonomy to establish a unified framework for defining and categorising skills across the Australian workforce. This is intended to replace the existing Australian Skills Classification with a more comprehensive system that bridges the gap between education, training, and employment sectors. The National Skills Taxonomy can provide the scaffolding for this capability-based approach by standardising how we define, evidence, and communicate complex skillsets.
Cherie Diaz, Executive Director of Education Innovation at Western Sydney University, said that we need to make sure attempts to formalise professional skills is done in a way that isn’t restrictive.
The balance is important is because we need to continue to leverage what’s in place and working, continue to build those strategic partnerships between education providers, technology providers, and employers, and to build a common language, so we're able to evidence the skills that are either being developed or exhibited in the workplace,” she told the ACS 2025 Election Forum.
"And we need to make it easier for transferable skills to be woven into that process."
Putting this mindset into practice isn’t simple. More than half (52%) of HR professionals in Hays’s recent survey said they struggle to assess skills accurately, while 49% said they found it hard to adapt roles to evolving requirements. Another 49% acknowledged the need for better training for hiring managers to support skills-based hiring. These insights reflect a system in transition – towards more agile, capability-led workforce planning – but one still grappling with foundational infrastructure.
Recommendation: Fast-track the development of a National Skills Taxonomy to reduce mismatches between jobs, roles, and skills.
Recognising Skills in a Modern Economy
The skills landscape and employment market are undergoing significant shifts. Technological advancements, workforce demographics, and industry needs are all shifting rapidly at a pace that is compounded by a geopolitical restructuring that is sending jolts through global markets.
Recruitment company Hays has noted in its 2025 Skills Report how the traditional approach to skills development – where a qualification serves as a lifelong credential – is no longer sufficient. Instead, the modern workforce is expected to engage in continuous learning, as skills become obsolete faster than ever before.
Careers in tech have long demanded continuous learning but the systems we use to recognise learning haven't kept pace. Today, many professionals – especially in tech – build their skills through non-traditional means: vendor certifications, open-source projects, self-directed training, and hands-on problem-solving. Yet much of this learning goes unrecognised by formal qualification frameworks. This leaves skilled individuals without a clear way to demonstrate their value, and limits career progression, hiring flexibility, and workforce mobility.
The result is a growing gap between what workers can do and what the system recognises. To bridge it, we need new tools that validate skills developed across multiple contexts, not just in formal education. Work is already under way on this with plans for a National Skills Passport. This digital platform is intended to consolidate formal qualifications, micro credentials, and on-the-job learning into a single, portable record, making it easier for individuals to demonstrate their capabilities and for employers to find candidates with the right mix of skills and experience.
Melinda Cilento, CEO of the Committee for Economic Development of Australia (CEDA), told ACS that there is a skills deficit “as far as the eye can see” in Australia. For her the greater concern is for the next generation who are entering the workforce under entirely different circumstances than those who came before.
“We should be really worried about the increasing number of boys who are not finishing school in this country, and we should be really worried about an education system which they do not think is relevant, engaging and empowering.
“If you look at Scandinavia, which is really good at lifelong learning, the reason they are able to do that is because they've got a really, really good foundational education system. We need kids coming out of school excited, curious and with really strong foundational skills, and then we need a sector that responds to that with more agile education and training.
“We've got to stop expecting our kids to fork out 10s of 1,000s of dollars for four years of education post-high school they don't think is relevant to them”
To deliver on its promise, the National Skills Passport needs to be a top priority for the next government – designed with interoperability, trust, and user control at its core.
Recommendation: Invest in lifelong learning and fast-track a National Digital Skills Passport to recognise learning wherever it happens.
Flexible Learning Pathways
Australia’s qualifications system has long been split between two tracks: higher education, which focus on academic theory and research, and vocational education and training (VET), which provides practical, industry-specific skills. But as jobs become more hybrid and learning needs more flexible, there is a greater need to harmonise the different elements of our qualifications and learning system.
Without more flexible, stackable learning pathways, we risk leaving people behind and failing to take advantage of high-productivity technologies like AI.
A 2023 Future Skills Organisation (FSO) report looked at the effects of generative AI on workplace skills which put the top end estimate of its value added to the economy at around $115 billion by 2030.
Getting those skills right means a sharpening focus on core human capabilities. Jenny Raad, a NSW Business Director for Technology with Hays Recruiting, told ACS that the skills needs of today are about staying relevant for how business works day-to-day.
“We see lots of demand for core human skills. The highest is communication followed by critical thinking and problem solving,” she said.
“This really leads into what we need for AI because if you don't have critical thinking and problem solving skills – if you can’t effectively communicate what you want – then you may not get the outcome you need from gen AI.”
Patrick Kidd, CEO of the FSO, told ACS that there is high potential value in maximising the use of AI.
“The loss in productivity is the opportunity cost of not investing in skills,” he said. “The challenge that we have is how to get urgent enough about the skills that are needed across the economy.
“Of that $115 billion around 70% of it is judged to be about individual productivity. So, if we can uplift skills, then maybe we make a big difference in terms of the nation’s productivity.”
Higher education is increasingly under pressure to evolve. While their graduates are valued for critical thinking and problem-solving abilities, many employers want more practical, job-ready skills. The University of South Australia is responding with a degree-level apprenticeship in software engineering, developed in partnership with BAE Systems. Over five years, students gain hands-on work experience and a Bachelor’s degree – a model that combines rigour with relevance.
Meanwhile, the VET sector faces its own set of challenges. Despite directly supporting high-demand areas like cybersecurity and digital infrastructure, VET is often seen as second-tier – particularly among school leavers and migrants. This perception has been shaped by under-regulated private providers, reputational damage, and a funding model that historically prioritised scale over quality. A 2024 parliamentary inquiry into the status of VET highlighted these concerns, pointing to the need for restoration of trust and prestige in the sector.
That perception is compounded by poor outcomes in key areas. The Future Skills Organisation (FSO) has identified the “low use and relevance of the ICT Training Package” as a workforce challenge. Completion rates for ICT VET qualifications remain low — less than half of those who began in 2018 and 2019 finished their course. These challenges highlight the need for VET to evolve as part of a more integrated tertiary system.
Steven Worrall, Managing Director of Microsoft Australia and New Zealand, commended the NSW government for implementing the Institute of Applied Technology recommendation and said Microsoft’s involvement in that review process helped foster greater relationships between the training providers and the employers in desperate need of skills.
“Our industry has typically taken graduates out of university as the primary source of talent,” Steven told the ACS 2025 Election Forum. “Now we're starting to deepen how we can best work with the TAFE network.
If I think about areas like cyber, AI or machine learning, and I think about the people who've come through the Institute of Applied Technology during the time we've been working there – the demographic typically is between 25 and 44. These are people who are working already, probably have a mortgage, certainly have a family. They aren't going to go to university and they certainly aren't going to stop work while they retrain.”
Jobs and Skills Australia (JSA) has begun this work at a national level, most recently by publishing a report Towards a Tertiary Harmonisation Roadmap. By advocating for a harmonised tertiary education sector, JSA aims to create a more cohesive framework that facilitates seamless transitions for learners between VET and HE, thereby addressing existing inefficiencies and better aligning educational outcomes with labor market needs.
This move towards harmonisation reflects a broader recognition of the need for adaptability within Australia's workforce development strategies. As industries evolve and the demand for hybrid skill sets grows, the traditional silos of VET and higher education are increasingly seen as limiting. The JSA's recommendations underscore the importance of a unified approach to skills recognition and qualification frameworks, enabling individuals to upskill and reskill more effectively in response to changing economic demands. Such integration is anticipated to enhance productivity, address critical skill shortages, and promote greater social equity by making tertiary education more accessible and responsive to the diverse needs of Australia's population.
Recommendation: Fast-track harmonisation between VET and higher education with a focus on job-ready, stackable qualifications.
Skills Frameworks as an Enabler
The tech sector has long recognised that keeping pace with change requires a shared system for defining, assessing, and applying skills. One of the clearest examples is the Skills Framework for the Information Age (SFIA), officially launched in the early 2000s, and now a globally recognised tool used to map the skills of individuals and roles across digital professions.
Within SFIA, each skill is linked to a set of typical activities and levels of responsibility, enabling consistent workforce development, career planning, and recruitment across organisations and countries. Maintained by the international SFIA Foundation, the framework is now used in almost 200 countries and has been adopted by governments, businesses, and workers around the world.
Australia is one of them. The federal government holds a whole-of-country license for SFIA that was recently renewed until 2027. The Australian Public Service Commission and the Digital Transformation Agency have worked to embed SFIA within the public sector, including making it a requirement for ICT labour hire through the DTA’s Digital Marketplace. The Australian Computer Society (ACS) also uses SFIA as part of its Migration Skills Assessment process and is developing a detailed IT Occupations Framework using SFIA as the foundation.
This is a model for how systems can evolve to support fast-moving industries, but its application is limited to a narrow slice of the workforce. One clear area where this thinking is gaining traction is cyber security – a field that has simultaneously too few workers but not clear enough pathways for potential workers to get started in the industry.
In its 2023-2030 Cyber Security Strategy, the government said it wanted to specifically professionalise the cyber security workforce in an effort to create clear pathways, reduce barriers to entry, and generally uplift the cyber workforce’s consistency.
Scarlett McDermott, Managing Director of Longitude Advisory and board member of the Australian Information Security Association told ACS that we are rapidly seeing the need for a trusted, high quality, and professionalised cyber security workforce in this country.
“Digital infrastructure is a critical part of the fabric of Australian society – we can't simply extricate it as part of how we interact with the government, with each other, with education, with so much of what we do in our lives. When you get to that point you can't play fast and loose.
I think we need to respect that technology moves really quickly, and we need a flexible system that supports that. I'd like to see a skills-based approach to professionalisation where possible, particularly for cyber security.
Now is the time to expand that mindset across the entire economy. We need a national approach to recognising skills that reflects how people actually learn and work. That means updating our education and training systems, helping employers understand new career pathways, and building infrastructure that supports lifelong development. Because we are a highly educated, innovative country — and yet, everywhere we look, there are skills mismatches. That’s a problem we can’t afford to ignore.
Recommendation: Expand the use of skills frameworks like SFIA and formalise skills-based professionalisation in critical areas like cyber security.
Conclusion
Australia stands at a pivotal moment as a wave of global shifts and new technologies reshape the way we live. As our economy has transformed, the ways we recognise, develop, and mobilise skills have struggled to keep up. We’ve seen the consequences: there is a growing skills mismatch that harms productivity and slows our country down. Too often, we’re still asking 21st-century workers to navigate a 20th-century infrastructure.
The good news is that across the country, we’re seeing early signs of a new model – one that’s more flexible, more inclusive, and more responsive to how people actually learn and work. Microcredentials and vendor certifications are reshaping career entry points. Skills frameworks like SFIA are creating clarity in fast-moving fields. Projects like the Institute of Applied Technology in NSW are blending academic and vocational strengths. And government from the Digital Skills Passport to the National Skills Taxonomy, are beginning to lay the foundations for a system that connects it all.
The task now is to accelerate. We need to unify these efforts into a modern national skills system: something that helps workers build and share their capabilities, helps employers find the talent they need, and helps government direct resources toward the jobs of the future. We have the tools. The momentum is building, but it cannot afford to slow down. We need next the will to build a system ready for what comes next.