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This paper is a review of literature on employer engagement with vocational education and training (VET). The aim was to review measures that may increase employer participation in skills training and outline how the VET system in Australia has engaged with employers and the issues associated with this. The paper addresses four specific issues: (1) the main features of the VET system in Australia to encourage employer participation in training; (2) the main indicators used to measure employer training activity; (3) the main evidence relating to the returns employers obtain from training; and (4) the main barriers to employers undertaking any/more training. The paper concludes that the major form of engagement is through the competency-based training system, which is manifested through training packages. Another way employers are encouraged to engage with VET is through competition amongst training providers. This provides employers with greater responsiveness and choice.