'You value what you pay for': enhancing employers' contributions to skill formation and use: a discussion paper for the Dusseldorp Skills Forum

This paper examines the issue of employers' contribution to the funding of education and training in Australia. The experience of the Training Guarantee Levy highlights that employers value what they pay for, i.e. where employers invest heavily in the skills of their workers they have strong incentives to ensure the productive deployment of those skilled employees. The encouragement of this high investment/high skill/high productivity cycle is the central policy imperative currently facing policy makers in Australia. Research has revealed that employers' contribution to training and education funding is in decline with training provision for non-standard workers being poor even though most net employment growth in recent times has been non-standard in nature. The authors examine the current trends in funding training in Australia and identify the level of employer supported training as one of the key challenges for the contemporary VET system. They suggest that employer underfunding is best understood through a notion of skill eco-systems and the approach to training results from what is described as a 'training regime' or a particular configuration of social and economic forces. In discussing the driving forces behind current trends and some possible directions for policy responses, the authors argue that the challenge is to change the regime that underlies current arrangements. The analysis suggests the need to consider a coherent set of skills policy initiatives that encourage a high investment/high skill/high productivity cycle so that employers will come to value the skills their employees have and are developing. Show less