VET courses need to be more industry-relevant and provide clearer pathways into the tech workforce in order to address the growing demand for these skills across the Australian economy, according to a new report.

The Future Skills Organisation initial workforce plan, the culmination of six months of the group operating as the Jobs and Skills Council for Australia’s finance, technology and business sectors, provides an evidence base for efforts to build a skilled workforce in the sectors.

The report identifies an ever-growing demand for finance, technology and business skills in sectors across the economy, and highlights the need for vocational education and training (VET) to play a bigger role in training these skills.

According to the report, technology and business jobs have grown at least 1.5 times faster than all other occupations in the last three decades.

About half of entrants to these sectors come from VET training backgrounds, but this has been in steady decline over the last five years.

There has been a significant decline in tech qualifications completions in the VET sector, with many workers and employers instead opting for industry accreditations and microcredentials.

VET completions at lower levels have fallen by about 85 per cent since 2016, the report found, while Diploma and Advanced Diploma completions are also falling.

According to the report, this is partially attributed to these tech training packages not providing students with the skills needed to work in a tech job.

The report also found that “VET lacks clear pathways into tech occupations” which is “driving students to other pathways”, and that many tech employers also prefer university graduates to VET ones.

“Addressing these issues will require significant action to shift both reality and perception,” the report said.

There has been an overall decline of 30 per cent in the completion of Certificates I to IV in the last five years, with VET enrolments not matching the increased demand in the relevant occupations.

“This means that the role of VET as a training pathway is shrinking for finance, technology and business occupations,” the report said.

“This is particularly relevant with the information and communications technology training package, which is seeing the most rapidly shrinking enrolments of all VET training packages.”

This leaves an opportunity for the VET sector to play a far greater role in developing solutions to meet Australia’s rapidly changing future skills demands, according to the report.

The Future Skills Organisation has highlighted five key priority areas in this area: keeping training solutions relevant to the workplace; the digital capability gap; the importance of keeping pace with new technologies; keeping up with the skill changes required by these technologies; and clearer pathways into finance, tech and business jobs.

The report found that about one in five workers in Australia are in finance, tech and business occupations, and 51 occupations in these fields are in shortage.

There has been a low supply in a range of these occupations and mismatches in the skills obtained by workers, it said.

The Future Skills Organisation said the findings show there is demand for an increase in work-based learning and short-form training options to enable workers to more easily transition in and out of occupations.

The organisation will be holding a National Forum in March featuring leaders from industry, training, unions and government to build on the plan, with a keynote address from Minister for Skills and Training, Brendan O’Connor.

“The government is taking action to address current skills and workforce shortages through the remit of the Jobs and Skills Council, and I look forward to engaging with the Future Skills Organisation at their inaugural National Forum to map out solutions to future-proof Australia’s finance, technology and business workforce.”

Jobs and Skills Council CEO Patrick Kidd said the forum will enable deeper engagement on the themes identified in the new report.

“The National Forum will deliver an insightful and impactful event in Melbourne by bringing together industry leaders around a common goal to build a skilled, thriving and resilient finance, technology and business workforce,” Kidd said.