Skill level is a concept used in the ABS’s ANZSCO classification, which ranks occupations by their range of complexity of performed tasks. ANZSCO skill level is measured by the level or amount of formal education and training, the amount of previous experience in a related occupation, and the amount of on-the-job training required to competently perform the set of tasks required for that occupation ¹⁹.

Analysing employment through a skill level lens is useful in assessing the composition of the labour market as it relates to further education and training. Skill level trends continue to emphasise the importance of further education and training to employment outcomes.

Employment increased across all skill level groups over the 20 years to February 2020. Figure 18 and Table 4 show that, alongside a shift towards a more service-based economy, the Australian labour force has also become much more highly skilled over the past two decades, with employment growth strongest in higher skilled occupations.

Skill level 1 occupations (the highest skill level group – usually requiring a bachelor degree or higher educational attainment level) accounted for 46.6% of total employment growth over the 20 years to February 2020. By contrast, skill level 5 occupations (the lowest skill level group – usually requiring only a certificate I or secondary education attainment level) accounted for the lowest share (7.5%) of employment growth over the period.

Over the 20 years to February 2020:

• the proportion of total employment accounted for by skill level 1 occupations (commensurate with a bachelor degree or higher educational attainment level) increased by 6.8 percentage points to stand at 32.4% of total employment
• the proportion of total employment accounted for by skill level 5 occupations (commensurate with a certificate I or secondary education attainment level) decreased by 4.0 percentage points to stand at 15.8% of total employment
• the proportion of total employment accounted for by skill level 2 (commensurate with an advanced diploma or diploma educational attainment level) and skill level 4 (commensurate with a certificate II or III educational attainment level) occupations remained relatively consistent, fluctuating less than 0.5 percentage points for both skill level groups. The share of total employment accounted for by these groups stands at 12.5% and 24.4% respectively.
• the proportion of total employment accounted for by skill level 3 (commensurate with a certificate IV or III educational attainment level) occupations decreased by 3.0 percentage points to stand at 14.9% of total employment.

Table 4: 20-year change in employment by Skill Level Groups

Sources: ABS, Labour force, Australia, detailed, seasonally adjusted by NSC