The Perception & Experience Challenge: Key Drivers of Workforce Shortages in In-demand Industries

On 1 August 2025, the Victorian TAFE Association (VTA) provided a submission on behalf of members into the Legislative Assembly Economy and Infrastructure Committee’s inquiry into student pathways to in-demand industries.

The purpose of this inquiry is to identify how best to guide and support students into in-demand industries that are critical to Victoria’s economic future. It focuses on improving pathways and support for priority cohorts – including regional students, female students wanting to work in male-dominated industries and students facing disadvantage.

Our submission put forward 19 practical recommendations focused on attracting and retaining students at TAFE and in in-demand industries.

Victoria is facing growing workforce shortages across in-demand industries such as healthcare, construction, education, and clean energy. This is also reflected on a national scale, with labour market analysis in 2024 showing that 33% of occupations are in shortage, many of these being in high priority sectors (1).

We can’t wait to address this critical issue – we need to start today.

If workforce shortages are not resolved, there is significant risk to Victoria’s economy and to Government priorities including building homes and critical infrastructure, and addressing climate change.

The Victorian TAFE Network is one of the most critical levers available to Government to develop a pipeline of skilled workers to enter priority industries, resolving these workforce shortages. 80% of future jobs are attainable via TAFE pathways (2), and in Victoria, 81 out of the top 100 largest growing occupations are attainable via TAFE pathways.

But there’s a problem.

The problem

The perception challenge

Negative perceptions of pathways to in-demand industries have a significant impact on student choices and workforce development.

Despite TAFE delivering strong student outcomes, high responsiveness to workforce demands, and high-quality facilities, perceptions of poor quality and limited student experience persist, particularly among key influencer groups like parents. These outdated views, unsupported by evidence, shape student choices and weaken the number of skilled graduates.

The VTA has released a report which explores the TAFE value and perception challenge in depth – which you can read here.

Similarly, certain industries linked to workforce shortages also struggle with their own perception challenges that often have little to do with whether these career pathways are indeed secure or rewarding.

The training and employment experience challenge

The reasons for workforce shortages can be complex and diverse and extend beyond the perception challenges faced by TAFE and Industry. Jobs and Skills Australia have identified four key factors driving workforce shortages throughout the training and employment experience of workers (3).

Factors driving workforce shortages (ranked from most to least common):

Long training gap: Insufficient workers are available, and a long training pathway is required to generate suitable applicants. This often affects roles requiring a Certificate III or above.
Retention gap: Sufficient workers are available, but workers do not remain in employment due to current working conditions.
Suitability gap: Sufficient workers are available, but they are not regarded as suitable by employers due to a lack of employability skills and/or workforce experience.
Short training gap: Insufficient workers are available, and a short training pathway is required to generate suitable applicants. This often affects roles requiring a Certificate II or below.

The solution

To meet the needs of in-demand industries, we must consider the full student journey including the drivers of attraction and retention at all stages.

Our recent submission to the Legislative Assembly Economy and Infrastructure Committee’s inquiry into student pathways to in-demand industries set out several recommendations to achieve this.

Change perceptions of in-demand industry pathways

The TAFE perception challenge can be tackled by providing schools, parents, and career advisers with evidence-based information about TAFE pathways and labour market data.

The reality is that TAFE graduates’ outcomes match university outcomes, TAFE graduates achieve employment outcomes equal with university graduates (78% vs 79%), with those from apprenticeships and traineeships even better (94%). On earnings, TAFE graduates with a Certificate IV or higher report higher median incomes than university graduates ($71,650 vs $68,000).

Additional funding for school visits, TAFE taster sessions, and information programs would also help the public get a genuine understanding of what their local TAFE has to offer.

Industry also has a critical role in reshaping perceptions by actively promoting pathways as attractive, clearly articulating which skills and careers are in demand, and positioning TAFE as the trusted route to them. Government can help enable this by equipping industry leaders to showcase authentic training experiences and workplace cultures.

Strengthening the attractiveness of the pathways to in-demand industries and the industries themselves will increase the number of people in the skills pipeline, delivering more skilled workers and ultimately increasing applicants for in-demand jobs.

Improve retention in in-demand industries

Shortening training times may seem like a solution to skills shortages, but it risks weakening graduate suitability and doesn’t address retention.

We recommend a targeted investigation into the key drivers of poor retention in in-demand industries focusing on wages, job security, working conditions (with a focus on underrepresented groups) and work-life balance. This requires coordination from both Government and industry.

Having robust evidence on why workers leave, what would encourage them to stay, and how these factors vary by industry is essential and can inform industry reforms that directly address drivers of attrition.

Equip students with the skills industry need

We recommend Government provide targeted funding to TAFE to expand and enhance foundational skills delivery. This should include essential competencies including English language, literacy, numeracy, and digital skills (LLND), tailored courses for varying ability levels, flexible delivery models, and training that is aligned with industry needs.

Foundational skills are already a proven enabler of successful education and employment outcomes. Students who undertook LLND programs were up to 1.8% more likely to complete training and up to 5.6% more likely to gain employment compared to peers who did not. Each additional completed foundation skills subject was associated with higher overall VET program completion rates.

Targeted funding would therefore act to further enhance the demonstrated impact of LLND programs, equipping students with the skills industry need and therefore increasing the number of skilled workers available in in-demand industries.

Increase placements with industry to increase suitability

We further recommend industry expand paid placements and earn-while-you-learn opportunities. Embedding students in workplaces earlier accelerates workforce readiness, improves alignment with employer expectations, and reduces transition delays from training to work. Paid placements deliver mutual benefit: students gain meaningful, financially supported experience that increases completion and employment outcomes, while employers secure access to a larger pipeline of job-ready talent.

Conclusion

Addressing Victoria’s workforce shortages requires a coordinated approach across TAFE, industry, and government. By improving perceptions, equipping students with the right foundational and technical information and skills, and making the end-to-end journey more attractive, we can grow a sustainable talent pipeline that meets the state’s current and future needs.

To learn more about our wider recommendations to secure a sustainable pipeline of skilled workers for Victoria’s future, read our submission summary here.

To learn more about the barriers faced by learners in their attraction to and retention at TAFE, read our article here.

You can also read our full submission on our website.