While skills development has long been a focus of policy-makers, ensuring the use of those skills has received much less attention. Skills utilisation, however, is a key component of workforce development, leading to increased productivity, higher levels of staff satisfaction and retention, and maximising the return on investment in skills development.

Through an analysis of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this research examined patterns of skill underutilisation across all Australian workers, with a focus on two industry sectors: manufacturing, and early childhood education and care. Interviews with employers from these two industry sectors further explored what high performing organisations are doing to understand the skills of their workers and what, if any, mechanisms are in place to maximise skills utilisation.

Key messages:

• Around 19% of Australian workers report that they are not using all of their skills at work. About 35% of workers are overqualified, potentially contributing to this level of skill underutilisation.
• The likelihood and perceived importance of skills utilisation appears dependent on the type of job held. High-skilled, complex jobs provide more opportunity for workers to draw on a broader range of their skills than low-skilled jobs.
• Employers believe that skills utilisation is important for staff satisfaction and retention, but there were very few formal mechanisms in place in the case study organisations for understanding workers’ skills and ensuring their optimal usage. Where mechanisms were used, they tended to be aimed at understanding skills needs, rather than ensuring skills utilisation.
• Employers were unsure whether support from government (or other bodies) would help them to be more active in utilising the skills of their employees. There was no sense that the lack of such support was the reason why these organisations were not addressing skills utilisation more actively. Instead, most turned the conversation towards skills development, including interest in financial support for training, which they see as higher priority.