Tertiary Education Sector, Australia: A Crucial Industry Workforce

Like most industries in Australia, the tertiary education sector is a crucial, thriving, if not somewhat challenged industry in 2023. The structure and workforce composition of the industry has evolved over time, indicating both a shift in the type of employment universities offer, as well as changes to the sector at a macro level.

To really understand the nature of employment in Australia’s tertiary education sector, it’s important to understand the far-reaching and long-term impact of the sector on our economy.

Aside from the immediate value of employment, this is a field that continues to place Australia on the global stage, for reasons including:

• The high standards of output from our tertiary education system
• The quality and breadth of our research, especially to inform key industries like health and science, defence, advanced technologies and space science
• The impressive deliverables and track records of our academics
• Our ability to align education outputs with commercial opportunities.

In short, it’s a big deal.

Background Briefing: Understanding Tertiary Education’s Impact

Here are some key facts about Australia’s tertiary education sector that you may (or may not) be aware of:

• Australia’s universities are at the forefront of global research in 20 critical fields. These include business, economics and management; space science; computer science; clinical medicine; chemical and material sciences; physics and mathematics
• Australia represents a tiny 0.34% of the global population. Yet we contribute 4.1% of all published research
• Australian universities are consistently ranked amongst the best in the world: there are seven Australian universities in the top global 100
• This last fact is reflected in our workforce, where over 47% of workers in Australia are tertiary educated
• The tertiary education sector is at the heart of Australia’s research and development ecosystem. The sector directly supports thriving industries including:
  • Advanced manufacturing
  • Agrifood technology
  • Transition to net zero
  • Defence
  • Health and life sciences
  • Tourism
  • Infrastructure
  • Digital technology
• Industry-university collaboration plays a key role in the growth of innovation in Australia with over $18b industry investment annually in research and development (R&D)
• Australia spends over $35b annually on R&D. This places us alongside the UK, Singapore and France as one of the highest R&D spenders
• Collaboration between Australian business and universities generates $12.8 billion every year in direct revenue for participating firms
• Once these collaborations flow on to the economy, the university/business collaborations contribute $26.5 billion every year to our national income. And, it’s estimated has created an additional 38,500 jobs
• Research from Deloitte shows the sector contributes around $25 billion to the Australian economy
• The sector directly employs over 130,000 staff and supports the delivery of education to over one million students every year.

Context is important; looking at these facts alone shows the importance of the sector to Australia’s economy. And therefore, how critical it is that the sector gets its workforce management right.

“Education is our largest services export and the biggest product we don’t source from the ground”.

Universities Australia Chief Executive, Catriona Jackson

Workforce Composition: Tertiary Education Sector

The primary function of jobs in the tertiary education sector can be grouped into four categories:

1. Teaching undergraduate and post-graduate students
2. Supervising research students
3. The undertaking of research
4. Community service and engagement.

And the workforce delivering these services are truly diverse. Broadly, staff within tertiary institutions can be categorised into these key functions:

1. Teaching and research academics. Consider these workers the ‘traditional’ university academics. Their roles include the delivery of lectures, co-ordinating the courses in their faculty, and the undertaking of some research. Although these workers are a typical member of the university workforce, they comprise a small percentage of all employees: only 10%.
2. Research staff. This is a smaller category of worker again and is a component of the academic staff. Typically, research staff are employed through grants, to undertake specific research.
3. Teaching-only academics (those heavily focused on teaching). These workers are the main proportion of academic staff. The vast majority are casual. Some of these academics are on recurring employment agreements. Some are fixed term contractors. These academics do very little, if any, paid research.
4. Professional and general university staff. This category of tertiary worker makes up almost half of all university or workers. They perform a diversity of non-academic roles that are required for the university to function cohesively. These roles include administration, IT, HR, finance and accounting, marketing, communications, library, operations, and grounds management amongst others.

Of these four different functions, tertiary sector workers are typically engaged via three different types of employment arrangements:

1. Continuing. This is an ordinary employment situation without a fixed end date. For academics, this is what’s called ‘Tenure’ in other markets such as North America, the UK, and European (a situation largely unknown in Australia).
2. Fixed Term. This is employment for a finite period or until the end of a designated project.
3. Casual employment (paid hourly). In a university context the term ‘sessional employment’ is used to describe academic workers paid on an hourly basis, or those academic workers engaged for a specific teaching timeframe – like a four-month semester. This group is most often treated as a sub-group of casual employment.

A Troubling Trend: Insecure Work in Tertiary Education

Looking at the composition of the workforce in the tertiary education sector, there’s an increasing trend towards ‘insecure’ employment. Insecure employment is defined as work that can be inclusive of one or more of the following elements:

• Casualisation
• Contract based work, where often, there is a lack of guaranteed continuity of work
• Zero or few paid leave entitlements
• No other statutory entitlements like superannuation contributions
• Loss of opportunity to attain union membership
• Sometimes, the exploitation of workers given their lack of leverage
• The expectation to ‘overwork’ with no commensurate compensation.

The effects of job insecurity are profound. Not only on the tertiary institutions themselves, but – as importantly – on the workers. The negative impacts of job insecurity include anxiety, financial insecurity, and stress which can lead to negative mental and physical health outcomes.

As well, insecure work means serious issues can arise (in fact, they already have). Issues such as wage theft, job losses, eroding intellectual capital, and what’s being called the ‘brain drain’ as researchers and academics take their skills and experience to international markets.

It didn’t help that during COVID, the previous federal (Coalition) government cut off universities from receiving the JobKeeper subsidy, the effects of which were devastating. Thousands of academics across Australia lost their jobs. But ironically, private institutions, such as Bond University, were entitled to JobKeeper. It was a dark moment in the sector’s history.

The diagram below shows the changes in total employment by university staff headcount among the three key categories of employment in the sector. It shows that around 145,000 of the total 221,000 staff in the sector were insecurely employed in 2019, versus 76,000 out of 127,000 in 2000.

Source: pc.gov.au

In recent months, the biggest known outcome from the insecure work trend in the tertiary sector is wage theft.

This is why compliance is so critically important.

[…] Senate inquiry into job security earlier this year [2022]. The inquiry heard that 47 per cent of the University of Melbourne’s 11,000 staff last year were casuals.

Fair Work Ombudsman, Sandra Parker

Workforce Compliance: The Tertiary Sector Solution

It would appear that the underpaying of workers in the sector is truly rife.

A senate enquiry in 2022 found that casuals and staff on fixed-term contracts, made up two-thirds of the sector’s workforce. And as part of this enquiry, eleven universities were investigated for potentially underpaying staff. As a result, the Fair Work Ombudsman (FWO) made the sector a top priority in 2022, to uncover non-compliance. This enquiry has also led the FWO instigating legal proceedings against the University of Melbourne.

But they’re not alone. The National Tertiary Education Union (NTEU) estimates that more than $25 million has been recovered so far from 23 universities.

“What has been surprising is the fact that it does look reasonably systemic,” Parker said. “It’s a trend – it obviously starts with poor governance, poor management oversight and a lack of centralised HR.”

            Fair Work Ombudsman, Sandra Parka (Source: Sydney Morning Herald)

We’re not suggesting non-compliance in the tertiary sector was intentional. In fact, like big business, universities often miss the mark on compliance inadvertently. The point here is this: compliance is actually not that hard to get right (blatant plug: especially when you partner with CXC 😉). But in a regulatory landscape that changes frequently, and is sometimes not fit for purpose, it’s easy to see how being non-compliant can occur.

It’s why having an expert partner for the compliance of all non-employee workers makes sense. We operate in one of the most complicated industrial relations frameworks in the world, here in Australia. It’s a multi-layered regulations system made up of legislation, enterprise agreements and awards. Given this, it stands to reason that non-compliance arises.

Indeed, organisations across the board are unearthing instances of non-compliance. In many cases, this is inadvertent; often, it is caused by a combination of legacy “set and forget” systems and processes, changes to workforce and ways of working, and the complexity of the regulatory landscape.

            Source: AFR

As we at CXC always say, compliance is critical – which is perhaps the biggest understatement of this issue.

The cost of non-compliance is potentially devastating – financially, structurally, and reputationally. Look at Melbourne Uni. Not only are they dealing with legal proceedings for underpayment of workers, but now, they’ve established a Wage Redemption Program to correct their non-compliance outcomes. A costly, damaging and hard road for them.

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