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OVERVIEW

The purpose of this paper is to provide information about the development of a new standard classification of occupations, the Australian and New Zealand Standard Classification of Occupations (ANZSCO), and to make the final structure of the new classification available to the public in advance of the release of the full ANZSCO publication scheduled for July 2006.

ANZSCO will replace the existing Australian Standard Classification of Occupations (ASCO) Second Edition and the New Zealand Standard Classification of Occupations (NZSCO) 1999 used in Australia and New Zealand, respectively. ANZSCO is intended to provide an integrated framework for storing, organising and reporting occupation-related information in both statistical and client-oriented applications, such as matching job seekers to job vacancies and providing career information.

This paper provides an introduction to ANZSCO, broadly describes the conceptual basis of ANZSCO, and provides details of the classification structure. The relationship between ANZSCO, ASCO Second Edition and NZSCO 1999 is discussed, as is the relationship to the International Standard Classification of Occupations (ISCO). The paper also outlines plans for implementing ANZSCO in Australian Bureau of Statistics (ABS) and Statistics New Zealand (Statistics NZ) collections.

BACKGROUND TO THE DEVELOPMENT OF ANZSCO

The ABS and Statistics NZ have a long-standing policy of harmonising major statistical classifications, wherever possible, as part of the Closer Economic Relations Agreement between the two countries.

Discussions were held between the ABS and Statistics NZ in the early 1990s on the feasibility of developing a joint occupation classification. It was agreed that the time available did not allow for a joint development at that time, but that the two countries would aim to develop a joint classification of occupations when ASCO was next reviewed prior to the 2006 Australian Census.

In March 2001 a workshop between the ABS and Statistics NZ was held in New Zealand to discuss the possibility of developing a joint or harmonised classification of occupations in time for the 2006 Censuses in Australia and New Zealand. The workshop also involved other relevant New Zealand agencies.

The benefits of developing a joint occupation classification were noted as being the ability to produce a more up-to-date, relevant and conceptually sound classification, and the improved capacity for analysis of trans-Tasman labour market data. Following this workshop the ABS and Statistics NZ agreed to proceed with a joint development.

The development of ANZSCO commenced in 2002 as a joint project between the ABS, Statistics NZ and the Australian Government Department of Employment and Workplace Relations (DEWR). The project was oversighted by a Project Board comprising senior management of ABS, Statistics NZ and DEWR. Reference groups were set up in Australia and New Zealand to provide advice and guidance on the structure and content of the classification.

The project team conducted formal consultations with stakeholders in Australia and New Zealand in 2002, 2003 and 2004. The purpose of these consultations was to inform stakeholders of progress and to seek their views on a number of key issues affecting the overall design and structure of ANZSCO. The views of stakeholders were canvassed on a wide range of issues including the level of detail required, the appropriateness of the criteria used to organise occupations into groups, and their preferences with respect to three different possible models developed for the ANZSCO structure.

Early in the development of ANZSCO, a conscious decision was made to maintain comparability, as far as practical, with ASCO Second Edition at the unit group level. This was achieved by minimising the extent to which ASCO Second Edition unit groups were split and re-aggregated when designing ANZSCO unit groups. It was acknowledged that doing so would result in a major time series break from NZSCO 1999 for New Zealand users at all levels of the classification.

ANZSCO


THE CLASSIFICATION STRUCTURE

The structure of ANZSCO has five hierarchical levels - major group, sub-major group, minor group, unit group and occupation. These are the same hierarchical levels as are used in ASCO Second Edition and NZSCO 1999.

A profile of the ANZSCO structure and a listing of the major, sub-major, minor and unit groups and occupations are shown in Appendixes 1, 4 and 5.

UNDERLYING CONCEPTS

ANZSCO is a skill-based classification used to classify all occupations and jobs in the Australian and New Zealand labour markets.

To do this, ANZSCO identifies a set of occupations covering all jobs in the Australian and New Zealand labour markets, defines these occupations according to their attributes and groups them on the basis of their similarity into successively broader categories for statistical and other types of analysis. The individual objects classified in ANZSCO are jobs.

The concepts of 'job' and 'occupation', therefore, are fundamental to an understanding of ANZSCO.

The concept of job

A 'job' is defined as a set of tasks designed to be performed by one person for an employer (including self-employment) in return for payment or profit. Individual persons are classified by occupation through their relationship to a past, present or future job.

Any particular job will typically involve an individual working for a particular employer and undertaking a particular set of tasks. People working for themselves are considered as having a job and belonging to the labour force.

People undertaking work without pay or profit, for example, voluntary work, are excluded from the concept of job. However, this is not to say that the classification cannot be used to describe the activities of persons not working for pay or profit.

The concept of occupation

The categories at the most detailed level of the ANZSCO structure are called 'occupations'. An 'occupation' is defined as a set of jobs that require the performance of similar or identical sets of tasks. As it is rare for two actual jobs to have identical sets of tasks, in practical terms, an 'occupation' is a set of jobs whose main tasks are characterised by a high degree of similarity.

The similarity of tasks is defined in ANZSCO as a function of the level and specialisation of skill required to perform those tasks. Skill is defined as the ability to competently perform the tasks associated with an occupation.

It follows that ANZSCO classifies occupations according to two criteria - skill level and skill specialisation.

The concept of skill level

In ANZSCO, skill level is defined as a function of the range and complexity of the set of tasks performed in a particular occupation. The greater the range and complexity of the set of tasks, the greater the skill level of an occupation.

Skill level is measured operationally 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

In general, the greater the range and complexity of the set of tasks involved, the greater the amount of formal education and training, previous experience and on-the-job training that are required to competently perform the set of tasks for that occupation.

Formal education and training refers to the level and amount of education and training required for competent performance of the tasks required in an occupation. It is measured in terms of educational qualifications as set out in the Australian Qualifications Framework (AQF) or the New Zealand Register of Quality Assured Qualifications (NZ Register).

Previous experience refers to the time spent gaining work experience in related occupations or activities required for the competent performance of the tasks in an occupation. It is measured in months or years.

On-the-job training refers to the amount of training required after commencing work in an occupation for competent performance of the tasks in an occupation. It is measured in months or years, and may be undertaken at the same time as formal training.

ANZSCO does not measure the skill level of an individual, rather it refers to the level of skill that is typically required to competently perform the tasks of a particular occupation. Skill level is an attribute of occupations, not of individuals in the labour force or of particular jobs. It is irrelevant whether a particular individual working in a job in a particular occupation has a certain amount of training or a particular level of competence or not.

For example, a person who spreads mortar and lays bricks for a living has the occupation Bricklayer, regardless of whether he or she is an exceptionally competent bricklayer with many years of experience and post-trade qualifications, or an inexperienced bricklayer with no formal qualifications and a low level of competence. The skill level of the occupation Bricklayer is determined on the basis of that typically required for competent performance.

ANZSCO assigns occupations to one of five skill levels. In determining the skill level of each occupation in ANZSCO, advice was sought from employers, industry training bodies, professional organisations and others to ensure that the information is as accurate and meaningful as possible. The five skill levels are outlined in Appendix 2.

The concept of skill specialisation

Skill specialisation is defined as a function of:

• field of knowledge required
• tools and equipment used
• materials worked on and
• goods or services produced or provided.

In recognition of the importance of these skills to employers, the project team considered using this set of generic skills as a possible additional dimension of skill specialisation. It was determined, however, that since they are applicable to most occupations, they had limited value as classification criteria.

It is understood that DEWR is supporting the development and application of employability skills for individual occupations, to assist in the matching of job seekers to job vacancies. Information about employability skills as they relate to specific occupations, defined in ANZSCO terms, may become available as a result of this work.

THE CONCEPTUAL MODEL

In ANZSCO occupations are organised into progressively larger groups on the basis of their similarities in terms of both skill level and skill specialisation.

The conceptual model adopted for ANZSCO uses a combination of skill level and skill specialisation as criteria to design major groups which are meaningful and useful for most purposes. The eight major groups are formed by grouping together sub-major groups using aspects of both skill level and skill specialisation. In designing the major groups, intuitive appeal and usefulness in both statistical and administrative applications were also important considerations.

The skill level criterion is applied as rigorously as possible at the second level of the classification, the sub-major group level, together with a finer application of skill specialisation than that applied at the major group level. Each sub-major group is made up of a number of minor groups.

Minor groups are distinguished from each other mainly on the basis of a finer application of skill specialisation than that applied at the sub-major group level. Within minor groups, unit groups are distinguished from each other on the basis of skill specialisation and, where necessary, skill level.

Virtually all unit groups are at one skill level. There are only eight unit groups which contain occupations at more than one skill level. In all but two of these unit groups, the vast majority of jobs classified to the unit group are at only one skill level. Data stored at unit group level can therefore be aggregated by skill level with a high degree of validity.

Within unit groups, the distinction between occupations amounts to differences between tasks performed in occupations. All occupations are at one skill level.

As a result, data classified at the major group level will provide only a broad indication of skill level. Data at the sub-major group level will provide a satisfactory indication of skill level for many analytical purposes. Data classified at the unit group level will provide an accurate indication of skill level and will be able to be aggregated by skill level only.

STATISTICAL BALANCE

As a general principle, a classification used for the dissemination of statistics should not have categories at the same level in its hierarchy which are too disparate in their population size. That is, similar numbers of 'real-world' entities should be classified to each category at a particular level. This approach serves to minimise large variations in standard errors and the suppression of cells in statistical tables at particular levels of the structure when using output from sample surveys. It also allows the classification to be used effectively for the cross-tabulation of aggregate data.

Categories which have been defined to reflect the real world, however, will not always be statistically balanced. To force categories to conform to size limitations would mean that the categories would not always be meaningful or useful.

In the development of ANZSCO a balance between these competing requirements was sought. The following minimum and maximum size guidelines were considered in designing the categories at each level of ANZSCO. For inclusion in ANZSCO, a category ideally fitted within the range listed below for either Australia or New Zealand. Some exceptions, however, were made for occupations (or groups of occupations) of particular strategic or labour market significance.

	Australia	New Zealand
Major Group	500,000 to 1,500,000	100,000 to 300,000
Sub-Major Group	100,000 to 300,000	30,000 to 100,000
Minor Group	50,000 to 150,000	10,000 to 30,000
Unit Group	5,000 to 30,000	3,000 to 10,000
Occupation	300 to 10,000	100 to 5,000

COMPARISON BETWEEN ANZSCO, ASCO SECOND EDITION AND NZSCO 1999

This section provides a broad comparison between ANZSCO and ASCO Second Edition and NZSCO 1999. The detailed relationship between ANZSCO, ASCO Second Edition and NZSCO 1999 will be explored in the correspondence tables (concordances) between ANZSCO and ASCO Second Edition, and ANZSCO and NZSCO 1999. See Relationship between ANZSCO 1 and ASCO Second Edition and NZSCO 1999.

Number of categories in classification structures

The following table indicates the number of categories at each level for the respective classifications:

Comparison between ANZSCO, ASCO Second Edition and NZSCO 1999 Major Groups

The following table compares the major group titles for ANZSCO, ASCO Second Edition and NZSCO 1999. Note that this table does not provide a correspondence between the three classifications.

	ANZSCO	ASCO Second Edition	NZSCO 1999
	1 Managers	1 Managers and Administrators	1 Legislators, Administrators and Managers
	2 Professionals	2 Professionals	2 Professionals
	3 Technicians and Trades Workers	3 Associate Professionals	3 Technicians and Associate Professionals
	4 Community and Personal Service Workers	4 Tradespersons and Related Workers	4 Clerks
	5 Clerical and Administrative Workers	5 Advanced Clerical and Service Workers	5 Service and Sales Workers
	6 Sales Workers	6 Intermediate Clerical, Sales and Service Workers	6 Agriculture and Fishery Workers
	7 Machinery Operators and Drivers	7 Intermediate Production and Transport Workers	7 Trades Workers
	8 Labourers	8 Elementary Clerical, Sales and Service Workers	8 Plant and Machine Operators and Assemblers
		9 Labourers and Related Workers	9 Elementary Occupations

The full list of codes and titles for all groups in ASCO Second Edition can be found at <https://www.abs.gov.au>.

Select 'Methods, Classifications, Concepts & Standards' then 'ABS concepts, classifications and statistical standards' then 'ABS classifications'.

The full list of codes and titles for all groups in NZSCO 1999 can be found at <http://www.stats.govt.nz>.

Select 'Statistical Methods' then 'Classifications & Standards' then 'View Classifications'.

RELATIONSHIP BETWEEN ANZSCO AND ASCO SECOND EDITION AND NZSCO 1999

Detailed correspondence tables (concordances) will be developed between ANZSCO and ASCO Second Edition, and ANZSCO and NZSCO 1999. The correspondence tables will show where one-to-one relationships exist between the occupations in ASCO Second Edition or NZSCO 1999 and ANZSCO, and where they do not.

A summary correspondence table will be included in the publication ANZSCO - Australian and New Zealand Standard Classification of Occupations (ABS cat. no. 1220.0) which is expected to be released in July 2006. Electronic versions of the correspondence tables will be available earlier to assist users in their transition to ANZSCO.

Following completion of data processing of the 2006 (Australian) Census, a link file will be produced which shows the numerical/proportional relationship between the categories of ASCO Second Edition and ANZSCO. A number of other collections, including the Australian Labour Force Survey will be dual-coded to both old and new classifications to assist in maintaining time series.

ALTERNATIVE VIEWS

Alternative (or thematic) views are ways of looking at specific subsets of occupations on the basis of the main goods and services produced or provided by an employee. In other words, alternative views are a means of outputting data about a range of related occupations which span different parts of ANZSCO.

The consensus from discussions with stakeholders was that alternative views would be a useful adjunct to the main ANZSCO structure. Therefore, a standard set of alternative views will be developed to facilitate meaningful and consistent comparison of employment in various 'industry' sectors between different data sources and across time.

At this stage there are plans to develop standard alternative views for agriculture, health, culture and leisure, hospitality and tourism, and information and communication technology (ICT).

INTERPRETING ANZSCO OCCUPATION DEFINITIONS

ANZSCO is primarily a statistical classification designed to aggregate and organise data collected about jobs or individuals. The classification definitions are based on the skill level and specialisation usually necessary to perform the tasks of the specific occupation, or of most occupations in the group. The definitions and skill level statements apply to the occupation and not persons working in the occupation. The allocation of a particular occupation to a particular skill level should be seen as indicative and not be used prescriptively.

ANZSCO PUBLICATION

This information paper provides an overview of the conceptual basis of ANZSCO and details of the final classification structure. The complete classification will be published in ANZSCO - Australian and New Zealand Standard Classification of Occupations (ABS cat. no. 1220.0) which is expected to be released in July 2006.

This publication will include detailed information about the conceptual basis of ANZSCO; definitions for the 8 major groups, 43 sub-major groups, 97 minor groups, 358 unit groups and 998 occupations which comprise ANZSCO; a summary correspondence table (concordance) between ANZSCO, ASCO Second Edition and NZSCO 1999; and the alternative views.

This publication will assist users who wish to understand the detailed structure and content of ANZSCO, and will aid in interpreting statistics classified to ANZSCO. A range of supporting materials, including detailed correspondence tables, will be released on the ABS and Statistics NZ web sites.

COMPARABILITY WITH ISCO

ISCO was developed by the International Labour Organization (ILO). ISCO was first issued in 1958 and revised versions were produced in 1968 and 1988. The main aims of ISCO are to provide a basis for international comparisons of occupation statistics between member countries and to provide a conceptual model for the development of national occupation classifications.

The current edition, ISCO-88, uses skill level and skill specialisation as criteria in the conceptual framework for the classification. Four broad skill levels are used, defined in terms of the educational categories and levels which appear in the International Standard Classification of Education 1976, published by the United Nations Educational, Scientific and Cultural Organization.

ISCO-88 consists of 10 major groups, 28 sub-major groups, 116 minor groups and 390 unit groups. The occupation level is not defined in ISCO-88, as it is expected that individual countries will develop this level of detail to suit their requirements.

The 10 major groups in ISCO-88 are broadly similar to the 8 ANZSCO major groups. The most significant differences at major group level are:

• ISCO-88 identifies Skilled Agricultural and Fishery Workers as a separate major group (Major Group 6), whereas ANZSCO includes Farmers and Farm Managers as a sub-major group in Major Group 1 Managers; Skilled Animal and Horticultural Workers as a sub-major group in Major Group 3 Technicians and Trades Workers; and Farm, Forestry and Garden Workers as a sub-major group in Major Group 8 Labourers.
• ISCO-88 Major Group 3 Technicians and Associate Professionals (and equivalent major groups in ASCO Second Edition and NZSCO 1999) has no equivalent in ANZSCO.
• A major group of Community and Personal Service Workers has been introduced for ANZSCO and has no equivalent in ISCO-88.
• In ISCO-88, jobs held by members of the armed forces are included in Major Group 0 Armed Forces. In ANZSCO, jobs held by members of the armed forces are classified with their civilian equivalents, where these exist, or to a number of defence force specific occupations.

IMPLEMENTATION OF ANZSCO


IMPLEMENTATION IN MAJOR ABS COLLECTIONS

There will be a phased introduction of ANZSCO into ABS collections from early 2006 onwards. In 2006 this will include the Census of Population and Housing, the Labour Force Survey, the Survey of Employee Earnings and Hours, the General Social Survey, the Multi-Purpose Household Survey, the Time Use Survey, and the Adult Literacy and Life Skills Survey. The following is a guide to implementation of the classification in some ABS collections where occupation is of particular interest.

2006 Census of Population and Housing

All occupation information reported in the 2006 Census will be dual-coded to ANZSCO and ASCO Second Edition. Standard output data on occupations will be published at the unit group (4-digit) level on an ANZSCO basis. Occupation (6-digit) level data, also on an ANZSCO basis, will be available as a special request. An electronic file linking ASCO Second Edition and ANZSCO at the occupation level will be available in early 2008 after processing of the 2006 Census has been completed.

Labour Force Survey (LFS)

ANZSCO will be introduced into the LFS in the August 2006 survey. Between August 2006 and November 2008, information supplied by survey respondents on occupation will be dual-coded to ANZSCO and ASCO Second Edition.

LFS data on an ANZSCO basis is expected to be released with the results of the August 2006 survey in September 2006. ASCO Second Edition data will continue to be available from the LFS up to the November 2008 survey.

It is the intention of the ABS to backcast data on an ANZSCO basis for periods prior to August 2006. Details of the backcasting strategy will be determined by the end of 2007, following analysis of dual-coded data from both the LFS and the Census. The LFS backcasting strategy will contain details on the period of backcasting, and the method to be used.

At this stage it is expected that backcast data (for periods prior to August 2006) will be released with the results of the February 2009 survey in March 2009. Backcast industry data based on the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 is expected to be released at the same time. This would coincide with the regular five-yearly unit record revision of LFS data incorporating revised population benchmarks.

Further details on the implementation of ANZSCO in the LFS can be obtained by contacting Merilyn Henden on Canberra (02) 6252 5489.

Survey of Employee Earnings and Hours

All occupation data reported in the May 2006 Survey of Employee Earnings and Hours will be dual-coded to ANZSCO and ASCO Second Edition. Data available from the survey will reflect ANZSCO major, sub-major, minor and unit groups. A limited amount of data will be published according to ASCO Second Edition.

Further information regarding times series for this collection can be obtained by contacting Valerie Pearson on Perth (08) 9360 5374.

Labour Price Index (LPI)

The LPI will be produced on an ASCO Second Edition basis up to and including the September quarter 2008. The LPI will be produced on an ANZSCO basis from the December quarter 2008 (to be released in February 2009). This timing coincides with the introduction of ANZSIC 2006. The full time series (i.e. back to the commencement of the index in the September quarter 1997) will be backcast to reflect ANZSCO, and will be available electronically.

Further details on the implementation of ANZSCO in the LPI can be obtained by contacting Robin Ashburn on Perth (08) 9360 5936.

IMPLEMENTATION IN STATISTICS NZ COLLECTIONS

Most Statistics NZ collections expect to implement ANZSCO in their first cycle for 2006.

2006 Census of Population and Dwellings

All occupation information reported in the 2006 Census will be coded to ANZSCO. Occupation responses will be dual-coded to ANZSCO and NZSCO 1999 to provide time series continuity.

Household Labour Force Survey (HLFS)

The HLFS will commence using ANZSCO from early April 2006 for June quarter 2006 processing to ensure compatibility with Census data. Coding will be done at the occupation (6-digit) level and dual-coding will be done for some quarters from 2006.

Labour Cost Index

ANZSCO will be introduced into the Salary and Wage Rates component of the Labour Cost Index from the September quarter 2007 and into the All Labour Costs component from the June quarter 2008.

Longitudinal Immigration Survey

This survey will commence using ANZSCO from October/November 2005 if circumstances permit. Otherwise ANZSCO will be implemented in the October 2006 cycle. This survey will not be dual-coded.

Survey of Family, Incomes and Employment

This longitudinal survey will commence using ANZSCO in early 2006 if circumstances permit. This survey will not dual-code as it is already in the field.

Household Disability Survey

This survey will use the 2006 Census of Population and Dwellings as a frame and as a data source. The survey output will also carry the dual codes.

Household Expenditure Survey

The Household Expenditure Survey will commence coding to ANZSCO in September 2006.

New Zealand Income Survey

This survey is a supplement to the June quarter 2006 HLFS and will commence using ANZSCO from July 2006. This survey will dual-code.