Conceptual basis of ANZSCO

The scope of ANZSCO is all occupations and jobs in the Australian and New Zealand labour markets undertaken for pay or profit, including jobs occupied by people working for themselves.

ANZSCO is not designed to cover work not undertaken for pay or profit, for example voluntary work. However, this does not preclude ANZSCO from describing such activities.

Occupations that are wholly illegal in New Zealand and all States and Territories of Australia are excluded.

The structure of ANZSCO has five hierarchical levels - major group, sub-major group, minor group, unit group and occupation. The categories at the most detailed level of the classification are termed 'occupations'. These are grouped together to form 'unit groups', which in turn are grouped into 'minor groups'. Minor groups are aggregated to form 'sub-major groups' which in turn are aggregated at the highest level to form 'major groups'.

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.

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.

Within unit groups, the distinction between occupations relates to differences between tasks performed in occupations and in most unit groups all occupations are at one skill level.

The distinctions between the various levels of ANZSCO are summarised in the following paragraphs.

Major Group

Major groups are:

• the broadest level of ANZSCO
• formed using a combination of skill level and skill specialisation to create groups which are meaningful and useful for most (statistical and administrative) purposes.

Sub-Major Group

Sub-major groups are:

• subdivisions of the major groups
• distinguished from other sub-major groups in the same major group on the basis of skill level and a broad application of skill specialisation.

Minor Group

Minor groups are:

• subdivisions of the sub-major groups
• distinguished from other minor groups in the same sub-major group mainly on the basis of a less broad application of skill specialisation.

Unit Group

Unit groups are:

• subdivisions of the minor groups
• distinguished from other unit groups in the same minor group on the basis of a finer application of skill specialisation and, where necessary, skill level.

Occupation

Occupations are:

• the most detailed level of ANZSCO
• subdivisions of the unit groups
• distinguished from other occupations in the same unit group on the basis of detailed skill specialisation and, occasionally, skill level
• sets of jobs which involve the performance of a common set of tasks.

As noted in Conceptual model, the framework adopted for ANZSCO is based on the concepts of 'job' and 'occupation'. The concept of 'occupation' is based on the concepts of 'skill level' and 'skill specialisation'.

Understanding these concepts is fundamental to understanding ANZSCO. These concepts are defined in the following sections.

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 pay 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.

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.

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 in ANZSCO 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.

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 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) and the New Zealand Qualifications Framework (NZQF). 

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 that 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 they are 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, 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 determination of boundaries between skill levels is based on the following definitions. 

Skill Level 1 

Occupations at Skill Level 1 have a level of skill commensurate with a bachelor degree or higher qualification. At least five years of relevant experience may substitute for the formal qualification. In some instances, relevant experience and/or on-the-job training may be required in addition to the formal qualification. 

Skill Level 2

Occupations at Skill Level 2 have a level of skill commensurate with one of the following:

• NZQF Diploma or
• AQF Associate Degree, Advanced Diploma or Diploma.

At least three years of relevant experience may substitute for the formal qualifications listed above. In some instances, relevant experience and/or on-the-job training may be required in addition to the formal qualification.

Skill Level 3

Occupations at Skill Level 3 have a level of skill commensurate with one of the following: 

• NZQF Level 4 qualification
• AQF Certificate IV or
• AQF Certificate III including at least two years of on-the-job training.

At least three years of relevant experience may substitute for the formal qualifications listed above. In some instances, relevant experience and/or on-the-job training may be required in addition to the formal qualification.

Skill Level 4

Occupations at Skill Level 4 have a level of skill commensurate with one of the following:

• NZQF Level 2 or 3 qualification or
• AQF Certificate II or III.

At least one year of relevant experience may substitute for the formal qualifications listed above. In some instances, relevant experience may be required in addition to the formal qualification.

Skill Level 5

Occupations at Skill Level 5 have a level of skill commensurate with one of the following:

• NZQF Level 1 qualification
• AQF Certificate I or
• compulsory secondary education.

For some occupations a short period of on-the-job training may be required in addition to or instead of the formal qualification.

In some instances, no formal qualification or on-the-job training may be required.

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.

Field of knowledge required refers to the subject matter knowledge that is essential to competently perform the tasks of an occupation.

Tools and equipment used includes all forms of plant, machinery, computer-based equipment or hand tools used in the performance of the tasks, as well as intellectual tools such as personal interaction, and art or design techniques. 

• The term plant is used to describe mobile or stationary equipment which is large in size, performs several related functions, and is usually controlled by an internally located operator.
• The term machinery is used to describe stationary equipment which is not as large as plant, performs one processing function and is usually controlled by an externally located operator.
• The term hand tools is used to describe equipment which is small enough to be moved by one person.

Materials worked on refers to materials of both a tangible and abstract nature which are extracted, processed, transformed, refined or fabricated as an essential part of the tasks performed. Examples of materials worked on include wood, metal, livestock, accounting data, text, people and organisations.

Goods or services produced or provided refers to the end product of the performance of the tasks of an occupation including physical goods, personal or other services, or other products such as a software application or statistical information. 

In developing the skill specialisation criteria for ANZSCO, employability skills were considered as a possible additional dimension of skill specialisation. There are two facets to employability skills, personal attributes such as loyalty, commitment and motivation, and generic skills, including communication, team-work and problem-solving. Employers are increasingly using employability skills in conjunction with technical or job-specific skills when assessing the suitability of an individual for a particular occupation. Since these employability skills are applicable to most occupations, it was decided not to include them as classification criteria for ANZSCO. 

One of the primary purposes of a statistical classification is to provide a simplification of the real world, which is a useful framework for collecting and analysing data from both statistical and administrative collections. To achieve this end, there are a number of practical considerations which impinged on the design of ANZSCO.

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 is referred to as statistical balance, and 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 developing 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.

Another consideration affecting the design of ANZSCO was the statistical feasibility of the categories. That is, whether it is possible to accurately and consistently distinguish between the categories in the classification on the basis of responses to questions which can reasonably be asked in statistical collections such as population censuses and labour force surveys.