AWPA presentation on Workforce Development at the 7th Annual Australasian Talent Conference
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This presentation was made by Robin Shreeve, CEO of AWPA at the 7th Annual Australasian Talent Conference 2013, 28-30 May 2013 in Sydney themed: Agile Talent Management - Optimise, In-source, Outsource, Offshore, Redeploy.
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AWPA presentation on Workforce Development at the 7th Annual Australasian Talent Conference
- 1. Future focus: 2013 National Workforce Development Strategy Australian Talent Conference May 2013
- 2. The world of work is changing 2
- 3. What we are doing and why What challenges face our workforce now and over the years to 2025? How should we address them? Productivity Evolving technology Participation Skills under- utilisation Restructuring Industries Innovation Changing work arrangements 2025 Asian Century 3
- 4. Specialised occupations Scenarios Demand Driven Funding • Apply concept of specialised occupations - those occupations with greatest risk of market failure • Develop, test and model multiple scenarios to achieve flexible policy responses • Fund users rather than providers – but only after you have sorted out quality and regulation Our three conceptual pillars in our response to aligning skills, qualifications and the economy’s needs 4
- 5. Approach to the 2012 strategy Plausible worlds (but not predicting the future!) Scenario Projections of demand & supply side implications of the scenarios Modelling The policy recommendations balance aspirational goals and risks, after assessing key differences between the scenarios Strategy Analysing the uncertainty, commonality, differences and risks of the scenarios Analysis Each process informs the next 5
- 6. The four scenarios 6 Flexible migration Fluctuating labour participation Slightly differing industry structures Varying fiscal capacity Commonalities • Ageing population • Importance of Asia • Technology • Sustainability challenge
- 7. Positioning the Australian workforce for the future 7 Increasing qualifications to meet growing demand for higher skills Improving productivity in the workplace Building labour force participation to meet current and future needs Raising language, literacy, and numeracy skill levels Enabling individuals and the tertiary system to be more adaptive Strengthening quality in the tertiary sector Investing in skills will pay for itself
- 8. Australia will need a more highly skilled and qualified workforce 8 Qualification held 2011 2025 (‘000) Average annual change 2011–25 (%) Long boom Smart recovery Terms of trade shock Ring of fire Long boom Smart recovery Terms of trade shock Ring of fire Postgraduate 1,588.0 3,104.7 2,714.9 2,941.4 2,187.5 4.9 3.9 4.5 2.3 Undergraduate 4,126.3 7,256.9 6,475.3 6,877.5 5,435.7 4.1 3.3 3.7 2 Advanced diploma/Diploma 2,299.5 3,842.3 3,428.2 3,632.4 2,920.1 3.7 2.9 3.3 1.7 Certificate III &IV 3,597.6 6,195.8 5,323.0 5,671.9 4,441.9 4 2.8 3.3 1.5 Certificate I & II 1,563.1 2,079.2 1,914.9 1,961.2 1,774.6 2.1 1.5 1.6 0.9 Total 13,174.6 22,479.0 19,856.4 21,084.5 16,759.8 3.9 3 3.4 1.7 Total qualifications held by persons employed, unemployed and not in the labour force, by scenario and qualification level (‘000) Derived from Deloitte Access Economics, 2012, Economic modelling of skills demand and supply, Tables 5.10–5.17.
- 9. Education qualifications forecasts Source: Deloitte Access Economics (2012) ‘Economic modelling of skills demand and supply’ - derived from p.iv and tables 5.18-5.21 Long Boom Smart Recovery Terms of Trade Shock Ring of Fire Proportion with post school qualifications 75.4% 70.3% 73.7% 65.0% Annual number of additional qualifications required to 2025 831,900 643,800 726,100 411,500 Share of those employed with post-school qualifications, by 2025 In 2011 the share of employed persons with a post-school qualification was 59.8% 9
- 10. Projected qualification supply less demand (based on labour force) annual average 5 years to 2025 10 Qualification Long Boom Smart Recovery Terms of Trade Shock Ring of Fire Postgraduate -71,180 -43,579 -57,939 -725 Undergraduate -106,109 -65,394 -90,628 -2,458 Adv. Diploma/ Diploma -61,180 -49,539 -55,818 -23,290 Certificate III/IV 9,004 38,111 22,909 59,311 Certificate I/II 64,236 66,657 65,493 64,351 Total -165, 229 -54,745 -115,982 97,189
- 11. A knowledge economy through skills development and targeted planning • Skills are part of the solution to participation, skills shortage and productivity challenges • Demand for higher level qualifications is strongest. • But lower level qualifications are necessary to increase participation and are a pathway to higher level qualifications. • The increasingly demand-led tertiary system means workforce development plans in priority sectors and monitoring skills supply is critical. 11 Recommendation: 1.1 – Minimum annual increase of 3% in tertiary education qualifications to 2025
- 12. Why do we need to improve our productivity? 12
- 13. How can we improve productivity? 13 • Workforce development integrates business strategy, work organisation and job design • Skills development as investment not cost • Improving skills utilisation indicative of high- performing workplaces Workplace • Closer alignment between government programs to facilitate workforce development National Strategy Benefit •Improved profitability, innovation, productivity and retention •Positive impact on employee motivation and job satisfaction
- 14. Improving productivity in the workplace 14 Skills in the workplace •Skills are used effectively •Skills are continuously developed •Skills, techniques and improvements are shared SMES •Australia has a high proportion of SMEs •SMEs face barriers to innovation •SMEs need support to develop and implement innovative workforce development plans Management and leadership •modelling shows increased demand for managers across all scenarios •management’s ability to effectively use the skills of workers is a strong influence on innovation and productivity
- 15. Improving productivity in the workplace 15 Recommendations: 2.1 – Adjust NWDF guidelines to allow other workforce development activities that complement training delivery 2.2 – Explore joint funding between Enterprise Connect & Skills Connect to support workforce development for SMEs 2.3 – Extend Enterprise Connect services to other labour-intensive industries 2.4 – Commission review of leadership and management, including front line management 2.5 – Co-fund proposals that support regional employment and workforce development partnerships
- 16. Participation improves social inclusion 16 People with low skills Older workers People with disadvantage Focus on upskilling Focus on retention Focus on access and support to build sustainable pathways to work Improving social inclusion Benefits •People with qualifications 20%* more likely to be in labour force •Qualification completions assist in lift participation rates and meeting projected labour demand •Increasing skills of existing workers improves job advancement, opening opportunities for job seekers Expanding tertiary places is not enough Align job services and training providers Expand wraparound services *ABS, 2011, Education and work, Cat no. 6227.0, May, Canberra
- 17. Building labour force participation to meet current and future needs 17 Recommendations: 3.1 – Adopt aspirational goal of 69% labour force participation by 2025 3.2 – Co-contribution funding for industry-led initiatives supporting employment in non-traditional occupations 3.3 – Up-scaling successful approaches to help workers over 45 to re-enter the workforce 3.4 – Additional funding for expansion of training delivery strategies and wraparound services 3.5 – Better align JSA contractual arrangements to promote training for disadvantaged job seekers that is more flexible, fit for purpose and aligned to job outcomes; provide additional funding to incentivise provision of longer support for disadvantaged job seekers
- 18. Raising language, literacy, and numeracy skills is critical 18 We know there is a strong relationship between LLN skills and employment – those with higher levels of LLN skills are more likely to be employed YET… 44%* of Australians have literacy scores below level 3 55%* of Australians have numeracy scores below level 3 LLN development for adults continues to be stigmatised despite being a widespread issue Many employers report they are impacted by low LLN skills yet most employers are unaware of existing programs *Source: ABS, 2013, Program for International Assessment of Adult Competencies Survey, cat. no. 4228.0, Canberra
- 19. Raising language, literacy, and numeracy skills is critical 19 Recommendations: 4.1 – Regular national sample survey assessing LLN of adults based on ACSF 4.2 – Fund and develop national public awareness campaign to promote LLN skills 4.3 – Fund and develop comprehensive interactive national LLN information service 4.4 – Fund Workplace Champion program to promote lifelong learning and workplace training 4.5 – Upscale LLN Practitioner Scholarships Program to develop LLN practitioner workforce 4.6 – National pilot of foundation skills assessment following evaluation of online LLN assessment models
- 20. Work integrated learning can bridge the gap between education and training and work 20 Government Industry Work ready graduates Formal learning Practical work experience Providers
- 21. Enabling individuals and the tertiary system to be more adaptive 21 • facilitate lifelong career developmentCareer advice • support transition from study and training to workWork ready graduates • investigate how to best build individuals’ adaptive capacityTraining packages • support innovation and professional development to develop a flexible, adaptable workforce New learning paradigm • improve interface between HE and VET to provide consistency in funding and articulation Integrated tertiary sector • embed new technologies to reflect international best practiceICT in teaching and learning
- 22. Enabling individuals and the tertiary system to be more adaptive 22 Recommendations: 5.1 – Align and strengthen career development advice services 5.2 – Review entitlement systems to ensure responsiveness to change is not limited by restrictions 5.3 – Government, tertiary education providers and industry to collaborate to support transition to work through work-integrated learning and cadetships 5.4 – The NSSC and ISCs to investigate how training packages can best build adaptive capacity
- 23. Strengthening quality in the tertiary sector 40 50 60 70 80 90 100 110 120 130 140 Primary Govt (a) Secondary Govt (a) VET (b) Higher Ed (c) 23 Commonwealth and state government recurrent expenditure, funding per full-time equivalent student (schools and higher education) and per annual hour (VET) indexed to 1999 (1999=100) (a) Schools Average Government School Recurrent Costs data. Includes state and territory expenses. (b) VET Government Recurrent Expenditure per annual hour sourced from Productivity Commission, Report on government services, Table 5A.19. Includes state, territory and Commonwealth government expenditure. (c) Published and unpublished higher education data from the Department of Industry, Innovation, Science, Research and Tertiary Education. Operating Grant and Commonwealth Grant Scheme funding only.
- 24. Strengthening quality in the tertiary sector • Between 2006 and 2010, government real recurrent expenditure on VET increased by 10% but expenditure per student annual hour decreased by 14% during the same period. • The Productivity Commission found: unlike most of their counterparts in other education sectors, VET teachers, trainers and assessors are ‘dual professionals’, with a range of capabilities variously recognised in either the education or industry spheres • The background of VET learners is varied and complex. • There has also been a diminished academic focus on VET. • Continue to recommend a new national body and program to emphasis quality improvement in teaching, learning and assessment. 24
- 25. Strengthening quality in the tertiary sector 25 External assessments for identified high-risk qualifications externally set and administered More stringent requirements for RTOs in high-risk areas not hold provisional registration track record in ongoing formal professional development track record in delivery of nationally recognised qualifications undertake an external validation
- 26. Strengthening quality in the tertiary sector 26 Recommendations: 6.1 – Commission a review of funding in the VET sector to determine a price for high quality delivery 6.2 – NSSC to consider developing additional assessment and registration requirements for identified high risk qualifications 6.3 – Establish a VET equivalent of the Office for Learning and Teaching to drive excellence in VET
- 27. Increased funding is in line with projected long term economic growth Investing in skills will pay for itself 27 Industry demand for qualifications is projected to increase by between 3% and 3.9% pa We recommend the expansion of qualification enrolments by a minimum of 3% pa Public and private funding for tertiary education needs to expand by a little more than 3% pa The benefits far outweigh the cost: •the additional public funding in 2025 projected by AWPA exceeds that in the IGR 2010 projection by $2.1 billion •the additional public revenues from the effect of increased qualifications on labour force participation, employment and GDP is estimated at between $6.7 billion and $24.8 billion
- 28. Investing in skills will pay for itself 28 Recommendations: 7.1 – Extend start-up scholarships to full time VET students receiving income support 7.2 – Support expansion of public and private tertiary education funding of at least 3 per cent per annum to meet industry demand and commit further funds to support the implementation of the suite of measures outlined in the strategy
Notas do Editor
- The scenarios represent possible, plausible futures. They are not meant to be projections of the future nor are they based on past trends. Rather, they help us deal with the uncertainties and risks of the future as well as those developments we can be reasonably certain of. Modelling of the supply and demand for skills and qualifications has been developed on the basis of these scenarios.
- Commonalities Ageing PopulationUnder all scenarios the ageing of the Australian workforce will be a critical factor, both in terms of dependency ratios of taxpayers to people who are no longer working, and in impacts on the healthcare and services sectors. The growing importance of AsiaThe continuing growth of Asian countries, especially China and India, is an area of relative certainty across the scenarios. Critically, this means a high-skilled future for Australia as services to Asia develop, and highlights the importance of developing the skills and knowledge to support Australia’s capability to participate in ‘the Asian Century’. The Australian workforce will need skills in Asian languages and cultures, as well as business skills for these environments.Technology and innovationTechnology and innovation are important considerations across all scenarios (though to differing degrees) and also have important implications for the tertiary sector. The VET sector plays an important role in incremental innovation. Upskilling and reskilling of existing workers would also be important to avoid skills obsolescence in the face of new technologies. Climate change/sustainabilityAll the scenarios incorporate some impacts from and responses to climate change, although the scenarios have been distinguished by the severity of the impacts. The carbon price is assumed as common to all scenarios. Key differencesMigration One of the greatest uncertainties across the scenarios is migration. Skilled migration expected to act as a shock absorber in times of strongest growth. Permanent migration makes the most significant contribution to building Australia’s skills base. However temporary migration, which is more flexible and able to meet changing needs, is a key element in ensuring flexibility regardless of what the future holds for Australia to 2025. Fiscal capacityFiscal capacity is a critical uncertainty – and risk - across the scenarios. This is important for funding and investment in education and training, and in particular government’s capacity to pay. In a long boom scenario it could be expected that there is funding more easily available to fund tertiary education. However when government budgets are constrained, this may result in greater responsibility shifted to employers and individuals.
- These are the seven themes of the strategy
- The modelling shows Australia will need to develop a more skilled and qualified workforce to meet increasing industry demand for higher skills. Australia needs to grow its supply of tertiary qualifications by at least 3 per cent per annum to 2025 to keep pace with this demand. This demand for qualifications is driven by the increasing size of the labour market, changing employment composition, retirements, skills deepening and skills broadening.Recommendation 1.1That Australian governments support the achievement of a minimum annual increase of 3 per cent in tertiary education qualifications to 2025 to meet national demand for skills and qualifications, recognising that higher level qualifications will grow relatively faster.
- These figures include people employed as well as those who have post-school qualifications but are unemployed or not in the labour force. In terms of the overall balance of demand and supply for qualifications, the projections show that under the Long Boom, Smart Recovery and Terms of Trade Shock we will have a deficit of higher level qualifications (i.e. Diploma and above) of from around 160,00 to 240,000 per year in the 5 years to 2025. The deficit in the ring of fire is 26,473. Certificate III/IV is close to being in balance in the long boom (9,000 oversupply), with a higher oversupply in the other scenarios ranging from 22,900 (Terms of Trade Shock) to 59,311 (Ring of Fire). There is an oversupply of certificate I/II in all scenarios. The oversupply is similar regardless of scenario, ranging from 64,236 (Long boom) to 66,657 (Smart Recovery). Interpretation of the data by level of qualifications needs to be seen against the COAG commitment of introducing a national training entitlement for a government-subsidised training place to at least the first Certificate III qualification. In this context the apparent oversupply of Certificates I/II could be seen as providing the first post school qualification and a pathway to qualifications in greater demand.
- Skills part of solution to participation, skills shortage and productivityModelling shows demand for qualifications expected to increase on average between 3-3.9%pa (for 3 high growth scenarios)Strongest at higher qualification levelsBUT lower qualifications important to increasing participation and pathway to higher qualificationsStudent demand-led system in HE and increasingly VET make anticipating future supply of qualifications more difficultDevelopment of workforce development plans for priority sectors and monitoring skills supply critical
- The workplace needs to be ensure that:existing skills are used effectivelyskills are continuously developed on and off the jobskills, techniques and improvements (old and new) are shared SMEs face barriers to innovation and need support to develop and implement innovative workforce development plans The strategy’s modelling shows increased demand for managers across all scenarios (334,800-641,500 or 23-44% between 2011 and 2025)Research and stakeholder consultation agreed that management’s ability to develop effectively use the skills of workers is a strong influence on innovation and productivity.
- Recommendation 4.1That the Australian Government fund and develop a national sample survey for the assessment of literacy and numeracy levels of the adult population based on Australian Core Skills Framework levels, with a view to introducing a five-yearly assessment (commencing in 2015) to provide a mechanism to more regularly monitor and report on progress towards the 2022 target.Recommendation 4.2That the Australian Government fund a national public awareness campaign to promote the development of LLN skills as a mainstream issue and showcase the assistance available.Recommendation 4.3That the Australian Government fund a new, comprehensive national LLN information service underpinned by an interactive website to better link Australians with the range of LLN assistance available.Recommendation 4.4That the Australian Government fund a Workplace Champions Program to help foster a culture of lifelong learning and promote training in the workplace.Recommendation 4.5That the Australian Government upscale the Language, Literacy and Numeracy Practitioner Scholarships Program and fund it beyond 2014 to address current and anticipated skills shortages in the LLN practitioner workforce.Recommendation 4.6That the Australian Government undertake a national pilot of an online foundation skills assessment following an evaluation of online LLN assessment models such as the Cores Skills Profile for Adults and the RU Ready? program.
- Employers are demanding work-ready graduates. In workplace surveys, employers routinely rank work experience as among the most important attributes they need in their staff. One way of bridging the gap between higher education and work is via work-integrated learning such as professional cadetships, where an employer agrees to contribute to, or subsidise the cost of, an employee’s education. There is benefit in collaboration between government, providers and industry to expand opportunities for work-integrated learning and to support further development of professional cadetships in identified higher education occupations and higher level VET qualifications.
- Remove restrictions on entitlement fundingIndustry demand for qualifications is not static, and we caution against the use of a ‘firstness’ approach, limiting access to public funding for more than one VET qualification. This approach may prevent people from retraining in crucial areas, especially due to structural adjustments in the economy. We propose that jurisdictions review their approaches to entitlement to ensure people are supported to undertake a further qualification in areas in need of skilled workers or to develop foundation skills, regardless of whether they have already ‘used’ their entitlement in a different field of study.
- Remove restrictions on entitlement fundingIndustry demand for qualifications is not static, and we caution against the use of a ‘firstness’ approach, limiting access to public funding for more than one VET qualification. This approach may prevent people from retraining in crucial areas, especially due to structural adjustments in the economy. We propose that jurisdictions review their approaches to entitlement to ensure people are supported to undertake a further qualification in areas in need of skilled workers or to develop foundation skills, regardless of whether they have already ‘used’ their entitlement in a different field of study.
- Introduce external assessments AWPA welcomes the review of national standards for the regulation of VET. This is considering issues we have previously supported, including lifting entry barriers for new registered training organisations (RTOs) and provisional registration. However, we believe the review should also consider introducing a requirement for externally set and administered assessments for identified high-risk qualifications and more stringent requirements for RTOs delivering high-risk qualifications such as the Training and Education Training Package.Introduce more stringent requirements for RTOs in high-risk areasIn Skills for prosperity we argued for more stringent requirements for applicants seeking to deliver the Training and Education Training Package (TAE), because it provides the central qualifications for teachers in the VET sector and there was persistent evidence of systemic and widespread concerns about quality in this area. We continue to advocate that entry to this market should be subject to more rigorous requirement specifically, they must:demonstrate a track record in delivery of nationally recognised qualifications in an industry area other than the TAE for a period of at least two yearsnot be a holder of provisional registrationdemonstrate a track record in ongoing formal professional development of their staffmeet a requirement for an external validation conducted by an expert validation panel before initial and renewal registration.The requirements should also apply to those RTOs currently registered to deliver TAE and other identified high-risk qualifications, once they seek renewal of registration.