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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  • 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.
  • AWPA presentation on Workforce Development at the 7th Annual Australasian Talent Conference

    1. 1. Future focus:2013 National WorkforceDevelopment StrategyAustralian Talent ConferenceMay 2013
    2. 2. The world of work is changing2
    3. 3. What we are doing and whyWhat challengesface our workforcenow and over theyears to 2025?How shouldwe addressthem?ProductivityEvolvingtechnologyParticipationSkills under-utilisationRestructuringIndustriesInnovationChangingworkarrangements2025Asian Century3
    4. 4. SpecialisedoccupationsScenariosDemand DrivenFunding• Apply concept of specialisedoccupations - thoseoccupations with greatest riskof market failure• Develop, test and modelmultiple scenarios to achieveflexible policy responses• Fund users rather thanproviders – but only afteryou have sorted outquality and regulationOur three conceptual pillars in our response to aligningskills, qualifications and the economy’s needs4
    5. 5. Approach to the 2012 strategyPlausibleworlds(but notpredictingthefuture!)ScenarioProjectionsof demand& supplysideimplicationsof thescenariosModellingThe policyrecommendationsbalanceaspirational goalsand risks, afterassessing keydifferencesbetween thescenariosStrategyAnalysingtheuncertainty,commonality,differencesand risks ofthe scenariosAnalysisEach process informs the next5
    6. 6. The four scenarios6FlexiblemigrationFluctuating labour participationSlightlydifferingindustrystructuresVarying fiscal capacityCommonalities• Ageing population• Importance of Asia• Technology• Sustainability challenge
    7. 7. Positioning the Australian workforce for the future7Increasing qualifications to meet growing demand for higher skillsImproving productivity in the workplaceBuilding labour force participation to meet current and future needsRaising language, literacy, and numeracy skill levelsEnabling individuals and the tertiary system to be more adaptiveStrengthening quality in the tertiary sectorInvesting in skills will pay for itself
    8. 8. Australia will need a more highly skilled andqualified workforce8Qualification held 2011 2025 (‘000) Average annual change 2011–25 (%)LongboomSmartrecoveryTerms oftrade shockRing offireLongboomSmartrecoveryTerms oftrade shockRing offirePostgraduate 1,588.0 3,104.7 2,714.9 2,941.4 2,187.5 4.9 3.9 4.5 2.3Undergraduate 4,126.3 7,256.9 6,475.3 6,877.5 5,435.7 4.1 3.3 3.7 2Advanceddiploma/Diploma2,299.5 3,842.3 3,428.2 3,632.4 2,920.1 3.7 2.9 3.3 1.7Certificate III &IV 3,597.6 6,195.8 5,323.0 5,671.9 4,441.9 4 2.8 3.3 1.5Certificate I & II 1,563.1 2,079.2 1,914.9 1,961.2 1,774.6 2.1 1.5 1.6 0.9Total 13,174.6 22,479.0 19,856.4 21,084.5 16,759.8 3.9 3 3.4 1.7Total qualifications held by persons employed, unemployed andnot 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. 9. Education qualifications forecastsSource: Deloitte Access Economics (2012) ‘Economic modelling of skills demand and supply’ - derived from p.iv and tables 5.18-5.21Long Boom SmartRecoveryTerms ofTradeShockRing of FireProportion with post schoolqualifications 75.4% 70.3% 73.7% 65.0%Annual number of additionalqualifications required to2025831,900 643,800 726,100 411,500Share of those employed with post-school qualifications, by 2025In 2011 the share of employed persons with a post-school qualification was 59.8%9
    10. 10. Projected qualification supply less demand (based onlabour force) annual average 5 years to 202510Qualification Long Boom SmartRecoveryTerms of TradeShockRing of FirePostgraduate -71,180 -43,579 -57,939 -725Undergraduate -106,109 -65,394 -90,628 -2,458Adv. Diploma/Diploma-61,180 -49,539 -55,818 -23,290Certificate III/IV 9,004 38,111 22,909 59,311Certificate I/II 64,236 66,657 65,493 64,351Total -165, 229 -54,745 -115,982 97,189
    11. 11. A knowledge economy through skillsdevelopment and targeted planning• Skills are part of the solution to participation, skills shortageand productivity challenges• Demand for higher level qualifications is strongest.• But lower level qualifications are necessary to increaseparticipation and are a pathway to higher level qualifications.• The increasingly demand-led tertiary system means workforcedevelopment plans in priority sectors and monitoring skillssupply is critical.11Recommendation:1.1 – Minimum annual increase of 3% in tertiaryeducation qualifications to 2025
    12. 12. Why do we need to improve our productivity?12
    13. 13. How can we improve productivity?13• Workforce development integrates businessstrategy, work organisation and job design• Skills development as investment not cost• Improving skills utilisation indicative of high-performing workplacesWorkplace• Closer alignment betweengovernment programs tofacilitate workforcedevelopmentNationalStrategyBenefit•Improvedprofitability,innovation,productivity andretention•Positive impacton employeemotivation andjob satisfaction
    14. 14. Improving productivity in the workplace14Skills in theworkplace•Skills are usedeffectively•Skills are continuouslydeveloped•Skills, techniques andimprovements aresharedSMES•Australia has a highproportion of SMEs•SMEs face barriers toinnovation•SMEs need support todevelop and implementinnovative workforcedevelopment plansManagement andleadership•modelling showsincreased demand formanagers across allscenarios•management’s ability toeffectively use the skillsof workers is a stronginfluence on innovationand productivity
    15. 15. Improving productivity inthe workplace15Recommendations:2.1 – Adjust NWDF guidelines to allow other workforce developmentactivities that complement training delivery2.2 – Explore joint funding between Enterprise Connect & Skills Connect tosupport workforce development for SMEs2.3 – Extend Enterprise Connect services to other labour-intensive industries2.4 – Commission review of leadership and management, including front linemanagement2.5 – Co-fund proposals that support regional employment and workforcedevelopment partnerships
    16. 16. Participation improves social inclusion16People withlow skillsOlderworkersPeople withdisadvantageFocus onupskillingFocus onretentionFocus on accessand support tobuild sustainablepathways to workImproving social inclusion Benefits•People with qualifications20%* more likely to be inlabour force•Qualification completionsassist in lift participationrates and meetingprojected labour demand•Increasing skills of existingworkers improves jobadvancement, openingopportunities for jobseekersExpanding tertiary places isnot enoughAlign job services and training providersExpand wraparound services*ABS, 2011, Education and work, Cat no. 6227.0, May, Canberra
    17. 17. Building labour force participation tomeet current and future needs17Recommendations:3.1 – Adopt aspirational goal of 69% labour forceparticipation by 20253.2 – Co-contribution funding for industry-led initiativessupporting employment in non-traditional occupations3.3 – Up-scaling successful approaches to help workersover 45 to re-enter the workforce3.4 – Additional funding for expansion of training deliverystrategies and wraparound services3.5 – Better align JSA contractual arrangements topromote training for disadvantaged job seekers that ismore flexible, fit for purpose and aligned to joboutcomes; provide additional funding to incentiviseprovision of longer support for disadvantaged job seekers
    18. 18. Raising language, literacy, and numeracyskills is critical18We know there is a strong relationship between LLN skills and employment –those with higher levels of LLN skills are more likely to be employedYET…44%* ofAustralians haveliteracy scoresbelow level 355%* ofAustralians havenumeracy scoresbelow level 3LLN developmentfor adultscontinues to bestigmatised despitebeing a widespreadissueMany employersreport they areimpacted by lowLLN skills yet mostemployers areunaware of existingprograms*Source: ABS, 2013, Program for International Assessment of Adult Competencies Survey, cat. no. 4228.0, Canberra
    19. 19. Raising language, literacy, and numeracyskills is critical19Recommendations:4.1 – Regular national sample survey assessing LLN ofadults based on ACSF4.2 – Fund and develop national public awarenesscampaign to promote LLN skills4.3 – Fund and develop comprehensive interactivenational LLN information service4.4 – Fund Workplace Champion program to promotelifelong learning and workplace training4.5 – Upscale LLN Practitioner Scholarships Program todevelop LLN practitioner workforce4.6 – National pilot of foundation skills assessmentfollowing evaluation of online LLN assessment models
    20. 20. Work integrated learning can bridge the gapbetween education and training and work20Government IndustryWork readygraduatesFormal learningPractical workexperienceProviders
    21. 21. Enabling individuals and the tertiary system tobe more adaptive21• 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 aflexible, adaptable workforceNew learning paradigm• improve interface between HE and VET to provide consistency infunding and articulationIntegrated tertiary sector• embed new technologies to reflect international best practiceICT in teaching and learning
    22. 22. Enabling individuals and the tertiarysystem to be more adaptive22Recommendations:5.1 – Align and strengthen career developmentadvice services5.2 – Review entitlement systems to ensureresponsiveness to change is not limited byrestrictions5.3 – Government, tertiary education providers andindustry to collaborate to support transition to workthrough work-integrated learning and cadetships5.4 – The NSSC and ISCs to investigate how trainingpackages can best build adaptive capacity
    23. 23. Strengthening quality in the tertiary sector405060708090100110120130140Primary Govt (a) Secondary Govt (a) VET (b) Higher Ed (c)23Commonwealth and state government recurrent expenditure, funding per full-time equivalentstudent (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 andCommonwealth Grant Scheme funding only.
    24. 24. Strengthening quality in the tertiary sector• Between 2006 and 2010, government real recurrentexpenditure on VET increased by 10% but expenditure perstudent annual hour decreased by 14% during the sameperiod.• The Productivity Commission found:unlike most of their counterparts in other educationsectors, VET teachers, trainers and assessors are ‘dualprofessionals’, with a range of capabilities variouslyrecognised 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 toemphasis quality improvement in teaching, learning andassessment.24
    25. 25. Strengthening quality in the tertiary sector25External assessmentsfor identified high-risk qualificationsexternally set and administeredMore stringent requirements forRTOs in high-risk areasnot hold provisional registrationtrack record in ongoing formalprofessional developmenttrack record in delivery of nationallyrecognised qualificationsundertake an external validation
    26. 26. Strengthening quality in the tertiary sector26Recommendations:6.1 – Commission a review of funding in the VETsector to determine a price for high qualitydelivery6.2 – NSSC to consider developing additionalassessment and registration requirements foridentified high risk qualifications6.3 – Establish a VET equivalent of the Office forLearning and Teaching to drive excellence in VET
    27. 27. Increased funding is in line with projectedlong term economic growthInvesting in skills will pay for itself27Industry demandfor qualificationsis projected toincrease bybetween 3% and3.9% paWe recommendthe expansion ofqualificationenrolments by aminimum of3% paPublic and private funding fortertiary education needs to expandby a little more than 3% paThe benefits far outweighthe cost:•the additional publicfunding in 2025 projectedby AWPA exceeds that inthe IGR 2010 projection by$2.1 billion•the additional publicrevenues from the effect ofincreased qualifications onlabour force participation,employment and GDP isestimated at between $6.7billion and $24.8 billion
    28. 28. Investing in skills will pay for itself28Recommendations:7.1 – Extend start-up scholarships tofull time VET students receivingincome support7.2 – Support expansion of public andprivate tertiary education funding ofat least 3 per cent per annum to meetindustry demand and commit furtherfunds to support the implementationof the suite of measures outlined inthe strategy
    29. 29. Thank you@AWP_Agencywww.awpa.gov.au

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