2013 12 skills for jobs plan volume 2


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The State’s Training and Skills Commission released the annual update of its Skills for Jobs five-year plan for skills and workforce development in South Australia on Tuesday, 26 November, 2013, at the Commission's forum in Adelaide.
The Commission’s advice in the 2013 plan focuses on better targeting public funding to areas of industry demand and increasing the correlation between post-school education and jobs.
Despite a volatile global economy and structural change domestically, the Commission anticipates economic and employment growth, although revised downward, will continue in South Australia.
Although industry sectors vary, the Commission expects there will be strong growth in a number of industry sectors including mining; health care and social assistance; education and training; and agriculture, forestry and fishing.
The Commission’s recommendations to Government, which have been developed through extensive discussions with industry, community and academic leaders, include:
Informed client choice – ensuring information for participants and potential participants is available to assist them to make training choices that lead to jobs
Confidence in the training system - maintaining a quality assurance framework to ensure vocational education and training graduates have the skills they need for work
Skills for jobs – ensuring students complete their training knowing there is a high probability they will get a job
Industry-led demand – ensuring the training system aligns with the needs of industry
Sustainable registered training organisations – ensuring that high quality training organisations have a viable business model.

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2013 12 skills for jobs plan volume 2

  1. 1. SKILLS FOR JOBS The Training and Skills Commission Five-Year Workforce Development Plan November 2013 // Volume 2 www.tasc.sa.gov.au
  2. 2. P2 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  3. 3. Contents Chapter 6: Detailed Modelling 4 and Methodology > Scenario Approach > Economic and Employment Outlook 5 7 > Demand for Qualifications 11 > Total Demand 16 > Specialist Occupations 18 Chapter 7: Industry Profiles Overview 20 > Agriculture, Forestry and Fishing 22 > Mining 26 > Manufacturing 30 > Electricity, Gas, Water and Waste Services 34 > Construction 38 > Retail and Wholesale Trade 42 > Accommodation and Food Services 44 > Transport, Postal and Warehousing 46 > Information Media and Telecommunications 50 > Financial and Insurance Services 52 > Rental, Hiring and Real Estate Services 54 > Professional, Scientific and Technical Services 56 > Administrative and Support Services 58 > Public Administration and Safety 60 > Education and Training 62 > Health Care and Social Assistance 64 > Arts and Recreation Services 68 > Other Services material contained in this plan has been70 Disclaimer: The developed by the Training and Skills Commission with support and data provided by the Department of Further Education, Employment, Science Technology and others. The views Chapterrecommendationsandnot necessarily reflect the views of 8: Regional Profiles Overview 72 and do the Government of South Australia or the Department of 76 Further > Barossa, Light & Lower North Education, Employment, Science and Technology, or indicate any commitment to > Eyre and Western a particular course of action. 80 > FarThe information contained in the plan is provided in good faith North 86 and all reasonable care has been taken in its preparation. The > Fleurieu and Kangaroo Island 90 Training and Skills Commission recommends that users exercise care in interpreting this plan and carefully evaluate the relevance > Limestone Coast their purposes and where necessary obtain 95 of the material for appropriate advice specific to their particular circumstances. > Murray and Mallee 101 The plan can be accessed electronically at www.tasc.sa.gov.au > Yorke and Mid North 106 Images have Department of > Adelaide Hills been supplied by theand Technology Further 112 Education, Employment, Science and the Department of Planning, Transport and Infrastructure and the > Eastern Adelaide 116 South Australian Tourism Commission. > Northern Adelaide 120 Acknowledgements: The Training and Skills Commission expresses its sincere > Southern Adelaide gratitude to the Department of Further 124 Education, Employment, Science and Technology and its > Western Adelaide have provided detailed information to inform 128 stakeholders who this plan. The Commission also acknowledges the contributions of Joshua Rayner, Chris Zielinski, James Rundle and Ann Kerr in producing this plan. www.tasc.sa.gov.au P3
  4. 4. Detailed Modelling and Methodology This section supports the information presented in the Economic Outlook and Demand for Qualifications section of the Skills for Jobs Plan and includes: • An outline of the economic scenarios used to develop the Commission’s modelling. • Detailed results of the Commission’s modelling of the future demand for qualifications. • Details of the approach used to derive our results, including refinements since last years plan. • An explanation of the methodology used by the Commission to identify specialist occupations in the State labour market. In recognition of the uncertainty associated with forecasting, the Commission has adopted a scenario based approach to its modelling for this iteration of Skills for Jobs. In addition, consistent with the approach in our 2012 Plan (due to the policy move to a demand driven VET system in South Australia) our modelling continues to focus on future industry demand for qualifications. Furthermore as Skills for All is still in its infancy there is insufficient information available to determine with any degree of certainty how supply might respond to demand in the future. P 4 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan The Commission’s modelling of the demand for qualifications comprises the following components: • Demand from new entrants (to fill job openings resulting from employment growth and replacement demand). • Existing workers up-skilling (completing a qualification above their highest level of qualification). • Existing workers gaining a qualification at an equivalent or lower level (referred to as ‘skills broadening’). • Demand by people needing to undertake lower level qualifications before they can attain the higher level qualifications needed by industry (‘pathways’ demand). • Demand by people who are not employed and who represent a necessary reserve capacity (referred to as ‘reserve labour force’). The focus of planning should be on what we can anticipate. We believe that our estimates of future industry demand for qualifications are the best that can be achieved, and provide a useful guide notwithstanding the acknowledged uncertainties inherent in workforce planning. Volume 2
  5. 5. Scenario Approach Projecting the long-term future of the South Australian economy inevitably involves significant uncertainty. ‘To better understand the significance of this uncertainty and its likely causes, the projections for the 2013 Skills for Jobs Plan have been developed from four alternative scenarios. It is acknowledged that other possible scenarios could be created specifically for South Australia; however, it is the Commission’s view that this additional complexity would add little. Indeed, it could distract from our purpose for undertaking scenario modelling, which is to explore the possible range of future demand for qualifications and to identify the common themes across the projected level of demand. Instead it is the Commission’s view that the four scenarios presented broadly cover the range of possible futures for South Australia. In interpreting the results of the scenarios for the development of future skills policy, it is important to consider which drivers have the most disparate (or conversely the most similar) impact across the scenarios. The economic scenarios used as a basis for our modelling of the future demand for qualifications were initially developed at the national level by the Australian Workforce and Productivity Agency (AWPA) and modelled by Deloitte Access Economics (DAE). The four scenarios are known as the Long Boom, Smart Recovery, Terms of Trade Shock, and Ring of Fire. These national projections were adapted for South Australia as part of the economic modelling undertaken for the South Australian Government’s Economic Statement, released in early 2013. In adapting the scenarios for South Australia, consideration was given to our different industry and demographic structure and our changing relationship with the national economy. These South Australian based economic scenarios have been used to guide the development of our modelling. Detailed Modelling and Methodology Detailed descriptions of the four scenarios are available from the AWPA website in the Scenarios for Australia 2025 publication. In brief though, the scenarios have been built around the following key drivers: • Social, demographic and cultural trends. • Economic and financial trends and globalisation. • Labour force, industrial and workplace trends. • Science, technology and innovation. • Governance and public policy capability. • Sustainability (focus on water, energy, population). The scenarios are based on AWPA’s assessment of the possible future directions for the evolution of these key drivers and their interactions. The strongest driver in terms of differences between the four scenarios was economic and financial trends and globalisation. The other drivers had more in common in terms of their impact and varied less from one scenario to another. For example, the demographic ageing of the population impacts in much the same way in all the scenarios, although the impact is greatest for the scenarios with the lowest rate of population growth. Even technological change, while a key determinant of our futures, differs less between scenarios, although again the rate of take-up of new technology does vary according to the nature of the scenario. P5
  6. 6. Scenarios The Long Boom scenario assumes the high demand for resources traded with China and other countries continues. The terms of trade decline moderately over time but remain at historically high levels. In addition, the imbalances in the European economies and elsewhere do not have a major effect on growth, while industries challenged by the high terms of trade undertake structural adjustment. This scenario has the highest employment and economic growth with a significant lift in labour force participation rates and sustained levels of net overseas migration. The Smart Recover scenario is characterised by initial slower economic growth due to a continuation of the current difficulties faced by Australian and global economies. Following this period of slower economic growth, Australia moves back towards its potential growth path on the back of improved global economic conditions and industry and government strategies to implement a knowledge economy. In the Terms of Trade Shock scenario, the global economy continues to grow at a healthy rate over time. However, resource prices fall mainly due to increased supply from other competing countries. The Australian dollar falls and we move back to a broader based economy, with less structural adjustment. The Ring of Fire scenario is characterised by a risky world with multiple economic, political and environmental shocks. Global economic growth is low, with significant volatility. There is low business and consumer confidence, increased protectionism reducing international trade and stunting productivity growth, and a notably lower level of net overseas migration to Australia. AWPA has advised and the Commission agrees, that the Ring of Fire scenario reflects a failure of governance both internationally and domestically and as such should not be used as a basis for future planning. Accordingly, the following analysis focusses on the remaining three scenarios. Particular attention is given to the Smart Recovery scenario, which has been adjusted to incorporate State Treasury projections1 of Gross State Product (GSP) and employment growth. Given recent trends in key economic indicators and alignment with State Treasury projections, the Commission believes that the Smart Recovery scenario represents our best single estimate of the future increase in job openings and demand for qualifications. The Commission recommends that this projection be used as a basis for future skills planning, but with the understanding that given the stronger demand projected in the other two growth scenarios, actual demand might well be higher than this projection. Failure to meet the projected levels of demand indicated by the Smart Recovery scenario would place South Australia’s future growth potential at risk. South Australian 2013-14 Budget Statement Budget Paper 3, June 2013 1 P 6 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  7. 7. Economic and Employment Outlook The economic scenarios discussed have been used as a basis for estimating the demand for qualifications presented below. The scenario modelling undertaken for the Economic Statement 2013 took a long-term perspective out to 2024-25. While we have projected forward our modelling for this time period, the focus below is primarily on the five-year period 2011-12 to 2016-17. Reference is made to the longer term period were notable trends are evident. Table 1 provides the broad macroeconomic assumptions for each scenario over the period 2011-12 to 2016-17. Between 2011-122 and 2016-17, it is estimated that GSP in South Australia will grow by at least 2.25% per annum, but with the potential to grow by as much as 3.25% per annum if the Australian and world economies recover strongly. This 2.25% projected average growth rate compares with the projection of 3.00% presented in our 2012 Plan and historical growth of 2.75% per annum. This downward revision in the Commission’s outlook for economic growth is consistent with revisions made globally and nationally which acknowledge the recent changes in the economic environment. Given the projected rate of economic growth and assumed levels of labour productivity, it is estimated that average employment growth in South Australia will be at least 0.75% per annum, but could be as much as 1.75% per annum over the five-year period. This compares to the projection of 1.50% presented in our 2012 Plan. Table 1: Macroeconomic assumptions by scenario, 2011-12 to 2016-17 Variable History Long Boom 123.9 104.0 77.0 71.0 73.2 $1.02 $0.80 $0.78 $0.60 $0.72 1.00% 1.25% 1.00% 1.00% 0.75% 62.5% 66.5% 63.7% 66.0% 63.4% 5.5% 5.3% 5.6% 5.3% 7.1% 1.50% 1.75% 0.75% 1.25% 0.25% Labour Productivity Growth 1.25% 1.50% 1.75% 1.25% 0.50% Output (GSP) Growth2 2.75% 3.25% 2.25% 2.75% 0.75% Terms of Trade1 Australian Dollar/US 1 Adult Population Growth 2 Labour Force Participation Rate 2 Unemployment Rate 2 Employment Growth 2 2 1 2 2 Smart Terms of Recovery Trade Shock Ring of Fire Historical value as at 2011-12, Scenario value as at 2016-17 Historical value average for period 2002-12, Scenario value average for period 2011-12 to 2016-17 The base year is 2011-12 – the most recent full year for which there is published reliable data to use as the basis for estimating future demand. Detailed Modelling and Methodology P7
  8. 8. Employment Growth by Industry Given the influence of the particular economic drivers associated with each of the three growth scenarios, future industry employment growth varies quite considerably across scenarios. However, as noted previously, from a policy perspective we are interested in the common/contrasting trends across the scenarios. Under each of the three growth scenarios, employment growth is expected across the majority of industries. Those industries projected to record the strongest rate of employment growth consistently across the three growth scenarios over the period 2011-12 to 2016-17 include: • Health Care and Social Assistance, which is projected to grow by at least 3.6%, but could be as much as 5.8% per annum given the other scenarios. • Mining, which is estimated to grow by 3.5% or as much as 4.3% per annum. • Education and Training, which is expected to grow by 2.5% or as much as 3.9% per annum. P 8 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan As these industries are projected to be the highest growing industries across the three scenarios, this gives us a reasonable degree of certainty that we need to plan for growth in these sectors. In contrast, there are a few industries where there are considerable differences in future employment growth between scenarios. These are industries where it will be important that flexibility exists in the training system to meet the uncertainty. Industries that show a notable difference across the three scenarios include: • Construction, which varies between growth of 2.4% and decline of 0.7% per annum. • Professional, Scientific and Technical Services, which varies between growth of 3.6% and decline of 0.8% per annum. • Administrative and Support Services, which varies between growth of 2.5% and decline of 2.0% per annum. For each of these industries, positive growth is limited to the Long Boom scenario. This suggests that current and immediate economic conditions, which are the most positive under the Long Boom scenario, are the main reason for the difference in growth across scenarios. Volume 2
  9. 9. Table 2: Projected Annual Average Employment Growth by Industry, 2011-12 to 2016-17 Industry Historical (10yr Avg) Long Boom Smart Recovery Terms of Trade Shock Ring of Fire Agriculture, Forestry and Fishing -0.8% 1.7% 1.6% 1.7% 0.8% Mining 14.9% 4.3% 3.9% 3.5% 2.3% Manufacturing -2.6% -2.0% -1.8% -2.2% -0.5% Electricity, Gas, Water and Waste Services 6.9% 0.0% -5.2% -3.6% -4.4% Construction 3.7% 2.4% -0.7% -1.2% -2.0% Wholesale Trade 0.4% 0.6% -1.8% -2.8% -2.6% Retail Trade 2.5% 0.9% 1.1% 1.8% 1.1% Accommodation and Food Services 1.7% 0.1% -0.2% 0.7% -0.1% Transport, Postal and Warehousing 1.4% 2.1% 2.1% 2.6% 0.8% Information Media and Telecommunications 1.7% 0.9% -1.0% -0.8% -2.1% Financial and Insurance Services 2.7% 1.0% 1.0% 0.0% -0.9% Rental, Hiring and Real Estate Services 1.6% 3.5% 2.5% 2.9% 2.5% Professional, Scientific and Technical Services 3.7% 3.6% -0.8% -0.3% -3.7% -1.0% 2.5% -2.0% -1.1% -3.8% Public Administration and Safety 3.2% 0.8% -1.1% -0.1% -1.0% Education and Training 1.8% 2.8% 2.5% 3.9% 1.8% Health Care and Social Assistance 2.0% 3.9% 3.6% 5.8% 3.2% Arts and Recreation Services 2.7% 1.5% 1.9% 2.8% 2.0% Other Services 1.7% 1.4% 2.0% 2.3% 1.4% 1.50% 1.75% 0.75% 1.50% 0.25% Administrative and Support Services Total Over the longer term to 2024-25, at least 15 out of the 19 industry sectors are expected to record positive employment growth across the three growth scenarios. Those sectors expected to record declining employment (albeit slightly in some cases) across the three scenarios, include: Manufacturing, Electricity, Gas and Water Supply and Wholesale Trade. Detailed Modelling and Methodology P9
  10. 10. Job Openings Over the five year period 2011-12 to 2016-17 it is estimated that growth in the South Australian economy will create at least 30,000 new jobs, but this could be as high as 73,000. Given the other scenarios it is likely that more rather than less jobs will be created. This compares with 58,000 published in last year’s plan for the period 2010-11 to 2015-16. Data updates/refinements to methodology Between 2011-12 and 2016-17, the number of net job openings resulting from replacement demand is estimated to be 86,000, but under the other scenarios could be as low as 81,000. This compares to 81,000 published in last year’s plan. The four scenarios used are based on those developed by AWPA at the national level and adapted for South Australia. The combined impact of employment growth, plus the need to replace workers who will be leaving the workforce or changing occupations, results in estimated job openings over the five-year period of at least 116,000, with the possibility of up to 154,000. This compares with 139,000 job openings projected in our 2012 Plan. Over the longer term (to 2024-25), the rate of employment growth is expected to increase under each scenario, resulting in job openings over the period of at least 364,000, but up to as many as 468,000. 160,000 140,000 73,000 100,000 57,000 30,000 State Treasury forecasts of GSP, labour productivity and employment have been used to guide the development of the Smart Recovery scenario. Employment projections for each scenario have been modelled at the industry division level (1 Digit ANZSIC). The overall employment growth projections have been utilised for the four scenarios while maintaining the industry shares implied by the modelling undertaken for the Premier’s Economic Statement. Centre for the Economics of Education and Training (CEET) replacement rates have been updated to incorporate 2012 labour force data (replacement rates are used to estimate replacement demand). Replacement rates for each scenario were developed by applying the annual percentage point movement in retirement rates modelled by DAE. Figure 1: Job Openings by scenario, 2011-12 to 2016-17 120,000 For this iteration of the modelling, a scenario-based approach has been adopted. 7,000 80,000 86,000 85,000 88,000 Smart Recovery Terms of Trade Ring of Fire 40,000 81,000 Long Boom 60,000 20,000 0 Replacement New Jobs P 10 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  11. 11. Demand for Qualifications The future demand for qualifications is driven principally by the skilling requirements of new entrants (to fill job openings resulting from expansion and replacement demand) and the skilling requirements of the existing workforce (to align skills with changing industrial and occupational needs). These components have been estimated separately. As in previous years, the methodology used to estimate the future demand for qualifications draws heavily on the methodology developed by CEET.3 Underpinning these estimates are scenarios of the likely future qualifications profile of the workforce, known as skills deepening. It is assumed that skills deepening in the Smart Recovery scenario will be broadly in line with historical trends, taking into account that the rate of change will reduce as the proportion of workers with a qualification approaches 100%4. AWPA modelling of skills deepening was used to inform the degree to which skills deepening might vary between scenarios over the projection period. Over the period 2011-12 to 2016-17, the proportion of South Australian workers holding at least one non-school qualification is expected to increase from 60.3% to 66.6% but could be as high as 68.9%. By comparison, the continuation of historic trends would result in a proportion of 67.1% by 2016-17. 3 4 Data updates/refinements to methodology Skills deepening rates have incorporated 2012 Australian Bureau of Statistics (ABS) Survey of Education and Work data. Skills deepening rates have been estimated at the detailed occupation level by using occupation and qualification shares and an iterative redistribution process. This allows the qualification profile for each occupation to deviate from the average qualification profile for the sub-major group. A continuation of historic trends (between the ABS 2006 Census and the ABS 2011 Census) in the forecast period would result in skills deepening occurring at a rate of 1.36 percentage points per year. Due to the asymptotic nature of skills deepening, it was assumed that skills deepening will occur in the Smart Recovery scenario at a slower rate of 1.25 percentage points per year to 201617 and 1.15 percentage points per year for the remainder of the period to 2024-25. Shah, C Demand for qualifications and the future labour market in Australia 2010 to 2025, a report for the Department of Education, Employment and Workplace Relations, Canberra, 2010 The proportion of workers in any occupation with a qualification cannot exceed 100%, and the rate of change in this proportion is bound to decelerate as a 100% rate is approached. Detailed Modelling and Methodology P 11
  12. 12. Existing Workers Estimated demand for qualifications from existing workers totals 122,000 but this demand could be as high as 138,000. This compares with our estimate of existing worker demand of 127,000 published in last year’s plan. There are two components to existing worker demand, workers who are up-skilling (completing a qualification at a higher level than their current highest level qualification) and workers who are gaining a qualification at an equivalent or lower level (referred to as ‘skills broadening’). New Entrant Demand To meet the projected industry demand over the period 2011-12 to 2016-17 it is estimated that 89,000 new entrants will need to gain a qualification. However, this requirement could be as high as 111,000. It is estimated that over the period 2011-12 to 201617, existing workers up-skilling will result in demand for 57,000 qualifications, but this could be as much as 70,000. This level of up-skilling demand is comparable to the number estimated last year of 61,000. Table 3: New Entrant, Demand for Qualifications, 2011-12 to 2016-17 Table 4: Existing Workers (Up-skilling), Demand for Qualifications, 2011-12 to 2016-17 Qualification Level Post Graduate Number 9,000 Qualification Level Post Graduate Number 9,000 Bachelor Degree 29,000 Bachelor Degree 13,000 Advanced Diploma/Diploma 12,000 Advanced Diploma/Diploma 12,000 Certificate IV 9,000 Certificate IV 9,000 Certificate III 24,000 Certificate III 13,000 Certificate II 6,000 Certificate II - 1,000 Certificate I Certificate I Total 89,000 Total Components may not add to total due to rounding. P 12 Components may not add to total due to rounding. Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2 57,000
  13. 13. Over the same period, it is estimated that broadening demand will result in the need for a minimum of 66,000 qualifications, or up to as many as 69,000 qualifications. This compares with the level of broadening published in last year’s plan of 66,000. Table 5: Existing Workers (Broadening), Demand for Qualifications, 2011-12 to 2016-17 Qualification Level Post Graduate Bachelor Degree Advanced Diploma/Diploma Number 4,000 10,000 8,000 Certificate IV 23,000 Certificate II 10,000 The qualification profile of workers was updated using 2011 ABS Census of Population and Housing data. The ABS Survey of Education and Training 2009 data was used to derive the number of employed persons with a non-school qualification that have completed a qualification in the past 12 months at the same or lower level for work related reasons. 10,000 Certificate III Data updates/refinements to methodology Certificate I Total Skills broadening varies between scenarios as a result of different employment levels and skills deepening rates. 1,000 66,000 Components may not add to total due to rounding. Detailed Modelling and Methodology P 13
  14. 14. Pathways Demand Marginally attached labour force The Commission acknowledges that the modelling methodology, by definition, attempts only to capture industry demand, resulting in low estimates of demand for Certificate I and II level qualifications. Nonetheless, while industry demand for these qualifications is low, they provide pre-employment skills and also an entry point for many individuals and can be a stepping stone to higher level qualifications. In effect, the industry demand for higher level qualifications cannot realistically be met in some circumstances without a number of people obtaining these entry level qualifications. This applies particularly for those people who left school before completing their secondary education. The Commission also recognises that there is a need to consider demand for qualifications that is not strictly industry demand, but which incorporates demand from those who are currently unemployed or not in the labour force. This recognises that the economy always requires more skilled labour than is actually employed at any point of time. A proportion of workers are always moving for various reasons, but employers need them to retain their skills so that they can readily be re-employed to replace others who leave for similar reasons. The Commission believes that this pathways demand should be incorporated into the modelling, given that a number of individuals will need to undertake lower level qualifications before they can attain the higher level qualifications needed by industry. It is estimated that there will be an additional demand for 13,000, up to as many as 14,000 qualifications at the Certificate I and II levels for ‘pathways’ purposes over the next five years. It is estimated that demand from this source will be 11,000 qualifications (with the possibility of up to 13,000 qualifications) between 2011-12 and 2016-17. In the 2012 Skills for Jobs Plan, we estimated demand for qualifications from this source of around 6,000. Table 7: Marginally attached labour force, Demand for Qualifications, 2011-12 to 2016-17 Qualification Level Number Qualification Level Certificate II 2,000 Total 13,000 Data updates/refinements to methodology NCVER Student Outcomes Survey data for 2010 to 2012 has been used to derive the percentage of all Certificate I and II graduates who subsequently enrolled in further study. This proportion was then used to estimate pathways demand for Certificate I and II qualifications in the model. P 14 Advanced Diploma/Diploma 2,000 Certificate IV 1,000 3,000 2,000 – Total 11,000 11,000 Certificate I 2,000 Certificate I Number Bachelor degree Certificate II Table 6: Pathways Demand for Qualifications, 2011-12 to 2016-17 1,000 Certificate III This compares to the estimate of pathways demand in our 2012 Plan of 17,000 qualifications over the period 2010-11 and 2015-16. Post Graduate Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Data updates/refinements to methodology The proportion of those marginally attached to the labour force was sourced from the modelling underpinning the AWPA Workforce Development Strategy (Smart Recovery scenario). This proportion has been applied to the total demand for qualifications (excluding pathways demand), to derive the demand for qualifications from those marginally attached to the labour force. This proportion was assumed to be constant for each scenario. Volume 2
  15. 15. Detailed Modelling and Methodology P 15
  16. 16. Total Demand Demand for Qualifications by Occupation The combined demand for qualifications (from new entrants, existing workers, pathways demand and demand from the marginally attached workforce) results in projected total demand of 236,000 under the Smart Recovery scenario, but could be as high as 277,000 qualifications over the five-year period. This compares with projected demand for qualifications of 247,000 published in our 2012 Plan. In previous Skills for Jobs plans the Commission has published demand for qualifications projections on an occupational grouping basis which broadly resembled proxy industry sectors. To simplify the interpretation of the projections, we have shifted the focus to the Australian Bureau of Statistics, Australian and New Zealand Standard Classification of Occupations (ANZSCO) major/sub-major groups. Those sub-major ANZSCOs that have broadly similar skills have been grouped. Under the Smart Recovery scenario, we expect that a third (77,000) of this demand will be for higher education qualifications (degree and above) with the remaining two-thirds (159,000) being for VET level qualifications. Demand for VET qualifications will be driven by the need for higher level qualifications (Certificate III and above). Table 8: Projected Total Demand for Qualifications, 2011-12 to 2016-17 Qualification Level Number Post Graduate 23,000 Bachelor Degree 54,000 Advanced Diploma/Diploma 34,000 Certificate IV 29,000 Certificate III 63,000 Certificate II 29,000 Certificate I 4,000 Total 236,000 Over the longer term, total demand for qualifications is expected to grow at a stronger rate than that estimated over the next five years, with an increased focus on higher level VET and higher education qualifications. According to our modelling, the occupation groups estimated to account for the highest proportion of demand for qualifications over the period 2011-12 to 2016-17 include: • Clerical and Administrative Workers, accounting for 13.0% of total demand for qualifications, but could be as high as 13.7%. • Health and Community Services Workers, accounting for 12.4%, or as high as 13.2%. • Sales Workers, accounting for 9.2%, but could be as low as 8.5%. • Health and Welfare Professionals, accounting for 8.0%, but could be as high as 9.5%. Under the Smart Recovery scenario, our modelling suggests that just over half of VET qualifications demand over the five years to 2016-17 will be within the occupation groups of Clerical and Administrative Workers, Health and Community Services Workers, Sales Workers and Business, Human Resources and Marketing Professionals. In contrast, the occupation groups of Health and Welfare Professionals, Education Professionals and Business and Public Administration Managers will account for almost half of total demand for higher education qualifications. Figure 2 shows the projected profile of qualifications demand over the period 2011-12 to 2016-17 by occupation group and level of qualification. Over the longer term to 2024-25, the occupation profile of the demand for qualifications under the Smart Recovery scenario remains fairly consistent with the profile in 2016-17. It is the Commission’s view that this distribution of qualifications demand should be used to guide public investment in Vocational Education and Training. P 16 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  17. 17. Figure 2: Demand for Qualifications Profile by Occupation Group, 2011-12 to 2016-17 Clerical and Administrative Workers Health and Community Service Workers Sales Workers Health and Welfare Professionals Business and Public Administration Managers Business, Human Resources and Marketing Professionals Education Professionals Automotive and Engineering Trades Workers Factory Process Workers Other Labourers Machinery Operators and Drivers Farmers and Farm Managers Design, Engineering, Science and Transport Professionals Hospitality, Retail and Service Managers Sports and Personal Service Workers Other Technicians and Trades Workers Hospitaility Workers Engineering, ICT and Science Technicians Construction Trades Workers Electrotechnology & Telecommunications Trades Workers ICT Professionals Food Trades Workers Skilled Animal and Horticultural Workers Construction and Mining Labourers Farm, Forestry and Garden Workers Arts and Media Professionals 13.0% 12.4% 9.2% 8.0% 7.5% 7.1% 6.7% 3.2% 3.2% 3.0% 3.0% 2.8% 2.6% 2.5% 2.3% 2.0% 2.0% 1.9% 1.7% 1.7% 1.4% 0.8% 0.4% 0.3% 0% As stated previously, given the move to a demand driven VET system under the Skills for All reforms the Commission is less certain about how the supply of VET skills will respond in the future. This is further exacerbated by current government budget conditions which may see revisions to public investment in training over the coming years. A critical feature of Skills for All is that supply responds quickly to industry demand for skills and qualifications. That means that industry demand should be the driver of the system, and the main focus of workforce planning, with the supply and funding then adjusted to meet that demand. Detailed Modelling and Methodology Higher Education VET 0.6% 0.4% 5% 10% 15% However, using our previous method of projecting supply (an extrapolation of recent trends, taking account of known policy changes) we believe that growth in the supply of qualifications will be broadly sufficient to meet the level of demand projected under the Smart Recovery scenario. If demand exceeds this level, and on balance it may well do so, then the supply of skills will potentially fall short of demand. This suggests that there may be the need for additional policy action over the medium to long-term to ensure there is sufficient supply. Policy considerations could include: adjusting total funding, increasing incentives and/or improving the cost efficiencies of delivery. P 17
  18. 18. Specialist Occupations For many occupations, there is no direct relationship between the specific qualification studied and the jobs graduates end up in. For these occupations, the labour market is generally effective in responding to changing skill needs and economic fluctuations. However, for some occupations where there is a much closer relationship between the job and a specific qualification, and where the training duration is typically long and relatively expensive, there is Criterion 1. Long lead time Skills are highly specialised and require extended learning and preparation over several years. 2. High use The skills are deployed for the uses intended (close occupational fit). potential for market failure because the labour market is less able to adjust quickly. Furthermore, because the skills for these specialist occupations are highly specific, the qualifications are not readily transferable from elsewhere. The Commission has adopted the following criteria and associated indicators, measures and data sources for defining specialist occupations in the South Australian labour market: Indicators Measures • Length of course. • An occupation must be at ANZSCO Skill Level 3 or above.5 • The skills which people acquire through education and training are used for their intended purpose. • A majority of people in the occupation have the requisite qualification. • Above average match between intended and destination occupation of graduates. • 60% or more of those working in the occupation have a skill level commensurate with that specified. Source: Australian Workforce and Productivity Agency 3. Opportunity cost The opportunity cost of the skills being in short supply is high (causing either bottlenecks in the supply chain or imposing significant costs by their absence) and/or the skills are required to implement the Government’s economic development priorities. 4. Industry intelligence There is robust intelligence from industry regarding the demand, supply and use of these skills. There is adequate data to assess the first three criteria. 5 6 P 18 • The occupation has licensing or registration requirements.6 • The occupation/skills are needed to deliver government priorities. • Registration/licensing requirement. • The occupation is associated with the State Government’s economic priorities. Sources: COAG mutual recognition arrangements ABS ANZSCO, cat. no. 1220.0 Economic Statement 2013 DFEEST STEM Occupations • Industry Skills Boards (ISB) and other industry stakeholders (e.g. professional associations) can provide robust intelligence. • ISBs, Industry Skills Councils (ISC) and professional associations. Sources: National Industry Skills Councils’ Environmental Scans. Information available from professional associations. Occupations at Skill Level 3 have a level of skill commensurate with one of the following: 1) AQF Certificate IV. 2) AQF Certificate III including at least two years of on-the-job training. 3) 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 qualifications. Occupations for which some form of legislation-based registration, certification, licensing, approval, admission or other form of authorisation is required by individuals in order to practice the occupation legally. Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  19. 19. These criteria align closely with those used by AWPA to identify specialised occupations at the national level. The Commission has identified 87 ANZSCO7 occupations at the unit group level8 in South Australia which meet the criteria, representing just under one quarter of all occupations defined by the ABS. Together, these 87 specialist occupations account for around 22% of total employment in South Australia. The majority of occupations on the list are Professionals (52), followed by Technicians and Trade Workers (29), Community and Personal Service Workers (4) and Managers (2). The purpose of identifying these specialist occupations is to highlight where detailed workforce planning may be required, and where the government intervention in skills planning is expected to add value. For areas identified for further examination, it is important that government and industry work together through established advisory mechanisms and utilise existing industry workforce planning models and approaches. This will ensure a consistent and accurate assessment of need. It is also important to clarify that the criteria used to define a specialist occupation do not, of themselves, indicate whether an occupation is currently facing a prospective excess or shortage of skills (the criteria do not include any indicators of current/future demand or supply). Undertaking an analysis of the future demand for qualifications for specialist occupations is the starting point for determining where government intervention in skills planning may need to occur. It also helps identify where other (non-training) workforce development responses may be required. The Commission’s assessment of the 87 specialist occupations in this plan is based on a risk assessment rating. The risk assessment rating is a composite rating based on current labour market conditions (has the Department of Education, Employment and Workplace Relations (DEEWR) assessed the occupation as in shortage or experiencing recruitment difficulties), the projected level of industry demand for qualifications over the five year period to 2016-17 and an assessment of the ability of the training system to supply sufficient skills (based on the Commission’s modelling). The Commission believes that those occupations with a risk assessment rating of Above Average are the ones that should be closely monitored to ensure there are sufficient skills and/or workforce development strategies in place to meet industry demand. In contrast, those occupations with a risk assessment rating of Below Average are the ones where there is a lower risk that the training system will be unable to respond to demand. Our modelling suggests that there are 10 specialist occupations with an Above Average risk assessment, these include: • Civil engineering professionals • Early childhood (pre-primary school) teachers • Electrical distribution trades workers • Electronic trades workers • Engineering managers • Geologists and geophysicists • Medical imaging professionals • Metal fitters & machinists • Mining engineers • Motor mechanics The risk assessment rating for all 87 specialist occupations is provided in the Economic Outlook and Demand for Qualifications section. Australian Bureau of Statistics (ABS), Australian and New Zealand Standard Classification of Occupations (ANZSCO), 2009 The ANZSCO classifications groups occupations into the following hierarchy: Major Group, Sub-Major Group, Minor Group, Unit Group and occupations. The Commissions analysis is focused at the unit group level as this is the lowest level for which data is readily available. 7 8 Detailed Modelling and Methodology P 19
  20. 20. Industry Profiles Overview Based on our modelling we expect the majority of industries to record employment growth over the period 2011-12 to 2024-25, although for some this growth will not be large. Under the Smart Recovery scenario it is projected that employment in South Australia will become less reliant on Agriculture and Manufacturing sectors and more reliant on Professional, Health and Education Services sectors over this period. These services sectors are projected to increase their share of employment from just over a quarter to more than a third of total jobs in South Australia. Figure 3 provides an indication of the historical and expected (under the Smart Recovery scenario) change in industry composition in South Australia. Figure 3: South Australian Industry Composition, 1998-99 to 2024-25 1998-99 2011-12 15.7 12.8 42.6% 7.7 5.7 16.4 42.6% 9.1 13.7 7.2 13.6 14.6 11.1 38.9% 2024-25 4.9 7.7 Source: Australian Bureau of Statistic (ABS), Labour Force Survey, Cat No: 6291.0,55.003. Government of South Australia, Economic Statement 2013 (Smart Recovery scenario) 8.2 6.3 4.2 9.5 7.3 Wholesale & Retail Education & Training Health Care Agriculture Manufacturing Other Construction P 20 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  21. 21. To complement the top-down economic modelling, the Commission has gathered local intelligence from a range of stakeholders. The information presented in this section draws on this industry intelligence, which has been gathered through the Commission’s formal consultations with industry advisory bodies and other stakeholders throughout the year. The attached industry profiles provide information gathered from industry about the outlook for their sector and key current and future skills and workforce development issues. Industry stakeholders: common themes and priorities A reoccurring theme throughout the Commission’s industry consultation process was the lack of quality ‘one-on-one’ career advice to students to enable them to make informed decisions. Industry believe that the lack of student understanding of education and employment pathways is leading to inappropriate commencements in training courses – in particular Certificate I and II courses. It was further mentioned that a number of students were enrolling in some courses purely from a ‘hobby’ perspective. Solutions recommended by industry included: • Developing a process to screen the suitability of participants for training. • Charging a small fee to encourage participants to commit to training (individual buy-in). Industry consultation also highlighted the need for student career counselling to be made more widely available to maximise training and employability outcomes and minimise poor career decisions. A significant number of industry sectors raised concerns around the unintended consequences of capping courses under Skills for All. Central to the concerns of industry were: • A fear that higher level qualification in the sector may be capped in the future. • Skills for All providers who have spent considerable money on their registration and capacity building don’t have the security of a known commercial environment. • There is no mechanism to turn away students who are clearly unable or unmotivated to undertake a specific course. Several industry stakeholders commented that they believe the Skills in the Workplace (SiW) program is not meeting employer’s needs. Issues raised included: constant changing of eligibility rules, complex contract arrangements, inflexibility and overly bureaucratic processes. It was further mentioned that SiW program was initially promoted as a critical component of Skills for All; however, several sectors questioned its relevance in the face of successive rules and guideline changes. One industry sector stated “SiW started off as an independent program but got consumed by Skills for All requirements”. The Commission‘s 2013 consultations with industry stakeholders resolved that there remains a high level of support for the SiW program; however industry believes the program is too bureaucratic and focused towards large enterprises. Industry Profiles Overview P 21
  22. 22. Agriculture, Forestry and Fishing Employment Outlook According to the Commission’s modelling, employment in the Agriculture, Forestry and Fishing industry is projected to grow by 1.6% per annum under the Smart Recovery scenario over the next five years. This is above the historical decline experienced over the past decade of 0.8% per annum. Over the longer term, employment growth in the industry is expected to be more subdued, resulting in Agriculture’s share of employment in South Australia falling from 4.9% to 4.2% of total employment. Figure 4: Average Annual Employment Change, 2011-12 to 2016-17 Figure 5: Agriculture, Forestry and Fishing Industry share of Total Employment 2.0% 4.9% 1.5% 1.0% 1.7% 1.6% 2011-12 1.7% 0.5% 0.8% 5.2% 0.0% -0.5% -0.8% 2016-17 Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year -1.0% 4.2% 2024-25 P 22 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  23. 23. Consultation with the Agriculture, Forestry and Fishing industry indicated that the sector was generally supportive of the Commission’s modelling projections for the next five years. Industry indicated that over the next five years technological advancements in the industry have the potential to support less labour intensive operations. However, over the longer term demand for agricultural products is likely to increase requiring higher levels of employment and/or further improvements in technology to meet expected demand. Industry commented that the scenarios used by the Commission did not take into account varying seasonal events such as drought which can severely impact on the sector. Industry Profiles Overview Innovation and technological advances have helped the industry remain competitive. Industry experts are predicting that technological advances across the industry will continue, revolutionising production in the foreseeable future. However, water remains a key constraint on future output. Highly productive small farms will decline with the emergence of a corporate style or expansive family farm becoming the model of the future. Consultation indicated that industry was generally supportive of the replacement rates projected by the Commission. However, it was indicated that from 2016-17 industry expects that ageing of the workforce will result in increasing retirements across the industry. P 23
  24. 24. Workforce Development Themes and Issues The Primary industry sector plays a key economic role across the State ensuring regional communities are not stripped of services. Food and fibre production accounts for well over half the State’s exports and the sector is the largest employer in regional South Australia. The industry continues to exhibit the highest productivity growth due to its ability to adapt against drought, declining rural populations, terms of trade, an ageing workforce, limited investment attraction and poor infrastructure and services support. The sector continues the process of restructuring, moving away from the traditional family farm model to a system that is more aligned to corporate structures. Increasingly the industry is witnessing the scaling up of businesses through the aggregation and collaborative farming practices. Although this appears positive in terms of sustainability there is an urgent need to address the declining labour supply. This is leading to the loss of a wide range of occupational groups including Diesel Mechanics, Agronomists, Soils Scientists, Piggery Technicians, Aquiculture Farm Managers, Feedlot Managers, Horticulture Technicians and a host of other occupations in the sector. The training numbers are often very low in these occupational areas and combined with fairly intense competition from Mining, Oil and Gas sectors there is difficulty sourcing replacements. This is being compounded by retirements in key areas of agronomy and machinery maintenance, leading to a lack of highly skilled people in the industry. Industry commented that employment of backpackers and transient workers plays a significant role in ensuring crops are harvested across most of the horticulture sector. Governments should be cognizant of this fact and support these transient workers through the adoption supportive policies and strategies. The Seafood sector reported that it has been adversely impacted by growth of the Oil and Gas sectors in the North West Shelf which has taken several dozen highly trained maritime personnel (especially Skippers and Marine Engine Drivers). For the first time the prawn industry has had to actively recruit deck crews following the loss of number of long-term crew members. Most Seafood industry occupations are licensed which can take many years to qualify for a maritime ticket. So the loss of these key sector personnel has an immediate and significant impact. The Seafood industry comprises multiple sectors with varying employment training characteristics, such as the introduction of new skills mixes in seafood/aquaculture, to include the care, handling and management of new fish farming species. Fixed learning packages are deemed less relevant as industry believes the training sector is unable to adapt in time to accommodate their needs. The training sector needs to understand the market for up-skilling and engage with the farming community by providing short industry specific training, preferably onsite and at times convenient to employers. Industry believes there is a need for the State Government to broaden its policy assistance measures away from Mining and focus on other major industry sectors such as Agriculture. This balance is seen as critical in light of the sectors significant contribution to government revenue created though the multiplier effect to the state’s economy. South Australia’s Agrifood industry has the oldest workforce in the State which combined with the oldest population on the mainland poses a real and imminent threat to the industry. The sectors ageing workforce and its ability to train people to the required standard in time to meet the replacement need is a major concern. General agriculture issues are the same as in the Seafood industry, where it can take several years to acquire specific industry competencies. Many businesses are concerned about their ability to compete for labour, and of the likely success of investing in costly attraction strategies which all too often are beyond the capacity of individual enterprises, particularly small to medium sized enterprises. P 24 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  25. 25. The sector believes there is a need for more relevant regional workforce development plans across the state that reflect current and future labour and skills needs. There is a growing consensus that migration will be an integral component of any future growth in productivity for the sector. This will require a much stronger targeted migration strategy for the regions that tops up the existing skills base through improved deployment support including more active ‘migrant friendly town’ approaches which have been successfully trialled in eastern states. Industry stated it urgently requires State Government assistance to implement regional workforce development plans that support industry growth across all of the sector. Industry expressed concern over a lack of sector based strategies to support industry to overcome major workforce development barriers including: • Lack of attraction of people into the industry and regions across the State. • Poor image of primary industries as a career choice • Poor or no promotion of regions as a desirable place to work and live. • Limited or no targeting of jobs to under-employed or unemployed outside of the regions. • A high level of informality in recruitment, induction, development and retention. • Inability of many regional centres to offer the range of services and leisure attractions of larger regional centres and major urban centres. • Loss of skilled personnel to Mining and Oil and Gas sectors. • No locally managed system to source and facilitate labour exchange and manage training issues. • Poor targeting of migrants especially for trades and agribusiness professional positions. • The sectors increasing reliance on the hiring of 457 visas holders in the absence of any domestic labour willing to work in regional areas. • Significant ageing of the workforce during a period of farm aggregation. • Low levels of unemployment in some regional areas from which to draw potential employees. Industry Profiles Overview A number of these issues were also mirrored within the National Industry Skills Council, Agrifoods Skills Australia 2013, Environmental Scan: • Building world class business and leadership capabilities, entrepreneurial skills, marketing and global supply chain management skills and Asia-relevant capabilities which collectively, shape and drive dynamic enterprise development and profitability. • Attraction of greater numbers of people to the industry with sufficient aptitude to replace an ageing workforce. • Widespread up-skilling in new practices and new knowledge is urgently needed by existing workers in response to a changing policy environment, new work practices to lift productivity levels. • Poor speed-to-market of publicly funded research findings continues to be one of the major constraints in substantially lifting agrifood productivity levels. Industry advised that RTOs must appreciate the unique training needs of regions and respond by delivering a broader variety of short, accredited and non-accredited courses for employers and employees to choose from. Industry emphasised that it has a distinctive workforce culture concerned with practical competency developed through lengthy experiential learning models. Learning is mostly informal and certainly not structured in the same way as traditional qualifications. The sector is less concerned with formal qualifications and more concerned with acquiring relevant skills that are fit for purpose. Industry stressed this does not mean that competencies contained in the Agribusiness qualifications are incorrect; what is does mean is the method of access and engagement with farmers should be highly specific and focused on their training needs. Few farmers have formal qualifications and in most cases industry believes these are not needed. However, the sector is seeing an increase in demand for short courses that are focused on new market pressures such as food safety, chemical safety, financial management, commercial management, marketing and innovation. In addition, the sector requires skills in workforce planning to assist industry with employee development and underpin regional attraction and retention strategies. P 25
  26. 26. Mining Employment Outlook According to the Commission’s modelling, employment in the Mining industry is projected to grow by 3.9% per annum under the Smart Recovery scenario over the next five years. This is less than the historical rate of growth experienced over the past decade of 14.9% per annum, but acknowledges the shift from a period of significant investment to a more operational period. Figure 6: Average Annual Employment Change, 2011-12 to 2016-17 16.0% 14.0% 12.0% 10.0% 8.0% 14.9% 6.0% 4.0% 4.3% 2.0% 3.9% 3.5% 2.3% P 26 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2 Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year 0.0%
  27. 27. Over the longer term, employment growth in the industry is expected to continue, resulting in Mining’s share of employment in South Australia increasing from 1.8% to 2.2% of total employment. Figure 7: Mining Industry share of Total Employment 1.8% 2011-12 Consultation with Industry indicated that employment growth amongst existing mines is likely to be relatively flat going forward. However, if new projects under consideration move through to development, then employment is expected to increase considerably over the next 16 years. This suggests a much stronger rate of growth than that projected by the Commission under all scenarios. Research undertaken by the Resources and Engineering Skills Alliance (RESA) as part of their South Australian Future Mining Workforce Report 2014 to 2030 suggests that if 16 of the 40 projects are developed over the next 16 years (‘likely scenario’) approximately 27,500 jobs will be directly and indirectly created. If all 40 projects (‘less likely scenario’) are developed more than 36,000 jobs will be directly and indirectly created between 2014 and 2030. Industry suggested that the average staff turnover rate for employees of mining companies is currently 14%, while the average turnover figures for contractors averaged 20%. These rates were much higher than the replacement rates projected by the Commission. 2.1% 2016-17 Anecdotal evidence suggests that contractor turnover is high due to a variety of factors, including the transient nature of many employees, the often demanding physical endurance of the work, long hours, Fly In and Fly Out (FIFO) and the lure of other employment with higher salaries. It was acknowledged that remote site operations are unique and will continue to be subject to the impact of high turnover. High labour turnover is impacting recruitment time, costs and productivity. 2.2% 2024-25 Industry Profiles Overview P 27
  28. 28. Workforce Development Themes and Issues Skilling of new entrants into the sector is required to meet future workforce demand for a large number of projects currently in the development stage. There is a critical need to train ‘work ready staff’ to meet the demands of the sector. The Mining industry believes industry needs to up-skill professionals in their workforce with skills in leadership, training and change management to remain world competitive. Occupations in demand include: • Professionals – Mechanical Engineers, Human Resource and Training Professionals, Metallurgists, Work, Health and Safety Professionals and Geologists. • Trade – Mechanical Technicians and Fitters, Drillers, Diesel Mechanics, Electricians and Electrical and Instrumentation Technicians. • Semi-skilled – Driller’s Assistants, Mobile Plant Operators and Fixed Plant Operators, general skilled workers, Miners and Maintenance Support Worker. Further consultation with tertiary institutions and registered training organisations is needed to identify possible barriers to training and employment for ‘in demand’ occupations. There are a number of factors that have potential to affect the sector including: • Impact of global commodity prices. • Mine approval and development cycles. • Australian Dollar ($AUD). • Wages, productivity and automation. In the long-term, the biggest impacts will be around productivity and automation which may see some sites become fully automated via offsite control leading to a downward trend in wages. The latter factor is being influenced by declining sector productivity which, according to 2011 Australian Bureau of Statistics Mining Productively Index, has fallen significantly since 2002. P 28 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Industry is seeking people with the right skills, attitude, cultural fit, as well as strong focus on safety. Contemporary mining company’s hiring strategies include: • High school students receptive to mining careers. • Regional families recognise mining options. • Companies who have up-skilled reap the benefits. • Employment of women. • Industry of choice in attracting new workers. • Ageing workforce offers more skilled worker opportunity. Engineers lead the top of the skills in demand list for the Mining sectors including Mechanical and Chemical Engineers. RESA advised that the mining industry are seeking to up-skill their workforce particularly around leadership training and change management. The South Australian Mining industry differs from other states in that there are a considerable number of companies that are one project entities which are sensitive to fluctuations in global demand. Global population growth is estimated by the United Nations to peak in 2050 at 9.5 billion. This will be a key driver in global consumerism and the demand for mining resources. South Australia is well placed to capitalise on this demand particularly around its reserves of copper. Industry believes that current world reserves of copper are insufficient to meed to the current needs of China reinforcing South Australia’s key role in the world copper supply chain. Mineral exploration expenditure in 2011-12 continues to see South Australia dominate in copper, uranium and iron ore attracting: • A third, $146 million (34%) of national Copper exploration. • Almost a quarter, $33 million (23%) of national Uranium exploration. South Australia is also emerging as a major destination for iron ore exploration, attracting the largest share of expenditure for this commodity outside iron ore giant Western Australia. In addition South Australia is leading in a number of areas including: • Shale oil (independent studies have confirmed a major source in the far north of South Australia, which is estimated, to be worth many trillions of dollars). • The University of Adelaide produces more mining graduates than any other university in Australia. Volume 2
  29. 29. • The State Government has announced that a new Mining and Engineering Centre will be built at Regency Park, supported by an allocation of $38.3 million in the 2012 State Budget. • Resource and development capacity including the Deep Exploration Technologies Cooperative Research Centre provides funding to build critical mass in research ventures between end users and researchers to deliver significant economic, environmental and social benefits across Australia. Olympic Dam is still in production and will be for a very long time as it is the world’s largest uranium deposit, fourth largest copper deposit and fourth largest gold deposit, and the site of Australia’s largest underground mine. It will still employ hundreds of people over the foreseeable future. Industry advised that Australians are widely involved in global resources projects around the world including France, Mongolia and Chile. Given this, demand for our skills in engineering and project management will only increase over time. It is with this in mind South Australia needs to have a workforce development strategy that is focused on equipping local people with the skills needed by industry in the long-term. The consequences of not adopting this strategy is continued inflated wages for the sector and ultimately the viability of mining projects. While South Australia is excelling in tertiary training for professional occupations there are issues to address in the vocational sector. Industry believes that the training system is out-dated and needs to adopt a contemporary approach where RTOs talk to industry and incorporate shorter training times and a ‘hands on’ approach. The Resources sector is experiencing issues around attracting, retaining and training high quality Welders (especially for work on high pressure volume pipes and vessels). The problem is around the quality of existing Welders and the challenge to take them to the next level. Industry believes that there is a need for adaptability between trades such as Fitters and Welders which may assist in bridging this gap. Industries are reducing non-essential training which is having an impact on areas including women’s training due to limited funds. There is a sentiment that some companies only do training if government pays for it. Industry advised that the qualifications in greatest demand over the next seven years include: Advanced Diploma • Advanced Diploma of Engineering • Advanced Diploma of Engineering (Technical) • Advanced Diploma of Engineering (Advanced Trade) • Advanced Diploma of ESI (Power Systems) Diploma Level • Diploma of Occupational Health and Safety • Diploma of Engineering (Technical or Advanced Trade) • Diploma of ESI Generation (Operations) • Diploma in Human Resources Management Certificate Level • Certificate IV in Electrical (Instrumentation) • Certificate IV in Human Resources • Certificate IV in Occupational Health and Safety • Certificate III in Automotive Mechanical Technology Trade • Certificate III Drilling Oil/Gas (On Shore) • Certificate III in Drilling Operations • Certificate III in Electrotechnology Electrician • Certificate III in Engineering (Electrical / Electronic Trade) • Certificate II Drilling Oil/Gas (On Shore) • Certificate II in Drilling Operations • Certificate II in Driving Operations • Certificate III in Civil Construction Plant Operations • Certificate III in Mining Operations • Certificate III in Surface Extraction Operations • Certificate III in Mining Exploration It was highlighted that skill sets are extremely important for the sector given that some employers are opposed to full qualifications on the basis that people leave the sector following the completion of training. Ideally these are skills sets that articulate into qualifications. Industry Profiles Overview P 29
  30. 30. Manufacturing Employment Outlook According to the Commission’s modelling, employment in the Manufacturing industry is projected to decline by 1.8% per annum under the Smart Recovery scenario over the next five years. This is less than the historical decline experienced over the past decade of 2.6% per annum. Over the longer term this trend is expected to continue, resulting in Manufacturing’s share of employment in South Australia falling from 9.1% to 6.3%. The Manufacturing sector is expected to employ fewer people, it will still be a critical component of our economy, supporting research, innovation and productivity growth. Figure 8: Average Annual Employment Change, 2011-12 to 2016-17 Figure 9: Manufacturing Industry share of Total Employment 9.1% 0.0% -0.5% -0.5% -1.8% -1.0% -2.0% -2.2% -2.6% 2011-12 -1.5% -2.0% 8.1% -2.5% Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year -3.0% 2016-17 6.3% 2024-25 P 30 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  31. 31. Consultation with the Manufacturing industry provided mixed views on the Commission’s modelling on a sector by sector basis. However, in general, the consensus was that the Commission’s outlook for the industry was broadly consistent with current industry intelligence. Sector snapshot • The Automotive sector is projected to continue to experience subdued employment conditions. Industry generally supported this outlook, however, noted that potential policy change or potential major closures (General Motors Holden) would further weaken the outlook for the sector. • Despite being projected to decline slightly, the Light Manufacturing sector considered the rate of employment growth modelled by the Commission to be more optimistic than what current industry intelligence suggested. • According to industry, despite the negative outlook for the Metals and Engineering sector, opportunities for growth still exist in the Resources sector. The outlook for this sector will also be heavily influenced by growth in the Defence Manufacturing sector. • While the Commission is projecting steady growth in Defence industry employment, consultation highlighted that continued lengthy delays in releasing Commonwealth Government contracts will impact negatively on the outlook for the sector. • The Defence industry highlighted the importance of maintaining defence contract continuity in order to build intellectual and manufacturing capability onshore to avoid a lack of capability leading to purchasing material from overseas. Under the current economic conditions, the Manufacturing industry is focused on deploying strategies to retain their best people while managing redundancies in non-core areas to reduce costs. The rates of labour turnover projected by the Commission were considered reasonable and broadly consistent with industry’s view. The importance of retaining staff was highlighted specifically by the Defence sector, who advised that highly qualified Defence sector employees seldom return following a redundancy through industry downsizing. Their advanced skills and experience are highly sought after in many higher paying roles outside of the Defence sector. According to consultations, innovation and sustainability is crucial to the ongoing viability of the Manufacturing industry. While it was acknowledged that innovation doesn’t necessarily support jobs growth in the short-term it has the potential to impact considerably on the industry in the longer term. It was highlighted that traditional manufacturing must undergo significant transformation to remain viable. Industry Profiles Overview P 31
  32. 32. Workforce Development Themes and Issues Industry contends strong policy direction is needed by Government to stop South Australia losing its manufacturing base. This sentiment was shared by Professor Goran Roos who commented in his Manufacturing into the Future Study9 that: ‘Allowing a shift away from manufacturing will be detrimental to the long-term wellbeing of the State. It takes longer and is much more complex and costly to rebuild a competitive manufacturing industry than it is allowing it to die.’ In acknowledgment of the industry’s importance to the State, the Government of South Australia has recognised the manufacturing industry as one of the States Seven Strategic Priorities10. In addition, the recently released 10-year Manufacturing Works strategy aims to drive the transition of manufacturing to high value-added activities that compete on value for money, not solely on cost. Industry is supportive of the strategy as it outlines a range of programs and initiatives to support manufacturers to innovate and prosper in an increasingly competitive global environment. It is the Commission’s view that South Australia’s Manufacturing industry base needs to be a step ahead of the competition and operate as a critical mass to ensure future growth is sustainable. Fundamental to this transition will be the establishment of Industry Clusters to provide the critical mass for purchasing raw materials and expanding export markets. To support the change required, the Manufacturing industry is focusing its efforts on creating a culture where innovation is the key to success. The sector believes the bulk of innovation takes place inside the workplace which requires a transitional strategy involving building leadership through skills ecosystems and cost reductions while understanding markets. The sector acknowledged the important role training plays in this process and the need to embed innovation in training. 9 10 P 32 Government of South Australia Professor Göran Roos Adelaide Thinker in Residence 2010–2011. Manufacturing into the future Summary of Recommendations. http://www.priorities.sa.gov.au/content/growing-advanced-manufacturing Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  33. 33. However, through consultation it was highlighted that the high cost to employers of releasing staff to attend training is a key impediment. This cost is often overlooked by Government when planning assistance measures to industry. Further, it was raised that government assistance for skills recognition services and transition services for workers are targeted to prominent large organisations leaving smaller employers and their workforces without comprehensive services. The Commission was advised that the current reforms to the training sector at both the state and national levels is undermining business confidence in the ability of the VET sector to deliver industry specific training in a contemporary setting. Concerns were raised on the high cost of technical and trade training, servicing of niche and thin markets and the quality of training delivery. Industry raised a number of questions and expressed a range of concerns about the implications of Skills for All. At the core of these concerns is the lack of clarity about the role of industry advice in informing market management. Specific examples included access to workforce development advice for enterprises, industry developed career and labour market information, and institutional trade training. It was noted that while Skills for All provides funding for training places there is a need for workforce development advisors to assist firms and sectors to analyse skills and training gaps and to develop appropriate workforce development solutions. Industry Profiles Overview At a national level Manufacturing Skills Australia (MSA), Industry Skills Council in its 2013 Environmental Scan commented that the changes to VET funding across the nation reflects the fact that VET has not been operating sustainably and that change is needed. Additional comments included: • The sector needs to ensure training providers are equipped to deliver the level of service required. • A strategic approach to workforce development generally seems limited in VET. In MSA’s EScan survey, 59% of RTO respondents noted that training happens on an ‘as needed’ basis in their organisation. • The VET sector is itself facing significant skill shortages and a strategic approach is needed to meet this challenge. MSA believes that the National Workforce Development Fund (NWDF) is working well with cocontributions encouraging enterprises to participate more. Gaining efficiency improvements via the implementation of competitive system and practice skills and qualifications continues to be a prime target for manufacturing enterprises using the NWDF. MSA has observed that the NWDF is making enterprises and providers think more strategically about training. They are more likely to assess their real skill needs and produce a considered development plan to drive their application for funding. Enterprises are becoming more conscious about their co-investment and the need to make a good return in today’s tough business climate. As a result, they are more likely to get useful results and less likely to waste resources when engaging the NWDF process. From a South Australian enterprise perspective it is believed the State has not received its proportionate share of the NWDF. This could be attributed to composition of South Australia’s businesses being predominantly small to medium enterprises. P 33
  34. 34. Electricity, Gas, Water and Waste Services Employment Outlook According to the Commission’s modelling, employment in the Electricity, Gas, Water and Waste Services industry is projected to decline by 5.2% per annum under the Smart Recovery scenario over the next five years. This is in stark contrast to the historical growth experienced over the past decade of 6.9% per annum. Over the longer term this trend is expected to continue, resulting in the Electricity, Gas, Water and Waste Services industry’s share of employment in South Australia falling from 1.6% to 1.0%. Figure 10: Average Annual Employment Change, 2011-12 to 2016-17 Figure 11: Electricity, Gas, Water and Waste Services Industry share of Total Employment 8.0% 1.6% 6.0% 4.0% 6.9% 2.0% 2011-12 0.0% 0.0% -3.6% -2.0% -5.2% -4.4% 1.2% -4.0% Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year -6.0% 2016-17 1.0% 2024-25 P 34 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  35. 35. Consultations with Industry suggested that with the exception of the Gas sector, the outlook for the industry was gloomy (possible negative employment growth). The close connection with Defence and Construction (which are experiencing reduced activity) and Government (under tight budgetary conditions) priorities are significant factors influencing the outlook for the sector. While current rates of replacement were quite low across the sector as a result of economic conditions and relatively high wage rates, industry indicated that rates of replacement were likely to be higher (particularly in regional areas) in the future. Industry Profiles Overview The Gas industry predicts retirement rates will result in a turnover rate of 8-12% over the next five years. There are numbers of transient employees within the industry, for example Trench Diggers who move in and out of the sector in response to project work. Industry expects strong turnover in the Power Generation sector, particularly in regional South Australia. The Water industry has an average State workforce profile of 47 years, across trades and operational roles; however, it is significantly higher in regional areas with many workers nearing retirement age. P 35
  36. 36. Workforce Development Themes and Issues Gas Industry highlighted that all sectors need dual trades training to ensure the industry can meet future efficiency and productivity demands. Industry issues include difficulty in finding experienced labour and trainers due to competition with Coal Seam Gas and Mining sectors. In addition, there is strong competition within the sector, as well as with the Water sector which attracts staff from the Gas sector. The Gas industry advised that they expect a doubling of their workforce from 2015 -17. The occupations most in demand are trade based skills, including, Engineers, Welders and Capacity Engineers. Currently these skills are being met through the importation of gas technical staff from both the west and east coasts of Australia - a costly exercise for employers. TAFE SA has piloted a Certificate II (general interest) for the Water sector which has received some support from councils. Industry representations further highlighted the need for alternative approaches to the traditional apprenticeship system. EOZ Energy Skills Australia and National Electrical and Communications Association (NECA) recently secured a $22 million grant for accelerated apprenticeships. The EE-Oz Energy Skills Australia pilot is a holistic progression management system for electrical apprentices. It involves apprenticeship training that combines work with structured training, allowing students to apply theoretical knowledge in the workplace. The pilot program will retain this combination, whilst allowing all parties greater flexibility to vary the rate of progression in response to individual circumstances. Industry will establish Benchmark Progression Points including both on and off-the-job elements to support staged, competency based apprentice progression. There are barriers for RTOs in the provision of training for these jobs as the positions are highly specialised and are only required on a project by project basis, resulting in a thin training market. Added to this is a high cost of training infrastructure which is generally prohibitive for private RTOs. The sector has been successful in lobbying for the UEG Gas Industry Training Package to be placed on scope, however, as yet there are no RTOs in the delivery space. Ideally the gas sector needs to work with other sectors with similar needs to get a critical mass for training. The project is supporting participants through industry mentors who provide services tailored to an individual’s learning needs. The South Australian component of the national project currently involves 50 young apprentices and has been developed in conjunction with key industry partners including, National Electrical and Communication Association, Master Electricians Australia and the Electrical Trades Union. P 36 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  37. 37. Electrical – Refrigeration Water The sector is observing a high turnover of Electricians and for the first time is witnessing the laying-off of refrigeration staff. The current industry outlook is bleak with a significant number of people competing for limited work. This is in contrast to the electronics trades where there is a skills shortage of Diploma qualified trades people. Major SA Water works, including the desalination plant and the laying of major interconnector pipe works and water main upgrades are nearing completion. SA Water is being resized due to a curtailing of major capital expenditure. The water sector is not expecting any major growth apart from replacement. Some of the sector’s smaller enterprises (of which there are approximately 100) are struggling in the present economic climate, while the larger operators (approximately 400), are managing just to keep their existing workforce. Regulations have recently been introduced which will open the network infrastructure for third parties access to use the resource - similar to telecommunications. A potential benefit could see SA Water working smarter with local councils around sharing and coordination of infrastructure. In regional areas SA Water is considering working with councils particularly in the areas of meter reading and minor works. While the expectation is SA Water will not necessarily grow as a result of these new regulations, contract work could expand significantly especially around assets maintenance and repair work. SA Water has around 80% of the sectors workforce. The current turnover rate in SA Water is 7% to 8% and it is expected that retirements over the next five years will increase considerably as the workforce ages. The rate of turnover is expected to be even higher in regional areas. SA Water as a business is interested in pursuing skills sets for their trades people who are qualified at the Certificate III and IV level. They are seeing a move by industry towards skills sets to supplement existing qualifications. Industry Profiles Overview P 37
  38. 38. Construction Employment Outlook According to the Commission’s modelling, employment in the Construction industry is projected to decline by 0.7% per annum under the Smart Recovery scenario over the next five years. This is in contrast to the historical growth experienced over the past decade of 3.7% per annum. Over the longer term the Construction industry is expected to recover and record positive employment growth, although growth is projected to be below the State average. As a result, the Construction industry’s share of employment in South Australia is expected to decline from 8.2% to 7.3%. Figure 12: Average Annual Employment Change, 2011-12 to 2016-17 Figure 13: Construction Industry share of Total Employment 8.2% 4.0% 3.0% 2.0% 3.7% 2.4% 1.0% 2011-12 0.0% -0.7% -1.2% -1.0% -2.0% 7.7% -2.0% Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year -3.0% 2016-17 7.3% 2024-25 P 38 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  39. 39. Industry believes that employment growth across the industry will be relatively flat over the coming years. However, some sectors would suggest that current conditions are much more subdued. The Construction industry generally reflects conditions in the wider economy. According to industry, the level of investment in industry has been in protracted decline since early 2011. The view is that the South Australian construction industry is approaching the bottom of the cycle, so going forward some growth is expected in both the short- term and long-term. Industry Profiles Overview Industry considered the turnover rates estimated by the Commission to be reasonable. Workers in the industry are ageing and with the protracted downturn there is an increased likelihood they could retire early or leave the industry. While this is becoming a common trend across the sector, the current contraction has outlasted others and may result in a more lasting effect as workers see this as an opportunity to exit the sector. P 39
  40. 40. Sector Snapshot Workforce Development Themes and Issues • While the Housing sector has undergone a muted recovery it is the belief that South Australia doesn’t have the population mass to sustain the recovery. Growth in the sector is not expected to be high as there is no significant pent-up demand, or other obvious trigger for growth. • It is believed the Commercial sector is entering into a period of decline following intense levels of activity induced by public investment in major projects and federal government stimulus has all but come to an end. The longer term outlook for the sector is poor due to a limited number of projects in the pipeline. • The Civil sector is expected to decline. While there has been concentrated levels of activity arising from investment in major projects, concern was raised about the level of activity being undertaken by interstate contractors with non-South Australian workforces. Further, areas of the Civil sector that support the Housing sector (subdivisions) have seen a significant reduction in work. The sector believes the construction industry in South Australia is undercapitalised which makes it challenging to win large contracts and hence larger interstate and overseas players dominate. Technology is becoming the new paradigm for the industry which is being hastened through the adoption of Building Information Management (BIM) systems across Australia and overseas. The CITB have been promoting the uptake of BIM three dimensional modelling which allows precision on the site. Unfortunately the training is being hampered by high cost to industry as the software is controlled by vendors. The CITB have been working closely with the New Royal Adelaide Hospital around BIM training for building staff. The CITB believe the increased use of technologies such as BIM and offsite fabrication and modular solutions will circumvent the Training Package system in all but bespoke construction. These emerging technology and increasing use of off-site techniques and technologies will evolve quicker than Training Packages can respond. The industry believes there is a need for the government to mandate BIM to get the industry to adopt the technology. Industry advised that professionalisation of the industry will continue leading to very few inexperienced jobs in the sector. Given strict licensing and Work, Health and Safety (WHS) requirements, roles for unskilled workers will all but disappear in the future. P 40 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  41. 41. The construction of wind turbines may soon slow and have a negative impact on the CITB levy and much needed construction work. The CITB stated the White Card is not a qualification but rather it is a requirement for industry and as such should be removed from the Skill for All Funded Training List (FTL). Industry believe that the vocational education system does not currently meet industry’s training needs and there is an urgent requirement for the VET sector to make training relevant and practical to industry standards. The National Construction & Property Services Industry Skills Council (ISC) reported in their 2013 Environmental Scan that South Australia’s Skills for All program was regarded as having comprehensive training programs working alongside the conveyancing industry which was said to be providing high quality outcomes for the industry. However, the ISC voiced concerns that the capping of this up-skilling opportunity has been reported by industry to be short sighted with adverse outcomes for the Construction sector. The longer the current period of contraction persists, the greater the likelihood of a skills deficit when the eventual upswing in industry activity occurs. The contraction is impacting on apprentice commencements and has the potential to create a ‘vacuum’ four years out – so there is an imperative to retain apprentices and encourage their completion. WHS legislation is expected to be a key driver of training demand for the next 12 months. Continuing industry contraction exacerbates cost and time sensitivity in respect of training. At a time when we have tried to stimulate adoption of new technology for future competitive advantage, the response has been underwhelming because of the industry environment. Apprentice numbers have been in steady decline since mid-2011, (primarily in general construction trades). There is more tertiary qualified entering the industry which is seeing the emergence of new roles for young industry professions. However, current subdued conditions are limiting job opportunities. Industry Profiles Overview P 41
  42. 42. Retail and Wholesale Trade Employment Outlook According to the Commission’s modelling, employment in the Retail and Wholesale industry is projected to increase by 0.5% per annum under the Smart Recovery scenario over the next five years. This is less than the historical rate of growth experienced over the past decade of 2.0% per annum. Over the longer term, employment growth in the industry is expected to continue, however, is likely to remain below the State average rate of growth. As a result, Retail and Wholesale’s share of employment is expected to fall from 14.6% to 13.6%. Figure 14: Average Annual Employment Change, 2011-12 to 2016-17 Figure 15: Retail and Wholesale Industry share of Total Employment 14.6% 2.5% 2.0% 1.5% 2011-12 1.0% 2.0% 14.4% 0.5% 0.9% 0.8% 0.5% 0.4% Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year 0.0% 2016-17 13.6% 2024-25 P 42 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  43. 43. Workforce Development Themes and Issues The Commission consultations with the Retail and Wholesale industry identified concerns around potential wage increases for employers in relation to the Fair Work Australia case for adult wages to 18 year old staff. The sector believes should Fair Work Australia grant adult wages to 18 year old staff the resultant impact on retailers’ bottom line and their ability to sustain jobs will be dire. The Commission notes the case is still under review by the Fair Work Commission. The Commission was advised that industry believes the Government should support business investment in the up-skilling of store managers who need additional expertise. Managing store expansions often require a specialised knowledge of issues including, managing new technologies, green gas refrigerators, lighting and specialised store computing. Industry raised the issue of almost daily representation from Job Services Australia providers seeking placements for their streams three and four clients. These constant referrals are placing considerable time pressures on store managers. Industry advised the Commission that it believes there is a serious mismatch between people being trained for the sector and the suitability and motivation of the students. The retail industry is considering screening as a way to ensure the suitability of potential employees for the industry. It was mentioned that some RTOs are using work experience in industry to test a person’s aptitude and attitude to the sector. In addition, it was suggested that RTOs need to provide evidence of training demand through a mapping process that demonstrates the training will lead to a job outcome. It is believed that these measures will help overcome the mismatch between training and suitability of the student to undertake the role. Industry Profiles Overview Industry suggested that the Department of Further Education, Employment, Science and Technology (DFEEST) should undertake analysis of training data to guide future funding for the industry. This should include how many students commenced training, how many completed and how many dropped out. This may resolve some funding capacity management issues under the Funded Training List. Industry advised the Commission that the sector believes the Skills for All policy settings are not right particularly where students are driving demand outside of industry need. P 43
  44. 44. Accommodation and Food Services Employment Outlook According to the Commission’s modelling, employment in the Accommodation and Food Services industry is projected to decline by 0.2% per annum under the Smart Recovery scenario over the next five years. This is in contrast to the historical rate of growth experienced over the past decade of 1.7% per annum. Over the longer term, the Accommodation and Food Services industry is expected to recover and record positive employment growth, although growth is projected to be below the State average. As a result, the accommodation and food services industry’s share of employment will decline from 6.6% to 6.0%. Figure 16: Average Annual Employment Change, 2011-12 to 2016-17 Figure 17: Accommodation and Food Services Industry share of Total Employment 2.0% 6.6% 1.5% 1.0% 1.7% 2011-12 0.5% 0.7% 6.3% 0.1% 0.0% -0.1% -0.2% Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year -0.5% 2016-17 6.0% 2024-25 P 44 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2
  45. 45. Workplace Development Themes and Issues The Commission’s consultations with the Food Services industry indicated that overall conditions within the industry are steady. However, the sector is battling with increases in food cost, higher wages, greater compliance and increased regulation, all of which are hampering the industry’s ability to expand and hire. This combined with falling poker machine revenues (down to the levels of 10 years ago) is painting a poor economic outlook for the industry unless present patronage levels increase substantially. A number of the larger hotel chains are experiencing lean times and are endeavouring to minimise wage costs by utilising the first or second year apprentices to prepare meals. Industry advised the Commission of a number of workforce issues including high staff turnover within the industry to other sectors, as the skills acquired are readily transferrable for example employees possessing Certificate IV in Management. Industry Profiles Overview The industry advised that many employers reward good staff through quick career promotions but are not always keen to hire trained staff with employers preferring training staff to their standards. There is a feeling that the training provided by TAFE SA and private RTOs does not prepare students for real work situations where customer and service demands can be extreme. There is respectable demand for school based trainees in the Food Services industry. However, representations to the Commission has suggested Industry believes that Certificate II and III shouldn’t be delivered through VET in Schools but rather through a school based apprenticeships. This avoids situations where new entrants only possess industry theory without any practical on the job experience. P 45
  46. 46. Transport, Postal and Warehousing Employment Outlook According to the Commission’s modelling, employment in the Transport, Postal and Warehousing industry is projected to increase by 2.1% per annum under the Smart Recovery scenario over the next five years. This is stronger than the rate of growth experienced historically in the industry over the past decade of 1.4% per annum. Over the longer term this trend is expected to continue, resulting in Transport, Postal and Warehousing industry’s share of employment increasing from 4.0% to 4.4%. Figure 18: Average Annual Employment Change, 2011-12 to 2016-17 Figure 19: Transport, Postal and Warehousing Industry share of Total Employment 3.0% 4.0% 2.5% 2.0% 1.5% 2011-12 2.6% 2.1% 1.0% 2.1% 1.4% 4.3% 0.5% 0.8% Ring of Fire Terms of Trade Stock Smart Recovery Long Boom Historical 10 year 0.0% 2016-17 4.4% 2024-25 P 46 Skills for Jobs 2013 The TaSC Five-Year Workforce Development Plan Volume 2