Download The Western Australian Workforce (previously “Labour Supply”)

THE DEPARTMENT OF TRAINING
AND WORKFORCE DEVELOPMENT
Training, skills formation and productivity
April 2010
w: dtwd.wa.gov.au
Training, Skills Formation and Productivity
Training, Skills Formation and Productivity
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Introduction
This briefing paper is one in a series of five such papers that will form the
basis for consultation as part of the development of the Western
Australian Workforce Development Plan due for release in June 2010.
Other papers in the series are:
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Western Australia’s Changing Workforce
Attracting and Retaining a Skilled Workforce
Challenges to Workforce Participation
Workforce Development Planning and Coordination
The purpose of the briefing papers is to identify the issues impacting on
the supply and demand of labour in Western Australia and to stimulate a
discussion of these issues. The papers are further intended to generate
thought on the policies, strategies and actions required to address the
issues.
The focus of this paper is on the State’s training system and how this
system impacts on workforce development in Western Australia.
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Background
The Western Australian economy is entering a new period of sustained
economic expansion fuelled by the growth of the State’s resources sector.
This growth makes Western Australia a leading contributor to the national
economy, with 38 per cent of Australian merchandise exports originating
in Western Australia and 64 per cent of all mining industry investment
invested in Western Australia in 2009.
Much of this is due to the State’s major projects. According to Australian
Bureau of Agricultural and Resource Economics (ABARE), Western
Australia is the home to $93 billion worth of advanced major projects –
representing 82 per cent of all advanced projects in Australia.
This level of investment and resources development is expected to place
increasing pressure on the State’s labour market.
While the major resource and infrastructure projects are providing the
economic catalyst for this demand for labour and skills, a significant
impact will be felt by other industries which will be ‘crowded out’ by the
demand created by the major projects and will have to ‘backfill’ jobs
vacated by those workers choosing to take advantage of the opportunities
offered by the resources and construction sectors.
It is therefore essential that steps are taken to minimise projected labour
and skills shortages and the associated effects on the wider community, to
ensure both the State and the nation receive the greatest possible benefits
from these opportunities.
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Training, Skills Formation and Productivity
To address this, the Department of Training and Workforce Development
is working to develop a plan for the State to effectively manage labour
demand and supply – to align the needs of industry with those of the
State’s workforce and to seek a balance between both.
To inform the development of the Plan, this briefing paper and the others
in the series are designed to stimulate a discussion of the issues and to
generate thought on the policies, strategies and actions required to
address them.
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Training in Western Australia
The Government of Western Australia recognises the importance of the
training system in meeting the needs of industry and the community in the
State. In 2009, the Government launched Training WA: Planning for the
future 2009-2018 outlining a range of strategies and targets focused on:
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increasing participation in training;
developing a contemporary apprenticeship and traineeship system;
providing support for regional communities;
maintaining a vibrant and diverse training market; and
developing the training system’s capability and capacity.
As at December 2009, there were 349 registered training organisations
(RTO) delivering publicly-funded training in Western Australia. This
includes 10 TAFE Institutes and 3 Universities with more than 50 campus
locations around the State, delivering over 400 courses across 19 broad
occupational categories.
In 2008, under the Commonwealth-State Funding Agreement, Western
Australia allocated $335 million across the State to deliver 29.2 million
hours of training. This represents a 6.6 per cent increase since 2005,
when delivery equated to 27.4 million hours.
Over that same period, 145,317 students completed their courses and
applied for a qualification at Certificate I or above (including non-publiclyfunded activity).
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Training Challenges
Increasing Skills Development
In comparison to other states and territories, Western Australia ranks third
in the percentage of the population aged 15-64 having attained a nonschool qualification (54.5 per cent). 1 However, in 2008 the vocational
education and training participation rate for people aged 15-64 in Western
ABS, Education and Work, Australia, May 2009, 6227.0
April 2010
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Training, Skills Formation and Productivity
Australia was 7.1 per cent 2 , the second lowest of all states and territories
and below the national average of 8.0 per cent. 3
Western Australia has historically experienced lower training participation,
with many people choosing to take advantage of strong local employment
conditions. Western Australia’s labour force participation is the highest of
all Australian States at 68.3 per cent. 4
A key issue for Western Australia is how to
encourage sufficient students and employers to
undertake and invest in training despite the strong
economic conditions and employment opportunities.
This includes changing employer and student perceptions about vocational
education and training, and ensuring training is flexible and leads to
positive outcomes.
Planning for Training Delivery
It is important that industry and the community are consulted when
Government expenditure on vocational education and training is
prioritised. This raises issues around the most appropriate mechanisms to
engage with industry and the community about their current and future
training requirements.
In addition to consultation through these briefing papers, the Department
of Training and Workforce Development utilises a network of advisory
bodies to consult with industry about their training needs, including
Training Councils and peak industry bodies such as the Chamber of
Commerce and Industry. The Department also utilises a range of
economic and labour market forecasts, gathers intelligence on the labour
requirements of major resource projects, and is overseeing a series of
consultation based regional workforce development plans.
It is important that public funding for training delivery is then prioritised to
the most appropriate areas. Considerations include:
 skill shortages;
 the demand for new entrants with training qualifications;
 the demand for up-skilling employees;
 training costs;
 training completion rates;
 the social return from the investment in training; and
 workforce age.
2
Scope for comparison purposes with other states is delivery under the Commonwealth–State Agreement for Skilling
Australia’s Workforce delivered by TAFE and private Registered Training Organisations
3
Steering Committee for the Review of Government Service Provision, Report on Government Services 2010,
Canberra, 2010
4
ABS, Labour Force, Australia, Mar 2010, 6202.0
April 2010
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Training, Skills Formation and Productivity
Training for Apprentices and Trainees
The recent downturn saw a large decline in the numbers of apprentices in
training following several years of sustained growth. This has been due to
reductions in the numbers of commencements (minus 26.4 per cent from
2007 to 2009) as well as many apprentices being put out of work.
The current forecasts indicate that industry demand for trade skills will
increase, with the resources sector leading an increase in demand for
skills in building and construction, electrical, automotive, metals and
engineering, and hospitality. The increased demand will result in pressure
on the training system to supply skilled workers within a short time period.
Previous research undertaken by the Department, however, has shown
that it took almost fourteen years to recover apprenticeship
commencement figures from the recession of the early 1990s. The State
cannot afford to wait such a long period under current economic
circumstances and a range of flexible training responses will be required in
order to meet this additional demand.
This could include alternative models to accelerate apprenticeship or
traineeship training, such as an increase in the proportion of training
completed away from the worksite, or models involving a greater
proportion of training delivered in the workplace.
Currently Group Training Organisations offer an alternative to the
traditional apprenticeship/traineeship model, employing apprentices and
trainees and then placing them with ‘host employers’ during part of their
apprenticeship or traineeship.
Sometimes apprentices are required to undertake classroom based
training away from home, receiving an allowance to assist with their travel
and accommodation. The impact this has on the demand and supply of
apprentices could also be considered, along with the current levels of pay
for apprentices and trainees in comparison to fully qualified employees in
the industry, and the impact of fly-in-fly-out labour.
Industry views over the quality of apprenticeship and traineeship
assessment outcomes are also important.
Increasing Higher-Level Qualifications
There is a growing recognition of the importance of higher level skills in
improving productivity and maximising opportunities in a growing
economy, particularly at the Certificate IV level and above.
In May 2009, the Australian Government released its innovation policy
agenda to 2020. Innovation is now recognised as being about more than
the funding of research and science but also business and industry
innovation – next generation products, inventions and technologies, as
well as innovation in operations, organisation and business models.
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Training, Skills Formation and Productivity
According to the Review, innovation programs in Australia need to be
directed more at strengthening innovation in management and
management practice inside organisations, including leadership and
culture. 5
An international comparative study found that improving management
practice is associated with large increases in productivity and output – up
to 25 times more effective than simply increasing labour and 65 times
more effective than increasing invested capital. 6
Relentless improvement in skills plays an essential role here. Bettermanaged firms need more highly skilled workers and they make better use
of them, while better trained managers will be a key component of
improved performance.
The Department’s growth forecasts indicate there will also be an ongoing
increase in the demand from employers for higher-level skills.
Building a more highly-skilled workforce will require attention and
pathways from all levels of education, from early childhood education and
schooling, through vocational education and training and higher education,
and into the workplace.
Participation In Training by Disadvantaged Groups
Training provides an important opportunity for disadvantaged Western
Australians to enter and participate in the workforce.
Given the forecast growth in labour demand, it is critical that opportunities
are made available to help those traditionally under-represented groups to
enter the workforce – Indigenous people, mature-aged people, those with
disabilities and those from culturally and linguistically diverse backgrounds.
There has been significant improvement in training participation by
Aboriginal people in recent years. While Aboriginal people make up 2.6 per
cent of the Western Australian population aged 15 to 64 years, they
represented 7.1 per cent of course enrolments in 2008. 7
Of the 9,073 course enrolments by Aboriginal people aged 15-64 in 2008,
76 per cent were in employment related vocational award courses. 8
However, these tended to be at lower certificate levels than non-Aboriginal
students. In 2008, the highest proportion of Aboriginal course enrolments
was at the Certificate I and II level (58.0 per cent), compared to 25.7 per
cent for non-Aboriginal enrolments.
5
Green R, Innovative Capability in the Economy and Workplace, Presentation to Big Skills Conference, Sydney,
March 2-5 2009
6
LSE-McKinsey study of managerial practices and productivity, 2007
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Clients of Aboriginal or Torres Strait Islander descent under the former Skilling Australia’s Workforce Agreement.
16.7% of responses were not stated.
8
2003 to 2008 Skilling Australia’s Workforce Scope course enrolments by Aboriginal status, 2008, WA Department of
Training and Workforce Development.
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Training, Skills Formation and Productivity
In 2008, 3.6 per cent of course enrolments were from mature aged
students (aged 55 to 64 years old). 9 Some 40.6 per cent of the 4,672
mature age enrolments were at the certificate I and II level.
There has been significant improvement in VET related training
participation by students aged 15-64 from a non-English speaking
background (NESB) in recent years, representing 12.0 per cent of
enrolments in 2008. 10 In 2008, the highest proportion (31.6 per cent) of
NESB student course enrolments was at the Certificate I and II level.
People with disability are under-represented overall with approximately 5
per cent of training participants 11 whereas the generally accepted level of
disability within the broad community is 20per cent. 12 It should be noted
however, that this under-representation may be influenced by persons who
choose not to disclose their disability.
The range of barriers and challenges to accessing training and
employment are complex, with many of these groups experiencing multiple
barriers.
Types of barriers that may be experienced include:
 institutional barriers, including: costs for training; access to
training facilities; or selection and recruitment processes; and
 household barriers, including: domestic responsibilities, lack of
income or lack of personal transport.
Once in training, disadvantaged groups can face further barriers, including:
insufficient recognition of individual learning styles; insufficient support for
learners; inappropriate assessment; or household barriers, including lack
of access to computers out of class hours or poor nutrition.
Training System Capacity and Capability
As trade training increases, this is likely to put pressure on existing trade
training infrastructure and equipment. At the same time, due to the
increase in wages in these trade areas, the attraction and retention of
trade lecturers will become increasingly difficult, which may constrain the
ability of the training system to meet demand.
These issues are more likely to be felt in regional areas. The challenges
faced by the State as the largest geographical state or territory in the
country are well documented and any increased demand will place greater
pressure on infrastructure and resources in the regions.
Furthermore, while demand for apprenticeships is expected to increase,
there is likely to be a reduction in student demand for general institutional
9
2003 to 2008 Skilling Australia’s Workforce Scope course enrolments, 2008, WA Department of Training and
Workforce Development.
10
Note that 16.1% of responses were either language unknown or language not stated.
11
Skilling Australia’s Workforce Scope, end of study reporting basis, 2008.
12
Bureau of Statistics, Disability, Ageing and Carers: Summary of Findings 2003, CAT No 4430.o (2004).
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Training, Skills Formation and Productivity
training places, as potential students head straight into employment and
employers are too busy to release staff for training.
Since most high-level qualifications, existing-worker training, literacy and
numeracy programs, and re-entry programs (such as those for the matureaged, New Opportunities for Women, programs for the long-term
unemployed) are institutionally-based, any reduction in demand will make
it difficult to maintain delivery levels and quality of service in these areas.
Given the above, as well as the rapid changes recently experienced in
global economic conditions, it is clear that any forward planning must
include strategies to enhance flexibility and innovation in the training
market including, but not necessarily limited to:
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innovative use of technology in teaching and learning;
promotion of diversity in the training market through increased
competition;
providing greater opportunities to access recognition of prior
learning of experienced workers;
providing clear pathways between schools, training
organisations, universities and employers;
better coordination between privately-funded and publiclyfunded training services;
encouraging partnerships between training providers; and
ensuring quality information is available to students,
employers, industry and the community.
5 Current Activities
Training WA
As mentioned previously, Training WA: Planning for the future 2009-2018
was implemented in 2009 recognising the need to continue reforms which
have achieved an increase in apprentices and trainees, with a renewed
focus on supporting employers to address barriers to the uptake and
retention of apprentices.
The initiative also recognised the importance of reversing the decline in
institutional delivery, including institutional-based training by mature age
people, and in people enrolling in higher level qualifications.
More detailed information on the Training WA initiative and targets can be
found at: http://www.stb.wa.gov.au/SiteCollectionDocuments/Training_WA.pdf.
The specific activities and targets outlined in the Training WA initiative, as
they pertain to the issues outlined above, are included in the list of
strategies outlined below.
In terms of future skills development, the Training WA initiative outlined a
target to increase by 17,500 the number of working aged Western
Australians undertaking accredited training by 2012.
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Training, Skills Formation and Productivity
The Training WA initiative also outlined a range of strategies to consult
with industry and the community on training issues, including through a
revised network of industry training advisory bodies developing specific
workforce development plans for each industry.
The Government has set a target to increase the number of apprentices
and trainees in training (38,280 as at February 2010) to 47,100 by
December 2012.
Additionally, the Government has undertaken a number of initiatives to
support an increase in training, including by providing rebates on workers
compensation premiums for employers of Certificate III level and above
apprentices and trainees. In addition, the Government has
provided incentives for employers to take on apprentices and trainees outof contract due to the economic downturn, and reduced the term of
apprenticeship for people who complete a pre-apprenticeship.
Increasing Higher-Level Qualifications
In terms of higher level qualifications, the Training WA initiative includes
the following targets:
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17,000 additional Western Australians enrolled in higher-level
training (Certificate IV and above) by 2012, representing an
increase in course enrolments to 48,400; and
450 courses at Certificate III and above will be available in
regional Western Australia by 2012, representing a 12 per cent
increase on 2008 levels.
Additionally, the Government has undertaken a number of initiatives to
increase high level qualifications, including implementing the Masterclass
of trades, giving apprentices and trainees the opportunity to expand their
skills beyond their trade qualifications. The Government has also
enhanced pathways for students to progress to higher levels of training
through VET in Schools, and by implementing the Productivity Places
Program (see National Training Initiatives, below) provided training for
existing workers and job seekers.
Implementing the Training for Priority Target Groups
The Training WA initiative includes the target of 33,000 Western
Australians to be enrolled in Certificate I foundation training during 2009
and 2010. This is an increase in enrolments from 15,938 in 2008 to 16,700
by 2010.
Additionally, the Government has undertaken a number of initiatives in this
area, including:
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April 2010
non-accredited Equity Development and Innovation (EDI)
funded programs for marginalised people who have
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adult and Community Education (ACE) non-accredited
programs expand the participation of under-represented
groups in non-accredited and non-formal adult and community
education activities;
the Access Program (accredited training), which promotes
equality of opportunity for disadvantaged groups to gain access
to training that will lead to further training and/or employment;
publishing an information booklet, Employability skills and
workplace culture in Australia: A guide for migrants to Western
Australia planning to enter the workforce, translated into
Chinese and Arabic (with other translations currently
underway); and
providing course fee exemptions for specified groups to assist
them to access training.
Training System Capacity and Capability
The Western Australian Government is undertaking a range of initiatives in
this area including:
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April 2010
significant recent investment in trade training infrastructure and
equipment, particularly in the regions;
providing fee concessions for recognition of prior learning;
reducing the required term for recognition of prior learning;
greater flexibility to deliver training in the workplace through the
VET Act reforms, Enterprise Bargaining Arrangements with
public providers and other initiatives including Transforming the
Trades Training initiative;
encouraging partnerships between training providers and
industry to support workplace learning;
providing funding for employers to undertake the Certificate IV
in Training and Workplace Assessment;
implementing a voucher system for small business owners to
access training;
establishing an e-learning taskforce to work with training
providers to increase the innovative use of technology; and
increasing the proportion of VET in schools in key priority
industry areas from 23 per cent of enrolments to 40 per cent by
2012.
National Training Initiatives
Western Australia is broadly supportive of the national reform agenda and
has incorporated a number of key reforms in setting the future direction
for the WA training system, including enhancing local industry training
advisory arrangements.
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Training, Skills Formation and Productivity
The Western Australian Government, in partnership with the
Commonwealth, has also committed to provide up to 74 000 new training
places to 30 June 2012, under the Productivity Places Program (PPP).
The PPP will deliver 711,000 qualification commencements nationally
over 5 years. These qualifications are being delivered in an industrydriven system, ensuring that training is more responsive to the needs of
businesses and participants. Places will be allocated to existing workers
wanting to gain or upgrade their skills and to job seekers.
Western Australia has also joined with other states and the Australian
Government in the COAG Youth Compact with Young Australians. The
Compact is based upon three core principles:
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anyone under the age of 17 must be earning or learning, you must
be in full time school, training or work;
if you are under the age of 20 and are not working, you will be
provided with a training place with the first priority - a year 12 or
equivalent VET qualification; and
if you are under the age of 25 and you are not working you are
guaranteed a training place to ensure you have the skills needed to
be part of the recovery.
The Compact with Young Australians will provide up to 135,000 young
people with higher qualifications nationally.
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Summary
An increase in the State’s economic activity will raise the pressure on the
training system to supply skilled workers within a short time period.
Western Australia has historically experienced lower training participation
in comparison to the national average. A key issue for Western Australia
will be how to encourage sufficient students and employers to undertake
and invest in training despite the strong economic conditions. It is also
important that publicly funded training is targeted to those areas in
greatest need.
Western Australia will need to increase training for apprentices and
trainees, and consider alternative models of delivery to provide the skills
required within a short time period.
At the same time, there is the need to increase higher-level skills in the
economy, including in areas supporting the resources sector, as well as
the need to provide opportunities to help those traditionally underrepresented groups to enter the workforce – Indigenous people, matureaged people, those with disabilities and those from culturally and
linguistically diverse backgrounds.
April 2010
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Training, Skills Formation and Productivity
As training increases, this is likely to put pressure on existing training
infrastructure and equipment, including in trade areas. At the same time,
due to the increase in wages, the attraction and retention of lecturers will
become increasingly difficult, which may constrain the ability of the training
system to meet demand.
In order to increase the capacity of the training system, a range of options
will need to be considered.
April 2010
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Training, Skills Formation and Productivity
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Submissions
The Department of Training and Workforce Development welcomes
submissions on the issues contained within this briefing paper, including
suggestions and recommendations on the policy and strategy options
which may be used to address the issues.
The closing date for submissions is June 1, 2010.
Submissions can be made by:
Online form:
email:
Fax:
Post:
April 2010
www.dtwd.wa.gov.au/workforcedevelopmentplan
[email protected]
08 9238 2608
Western Australian Workforce Development Plan
State Workforce Planning
151 Royal Street, EAST PERTH WA 6004
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