Australasian Talent Conference 2013 - National Workforce Development Strategy

Future focus: 2013 National Workforce Development Strategy

Australian Talent ConferenceMay 2013

© This information is the property of ATC Events and may not be reproduced or used without attribution

The Australian Workforce and Productivity Agency

2

• Began as Skills Australia. Expert independent Board with expertise in industry, economics, education and academia

• Provides independent advice to the government on current, emerging and future skills needs and workforce development needs

• Remit expanded in March 2009 to look at full scope of labour market and give advice on HE & VET

• 2011 Budget announcement -extended role as Australian Workforce and Productivity Agency. Responsible for National Workforce Development Fund. Legislation passed June 2012.

• 1 July 2012 – became the Australian Workforce and Productivity Agency

Back row (L to R): Dr John Edwards, Heather Ridout, Keith Spence

Middle row: Prof. Gerald Burke, Peter Anderson, Ged Kearney

Front row: Marie Persson,Philip Bullock (Chair), Dr Michael Keating AC

The world of work is changing

3

Where work is being outsourced to and supplied from

What we are doing and why

What challenges face our workforce now and over the

years to 2025?

How should we address

them?

Productivity

Evolving technology

Participation

Skills under-utilisation

Restructuring Industries

Innovation

Changing work

arrangements

2025

Asian Century

5

Specialised occupations

Scenarios

Demand Driven Funding

• Apply concept of specialised occupations - those occupations with greatest risk of market failure

• Develop, test and model multiple scenarios to achieve flexible policy responses

• Fund users rather than providers – but only after you have sorted out quality and regulation

Our three conceptual pillars in our response to aligning skills, qualifications and the economy’s needs

6

Approach to the 2012 strategy

Plausible worlds

(but not predicting

the future!)

Scenario

Projections of demand & supply side implications

of the scenarios

Modelling

The policy recommendations

balance aspirational goals

and risks, after assessing key

differences between the

scenarios

Strategy

Analysing the

uncertainty, commonality,

differences and risks of

the scenarios

Analysis

Each process informs the next

7

The four scenarios

8

Flexiblemigration

Fluctuating labour participation

Slightly differing industry

structures

Varying fiscal capacity

Commonalities• Ageing population• Importance of Asia• Technology• Sustainability challenge

9

Positioning the Australian workforce for the future

Increasing qualifications to meet growing demand for higher skills

Improving productivity in the workplace

Building labour force participation to meet current and future needs

Raising language, literacy, and numeracy skill levels

Enabling individuals and the tertiary system to be more adaptive

Strengthening quality in the tertiary sector

Investing in skills will pay for itself

10

Australia will need a more highly skilled and qualified workforce

Qualification held 2011 2025 (‘000) Average annual change 2011–25 (%)

Long boom

Smart recovery

Terms of trade shock

Ring of fire

Long boom

Smart recovery

Terms of trade shock

Ring of fire

Postgraduate 1,588.0 3,104.7 2,714.9 2,941.4 2,187.5 4.9 3.9 4.5 2.3

Undergraduate 4,126.3 7,256.9 6,475.3 6,877.5 5,435.7 4.1 3.3 3.7 2

Advanced diploma/Diploma 2,299.5 3,842.3 3,428.2 3,632.4 2,920.1 3.7 2.9 3.3 1.7

Certificate III &IV 3,597.6 6,195.8 5,323.0 5,671.9 4,441.9 4 2.8 3.3 1.5

Certificate I & II 1,563.1 2,079.2 1,914.9 1,961.2 1,774.6 2.1 1.5 1.6 0.9

Total 13,174.6 22,479.0 19,856.4 21,084.5 16,759.8 3.9 3 3.4 1.7

Total qualifications held by persons employed, unemployed and not in the labour force, by scenario and qualification level (‘000)

Derived from Deloitte Access Economics, 2012, Economic modelling of skills demand and supply, Tables 5.10–5.17.

Education qualifications forecasts

Source: Deloitte Access Economics (2012) ‘Economic modelling of skills demand and supply’ - derived from p.iv and tables 5.18-5.21

Long Boom Smart Recovery

Terms of Trade Shock

Ring of Fire

Proportion with post school qualifications

75.4% 70.3% 73.7% 65.0%

Annual number of additional qualifications required to 2025 831,900 643,800 726,100 411,500

Share of those employed with post-school qualifications, by 2025

In 2011 the share of employed persons with a post-school qualification was 59.8%

11

Projected qualification supply less demand (based on labour force) annual average 5 years to 2025

12

Qualification Long Boom Smart Recovery

Terms of Trade Shock

Ring of Fire

Postgraduate -71,180 -43,579 -57,939 -725

Undergraduate -106,109 -65,394 -90,628 -2,458

Adv. Diploma/ Diploma

-61,180 -49,539 -55,818 -23,290

Certificate III/IV 9,004 38,111 22,909 59,311

Certificate I/II 64,236 66,657 65,493 64,351

Total -165, 229 -54,745 -115,982 97,189

13

A knowledge economy through skills development and targeted planning

• Skills are part of the solution to participation, skills shortage and productivity challenges

• Demand for higher level qualifications is strongest.• But lower level qualifications are necessary to increase

participation and are a pathway to higher level qualifications.• The increasingly demand-led tertiary system means workforce

development plans in priority sectors and monitoring skills supply is critical.

Recommendation:1.1 – Minimum annual increase of 3% in tertiary education qualifications to 2025

14

Why do we need to improve our productivity?

Employment by highest qualification, persons 25-64, Australia 2011

(% of population in each group)

Achievement in education and training has considerable effect on employment

15

Earnings, employed persons 15-64 by level of qualification, Australia 2009

Higher qualifications = higher rate of return

16

Gender segregation

17

Student returns – VET and HE

Source: KPMG Econtech , Economic Modelling of Improved Funding and Reform Arrangements for Universities (2010)

18

19

How can we improve productivity?

• Workforce development integrates business strategy, work organisation and job design

• Skills development as investment not cost• Improving skills utilisation indicative of high-

performing workplaces

Workplace

• Closer alignment between government programs to facilitate workforce development

National Strategy

Benefit• Improved

profitability, innovation, productivity and retention

•Positive impact on employee motivation and job satisfaction

20


Skills in the workplace• Skills are used

effectively• Skills are

continuously developed

• Skills, techniques and improvements are shared

SMES• Australia has a high

proportion of SMEs• SMEs face barriers

to innovation• SMEs need support

to develop and implement innovative workforce development plans

Management and leadership• modelling shows

increased demand for managers across all scenarios

• management’s ability to effectively use the skills of workers is a strong influence on innovation and productivity

21


Recommendations:2.1 – Adjust NWDF guidelines to allow other workforce development activities that complement training delivery2.2 – Explore joint funding between Enterprise Connect & Skills Connect to support workforce development for SMEs2.3 – Extend Enterprise Connect services to other labour-intensive industries2.4 – Commission review of leadership and management, including front line management2.5 – Co-fund proposals that support regional employment and workforce development partnerships

22

Participation improves social inclusion

People with low skills

Older workers

People with disadvantage

Focus on upskilling

Focus on retention

Focus on access and support to build sustainable pathways to work

Improving social inclusion Benefits

•People with qualifications 20%* more likely to be in labour force

•Qualification completions assist in lift participation rates and meeting projected labour demand

• Increasing skills of existing workers improves job advancement, opening opportunities for job seekers

Expanding tertiary places is not enough

Align job services and training providers

Expand wraparound services

*ABS, 2011, Education and work, Cat no. 6227.0, May, Canberra

23

Building labour force participation to meet current and future needs

Recommendations:3.1 – Adopt aspirational goal of 69% labour force participation by 20253.2 – Co-contribution funding for industry-led initiatives supporting employment in non-traditional occupations3.3 – Up-scaling successful approaches to help workers over 45 to re-enter the workforce3.4 – Additional funding for expansion of training delivery strategies and wraparound services3.5 – Better align JSA contractual arrangements to promote training for disadvantaged job seekers that is more flexible, fit for purpose and aligned to job outcomes; provide additional funding to incentivise provision of longer support for disadvantaged job seekers

Raising language, literacy, and numeracy skills is critical

24

We know there is a strong relationship between LLN skills and employment – those with higher levels of LLN skills are more likely to be employed YET…

44%* of Australians have literacy scores below level 3

55%* of Australians have numeracy scores

below level 3

LLN development for adults

continues to be stigmatised despite being a widespread

issue

Many employers report they are

impacted by low LLN skills yet most

employers are unaware of existing

programs

*Source: ABS, 2013, Program for International Assessment of Adult Competencies Survey, cat. no. 4228.0, Canberra

25

Raising language, literacy, and numeracy skills is critical

Recommendations:4.1 – Regular national sample survey assessing LLN of adults based on ACSF4.2 – Fund and develop national public awareness campaign to promote LLN skills4.3 – Fund and develop comprehensive interactive national LLN information service4.4 – Fund Workplace Champion program to promote lifelong learning and workplace training4.5 – Upscale LLN Practitioner Scholarships Program to develop LLN practitioner workforce4.6 – National pilot of foundation skills assessment following evaluation of online LLN assessment models

26

Work integrated learning can bridge the gap between education and training and work

Government Industry

Work ready graduates

Formal learning Practical work experience

Providers

27


• facilitate lifelong career developmentCareer advice

• support transition from study and training to workWork ready graduates

• investigate how to best build individuals’ adaptive capacityTraining packages

• support innovation and professional development to develop a flexible, adaptable workforceNew learning paradigm

• improve interface between HE and VET to provide consistency in funding and articulation Integrated tertiary sector

• embed new technologies to reflect international best practiceICT in teaching and learning

28


Recommendations:5.1 – Align and strengthen career development advice services5.2 – Review entitlement systems to ensure responsiveness to change is not limited by restrictions 5.3 – Government, tertiary education providers and industry to collaborate to support transition to work through work-integrated learning and cadetships5.4 – The NSSC and ISCs to investigate how training packages can best build adaptive capacity

29


19992000

20012002

20032004

20052006

20072008

20092010

201140

50

60

70

80

90

100

110

120

130

140

Primary Govt (a) Secondary Govt (a) VET (b) Higher Ed (c)

Commonwealth and state government recurrent expenditure, funding per full-time equivalent student (schools and higher education) and per annual hour (VET) indexed to 1999 (1999=100)

(a) Schools Average Government School Recurrent Costs data. Includes state and territory expenses. (b) VET Government Recurrent Expenditure per annual hour sourced from Productivity Commission, Report on government services, Table 5A.19. Includes state, territory and Commonwealth government expenditure. (c) Published and unpublished higher education data from the Department of Industry, Innovation, Science, Research and Tertiary Education. Operating Grant and Commonwealth Grant Scheme funding only.

30


• Between 2006 and 2010, government real recurrent expenditure on VET increased by 10% but expenditure per student annual hour decreased by 14% during the same period.

• The Productivity Commission found:unlike most of their counterparts in other education sectors, VET teachers, trainers and assessors are ‘dual professionals’, with a range of capabilities variously recognised in either the education or industry spheres

• The background of VET learners is varied and complex. • There has also been a diminished academic focus on VET.• Continue to recommend a new national body and program to

emphasis quality improvement in teaching, learning and assessment.

31


External assessments

for identified high-risk qualifications

externally set and administered

32


Recommendations:6.1 – Commission a review of funding in the VET sector to determine a price for high quality delivery6.2 – NSSC to consider developing additional assessment and registration requirements for identified high risk qualifications 6.3 – Establish a VET equivalent of the Office for Learning and Teaching to drive excellence in VET

33

Increased funding is in line with projected long term economic growth


Industry demand for qualifications

is projected to increase by

between 3% and 3.9% pa

We recommend the expansion of

qualification enrolments by a minimum of

3% pa

Public and private funding for tertiary education needs to expand

by a little more than 3% pa

The benefits far outweigh the cost:•the additional public funding in 2025 projected by AWPA exceeds that in the IGR 2010 projection by $2.1 billion •the additional public revenues from the effect of increased qualifications on labour force participation, employment and GDP is estimated at between $6.7 billion and $24.8 billion

34


Recommendations:7.1 – Extend start-up scholarships to full time VET students receiving income support7.2 – Support expansion of public and private tertiary education funding of at least 3 per cent per annum to meet industry demand and commit further funds to support the implementation of the suite of measures outlined in the strategy

Thank you

@AWP_Agency

www.awpa.gov.au

Business

Australasian Talent Conference 2013 - National Workforce Development Strategy