INDUSTRY SKILLS TRAINING OPPORTUNITIES IN LATIN AMERICA

INDUSTRY SKILLS TRAINING OPPORTUNITIES IN LATIN AMERICA

CONTENTS

Executive summary 03

Introduction 04

Argentina 09 Market overview 09 Key survey findings 09 Labour market trends 09 Demand and investment 10 Recommended approach for 11 Australian training providers

Paraguay and Uraguay 12

Chile 17 Market overview 17 Market trends 17 Key survey findings 17 Labour market trends 17 Demand and investment 18 Recommended approach for

Australian training providers 20

Mexico 23 Market overview 23 Key survey findings 23 Labour market trends 23 Demand and investment 24 Recommended approach for 27 Australian providers

Peru 31 Market overview 31 Key survey findings 31 Labour market trends 31 Demand and investment 32 Recommended approach for 33 Australian providers

Methodology 34

About Austrade 36

References 36

Disclaimer

This report has been prepared by the Commonwealth of Australia represented by the Australian Trade and Investment Commission (Austrade). The report is a general overview and is not intended to provide exhaustive coverage of the topic. The information is made available on the understanding that the Commonwealth of Australia is not providing professional advice.

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18-19-262. Published November 2019.

Industry Skills Training Opportunities in Latin America 01

02

EXECUTIVE SUMMARY

The shortfall is significant. Yet, the resources to address this shortfall are in limited supply domestically.

For the high-quality vocational education and training providers of Australia, the opportunities to expand into Latin America and empower a vast untapped workforce are considerable.

The governments of Latin American nations are not currently responding to the challenge of skills shortages with the speed that LATAM industries demand. So, these industries are rapidly diverting their own resources towards local and international training solutions.

For many Australian vocational education and training providers, Latin America’s distance, language barriers and unfamiliar business conventions have helped keep this region off the radar for offshore program delivery.

However, the practical market intelligence included in this report validates the need for Australian VET providers to further investigate and explore the opportunities available in Latin America.

This report provides up-to-date data and new insights into the Latin American market, and recommends market approaches based on the opportunities this region has to offer.

The findings included here are drawn from research conducted by the whole Austrade LATAM network, with a particular focus on the market insights and sector knowledge of specialists in six key target countries.

This report also includes first-hand insights from Latin American company owners and those responsible for determining how training budgets are allocated. These insights have helped to identify where skills gaps exist and in which areas and sectors the demand for training is greatest, as well as industry’s appetite for working with international provider partners.

Latin American industries are seeking workers with technical skills as well as the ‘soft’ skills that will allow them to adapt effectively to the challenges of the constantly evolving workplace. The industries in Latin America with the most significant skills shortages align well with Australian capability and expertise.

Given the slow pace of governmental response in the Latin American region, major industries are already looking for training solutions offshore. The need for skills training is greatest in the mining, agriculture, tourism and digital technologies sectors. However, there are also multiple opportunities for Australian providers to deliver training solutions for smaller industries and companies – independently or as part of a consortium.

With large and rapidly growing populations, and the rapid rise of the middle classes, demand for skilled workers in Latin America is unprecedented. The time is right for Australian VET providers to take advantage of these circumstances and take our world-class expertise to the LATAM region.

Latin American industry has a pressing need for skilled workers.


INTRODUCTION

Latin America is Australia’s second-largest source region for international students.

Second only to Asia, Latin America accounted for 10.1 per cent of international student commencements in Australia in 2018.

While double-digit economic growth has powered the rise of several Latin American countries to become key suppliers of students to Australia, most Australian providers have not yet fully explored the opportunities for offshore delivery in the region.

This report seeks to address this, by defining many of the skills shortages in the region, and by exploring the willingness of the corporate sector to pay external providers – including Australian institutions – to deliver training solutions.

Recent reports have highlighted skills shortages in Latin America.

The Manpower Group reported that Latin America had the largest skills gap in the world, with 50 per cent of companies unable to find suitable candidates, compared to 36 per cent of companies in Organisation for Economic Cooperation and Development (OECD) countries. The skills gap is most significant in Peru, Brazil and Mexico.

Companies throughout Latin America are experiencing skills gaps and talent shortages across a range of industries, primarily due to rapid industry growth and inadequate education and training.

Austrade has previously reported on the shortcomings in Latin America’s domestic education systems, particularly in the vocational education and training sector, and collaboration on policy between the Australian Government’s Department of Education and governments in the region has already begun.

Vocational education and training in Latin America – with the exception of specific areas such as mining – typically lacks cohesion and formal quality assurance. Instructors often have little industry experience and students receive minimal practical industry experience before graduation.

While governments in the region are aware that reform in technical and vocational education and training is needed, they lack the institutional capacity to act. They’ve also been unable to secure the confidence of industry.

Against this background, companies in many industries are addressing skills shortages directly. Until now, however, the Australian VET sector has not been privy to the specifics of how Latin American industry has been doing this, nor the scope of the opportunities available.

In developing this analysis of opportunities in LATAM, Austrade surveyed company owners at ten large companies in each country to better understand:

› the current skills shortages and gaps within their company

› the importance of training to them and their business

› the resources they currently allocate or are likely to allocate to training

› their expected return on investment in training

› the type of training delivery they prefer

› their willingness to use international providers.

Industry Skills Training Opportunities in Latin America04

Argentina

Peru

ChileParaguay

Uruguay

Mexico

The extraordinary geographic and demographic diversity of Latin America and its industries means that every country has different needs when it comes to skills development.

Each country presents a range of unique commercial opportunities – requiring a tailored approach from potential providers.

First-hand information gathered from four key countries in the region – Argentina, Chile, Mexico and Peru – has enabled us to highlight opportunities based on real and current insights

LATAM countries highlighted in this report


AT A GLANCE: INDUSTRY TRAINING OPPORTUNITIES IN LATIN AMERICA – ARGENTINA, CHILE, MEXICO AND PERU

ALL SURVEYED COUNTRIES

Willingness to engage external providers Yes – all

Experience engaging international providers Yes – all

Willingness to engage Australian providers Yes – all

ARGENTINA

Industries surveyed Agribusiness, chemical, construction, engineering, energy & mining, food & beverage, health, labour-intensive industries, software services, tourism & entertainment

Main skills gaps Soft skills, Technical skills, Language skills

Investment in training 100% allocate budgets and business hours for training. Oil and gas, mining and steel industries companies: US$1.2 million – US$9 million per year.

CHILE

Industries surveyed Mining and original equipment manufacturer (OEM)

Main skills gaps Mobile & fixed equipment operators, maintenance engineers, electricians and supervisors, and ICT networking specialists

Investment in training US$900,000 per year


MEXICO

Industries surveyed Mining, tourism

Main skills gaps Mining: Technical skills, safety, sustainability (environment and community relations), soft skills Tourism: English language, large-scale event management, customer service, soft skills

Investment in training Mining: Willing to contract foreign training providers, mainly through mining clusters Tourism: Leading hotel chains allocate 80 hours and US$58-200 per employee per year

PERU

Industries surveyed Mining, tourism

Main skills gaps Mining: Planning, geology, machine technology, project management, English language Mining & tourism: Leadership communication, other soft skills

Investment in training Mining: Willing to contract foreign training providers, mainly through mining clusters Tourism: US$33,000 per year.


08

ARGENTINA

Key survey findings

› The top three industries driving GDP are manufacturing; retail and wholesale trade; and service industries including education, tourism and food services

› Technology-based skills, work experience and relevant technical qualifications are the employee attributes companies most difficult to find

› One-third of company-based respondents in Argentina said ‘soft skills’ were important (see: page 10 for soft skills list)

› English proficiency is very important but difficult to find among local employees

› All companies surveyed allocated annual budgets for training

› The largest training budgets are in the oil and gas, mining and steel industries

› In-company and outsourced training were the most popular delivery modes.

Labour market trends

In 2019, Austrade surveyed 10 companies comprising a total of more than 75,500 employees across 11 industries, including agrochemicals, mining, financial services and ICT. Half of the companies surveyed said there was a gap between demand for talent and local supply. Further, carrying vacant positions had a negative impact on business.

These insights reiterated findings from a 2016 survey by Argentina’s National Institute of Technology Education (INET). The survey found that over two-thirds of organisations were currently recruiting for staff, but more than half of those were finding it difficult to fill the positions, mainly due to “lack of technical skills”, “lack of experience” and “no appropriate candidates”.

With its vast natural resources, Argentina is one of the largest economies in Latin America, also transforming as it integrates into the global economy. According to the World Bank, Argentina is forecast to grow by 2.7 per cent in 2020 and 3.1 per cent in 2021.

POPULATION:

44.9 millionECONOMY:

3rd largest in Latin America

GDP:

US$518 billion

Market overview


Demand and investment

Significant demand for both technical and soft skills was reported by several companies surveyed. The skills in highest demand are:

Technical Skills

› Mechanics

› Information and communications technology (ICT)

› Electronics

› Energy

› Quality Control

Soft Skills

› Teamwork

› Digital tools management

› Quality management

› Compliance

› Accountability & commitment

According to respondents the most difficult roles to fill were:

› Experts in lithium

› Oil and gas engineers

› Financial professionals

› IT developers

› Managers with proven leadership skills

Investment in training

To better understand the current demand for training, Austrade surveyed companies in Argentina about the ways in which they invest in training, how they prefer training is delivered to staff, and their experience in working with international providers. Company feedback is summarised here:

› Training was a “priority” or “very important” for nearly all companies

› All companies allocated annual budgets and business hours for training

› The largest training budgets were in the oil and gas, mining and steel industries, ranging from US$1.2 million to US$9 million per year

› Seventy per cent of companies spent an average of 48 hours on training per employee each year

› Most companies expected to see increased productivity as a return on their investment.

One firm reported having a fully ‘on-the-job’ learning mode, in which employees in-training were expected to spend 70 per cent of their work hours learning in parallel to performing their duties.

Preferred training model

› Most companies opted for tailored training when selecting a training solution.

› In-company and outsourced training were the most popular delivery modes.

› Most companies have had at least one experience with international education providers, and these experiences were all described as successful.


Recommended approach for Australian training providers

Focus areas

› Technology-based skills

› Digital alphabetisation

› Soft skills

› Language skills

› Energy experts.

The best way for Australian training providers to enter the Argentine market is to develop partnerships or commercial agreements with local companies that are currently outsourcing their training needs.

■ Yes 70%■ No 30%

■ England 10%■ Sweden 18%■ LATAM 20%■ US 52%

■ Yes 70%■ No 30%

■ England 10%■ Sweden 18%■ LATAM 20%■ US 52%

Source: Austrade, 2019

Experience with international training providers


Market trends

Paraguay is a landlocked country with an impressive track record of continuous economic growth, having raised a significant proportion of the population out of poverty. While poverty and income inequality are still major challenges, Paraguay’s middle class has almost doubled since 2003, and is now estimated to account for 38 per cent of the total population.

Paraguay also has a relatively young population, with around half aged 25 years and under, and 30 per cent aged 15 years and under.1

Paraguay’s economy relies heavily on the agribusiness sector, and increasingly the growing infrastructure, services, and manufacturing and assembly sectors. Within these industries there is a rising demand for ICT skills, and ICT as a sector itself is growing significantly.

Fulfilling the growth potential in these areas, however, is being affected by a lack of relevant training, insufficient technology-based knowledge and a lack of soft skills, according to a report by Paraguay’s Centre of Information and Resources for Development (CIRD).2

Companies are bridging these gaps by investing in training solutions, including exploring opportunities to buy training solutions from international providers.


Roles in demand in key industries are:

Agribusiness

› Engineers

› Technicians

› Managers

› Machinery operators

› Food technologists

Infrastructure

› Electricians

› Plumbers

› Masons

› Painters

› Carpenters

› Engineers – electrical, civil, structural

› Architects and property agents


Bordering Argentina, both Paraguay and Uruguay represent distinct commercial prospects for Australian providers offering tailored training and skills solutions.

POPULATION:

7 millionECONOMY:

Grew 4.5% annually 2004–2017

GDP:

US$40 billion

Market overview

PARAGUAY

PARAGUAY AND URUGUAY


ICT

› Programmers

› Developers

› Community managers

› Drone pilots

Electricity/electronics

› Network technicians

Graphics/publishing industry


› Printers-flexographic, print operators, offset printers

› Packers

› Plant administrators

› Quality controllers

› Graphic designers

› Sales executives

Skills in demand

The demand for these roles leads to corresponding demand in both technical and soft skills. These technical skills includes mathematics and finance, machinery operation, field learning, new and advanced technologies and software, workplace safety, high-tech machinery operation and design software.

Soft skills such as teamwork, problem solving, creativity, team building, interpersonal skills, communication, planning and language skills are all in increasing demand.


The best way for Australian training providers to enter the Paraguayan market is to develop partnerships or commercial agreements with local companies from the agribusiness industry that are currently outsourcing their training needs.


POPULATION:

3.5 millionECONOMY:

Growing 4.1% annually since 2003

GDP:

US$40 billion

Market overview

URUGUAY

Market trends

The second-smallest country in South America, Uruguay is distinctive thanks to its relatively high income per capita, low level of income inequality and almost complete absence of extreme poverty.

In percentage terms, Uruguay’s middle class is the largest in Latin America at more than 60 per cent of the population.3

Uruguay’s steady economic growth is due in part to effective macro-economic policies and a commitment to product and market diversification within its dominant agriculture and forestry sectors. To balance its previously heavy dependence on neighbouring Argentina and Brazil, Uruguay has more recently expanded trade relations with China and the European Union.

Uruguay is positioned highly on various development indices and is credited by the World Bank as having achieved high levels of access to basic services and education. Institutional stability and low levels of corruption have also translated into high levels of public trust in government.


Austrade met with officials from five national agencies and organisations in Uruguay to understand the demand for skills and qualifications, and how these needs are being addressed.4 The consensus from these discussions was the importance of ICT skills to Uruguay’s future. There is also demand in the following areas:

› Data science

› E-commerce

› Mathematics

› Sustainable development

› Renewable energies

› Forestry

› Mechanised planting

› Public services (e.g. healthcare, education)

› Cross-industry services (e.g. professional services)

› Safety

› Quality standards

› Soft skills, such as leadership, communication and teamwork

One of the world’s largest internet companies was unable to set up in Uruguay due to a shortage of qualified mathematicians.



Uruguay has a national scheme to finance companies’ training programs, with three different types of disbursements (as per currency exchange rate at time of printing):

› A$1,700 annually per employee

› A$15,000 annually per company

› A$17,000 annually for technical assistance/advisory services.

This national funding scheme was created in 2017 with more than 66,000 education and training providers registered on its roster. Training providers from overseas countries have also registered through one of the following avenues:

1. Getting a Tax and Labour Identity Code (called RUT) after opening a branch in Uruguay

2. Participating in a Joint Venture with a local Uruguayan company

3. Partnering with Uruguay’s Trade and Investment Agency, Uruguay XXI.

Any Australian education or training provider willing to take advantage of this program should follow one of the three pathways suggested above and then register on the online roster.

Recommended approach for Australian providers

The best way for Australian training providers to enter the Uruguayan market is to develop partnerships or commercial agreements with local training providers currently registered with the national funding program for industry training solutions.


16

CHILE

Market trends

The Chilean economy has been growing steadily for almost two decades thanks to sound macro-economic management, global trade (trade accounts for 60% of GDP, compared to 40% in Australia) and China’s demand for raw materials.

Policies designed to foster trade and investment have also been important, with Chile currently a signatory to 21 active free trade agreements and successfully attracting investment, primarily in the mining sector.

While mining has continued to be the backbone of the economy for the past decade, Chile has seen some of its large companies grow and become leaders in the region in other industries such as forestry, retail and the airline industry.

Key survey findings

› The mining industry will need more than 29,000 new employees to 2026

› The largest demand in mining is for mechanical and electrical maintenance workers

› There is an estimated gap of more than 5,000 staff in full time professional IT staff

› Skills gaps exist in cloud, big data, cyber security, IoT and software development

› There is increasing demand for non-technical skills

› There is high demand for staff with English proficiency.


There are two main trends shaping Chile’s labour market: the resurgence of the mining sector and digital transformation. The latter is driving change across multiple industries, especially mining, financial services and the retail sector.

Mining: An industry resurgence

Chile is the world’s largest producer of copper, iodine and rhenium, and the second largest producer of lithium.

Mining employs around 220,000 people and in the last decade accounted for 13 per cent of GDP on average, as well as more than 55 per cent of exports.

POPULATION:

19 millionECONOMY :

Average Growth 4% annually since 2000

GDP:

US$298 billion+

Market overview


The mining industry will need more than 29,000 new employees over the coming years to 2026, according to the Chilean Mining Skills Council’s Large Scale Chilean Mining Workforce Report 2017–2026. These numbers include estimated demand generated by new mines (11,300 new jobs), and projected retirements (18,069). The estimates also account for the expected deployment of technologies that may reduce labour demand by companies.

The Large Scale Chilean Mining Workforce Report 2017–2026 predicts there will be a shortage in several skill areas, primarily maintenance, and mobile and fixed equipment operations. With an estimated 25,000 post-secondary graduates expected to join the industry, and to help solve the current skills and talent shortage, the Chilean Mining Skills Council has developed standards to ensure training delivered by Chilean TVET institutions is better aligned to industry needs.

Mining jobs in highest demand 2017–2026

› Mechanical and electrical maintenance workers

› Mobile and fixed equipment operators

› University-qualified professionals (e.g. engineers)

› Supervisors

Source: Chilean Mining Skills Council

Mining workforce gap 2017–2026

› Mobile equipment operators

› Fixed equipment operators

› Maintenance professionals

› Mechanical maintenance workers

› Maintenance supervisors

Source: Chilean Mining Skills Council

Digital transformation: driving demand for new skills

Digital transformation is disrupting a growing number of industries in Chile. In particular, building a digital network is critical to the emerging mobile-first, cloud-based, complex-applications landscape and the expansion of the Internet of Things (IoT). This new infrastructure will require new skills and accelerated training for professionals, while new business models,

such as software-as-a-service (cloud) and outsourcing, will enable economies of scale and improve efficiencies for industries.

According to the Chilean government, the country leads Latin America in the use of computer technology, but there is still a significant talent gap, with a 25 per cent deficit of professionals per year in this area, amid declining enrolments in ICT-related disciplines.5


In a recent report by IDC, there is an estimated gap in full-time IT networking professionals of more than 5,000 staff.6 Emerging technologies represent 79 per cent of this gap, requiring skills in areas such as video, cloud, mobility, data centre and virtualisation, big data, cybersecurity, IoT and software development.

The IDC report also highlights the demand for non-technical skills, including:

› English language proficiency

› project management

› understanding the business impact of technology and the digital economy

› problem solving

› creativity and innovation

› teamwork

› communication

› industry knowledge

› entrepreneurial attitude.


The level of investment in training, in both allocation of budget and time, reflects the serious commitment being made by many companies in Chile to upskill their workforces. Our survey found the following:

› training was a priority for more than one-third of companies

› companies allocated an average of US$900,000 annually for training


› on average, companies allowed 28 business hours per employee each year

› price was usually a deciding factor when a company bought training packages

› more than half of companies expected to see increased productivity (59%) as a return on their investment, though innovation and other areas such as safety, empowerment and leadership were also a focus.

Austrade surveyed 11 companies in the mining and original equipment manufacturer (OEM) industries, with a combined total of more than 25,000 employees. The OEM firms are among the biggest buyers of training courses in the market.


While there has been relatively limited experience in working with international education providers to date, (less than one third of the companies surveyed, and of these few most are with the US), all companies said they were open to exploring new international providers to help meet their training needs. Companies also reported to prefer:

› tailored training over formal qualifications

› in-company training and outsourced training delivery modes

› online training and e-learning.

International training providers

In terms of experience working with international education providers, only 27 per cent of surveyed companies in Chile have developed some type of training with international providers, with the United States the main provider, but one of the companies had also worked with a top ranking Australian university.

Even though a small portion of the companies has experience working with international providers, these companies are open to exploring use of new providers from abroad.

■ US 50%■ LATAM 33%■ Australia 17%

■ Yes 30%■ No 70%





The Chilean VET sector is a highly competitive market and is dominated by well-established players, especially in the mining industry, which is one of the top spenders on training. But with the country’s steady economic growth, resurgence of the mining sector and digital disruption across most industries, there is significant demand for new skills.

› The best way for Australian training providers to enter the Chilean market is to develop partnerships or commercial agreements with local providers and technical training organisations that already have a dominant position in the market, and that are looking to diversify their training portfolio with training courses related to digital skills.

Focus areas

› Skills training to address the talent gap within mining, particularly mobile and fixed equipment operators and maintenance staff

› Digital skills including in cybersecurity, data management, big data, cloud, mobility, IoT and software development

› Soft skills to support digital transformation

SPOTLIGHT ON OPPORTUNITY

Digital Talent initiative powers ICT skills

To accelerate Chile’s transition to the new digital economy, a new public-private initiative has been established to develop new skills and provide access to quality jobs. ‘Digital Talent for Chile’ will manage job training processes and mediate the generation of job opportunities. It is being executed by an alliance between Fundación Chile and Fundación Kodea, and led by a group of eight agencies and organisations, including the Ministries of Finance, Labour and Social Welfare; the National Training and Employment Service; the Economic Development Agency; and the Confederation of Production and Trade.

A key goal of ‘Digital Talent for Chile’ is to train 16,000 people in four years, with a success rate of 70 per cent measured through employment, new entrepreneurs or continuity of study. The National Training and Employment Service has US$10 million to launch this initiative in 2019, which will lead to training in areas such as programming in the context of the Internet of Things (IOT), mobile interfaces, artificial intelligence, big data, social networks and blockchain. According to one of the key executives from the Digital Talent initiative, the program will seek to engage with international training providers developing short course ‘bootcamps’ in Chile.


21

22

MEXICO

Mexico is a key player on the global stage, with the world’s 15th largest economy and the second largest in Latin America after Brazil. It has close commercial ties with the US, which accounts for 77 per cent of its exports and 47 per cent of its imports.7

The Mexican economy is composed primarily of services, paticularly in tourism. The most important industrial sectors are energy and petroleum, mining and manufacturing. Mexico has free trade agreements with 46 countries, and is a member of the Pacific Alliance and the CPTPP.

There is a major deficit in compulsory education and a relatively low number of students progress to higher education.8 As a result, Mexico tends to specialise in low value-added activities. This results in a high degree of informal employment, which is estimated to represent 52.5 per cent of the country’s workforce. The development of job skills tends to be driven by large foreign companies.

Key survey findings

› There is demand for short-cycle programs to accelerate skills development

› There is an increasing demand for sustainable mining practices

› The lack of national mining industry skills standards represents an opportunity for the Australian VET system

› Mining companies are adopting standards from other countries – Canada, US and Sweden

› Mining safety, sustainability, technical and soft skills are in demand

› On-site training is a preferred training model for mining

› Training for tourism sector is a priority for companies and budget is allocated

› Demand for soft skills and English proficiency is high.

POPULATION:

127.9 millionECONOMY :

Second largest in Latin America

GDP:

US$1.2 trillion

Market overview



Jobs in high demand include:

› Special machinery operators

› Sales representatives: executives and sales consultants, vendors

› Office support staff: receptionists, personal assistants

› Qualified jobs: electricians, mechanics, welders

› Drivers: truck, construction, messaging

› Technicians: quality control, technical staff

› Engineers: chemical, electrical, civil

› Accounting and finance: accountants, auditors, analysts

› Qualified professionals: lawyers, project managers, researchers

› Managers and executives

Source: Manpower Group, Talent Scarcity Survey 2018

More short-cycle tertiary education neededNearly all higher-education graduates have bachelor degrees, but companies need more employees with postgraduate studies, and short-cycle tertiary training programs could be a way to accelerate skills development.9 Many of the most difficult positions to fill could be addressed by short-cycle tertiary education programs.10


Mining: A huge industry with significant skills gaps

Mining is an important source of foreign revenue for Mexico, and contributes approximately 8.3 per cent of industrial GDP and 2.5 per cent of national GDP. There are around 290 mining companies in the country, most of them with foreign capital from Canada, the US and China.

The mining sector is also a major job provider. In 2017, it supported 371,556 jobs directly and over 1.7 million jobs indirectly. Mining salaries are 32 per cent higher than the national average.11

While the industry has faced a number of challenges in recent years, including adverse public policies, the current government has indicated that it wants the industry to operate to world-class standards. Austrade is currently involved in measures to support the development of sustainable practices in the sector.

Mining skills gap

In Mexico, there is a significant skills gap but no national industry skills standards upon which training can be designed.

The Memorandum of Understanding between the National Council for Standardization and Certification of Labor Competencies (CONOCER) and PwC Skills for Australia, signed in November 2018, will allow Mexico’s emerging industry committees to adopt and adjust Australian standards to local requirements. However, Mexico’s skills bureaucracy is already seeking alternatives and mining companies are adopting standards from other countries such as Canada, the US and Sweden.

In 2019, Austrade surveyed the most important mining clusters in Mexico to understand the sector’s demand for skills and training. While there were varying perspectives, respondents identified five key areas that required skills development:

› Mining safety

› Sustainability (environment and community relations)

› Productivity

› Competitiveness

› Soft skills.

Both technical and soft skills are in demand. Specifically:

› Environmental management

› Extraction techniques and use of equipment for drilling

› IT

› Machines and equipment


› Electromechanics

› Diesel engines

› Metallurgy

› Instrumentation

› Mechanics

› Electronics

› Health and safety

› Civil protection

Source: Conacyt12


To understand the current demand for training, Austrade asked survey respondents (mining clusters – i.e., industry, academia, service providers) about how they invest in training and how they prefer training is delivered to staff. Findings included:

› For training staff in new skills, mining companies generally preferred to engage specialists to deliver the training on site

› Companies do some training in-house, including induction of new workers and training for workers promoted into new areas

› Some large, multinational companies have created in-house institutes to address specific training needs

› For companies with fewer resources, the mining clusters play a key role. They develop annual training calendars in coordination with members, with funding coming from members and the regional/state research and science councils. The clusters are typically very price-sensitive.


The growth in Mexico’s mining industry has attracted not only foreign capital but also foreign training providers and research institutions. Several are already established in the market, which represent competition for Australian providers but also indicates that mining companies are willing to work with international providers. Foreign training providers in Mexico include:

› The University of Arizona, which has academic and training links with the Sonora and Zacatecas mining clusters. The University does research with the higher education institutions that are members of the clusters and coordinates extension programs

› The Colorado School of Mines, which has a regular presence through affiliations with the mining clusters

› The Swedish Academy of Mining, which is working collaboratively to establish an academy in Zacatecas. It offers training to the clients of Swedish equipment suppliers, and gives local students access to facilities and equipment for training purposes.

Mapping industry training needsThe Zacatecas Mining Cluster worked with the State Ministry of Economy to map the training needs for the industry to 2025, through the newly created Centro de Mineria Compatible (Sustainable Mining Centre). The Centre will deliver training in collaboration with three Mexican universities: the National Polytechnic Institute, the Technical University of Zacatecas and the Autonomous University of Zacatecas. The University of Arizona also participates through the Lowell Institute, and the Centre has received expressions of interest from institutions from Canada, Chile and Peru.


Tourism: demand for skilled workers exceeds domestic supply

Mexico is one of the most popular tourist destinations in the world, with tourism representing 77 per cent of Mexico’s dynamic services sector. The tourism sector contributes 8.8 per cent to the GDP and is expected to grow strongly in the coming years as the anticipated number of international tourists continues to rise.13

Tourism is the second most important sector in employment terms, after retail, and employed more than 4 million people in 2018.14 However, as in other industries, there is a significant skills gap, which CONOCER has attempted to address through its National System of Tourism Certification, a skills certification program encompassing much of the tourism ecosystem.

Tourism skills gaps

In Austrade’s 2019 survey of senior staff across five major hotel chains, 60 per cent of respondents said they experienced a high level of difficulty in finding the right people for jobs. This was primarily because candidates did not have the non-technical (soft skills) and English language proficiency needed. While the hotel companies said these skills were essential, the universities and local VET institutes contracted to provide training in this sector typically do not include the development of these skills in their courses.

Some of the soft skills in high demand are:

› teamwork

› decision making

› communication

› managerial skills.


Austrade surveyed five major hotel chains across Mexico to better understand the current demand for training in the tourism and hospitality sector. Collectively these hotels hire more than 7,500 employees of all academic levels. The survey found the following:

› most companies considered training a priority, ranking it higher than ‘very important’

› most companies expected employees to participate in training, with an average of 80 hours per year allocated to each employee. However, there were some cases where up to 400 hours were allocated to training

› most companies allocated an annual budget to training. The average investment ranged from US$56 to US$200 per person per year

› all companies judged the return on investment in training on its ability to improve productivity, improve compliance with processes and procedures, enhance efficiency, control operating costs, increase customer loyalty and reduce staff turnover.


› Eighty per cent of companies had online training platforms. These were provided at no cost to their employees and were not included in the training budget

› Employees also received on-the-job training from peers, which was also excluded from the training budget

› Most training was tailored, in-person training delivered internally. Training was also delivered by external providers in more general areas such as security, hygiene, emergency response, systems and equipment

› For operations staff, no academic qualifications were required as training and certification was provided in house

› For managerial roles, a minimum level of academic study was required. Management staff received professional development through both internal training and external providers (via agreements with national and foreign universities)

› Hotels that did not have online learning platforms for standardised courses used national universities for training junior staff and foreign universities for senior executives.



Mexico’s tourism industry has a strong relationship with local education providers. Both vocational institutions and universities have agreements for internships and certifications that can be carried out onsite or at the institutions. These have been important in developing talent and boosting productivity.

Companies have some experience working with international training providers, which could indicate a willingness to continue to do so. Institutions engaged by survey respondents included Cornell University (US), Vatel Hotel and Tourism Business School (France) and University of Lausanne (Switzerland).


The growth in the mining and tourism industries is driving demand for skilled staff, but companies are finding it difficult to find suitable candidates. An increasing number of foreign training providers are entering the market, highlighting companies’ willingness to work with Australian providers.

Mining

› Mining safety

› Sustainability (environment and community relations)

› Productivity and competitiveness

› Soft skills

› Short-cycle tertiary education programs.

Tourism

› Skills training for operational staff: large-scale event management, digital platforms for event management,

› English language proficiency

› Customer service

› Teamwork, communication, mentoring, other interpersonal skills.

Key opportunities

Mining

› The best way for Australian training providers to enter the market is by working with mining clusters to assist in the adoption and delivery of Australian skills standards. This is a safe way to enter the local market and gain exposure to eventually target individual organisations

› The Federal Under-Ministry of Mining is currently drafting six best-practice manuals including Occupational Health and Safety, Best Practices in Community Engagement, Security, General Environment, Clean Energy and Mine Closure. The manuals will be part of a new regulation that all companies involved in the mining ecosystem will have to comply with, creating new opportunities for training providers

› PwC’s Skills for Australia, which maps competencies on behalf of the Department of Education for Australia’s mining sector, signed an MOU with its Mexican counterpart CONOCER. This allows Australian skills certifications to be recognised in Mexico, giving Australian training providers a competitive advantage

› Note that training will need to be delivered in Spanish.

Tourism

› The best way for Australian training providers to enter the Mexican market is to partner with local institutions that deliver CONOCER skill certifications or work directly with leading hotel chains

› The hotel sector provides considerable time for operations and managerial staff to undertake in-house training but limited budgets for external programs. However, it does offer programs with foreign universities for executives

› Australian providers can find a niche of opportunity by offering a fresh approach to the conventional training by traditional providers. Unlike France, Switzerland and the US, Australia is not recognised as a leading source of hospitality training. This presents a challenge but also an opportunity, allowing Australian providers to differentiate themselves through offering a distinctive approach.


SPOTLIGHT ON OPPORTUNITY

Orica: training needs boom

Melbourne-based Orica provides explosive technologies in more than 50 countries and has its Latin American headquarters Guadalajara in western Mexico. It is the market leader in explosives and infrastructure procurement in Mexico and is currently expanding its staff.

Mexico currently has no formal skills certification or competencies related to the use of explosives, so training is offered as a type of apprenticeship or informal on-the-job training. This training needs to be replicated every time a new staff member (who will be handling explosives) joins the company – which is frequently.

Austrade engaged PwC Skills in conversations with Orica to determine if explosives handling practices could be among the Australian industry standards recognised by CONOCER. This would make the Australian standard the industry standard in Mexico, forming the basis on which future training would be designed and opening up new opportunities for Australian training providers.

Partnership opens door to Australian training practices

In June 2019, Austrade and the Department of Foreign Affairs and Trade facilitated a visit program to Mexico for the University of Queensland’s Sustainable Mining Institute (SMI). The program also included a visit to the mining region of Zacatecas and local mining cluster.

As a result of this program, the SMI and Zacatecas Mining Cluster have agreed to collaborate on research and publications related to technical and productivity enhancements, corporate social and environmental performance, and sustainable development initiatives. They will also develop training and education activities to promote best practice, which will see Australian training practices influence mining companies in the region.


29

30

PERU

Peru is the third-largest country in South America and one of the fastest-growing economies in the region. Despite current political uncertainty in Peru, the World Bank forecasts growth of just under 4 per cent in 2019, driven by a recovery in domestic demand.

The economy is largely export-focused, with globally high prices for minerals, metals and agricultural raw materials translating into a new wave of mining investments and an expanding horticultural sector. Mining is the powerhouse of the economy, accounting for 10 per cent of GDP, while the tourism sector contributes 3.8 per cent.

Key survey findings

› Mining and tourism are large sectors with potential for Australian providers

› There is high demand for mining executives and supervisors

› Millions of dollars will be spent over the next ten years on recruitment of mining staff

› Both technical and management staff are in demand

› Candidates lack the necessary soft skills and English proficiency

› In-house and outsourced training are the most popular delivery modes

› Over half of survey respondents had experience with international education providers, with mostly positive results.


More than one-quarter of Peruvians are aged between 15 and 29 years. Around 5 million people within this age group are in the workforce and in need of training to support the growth of the thriving mining, agriculture, tourism and allied sectors.

Peru is one of the world’s largest producers of silver, copper and zinc. Mining accounts for around 60 per cent of exports, and mineral exports grew by 55.7 per cent from 2007 to 2017.15 As of December 2017, 199,495 people worked directly in mining.16

POPULATION:

32.6 millionECONOMY :

16 consecutive years of growth

GDP:

US$222 billion

Market overview


Over the coming decade, the mining industry will require around 46,000 new workers, with 17,000 needed over the next three years, due the number of current employees aged 60 years and over (9 per cent) and the forecast investment in new mine operations.17

Tourism is Peru’s third-largest industry by contribution to GDP and by the number of staff employed. Around 8 per cent of the Peruvian workforce or approximately 1.3 million people work in tourism, and the sector generated more than US$4.57 billion in exports in 2017.18 Between January and April 2019, almost 1.5 million international tourists visited the country, 2.7 per cent more than in the same period in 2018.19

Mining: Labour trends

› Hardest roles to fill: executives and supervisors

› Highest number of roles available: operator level (47%), professionals (22%), maintenance workers (19%)

› Women: 3% of operations, maintenance and supervision roles, 20% of professional positions, 6% of executive roles

› Young people (18–29): 8% of mining industry staff

› Millions of dollars spent on recruitment in the next decade

› Priorities: training and development, bridging skills gaps, improving performance.

Source: National Society of Mining, Petroleum and Energy, Inter-American Development Bank and Fundacion Chile, 2018

Mining: Difficult vacancies to fill

› Planning and unit managers

› Instrumentation and geotechnics

› Geologists

› Machinery technicians

› Heavy machinery operators

› Project managers

› Accountants.



Of the two major industries both technical and soft skills are in demand. Specifically:

Mining

› Maintenance of tools and equipment

› Open pit extraction

› Underground extraction

› Management, including managing maintenance tasks, implementing safety procedures, implementing training plans, and managing tools and equipment.

Source: National Society of Mining, Petroleum and Energy, Inter-American Development Bank and Fundacion Chile, 2018

The companies surveyed reported that employees and prospective employees met most of the academic requirements for positions but commonly lacked specialised skills and soft skills, as well as proficiency in English.

Soft skills

› Communication

› Leadership

› Analysis and synthesis

› Aptitude to peform job

› Emotional intelligence.



A range of budgets levels was reported in the survey. Not surprisingly mining companies have more money to invest than tourism companies. A summary of responses is given below:

› training was a priority or very important for most companies (although some mining companies ranked environment and safety more highly)

› all companies allocated resources for training. Mining, petroleum and plastic companies had annual training budgets of US$400,000 to US$1 million, while tourism companies invested less, with the maximum annual budget being US$33,000


› training allocation depended largely on employee availability (time without work allocation), especially in mining firms where work location and staff rosters affected availability

› most companies expected to see increased productivity as a return on their investment, and around one-third hoped to see an increase in safety awareness.


› Forty per cent of companies preferred to train staff in-house using an external provider, while 20 per cent used external training. For instance, a petroleum firm preferred to send employees overseas for specialised courses not available locally

› In-house and outsourced training were the most popular delivery modes

› Half of the companies surveyed have worked with international education providers, including from the US, Australia and Chile, and have seen generally positive results. However, the overall cost and tax implications were raised as concerns.


All the mining companies interviewed had experience training their employees with international providers. Meanwhile just the 30 per cent of the hospitality industry interviewed has received training with a non-national provider.


There is demand for skills development across multiple industries, especially mining, which will need around 17,000 new workers over the next three years. The skills gaps coupled with the high value companies place on training and their willingness to invest highlight the opportunities for Australian training providers. Austrade has already received requests by companies for Australian mining-related training.

Focus areas

› English language teaching for middle management and senior executives

› Higher education (Masters, PhD) for executives

› Training for machinery operators and technicians

› Long-term training to strengthen safety culture in mining companies

› Soft skills, especially communication and leadership.

Key opportunities

› Peru has technical education providers, most of them private, who are looking for new ways to improve their educational offer and they are open to commercial alliances with international providers, including Australians. Some local VET providers have classrooms within the companies to which they already provide services, especially in the mining industry; this could open doors to Australian providers to have direct access to companies in addition to the local education providers

› In the tourism industry, Peru has national and regional public training bodies for skills development who are seeking the latest trends in hospitality and tourism training. Topics such as adventure and rural tourism, service standardisation and English Language for the industry are opportunity areas to develop in partnership with Peruvian training bodies, some of whom launch international public tenders

› Technology and innovation in both the mining and tourism industries are growing rapidly, and both the government and companies are looking to train employees responsible for directly using the new technologies. This provides opportunities for consulting services, training and certification of skills

› Peru has at least three major mining projects in pipeline. This will open several commercial opportunities to Australian education providers at all levels, as the national providers will need alliances with international providers to meet the demand.


METHODOLOGY

Argentina

From January to February 2019, Austrade surveyed 10 companies with a total of more than 75,500 employees. Seven were among the largest companies in Argentina by number of employees, while the remaining three were Australian-owned firms, mostly SMEs. The industries covered by the survey were agrochemicals, supply chain services, mining, financial services, oil and gas, steel, energy, ICT, e-commerce, security and executive search firms.

The companies that participated in the survey were:

› Telecom

› Nufarm

› Mercado Libre

› YPF

› Securitas

› Banco Galicia

› Orocobre

› Chep

› Grupo Gestión

› Ternium.

Chile

From June to August 2019, Austrade surveyed 11 companies in the mining and original equipment manufacturer (OEM) industries, with a total of 25,000 employees.

The companies that participated in the survey were:

› Antofagasta Minerals (HQ)

› BHP

› Collahuasi

› Finning

› Freeport-McMoRan Inc.

› Minera Antucoya

› Minera Centinela

› Minera Los Pelambres

› Minera Nueva Unión

› Minera Zaldívar

› SQM.


Mexico

From April to June 2019, Austrade undertook a series of conversations with six organisations in the mining sector and conducted an in-depth survey of five of Mexico’s leading hospitality groups.

In the mining industry, Austrade spoke with the most important mining clusters in Mexico, which along with the Mexican Chamber of Mining (CAMIMEX) reflect the pulse of the mining industry. Austrade held one-on-one conversations with the Mining Cluster of Sonora comprising 19 mining companies and 21 mining equipment, technology and services (METS) companies, and the Mining Cluster of Zacatecas (7 mining companies and 6 METS), along with Fresnillo PLC, Industrias Peñoles, Orica and Immersive Technologies.

In the tourism industry, Austrade surveyed five major hotel chains across Mexico, which hire more than 7,500 employees of all academic levels. The companies that participated in the survey were: Grupo Real Turismo (Camino Real, Quinta Real), Grupo Presidente (InterContinental, Holiday Inn), Groupe Accor (Novotel, Sofitel, Ibis), Hilton Hotels and Hyatt Hotels.

Peru

From May to June 2019, Austrade surveyed 10 leading firms with a total of 41,000 employees. Participants were drawn primarily from the mining and tourism sectors, with additional participants from petroleum and plastics.

The companies that participated in the survey were;

› Marriott Hotels Peru (include Aloft, W, Four Points hotels)

› Hoteles Casa Andina

› Hoteles Belmond

› Hoteles Hilton Peru

› MMG / Las Bambas

› Antamina Peru

› Mining Plus

› Marcobre

› Hochschild Mining Group

› Southern Copper Corporation

› Minera Volcan.


1. Paraguay – Market Overview, Export.gov (International Trade Administration), 20192. Paraguay’s Centre of Information and Resources for Development (in partnership with the Inter-American Development Bank, 20173. WORLD BANK. The World Bank in Uruguay. Overview. Montevideo: 2019.

Available at: https://www.worldbank.org/en/country/uruguay/overview4. Organisations interviewed by Austrade: the National System of Productive and Competitive Transformation (Transforma Uruguay); the

Government Office of Planning and Budget; the National Institute of Employment and Professional Training (INEFOP); the think tank Eduy21; and Uruguay’s Chamber of Information and Communication Technologies.

5. Networking Skills in Latin America, IDC (sponsored by Cisco), 20166. Networking Skills in Latin America, IDC (sponsored by Cisco), 20167. Department of Foreign Affairs and Trade8. Organisation for Economic Co-operation and Development (OECD)9. Higher Education in Mexico: Labour Market Relevance and Outcomes, OECD, 201910. The Manpower Group, 201711. Mining Chamber of Mexico, Annual Report 201812. Futuro de la mineria zacatecana y los retos en capital humano, Conacyt.13. Ministry of Tourism14. National Institute of Statistics and Geography (INEGI)15. Ministry of Energy and Mines16. National Society of Mining, Petroleum and Energy17. Hacia una Fuerza Laboral Pertinente y Productiva, National Society of Mining, Petroleum and Energy, Inter-American Development Bank

and Fundacion Chile, 201818. Peru 21, 201819. Ministry of Foreign Trade and Tourism, Peru, 2019

REFERENCES

ABOUT AUSTRADE

The Australian Trade and Investment Commission (Austrade) is the Australian Government’s international trade promotion and investment attraction agency. We deliver quality trade and investment services to businesses to grow Australia’s prosperity. We do this by generating and providing market information and insights, promoting Australian capability and facilitating connections through our extensive global network.

We deliver international marketing and promotion services to the Australian education sector. This includes highlighting the global relevance, practicality and quality of Australian institutions, along with their innovation, creativity and focus on the future.

Austrade also supports Australian education providers through a range of information, advice and tailored services to support their international education engagement strategies. This includes the delivery of accurate and timely market intelligence and opportunities through the Market Information Package, an online portal available on a subscription basis to eligible institutions.

To discover how we can help you visit austrade.gov.au or contact us at [email protected] or on 13 28 78 (within Australia).


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INDUSTRY SKILLS TRAINING OPPORTUNITIES IN LATIN AMERICA