IBSA ENVIRONMENT SCAN Business Services Industry. Business Services Industry

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1 Business Services Industry Business Services Industry

2 Acknowledgments IBSA s Environment Scan 2010 has been produced with funding assistance provided by the Australian Government through the Department of Education, Employment and Workplace Relations. Innovation and Business Skills Australia 2010 Business Services Industry

3 Contents Chapter 1 Executive summary 1 Chapter 2 About this report 3 Chapter 3 The Business Services industry 4 Chapter 4 Employment trends 7 Chapter 5 The Business Services workforce 8 Chapter 6 Workforce development Business Services Training Package (BSB07) 12 Employer views 17 Chapter 7 Challenges for workforce development Addressing environmental sustainability 20 Integrating technology 21 Responding to structural change 21 Current literacy and basic business skills in SMEs 22 The economy and global financial downturn/recovery 23 Chapter 8 Future directions 24 Appendix 1 Business Services Occupations in Demand 26 Appendix 2 References 29 Appendix 3 Methodology and stakeholder input 30 Appendix 4 NCVER data 31 Business Services Industry

4 Table of Figures Figure 1: Business Services occupations workforce size 6 Figure 2: Median age by occupation Figure 3: Workforce age profile selected Business Services Occupations 9 Figure 4: Percentage of male workers in Business Services occupations 10 Figure 5: Participants in Business Services qualifications 12 Figure 6: Enrolments in Business Services units 13 Figure 7: Business Services qualifications completed 14 Figure 8: BSB Certificate III traineeship commencements and completions 16 Figure 9: BSB Certificate IV traineeship commencements and completions 16 Figure 10: Mode of delivery for BSB units 17 Table 1: Participation in Business Services qualifications Table 2: Business Services Qualifications Completions Table 3: Traineeship activity in BSB qualifications 41 Business Services Industry

5 Chapter 1 Executive summary The environment scan (Escan) provides Innovation and Business Skills Australia (IBSA) with an opportunity to gather industry intelligence on business directions and emerging workforce development issues and to consider it in the light of statistical information on training and industry trends. This report examines the key challenges facing the Business Services industry and considers their impact on workforce development. The primary objective of the Escan is to advise government of industry skill and workforce development needs and investment priorities for Australia s VET system. The report will also be of interest to other audiences including: Registered Training Organisations (RTOs) intent on responding to industry workforce development needs; and enterprises developing and implementing strategies to build workforce skill and productivity. This report identifies major challenges for the Business Services workforce that will require new and newly emphasised skills. Workforce development challenge: Impact on: Critical future skills: Addressing environmental sustainability Clerical and record keeping occupations, office managers Integrating technology Mobile workers, supervisors and managers, HR professionals Responding to structural change Current literacy, numeracy and basic business skills in SMEs The economy and global financial downturn Recruitment and retention in SME s All workers using new technologies SMEs HR professionals, managers and supervisors, SMEs Customer contact workers, clerks, office managers, small business managers Small business managers, sales professionals, customer contact Small business managers, HR and training managers Carbon auditing and carbon bookkeeping Energy efficiency planning and monitoring e waste management Independence and selfmotivation IT literacy, e commerce, digital business skills Creativity, design and innovation Business planning Communications and customer service Literacy and numeracy Basic business skills Supervision and leadership Marketing for small business Workforce planning In house capacity for training and development Business Services Industry 1

6 The Business Services industry faces the challenge of maintaining and building workforce skills throughout the period of economic downturn and recovery while technology, business requirements and regulatory environments continue to change. More uncertain economic times will severely challenge the large numbers of SMEs that are affected by low levels of literacy and basic business skills. National skill building strategies for SMEs are needed to ensure these businesses are able to benefit from the economic recovery. The VET system could support the development of critical new, emerging and updated skills for the Business Services workforce by: ensuring that appropriate qualifications and/or skill sets are available for areas that will be in increasing demand such as green skills, leadership, converging technologies and digital business skills creating appropriate workforce development solutions to build literacy, numeracy and basic business skills in SMEs increasing the uptake of RPL equipping learners with the underlying skills and supports that are needed for successful participation in training, such as online research skills ensuring that training and assessment is appropriately customised for individual business needs and that individual units of competency can be flexibly packaged, recorded and funded boosting employer participation in workforce development such as through the provision of workplace based supports, and improving communication with RTOs about business needs and expectations from training. The Escan research and consultation process has generated a list of occupations in demand for the Business Services industry Appendix 1. Skilling for these occupations will require specific attention in workforce development strategies. 2 Business Services Industry

7 Chapter 2 About this report This report accompanies and underpins IBSA s environment scan (Escan) It focuses on the workforce development needs and realities of Australia s Business Services industry. The report has been developed using statistical data available from the Australian Bureau of Statistics (ABS) and the National Centre for Vocational Education Research (NCVER) and with direct industry input through IBSA s consultation and survey processes. The research methodology used to prepare the report is explained in Appendix 3. The purpose of this report is to identify issues and challenges that are specific to the Business Services industry and to examine their ramifications for workforce development. Key findings and recommendations from this report have been incorporated into the IBSA Escan It should be noted that, much to the despair of statisticians, there are no unambiguous boundaries that can be used to capture and describe industries and their workforces. ANSCO and ANZSIC classifications used for data collection can sometimes fail to represent reality as it is understood by enterprises or individuals. For this reason figures and predictions about industry size and occupational cohorts should be regarded as indicative rather than as exact quantities. Business Services Industry 3

8 Chapter 3 The Business Services industry The Business Services industry is a major contributor to the Australian economy and employs a significant proportion of the workforce. However, it is not recognised as a distinct industry within the ANZSIC classification scheme used by the ABS and so the exact size and nature of the industry is difficult to quantify. The Business Services industry comprises small, medium and large enterprises including multinationals and franchises that operate with the primary purpose of providing business services to external clients, e.g. management consultants, recruitment agencies, customer contact centres. Additionally, the Business Services industry underpins every other business across all industries providing critical functions such as human resources management, office administration, data entry, record keeping and leadership. Business Services are a crucial part of Australia s estimated 1.9 million small and micro enterprises (SMEs) 1. In the five years between 2002 and 2007 the number of micro businesses (less than four employees) in Australia increased by an incredible 78% from 952,000 to 1,699, Microbusinesses now comprise 84.5% of all Australian businesses, up from 80% in More than half of all micro businesses are sole operators, employing no staff 3. The Business Services industry includes a number of significant sectors or domains, including: Administration Business development Communication Creativity, innovation and design Finance Industry capability and workforce development Information and Communications Technology Knowledge management and record keeping Mail house and despatch and leadership Regulation, licensing and risk Stakeholder relations and customer contact Schaper, M. An Overview of Australia s Small Business Sector, presented to the Council of Small Businesses of Australia, February 2008 Schaper, M. An Overview of Australia s Small Business Sector, presented to the Council of Small Businesses of Australia, February 2008 Schaper, M. An Overview of Australia s Small Business Sector, presented to the Council of Small Businesses of Australia, February Business Services Industry

9 Business Services workers provide the crucial services that keep all other industries functioning. As a result some of the sectors identified above can appear to duplicate the functions of other industries, e.g. Financial Services and ICT. However, their inclusion on the list does not imply that all functions of those industries are a part of Business Services, but rather that Business Services workers may specialise in certain aspects of those domains and apply them across many different industry contexts. Together receptionists, office managers, secretaries and personal assistants make up a workforce of more than 400,000. Counted together all Business Services occupations could account for as much as 15% of the Australian workforce. The graph below shows the workforce size (in 2008) for major Business Services occupations. Business Services Industry 5

10 Figure 1: BUSINESS SERVICES OCCUPATIONS WORKFORCE SIZE Switchboard operators Survey interviewers Conveyancers and legal executives Other clerical and office support workers Research and development managers Human resource clerks Court and legal clerks Other clerical and administrative workers Telemarketers Intelligence and policy analysts Mail sorters Public relations professionals Policy and planning managers Filing or registry clerks Other information and organisation Call or contact centre workers Transport and despatch clerks Corporate services managers Other specialist managers Call, contact centre and customer service Chief executive and managing directors Advertising and marketing professionals Human resource managers General managers and organisation analyst Personal assistants Human resource professionals Inquiry clerks Contract, program and project administrators Purchasing and supply logistics clerks Secretaries Keyboard operators Advertising and sales managers Office managers General clerks Receptionists Source: joboutlook.gov.au, based on Australian Bureau of Statistics (ABS) Labour Force Survey (February 2009) 6 Business Services Industry

11 Chapter 4 Employment trends According to DEEWR s SkillsInfo industry outlook 4, employment growth within the Business Services industry will be variable across sectors over the next five years. Due to the nature of ABS categorisation using ANZSIC, predictions are only available for a limited number of Business Services sectors. The predicted average growth rate for all industries is 1.0% annually. Industry sector % growth pa for 5 years to Employment Services ,300 Legal and Accounting Services ,900 Advertising Services 1.2 2,200 and Related Consulting Market Research, Statistical Services 1.8 2,300 Other Administrative Services 2.0 5,000 Number of new jobs resulting from predicted growth While the above predictions may prove accurate, for most Business Services occupations employment demand will be dependent on growth trends in the specific industry being serviced. It is possible therefore that demand in the near future for legal and accounting services may decline in the retail and wholesale industry but increase in education or health services. Blanket trends cannot be effectively applied to the Business Services industry. 4 DEEWR prepares annual updates of employment projections for industries for the next five years. These are based in part on the Monash model developed by the Centre of Policy Studies at Monash University, but also take into account recent employment trends and prospective industry developments. Current projections are based on data available in February It should be noted that a certain degree of uncertainty is attached to these employment projections, especially for industries where employment growth is highly correlated with macroeconomic and global conditions. Business Services Industry 7

12 Chapter 5 The Business Services workforce The size and diversity of the Business Services workforce makes it difficult to describe using simplistic characteristics. The median age for occupations within Business Services ranges from 30 years for telemarketers up to 50 years for chief executives and managing directors. A large number of Business Services occupations have a median age above the Australian all industry average of 37 years, as shown in the Figure 2. Figure 2: MEDIAN AGE BY OCCUPATION Business Services Industry

13 Source: jobsoutlook.gov.au (drawn from ABS data) Age profiles for key occupations are shown in Figure 3. The workforce for call or contact centre workers is skewed more toward the younger age groups, while office managers and human resource managers have a greater proportion of their workforce in the older age groups. However, all of these Business Services occupations have fewer workers in the 65 and over category than the all industry average. Figure 3: WORKFORCE AGE PROFILE SELECTED BUSINESS SERVICES OCCUPATIONS and Over Human Resource Managers Office Managers Personal Assistants Call or contact centre workers All Occupations Source: joboutlook.gov.au, based on Australian Bureau of Statistics (ABS) Labour Force Survey (February 2009) Business Services Industry 9

14 Given the wide range of occupations within the Business Services industry, gender balances varies considerably across the industry as shown in Figure 4. In general management occupations tend to be male dominated while administrative and legal occupations are female dominated. Figure 4: PERCENTAGE OF MALE WORKERS IN BUSINESS SERVICES OCCUPATIONS Chief executive and managing directors General managers Other specialist managers Advertising and sales managers and organisation analyst Transport and despatch clerks Call, contact centre and customer service Purchasing and supply logistics clerks All industry average Research and development managers Policy and planning managers Mail sorters Other information and organisation Contract, program and project administrators Corporate services managers Human resource managers Other clerical and office support workers Survey interviewers Advertising and marketing professionals Telemarketers Court and legal clerks Call or contact centre workers Human resource clerks Human resource professionals Public relations professionals Inquiry clerks Intelligence and policy analysts Other clerical and administrative workers Office managers Filing or registry clerks Conveyancers and legal executives Switchboard operators Keyboard operators General clerks Receptionists Personal assistants Secretaries 4.0% 2.2% 2.0% 83.1% 76.9% 71.4% 68.7% 65.2% 64.3% 59.8% 59.2% 54.9% 51.5% 51.4% 49.1% 47.0% 46.8% 45.5% 41.7% 41.1% 39.8% 39.7% 36.8% 36.7% 36.4% 35.5% 34.7% 32.4% 31.4% 27.9% 25.5% 22.0% 20.3% 19.6% 16.2% 16.1% 15.7% Source: joboutlook.gov.au, based on Australian Bureau of Statistics (ABS) Labour Force Survey (February 2009) 10 Business Services Industry

15 While small and micro businesses and their owners are incredibly diverse, it is possible to generate a typical profile of small business owners based on ABS demographic data. Accordingly a typical small business owner is 5 : male, Australian born tradesperson or professional years old year 12/trade qualified working full time in the business in a partnership or company. He: has been trading 1 5 years used personal finance to start has no formal management training has no business plan. 5 Schaper, M. An Overview of Australia s Small Business Sector, presented to the Council of Small Businesses of Australia, February 2008 Business Services Industry 11

16 Chapter 6 Workforce development VET provides an important pathway into employment in many Business Services occupations. Through the annual VET Provider collection and the quarterly Apprentice and Trainee collection, NCVER compiles data on publicly funded training and fee for service VET provided by public institutions. This data has been accessed to provide information on the uptake and use of IBSA s Training Packages in publicly funded VET. Significant amounts of training also occur outside of the publicly funded VET system. This includes: fee for service accredited training provided by private training providers, industry associations and other agencies in house accredited training delivered by enterprise RTOs non accredited training conducted in house or by external providers. IBSA has gathered information on organisational approaches to training from employers through an online survey and industry consultations. While this information provides some insight into the nature of workforce development occurring in the Business Services industry, it does not enable the extent of non publicly funded VET delivery to be quantified or estimated. Business Services Training Package (BSB07) IBSA s Business Services Training Package is the most heavily used of all Training Packages for publicly funded VET, accounting for 13.1% of all activity in Although the current Training Package for this industry is BSB07, most of the NCVER data reported here refers to use of the previous package BSB01. NCVER data shows that the number of publicly funded participants in Business Services qualifications (including BSB and BSA) has increased from 2005 to Figure 5: PARTICIPANTS IN BUSINESS SERVICES QUALIFICATIONS 140, , , , , , , , , , Source: NCVER VET Provider Collection Business Services Industry

17 Appendix 4 contains a table that identifies participant numbers for each Business Services qualification. Enrolments in units of competency from the Business Services Training Packages increased significantly between 2005 and 2008 as shown in Figure 6. Figure 6: ENROLMENTS IN BUSINESS SERVICES UNITS 1,400,000 1,200,000 1,205,197 1,278,350 1,000, , , , , , , , Source: NCVER VET Provider Collection 2008 NCVER records the reasons students give for undertaking study. Although for almost half of all Business Services students no reason is recorded, the data shows that for the remainder the primary reason for study is to get a job or to get extra skills for their job. However, some individual units show significantly different reasons for study. In 2008 a high proportion (ranging from 23% to 68%) of students indicated that the study was a requirement of their job when enrolling in: BSBAUD402B Participate in a quality audit BSBCMN311B Maintain workplace safety BSBFLM306A Provide workplace information and resourcing plans BSBINM302A Utilise a knowledge management system BSBMKG304A Assist with market research BSBOHS306B Contribute to implementing emergency prevention activities and response procedures NCVER data on subject results indicates that these subjects tend to have much higher than average rates of successful completion more than 90% for BSBFLM306A and for BSBMKG304A (NCVER s 2008 completion rate for all subjects is 77.1%). Some of these subjects also have extremely high rates of continuing studies indicating that the subject enrolment is being continued into the next calendar year. This was the case for 77.1% of all enrolments in BSBINM302A and 30.8% of BSBOHS306B enrolments (the all subject average is 7.1%). Business Services Industry 13

18 To get into another course of study was a frequent reason cited for enrolling in specific Business Services units. In 2008 almost one third of students indicated that this was the reason for study in many units within the Legislation field, which also tended to have higher than average rates of satisfactory completion. Figure 7 shows completions in Business Services qualifications between 2005 and Completions for this Training Package have increased since Although the graph indicates a drop in completions in 2008, it should be noted that the 2008 data is not considered final. NCVER will revise the 2008 figure upward when the 2009 VET Provider Collection gathers more information on 2008 completions. Figure 7: BUSINESS SERVICES QUALIFICATIONS COMPLETED 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 47,427 42,892 37,830 39, Source: NCVER VET Provider Collection 2008 NOTE: The NCVER approach to annual VET Provider Collection does not allow ready comparison between commencement and completion data; other than for apprenticeships and traineeships that come from a different collection. There is a time lag between participation in a qualification and completion of the qualification. More importantly, participant numbers are inflated because qualifications are generally completed over a number of years and the same student is counted in each calendar year they are enrolled. A very rough approximation may be achieved for individual qualifications by dividing the participant numbers in one year by the average course duration and comparing the result with the number of qualification completions in a later year. For example, the Certificate IV in Business (Marketing) BSB40701 recorded participation of 2,837 in Using an average duration of three years 6 we would compare 2,837/3=946 to completions of 689 in 2008, resulting in a completion rate of 72.8% which is similar to the successful completion rate that NCVER records for individual units of competency. As the 2008 qualification completions data is not yet final (it will be revised upward as NCVER receives more data) this roughly estimated completion rate will actually be higher than 72.8%. Through the quarterly Apprentice and Trainee Collection, NCVER collects data on training conducted under apprentice and trainee training contracts. The Business Services Training 6 NCVER student data indicates that more than 80% of students undertaking the Certificate IV in Business (Marketing) are studying part time; therefore an average course duration of three years is a realistic, or even low, estimate. 14 Business Services Industry

19 Package is heavily used for training under apprenticeship/traineeship contracts and accounted for 33.5% of commencements in non trades apprenticeships/traineeships in Certificate III and IV qualifications from the Business Services Training Package are used in very large numbers for traineeships. Appendix 4 includes a list of traineeship activity since January 2008 for Business Services qualifications. Although it is possible to infer completion rates from the collected data, the time lag for completion can make comparisons difficult. Additionally inconsistencies in the data (such as double counting of apprentices who change employer) may overstate commencement numbers. Figures 8 and 9 below show traineeship commencements and completions by quarter for all BSB Certificate III and Certificate IV qualifications. They indicate that traineeships in Business Services qualifications are being undertaken in significant numbers. The duration of study needs to be taken into account when comparing completion figures with commencements, but the data appears to be consistent with, or better than, the overall completion rate of 48.5% calculated by NCVER based on apprenticeship/traineeship commencements in Note: Fluctuations in commencement numbers are particularly pronounced across the quarters with the March quarter noticeably preferred for commencing a training contract. Completions are more evenly distributed over the four quarters of each year because the duration of training contracts vary according to individual and employer need. Completions and commencements cannot be directly compared by quarter it is more reliable to total annual figures for comparison. 7 NCVER, Australian Vocational Education and Training Statistics, Apprentices and Trainees 2008 Annual Business Services Industry 15

20 Figure 8: BSB CERTIFICATE III TRAINEESHIP COMMENCEMENTS AND COMPLETIONS 6,000 5,000 4,000 3,000 2,000 1,000 0 Jan Mar 2005 Apr Jun 2005 Jul Sep 2005 Oct Dec 2005 Jan Mar 2006 Apr Jun 2006 Jul Sep 2006 Oct Dec 2006 Jan Mar 2007 Apr Jun 2007 Jul Sep 2007 Oct Dec 2007 Jan Mar 2008 Apr Jun 2008 Jul Sep 2008 Oct Dec 2008 Jan Mar 2009 Commencements Completions Source: NCVER Apprentice and Trainee Collection March 2009 Figure 9: BSB CERTIFICATE IV TRAINEESHIP COMMENCEMENTS AND COMPLETIONS 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jan Mar 2005 Apr Jun 2005 Jul Sep 2005 Oct Dec 2005 Jan Mar 2006 Apr Jun 2006 Jul Sep 2006 Oct Dec 2006 Jan Mar 2007 Apr Jun 2007 Jul Sep 2007 Oct Dec 2007 Jan Mar 2008 Apr Jun 2008 Jul Sep 2008 Oct Dec 2008 Jan Mar 2009 Commencements Completions Source: NCVER ref relevant data collection 16 Business Services Industry

21 Publicly funded delivery of Business Services training was primarily institute based in However, significant proportions (up to two thirds) of some Frontline units were delivered in the workplace. Figure 10: MODE OF DELIVERY FOR BSB UNITS 5% 13% 6% 12% 64% College/campus based Online/remote access Employment based Other Not applicable Source: NCVER VET Provider Collection 2008 While the extent of publicly funded delivery of the Business Services Training Package is considerable, it is also widely used outside publicly funded VET. A number of professional associations, such as the Australian Human Resources Institute and the Australian Institute of Project map their standards to Training Package competencies or link their fee forservice programs to units or skill sets. Occupational Health and Safety units and qualifications within the Business Services Training Package have been designed to meet the needs of WorkSafe and are expected to be highly used, especially through mapping to in house training programs. Employer views Through an online survey and industry consultations IBSA gathered employers views on training and workforce development. Of the Business Services industry respondents to the survey: 70% said it was easy to get access to relevant training 70% said it was easy to upskill existing workers 65% said it was easy to provide on the job training 58% said it was easy to train new starters 42% said it was not easy to give staff time off to attend formal training Business Services Industry 17

22 Escan survey respondents reported on the type of training they provide for their staff. Of the Business Services industry respondents: 72% train staff using informal training 42% train staff using full accredited qualifications 37% train staff using units of competency 10% do not provide staff training The most common type of informal staff training provided by Business Services industry survey respondents was company/industry orientation or induction training, provided by 80% of employers who provide informal training. Once off product or process training was provided by 70% of employers who provided staff training. Two thirds of survey respondents reported that the current financial situation has resulted in a business plan to improve the skills of current staff, although 44% of respondents indicated that the financial situation had resulted in cuts to the formal training budget. In line with the relatively low use of accredited training reported via the survey, employers at IBSA s consultation forums identified a number of concerns about the capacity of the VET system to meet industry needs. Assessment: To some employers the assessment process appears to be more about a paper trail than a rigorous customised process that truly meets the needs of employers. A number of employers have reported to IBSA that they are no longer using accredited training because they found that assessment processes did not enhance learning, fit comfortably within their business processes or deliver the outcomes they required. A number of employers have suggested to IBSA that one on one assessment in the workplace is the preferred approach although others have cited the experience of one employer who lost income during a four hour shut down for assessment to take place. Instead the assessment could have been handled by looking at the learner s final work output, saving the business time and money. Quality training delivery: Employers have suggested that although the purpose of the quality audit process (AQTF) is to prevent fraud and ensure quality training and assessment, the system tends to backfire on genuine providers and industry clients by increasing the complexities of compliance and encouraging over assessment. Employers feel that there are opportunities in VET to have strong linkages into industry but unwillingness on the part of RTOs often prevents this from happening. As RTO clients, employers believe they have a role in partnering with the RTO to help the RTO truly understand the industry, and the individual business, and therefore deliver a more effective training program. Employers believe that more work based activities in training would help to ensure that it is directly relevant to the needs of the business. 18 Business Services Industry

23 Flexible training options: The emphasis on full qualifications in government policy doesn t always reflect what businesses want or need. Employers advise a need for funding of skill sets or potentially even individual units so businesses can more readily develop the skills they need. This is especially important for SMEs and would become the building blocks for qualifications. Many employers consider that undertaking a full qualification is a waste of time and resources when only some of the skills are needed. The full flexibility of Training Packages is not being made available to employers. RTOs should know all of the options, but often they do what is convenient rather than what is good for the learner or the employer. RTO communication: Employers believe there is a disconnect between RTOs and their industry clients due to RTOs not visiting businesses to ensure that training is relevant to their needs. Employers feel that many RTOs need to make a greater effort to communicate with business and understand business needs. Often employers don t fully understand the relevance of the skills being offered by RTOs, however in consultations with IBSA they acknowledge that this does not mean those skills aren t relevant. Employers need RTOs to explain the full training program to them so that they understand how it fits with business needs. In consultation with IBSA, employers also suggested that structuring training so that competencies most relevant to the job are completed first can contribute to employer satisfaction with training. Business Services Industry 19

24 Chapter 7 Challenges for workforce development Major challenges for skilling and workforce development in the Business Services industry have been identified through industry consultations and employer responses to IBSA s online survey. Future challenges for the Business Services industry will be: addressing environmental sustainability integrating technology responding to structural change. At the same time, the industry s ability to develop an appropriately skilled Business Services workforce will be impacted by: current literacy and basic business skills in SMEs the economy and global financial downturn/recovery recruitment and retention in SME s. Addressing environmental sustainability The need to address environmental sustainability was identified by survey respondents as a challenge for the Business Services industry 8. However the extent of the impact is likely to vary considerably between various occupations and sectors and will be influenced by the other industries in which Business Services occupations may be embedded. For example clerical and record keeping occupations within the energy and manufacturing industries will require considerable knowledge of carbon trading, office managers within the ICT industry need to understand how to deal with e waste. The Business Services workforce will need skills, knowledge and/or understanding in green skills 9. Further research and consultation will be needed to identify specific skill requirements for the various sectors, but they are likely to include: carbon auditing and carbon bookkeeping energy efficiency planning and monitoring e waste management % of Business Services industry respondents to IBSA s E scan survey were concerned about the environmental sustainability/green credentials (ISO14001) ranking it third on a list of eight potential concerns. 65% of Business Services industry respondents to IBSA s Escan survey identified a critical need for future industry skills in green/environmental sustainability skills and knowledge including carbon auditing. 20 Business Services Industry

25 Integrating technology The emergence of the digital economy is seeing the creation of a mobile, highly connected workforce challenging employers to re think how workplaces and work structures are designed and how workers should be prepared for this new way of working. Remote work arrangements have grown slowly in many parts of the Business Services industry. However, the near universal availability of high speed broadband following the National Broadband Network rollout is likely to trigger a significant expansion of remote work. Apart from the relevant technological skills, workers operating remotely will need greater independence and self motivation than are typically required in the workplace. Changes in management approaches and leadership styles are also likely to be necessary to accommodate the new work practices. The ever increasing presence of technology in all industries and occupations is naturally impacting on the Business Services industry. Industry demand for increased levels of digital literacy in all occupations from despatch clerks needing to maintain records on a handheld computer, to general managers needing to prepare and deliver PowerPoint presentations can create particular challenges for older workers 10 that will need to be addressed through training. As more and more business transactions are conducted via e commerce, SMEs in particular need digital business skills 11. Because of their more limited access to specialised ICT support, workers in SMEs often require higher levels of ICT skill than workers in larger organisations. The challenge for employers is to develop strategies to ensure that these skills are continually updated to keep pace with technological change. Responding to structural change The twin pressures of new technologies and economic uncertainty are re shaping parts of the Business Services industry. Industry convergence 12 between IT, business and creative industries presents new opportunities and niche areas for business, such as the use of social networking in marketing, or developing business products and tools for delivery to handheld mobile devices. Skills in creativity, design and innovation 13 will be necessary for workers and business operators to identify and capitalise on emerging opportunities as they arise. Reshaping of the industry is also occurring through restructuring in response to economic conditions. Businesses need to consider how to address the resulting workforce shrinkage and ensure that they still have the required pool of skills available in their remaining workforce. It is not an easy task and requires thinking beyond headcounts and ratios 42% of respondents to IBSA s Escan survey reported that it is not easy to move quickly to adjust staff numbers and skills to suit business changes % of Business Services industry respondents to IBSA s Escan survey identified a critical need for future industry skills in advanced computer and IT skills. 71% of Business Services industry respondents to IBSA s Escan survey identified a critical need for future industry skills in internet and digital business skills. 81% of Business Services industry respondents to IBSA s Escan survey identified a critical need for skills in converging technologies including combinations of creative, IT and business development skills ranking it first on a list of 23 possible emerging or future skills. 70% of Business Services industry respondents to IBSA s Escan survey identified a critical need for capabilities in creativity and design/innovation. Business Services Industry 21

26 In consultations with IBSA, employers reported that the training budget is always the first thing to disappear in an economic downturn, but it is important for businesses to keep training so they have the necessary skills for when the economy recovers. Planning for business continuity was identified as a critical future skill by 73% of respondents to IBSA s Escan survey. Current literacy and basic business skills in SMEs Many people (particularly in SMEs) have not had assistance with literacy and numeracy and do not have the basic skills or capabilities to assimilate information they lack learning skills and support. Numeracy is a particular problem for the calculation of currencies, import duties, GST and other tasks that require basic maths and it is difficult to get the message through, especially to small business, that training is available. The Adult Literacy and Lifeskills Survey conducted by the Australian Bureau of Statistics in 2006 as part of an international comparative study found that 40% of Australians in employment do not have the literacy skills considered necessary to cope with work and life in a knowledge based society and 44% do not have the required level of numeracy 14. People in these cohorts might have difficulty reading and understanding written instructions, communicating via , recording accurate measurements or calculating correct change 15. In SMEs limited literacy and numeracy skills can directly affect the businesses ability to meet regulatory requirements, communicate internally and externally, respond to customer requests and calculate business transactions. Businesses often identify literacy and numeracy issues as communication problems although their effect can be much more far reaching and complex than this implies. Communications and customer relations were identified as critical future skills by Business Services industry respondents to IBSA s Escan survey. People in SMEs also lack core business skills and don t know where to go to access training for skill gaps. The economic climate is forcing people out of big business they are starting small businesses or buying franchises without the necessary business skills. There is considerable naivety people don t know what it takes to run a business. In consultations with IBSA, employers and industry representatives reported that business owners often don t understand what new graduates are talking about. They can be intimidated by the qualifications and knowledge of graduates and may push them sideways or avoid recruiting them so that they won t feel outshone or embarrassed about their own lack of understanding Australian Bureau of Statistics, 2006 Adult Literacy and Lifeskills Survey, Summary Results, 2007 ISC WELL Network, Core Skills for Business, Business Services Industry

27 The economy and global financial downturn/recovery Fifty nine per cent of Business Services industry respondents to the Escan survey were concerned about the economy and global financial downturn/recovery 16. While Australia has been relatively protected from the effects of the global economic downturn, business confidence and behaviour has been significantly impacted. In consultations with IBSA, employers reported that there is now an increased focus on profitability and the bottom line making employers more reluctant to release workers for training. Businesses have become more risk averse and more cautious in their investment decisions. In more challenging times people look to good leaders to inspire an organisation and get the best from the workforce. Supervision and leadership were identified as critical skills for the future by 75% of Business Services industry respondents to IBSA s Escan survey 17. Industry representatives reported that SMEs that have prospered over the last 5 6 years without the need for marketing skills are now finding it difficult to compete with larger businesses as the pool of customers diminishes. Many small organisations need to re learn, or learn for the first time, how to attract business % of Business Services industry respondents to IBSA s E scan survey were concerned about the economy and global financial downturn/recovery ranking it first on a list of eight potential concerns. 75% of Business Services industry respondents to IBSA s Escan survey identified a critical need for skills in supervision and leadership ranking it second on a list of 23 possible emerging or future skills. Business Services Industry 23

28 Chapter 8 Future directions The Business Services industry, along with many other industries, faces the challenge of maintaining and building workforce skills throughout the period of economic downturn and recovery. Throughout this period business requirements, technology and regulatory environments in particular, will continue to change necessitating continual upskilling and flexibility. More uncertain economic times will severely challenge the large numbers of SMEs that are affected by low levels of literacy and basic business skills. National skill building strategies for SMEs are needed to ensure these businesses are able to benefit from the economic recovery. As the Industry Skills Council with responsibility for Business Services, as well as the increasingly related ICT, Financial Services and Cultural and Creative industries, IBSA has a key role to play in ensuring appropriate qualifications and skill sets are available. Escan 2010 findings suggest that IBSA s future work involve: working with industry to ensure that appropriate qualifications and/or skill sets are available for areas that will be in increasing demand: environmental sustainability carbon bookkeeping and related green skills leadership and supervision particularly in relation to new working structures created by the mobile and remote workforce converging technologies (cross industry skills encompassing ICT, business and creative skills) digital business skills. raising awareness of the need for literacy, numeracy and basic business skills in SMEs and working with government and industry stakeholders to identify appropriate workforce development solutions supporting the development and use of tools for RPL to encourage RTO and industry uptake. The Escan process has also identified actions that could be taken by other VET system stakeholders to ensure that Australia s Business Services workforce is appropriately equipped for the future. Industry/employers could support the development of the Business Services workforce by: communicating directly with RTOs about specific business needs and expectations from training playing an active role in training through the use of workplace coaches, mentors and provision of other workplace based supports. 24 Business Services Industry

29 Training providers could support the development of the Business Services workforce by: communicating directly with employers on specific business needs and collaborate with businesses on workforce development solutions that build on what is already in place customising training and assessment so that it is appropriate for the individual learner and can be carried out in the workplace paying specific attention to ensuring that underlying skills and supports are in place before learners begin their training, e.g. online research skills, IT skills for older learners building assessor skills in RPL and encouraging greater take up of this option by clients. Government could support the development of the Business Services workforce by: implementing a mechanism for recording skills and competencies that are not necessarily packaged in qualifications or Skill Sets developing funding mechanisms for the delivery of individual units of competency working with industry to build and fund literacy, numeracy and basic business skills learning solutions for SMEs.. Through the Escan IBSA has found that employers would prefer to self fund the training for their workforce than access government funding for training that does not completely meet their business needs. Employers do not want their training to be driven by funding requirements or application guidelines at the expense of real business outcomes. EXAMPLE: Rather than persist with standard material delivered by an RTO one organisation has paid instructional designers to produce their own customised materials using case studies, real life examples and customer survey data. Money spent on training and development is seen as investment (like R&D) so what is provided MUST be of value, highly relevant, able to be used immediately and targeted. Government funding restricts the ability to do this so the company was prepared to pay themselves. While the training is linked to accredited qualifications if possible, this is not considered essential. Business Services Industry 25

30 Appendix 1 Business Services Occupations in Demand This alphabetical list reflects occupational demand three years out reported from IBSA s Escan 2010 industry consultation and validation forums and industry survey. ANZSCO Occupation/Job Role Training Package Qualification BUSINESS SERVICES Accountant FNS / / / Account Manager FNS40604 FNS50204 FNS60204 BSB40307 BSB40107 BSB50307 BSB50207 BSB50107 BSB60307 BSB60207 BSB Bookkeeper FNS30104 FNS30404 FNS Accounts clerk FNS Business Policy and Planning Manager (including international) / / Call or Contact Centre Operator Call or Contact Centre Team Leader / Contract Program and Project Manager/ Administrator FNS30404 FNS40207 BSB30407 BSB40507 BSB50107 BSB20207 BSB30207 BSB40307 BSB50307 BSB31207 BSB40807 BSB40307 BSB50307 BSB41507 BSB51407 BSB60707 Cert IV in Financial Services Bookkeeping Cert IV in Financial Services Accounting Diploma of Accounting Advanced Diploma of Accounting Cert IV in Customer Contact Cert IV in Advertising Diploma of Customer Contact Diploma of Business Diploma of Advertising Advanced Diploma of Customer Contact Advanced Diploma of Business Advanced Diploma of Advertising Cert III in Financial Services Cert III in Financial Services (Accounts Clerk) Cert IV in Financial Services (Bookkeeping) Cert III in Financial Services Cert III in Financial Services (Accounts Clerk) Cert IV in Financial Services (Bookkeeping Cert III in Business Administration Cert IV in Business Administration Diploma of Advertising Cert II in Customer Contact Cert III in Customer Contact Cert IV in Customer Contact Diploma of Customer Contact Cert III in Frontline Cert IV in Frontline Cert IV in Customer Contact Diploma of Customer Contact Cert IV Project Diploma of Project Advanced Diploma of Project 26 Business Services Industry

31 ANZSCO Occupation/Job Role Training Package Qualification / Corporate Services Manager Corporate Social Responsibility Manager Customer Contact Manager / / Finance Manager General Administrative Officer BSB50407 BSB60407 BSB51107 BSB60407 BSB40307 BSB40807 BSB50307 BSB60307 BSB51107 FNS30304 FNS40704 FNS50204 FNS50504 FNS50704 FNS50804 FNS51004 FNS51204 FNS51304 BSB51107 BSB60407 BSB30407 BSB41107 BSB General Manager BSB / BSB60407 BSB60207 Diploma of Business Administration Advanced Diploma of Diploma of, including Business Continuity and Sustainability units Advanced Diploma of, including Business Continuity and Sustainability units Cert IV in Customer Contact Cert IV in Frontline Diploma of Customer Contact Advanced Diploma of Customer Contact Diploma of Cert III in Financial Services Accounts Clerical Cert IV in Financial Services (Financial Practice Support) Diploma of Accounting Diploma of Financial Services (Finance/Mortgage Broking ) Diploma of Financial Services (Personal Trustees) Diploma of Financial Services (Financial Planning) Diploma of Financial Services (Financial Markets) Diploma of Financial Services (Banking) Diploma of Financial Services (Consumer Education) Diploma of Advanced Diploma of Cert III in Business Administration Cert IV in Business Administration Diploma of Business Administration Diploma of Advanced Diploma of Advanced Diploma of Business HR Clerk/HR Officer BSB41007 Cert IV in Human Resources Human Resource Administrator/ Manager BSB50607 BSB60907 BSB Marketing Assistant BSB Market Research Analyst BSB41307 BSB50207 BSB51207 BSB41307 BSB51207 Diploma of Human Resources Advanced Diploma of (Human Resources) Vocational Graduate Cert in (Learning) Cert IV in Business Cert IV in Marketing Diploma of Business Diploma of Marketing Cert IV in Marketing Diploma of Marketing Business Services Industry 27