CONCEPT PAPER WORKFORCE PLANNING AND DEVELOPMENT SOUTH AUSTRALIAN DEFENCE INDUSTRY LEADERSHIP PROGRAM 2010

Transcription

1 SOUTH AUSTRALIAN DEFENCE INDUSTRY LEADERSHIP PROGRAM 2010 CONCEPT PAPER WORKFORCE PLANNING AND DEVELOPMENT Lisa Evans, John Godwin, Timothy Hender, Darryl Holt 1

2 1. Executive Summary As employers and Industry bodies know, the challenge of ensuring a supply of well-trained, adaptable, competent people to meet the demands of the Defence Industry is very significant. Skill shortages are hampering the ability of the Defence Industry to grow. A shortage of people trained at higher levels is also limiting the capacity of businesses to expand, change and innovate. The South Australian Defence Industry performs well, but to stay competitive it must have access to more people with the right skills and its workforce must be able to continue learning and adapting as skills requirements change. This challenge is affecting the Defence Industry right across Australia, not just in South Australia. This paper will explore Workforce planning and development and how it is fundamental to the strategic leadership of the South Australian Defence Industry, but yet is still constrained by political as well as commercial imperatives. Skilling for the future is essential to the strategic development of any Industry. However, the timeframes and complexities involved in much of Defence procurement places the Defence Industry in a unique position with respect to its strategic workforce planning needs. Opportunities exist for a unique approach by South Australia, as The Defence State, to invigorate its own, and by extension the national, debate on effective strategic workforce planning and development. The South Australian Defence Industry Leadership Program (SADILP) was commissioned by Government and the Defence Industry to examine issues relating to the provision of workforce planning and the development of skills, and the retention of those skills, in South Australia s Defence Industry. The need for the paper had been highlighted during the development of the Defence White Paper, the Defence Industry Policy and Defence Industry Workforce Action Plan (amongst others) when Local Government and Defence Leaders had expressed difficulties in recruiting and retaining skilled workers for the future. This concept paper explores: The supply of skilled workers in the Defence Industry; The political and social influences on workforce development and retention and how these can be used for positive outcomes; and Strategic imperatives for skills development and retention. In support of this research, it was important to look at: The current state of workforce planning in South Australia; Workforce Planning practice and guidelines; and Industry involvement and effects. By way of demonstration, a case study on a Defence SME identified some of the key challenges associated with Workforce Planning within the Defence Industry. It is clear from this case study that people who are recruited to do interesting work and given opportunity to be part of a new team, settle well and are more likely to stay with their employer and within the Industry. Analysis of this research has identified the following recommendations: 1. A need for a structured training and development program/s to meet Industry demand; 2

3 2. Support for the establishment of an Industry Skills Board within the Defence Industry; and 3. Better support for small Defence Industry businesses to recruit develop and retain workers 2. Analysis Experience As an Industry group, coming together from a range of companies, our representatives can relate to the complexities of Workforce Planning. Manning and skilling for the Air Warfare Destroyer Project has been a major challenge for Raytheon Australia, ASC and the AWD alliance. Skilled Systems Integration Engineers, Project Managers, governance/compliance leads, Logisticians and Technicians have been required to execute one of the largest Defence Programs in Australia s history. Many of the employees have transferred from other Defence projects drawn by the attraction of being challenged by new and emerging technology, leaving holes in capability within projects they have left. Similar difficulties have been encountered by Cobham Aviation Services Australia in supporting its $1 billion, 12 year civil maritime surveillance contract for the Australian Customs and Border Protection Service, with experienced software engineering, aeronautical engineering and project management personnel attracted to other defence and similar projects in Australia and overseas. This is further explored in the Case Study. Skills Overview The South Australian Government has committed to a jobs growth of 100,000 over the next six years, supported by 100,000 additional training places. Increasing skill levels through an accelerated education and training system has been widely recognised as one of the most important focus areas within the Defence Industry. By partnering with Government departments, the Industry can work to achieve these goals. The Defence Industry is concerned that people entering the Industry must be able to demonstrate competency skills in core areas. However, the difficulties in determining key competencies across the diverse areas in which people are employed will increase, especially where demonstration of practical experience is needed for certain Defence Projects. For example, it would be unrealistic to expect undergraduate Engineering courses to provide a complete education enabling a graduate to step into any sector of Engineering. Government can improve the way education and training programs are delivered by making funding more accessible to people and businesses and by encouraging the involvement of Industry and business in skills development as part of the broader workforce development effort. The Skills for All reform direction developed by the Government is a comprehensive ten-point reform program aimed at achieving the step change in skill levels necessary for the increase in participation and productivity required to realise South Australia s potential. The reform package includes the following. 3

4 1. A training entitlement. 2. Demand driven training. 3. A shared investment in skills. 4. A renewed partnership with Industry. 5. Clear role for TAFE SA. 6. An assurance of quality. 7. Well informed clients. 8. Improved pathways into learning and work. 9. School to Vocational Education Training (VET). 10. VET to university/university to VET a seamless tertiary system. The Government and Industry have committed to Workforce Planning by exploring various training initiatives, up skilling programs and easier transitions to higher qualifications. It has all been underpinned by the opportunity to develop skills that: Improve employability. Improve career prospects and ease labour market transitions. Increase adoption of new technologies. Provide options and control for people over their working lives. Support innovation. Planning for skills and jobs to support growth. Recruiting and Retaining High Quality Staff. Employment Flexibility Performance Management of current personnel. Learning & Development. Focus on future skills needs. Tertiary education and training. Creating an Equitable and Diverse Workplace. Industry partnerships. Workforce Development and Workforce Planning The term workforce development covers the strategic coordination of policies, planning and activities which may impact the entire workforce of a particular Industry or region. The principle workforce development activities of attraction, recruitment, personnel management, professional development and retention are strongly influenced by population policy, migration, health and retirement policies, as well as industrial and human resource policies. Therefore at the state and Industry wide level workforce development is linked to the broader economic context and may be considered an outcome of workforce planning 1. Defence Industry workforce planning describes the ongoing cycle of strategic planning required to achieve adequate and effective workforce development to meet the evolving workforce needs of the Defence Industry. Successful Defence Industry workforce planning in South Australia will depend upon coordination of the combined resources of State Government and Defence Industry towards strategic planning activities of research, information and planning systems, Government initiatives and policy development. A useful illustration of the breadth of the issues faced in strategic workforce planning is to consider one of the key problems that it attempts to solve. A critical Industry shortage of suitably qualified, skilled and experienced personnel in a particular region, Industry or time will be created by many factors; a shortage of people attracted to the career or Industry, peak periods of strong Industry demand, a boom in competing industries or regional areas, the bundling of work into jobs that 1 Standards Australia Handbook HB , Workforce Planning,

5 require specific qualifications or experience, access to appropriate training, and continuity of suitable career paths for professional development and retention. An examination of the workforce development needs of the Defence Industry in South Australia reveals that the workforce is influenced by many or all of these issues. However the timeframes and complexities involved in much of Defence procurement, combined with the emotive political and public focus on Defence and the procurement outcomes exacerbate many of these factors and present unique challenges for Industry and policy makers to address. Workforce Planning Practice and Guidelines A multitude of workforce planning standards, guides and toolkits have been published. In Australia many Federal and State Government bodies, public and private institutions publish guidelines and policies which aim to meet the strategic workforce planning needs of a particular organisation or Industry group. The majority of these standards and policies recommend a continuous process of matching workforce requirements to organisational objectives. Most follow the generic organisational planning cycle of plan-do-check-act and approximate the following key activities. 234 Scope the planning activity to determine the timescale, extent and level of detail, and conduct workforce analysis to establish a clear understanding of the strengths, weaknesses, internal structural issues and external factors that influence current and future labour demand and supply. Forecast future workforce needs and gather information to predict workforce demand in line with strategic objectives, trends and available information. This will include understanding future work requirements, identifying key competencies, developing forecasting models, identifying assumptions and scenario building. Identify current and future workforce supply by analysing quantitative research and forecasting future trends, auditing capability and skills, utilising competency frameworks and assessing external labour supply. Gap analysis and prioritisation of gaps according to the risk that each gap presents to the achievement of higher level strategic objectives. Development of workforce strategies, action plans, responsibilities, timeframes, information needs and the necessary business case for funding. Implementation, monitoring and continuous review. Standards Australia Handbook HB provides guidelines on workforce planning applicable to all sizes of business including Industry peak bodies, organisations, associations, Government agencies and Industry skills groups. Common barriers to workforce planning identified include low executive commitment, failure to link strategic and operational directions, a focus on the quick fix, ignoring key workforce segments, using old strategies to tackle new problems, reliance on limited data, omitting a risk assessment, confusing language, and job/role design. 5 The handbook defines the following steps in implementing workforce planning: 1. Build a business case for workforce planning. 2. Authority to proceed. 3. Establish a team of workforce planning champions. 2 Workforce Planning: a guide, NSW Premier s Department, Workforce Planning Toolkit, State Government of Victoria States Services Authority, Guidelines on Workforce Planning, Charles Sturt University, Division of Human Resources, Standards Australia Handbook HB , Workforce Planning,

6 4. Consider external workforce planning advice. 5. Implement the communication strategy. 6. Undertake the workforce profile survey. 7. Verify critical job groups and critical timeframes. 8. Analyse and report on workforce profile outcomes. 9. Identify workforce development strategies. 10. Identify supply sources for critical job groups. 11. Undertake risk assessment and identify mitigation strategies. 12. Monitor, map, measure and integrate. Workforce Planning in South Australia South Australia s Strategic Plan (SASP) 2007 provides a framework for the activities of the South Australian Government, business and the community; and the means for tracking progress state wide. The plan sets out an ambitious program of eighty four medium to long term targets, grouped under the following six interrelated objectives Growing Prosperity (Economic Environment, Employment, Exports, Infrastructure, Population, Aboriginal Unemployment). 2. Improving Wellbeing (Preventative Health, Healthy Life Expectancy, Psychological Wellbeing, Public Safety, Work-Life Balance). 3. Attaining Sustainability (Biodiversity, Climate Change, Ecological Footprint, Water, Energy, Aboriginal Lands). 4. Fostering Creativity and Innovation (Creativity, Innovation, Investment in Science, Research and Innovation, Venture Capital). 5. Building Communities (Women in Leadership, Political Participation, Volunteering, Aboriginal Leadership, Multiculturalism, Regional Population Levels). 6. Expanding Opportunity (Aboriginal Wellbeing, Early Childhood, Economic Disadvantage, Housing, Disability, Education, Aboriginal Education, Workforce Development and Training, Diversity in the Public Sector). The following targets are grouped under the objective of Growing Prosperity: Employment. Jobs: by 2014 better the Australian average employment growth rate. Unemployment: through to 2014 maintain equal or lower than the Australian average. Employment participation: Increase the employment to population ratio, standardised to age differences, to the Australian average. Employment in the Defence Industry: Increase Defence Industry Employment from to by The following targets are grouped under the objective of Expanding Opportunity: Workforce Development and Training. Non-school qualifications: by 2014 equal or better the national average. Higher Education: by 2014 increase proportion of higher education students to 7.5% of the national total. VET participation: by 2010 exceed the national average. In South Australia workforce planning is coordinated by the Department of Further Education, Employment, Science and Technology (DFEEST). The Government of South Australia Training and Skills Commission was established in September The Skills for Jobs Plan was published by the Commission in November 2009 and sets out a five year plan for Skills and Workforce 6 South Australia s Strategic Plan

7 Development in South Australia. Framed around consideration of existing education and training, discussion with Industry bodies, and analysis of skill needs, the plan recommends significant changes to the State s education and training system to achieve a more highly skilled workforce to enable South Australia to reach its economic and social potential. South Australia's nine Industry Skills Boards (ISBs) were created to help Industry and Government explore and plan for emerging skills and workforce issues. The ISBs represent their industries locally and nationally and promote the advantages of education, recognised training and lifelong learning for all South Australians. They also develop tools and provide advice to assist with attracting and retaining workers, providing career information to new and existing employees, upskilling the workforce, skills recognition, and linking to training. The Workforce Planning and Policy (WPP) Directorate supports the Training and Skills Commission, Government, Industry and the community including education and training providers in developing South Australia s workforce by developing and promoting well researched, fully consulted workforce information, policy positions and strategy options to enhance South Australia s efforts to build its workforce capacity. 7 The WPP Business Plan 2010 outlines the selected key performance measures under the DFEEST strategic plan goals for which WPP has responsibility, the WPP priorities and action strategies for Of note under DFEEST Goal 2 Strong Industry Partnerships the WPP priorities include independent evaluation and funding administration of the ISBs, strengthening Government funded Industry advisory and peak Industry bodies providing advice on workforce development, and development and support for the implementation of Industry Workforce Action Plans. Development of the Defence Industry Workforce Action Plan (IWAP) for South Australia was lead by the Defence Teaming Centre (DTC) in broad consultation with prime and small to medium sized enterprises, and supported by the State Government. The DTC will drive the implementation of the strategies and actions, working with Industry, Government agencies and higher education institutions. The plan focuses on ensuring Industry plays a role in attraction, development and retention; establishing a single point of contact in Government; streamlining security clearance processes; encouraging science, technology, engineering and mathematics in education; developing clusters with non-defence enterprises; establishing a Defence Industry leadership program; implementing the Advanced Technology Industry Schools Pathway Program; and articulating the pathways between VET and higher education. 3. Political and Social Influences on Workplace Development The previous section discussed the current state of workplace planning in South Australia and the roles of government in the strategic development of South Australia s workforce imperatives. This section will link together those two commentaries by focussing on the role of the South Australian State Government and Government funded organisations such as the Defence Teaming Centre in influencing workplace development for the Defence Industry. The role of Government in general as distinct from the State Government alone is finely nuanced and cannot be considered as a single set of rights and responsibilities arising from a 7 Department of Education, Employment, Science and Technology, Workforce Planning and Policy Directive, Business Plan

8 common approach to Industry. Rather, each of the two tiers of Government needs to be considered individually and in relation to the other. The Role of the Commonwealth The Commonwealth Government not only makes the largest single contribution to the Defence sector through the direct funding of the armed forces and supporting civilian operations such as the Defence Materiel Organisation and the Defence Science and Technology Organisation but also funds key global and local primes operating in Australia through its purchasing activities. While SMEs will benefit from a limited number of contracts with the DMO itself, most will benefit from this activity through contracting direct to primes rather than to the Commonwealth. Commonwealth Government $ $ ADF $ DSTO DMO $ $ SME PRIMES $ This spending is a national imperative not only in maintaining defence readiness but also in terms of community benefit. These benefits are transferred from the Commonwealth s procurement program through new design and construction, the integration of overseas components and through life support/upgrades. Anecdotal evidence indicates that the value of TLS can be three to four times that of the initial procurement a very important factor in sustaining local defence industries between key development contracts. This will be illustrated further in this paper in the discussion on the Case Study. The Commonwealth Government faces conflicting priorities when making these purchasing decisions. A key factor will be value for money for all Australian taxpayers, a factor which will often involve weighing up the relative benefits of sourcing goods and services in the global or the domestic market although Australia does not seek offsets (that is, requires non-australian primes to deliver at least part of a sourcing contract utilising Australian labour and/or other resources), political pressures arising from the need to assuage cabinet members, party rooms or potential swing states and electorates create a de-facto expectation that often highly localised economic and social conditions will be taken into account when major decisions are made. 8

9 The materiality of these outcomes cannot be underestimated - the decision to award a major project either overseas or to one Australian region or another can have significant effects on local employment and investment. State Government The State Government is expected (regardless of its constitutional or legislative powers) to deliver the economic benefits of the Commonwealth s purchasing decisions. There are four ways in which it can do so. Firstly, the State can provide the infrastructure to attract Defence industries in the first place and then retain them in the state. Prevailing views are that this is best achieved through multi-user infrastructure, such as Techport Australia, which allows SMEs in particular to co-locate with Primes and to integrate into their supply chains with reduced logistics costs. Secondly, and related to the above, the State is better placed than the Commonwealth to work with and develop the SME sector and to promote its inclusion into the Commonwealth s procurement supply chain by creating a positive business environment. This can be of vital importance in maximising the social and economic benefits of the procurement decision while the global primes are in a position to generate significant local employment, the SMEs are more likely to retain profits in the state and hence generate further investment, regardless of further purchasing decisions by the Commonwealth. To help it achieve this, the State can either initiate or develop peak bodies such as the Defence Teaming Centre. Thirdly, the State can act as an advocate on behalf of its local defence industry. This can involve lobby the Commonwealth government for defence contracts, or lobbying overseas Primes to either locate their Australian activities in their state, or to engage local SMEs into their Australian supply chains. In South Australia, this role is undertaken by Defence SA and the DTC. Fourthly, and of most relevance to this paper, the State is largely responsible for the delivery of the skills development and related services that form a key aspect of the workplace planning challenges facing the Defence Industry. This can be achieved through the delivery of direct training services through the existing network of professional and vocational institutions such as universities and the TAFE network. This role, however, generates several questions. What courses should be developed to meet gaps in the employment market? Who should undertake them, for example school leavers, the unemployed or 9

10 the underemployed seeking greater opportunities? When should the course be offered on a regular basis, or specifically in response to new but long lead time contracts? Where should the courses be delivered centrally or regionally, in existing training places or direct to Industry? To answer these questions, the State needs to produce relevant, high quality and accurate labour market data. This requires linking macro-level data that looks at employment growth by sector and occupation and seeks to identify skills shortages at that point-in-time with micro-level data gathered from SMEs and primes through peak bodies on individual and workgroup situations. On this basis forecasts can then be made on training needs. This data can then be distributed through either its own agencies or through peak bodies to SMEs and primes, who can then avoid the risks inherent in the use of in-house anecdotal data and draw upon state wide trends as a foundation for their workplace strategies. Potential Barriers Political and social influences can lead to Governments not only acting as enablers, but also barriers to workplace development and retention. Immigration is a key example of how competing political pressures can lead to adverse outcomes for Industry. It also acts as an illustration between the competing drivers of the Commonwealth and the States in supporting Defence. For States such as South Australia that are seeking to boost their population, a dynamic Defence Industry can be seen as an inducement to potential high skilled migrants seeking to maximise their education and experience in a more hospitable environment. However the Commonwealth, responding to political concerns arising from the more crowded east-coast cities or conservative rural electorates that oppose either immigration, population growth or both can be tempted to put a national cap on new arrivals, regardless of regional requirements. While the current position of allowing proportionally more migrants into regional areas such as SA appears to be working, the fact that SA has no direct power to allow migration (compared to, for example, the Canadian provinces) imposes significant ongoing risks. State Governments can also place barriers in the way of workplace development to support the Defence Industry. Australian companies are often obliged to source US rather than (for example) EU or Israeli technology to enable integration into common US/Australian platforms. The US International Traffic in Arms Regulations (ITAR) prohibit highly qualified foreign citizens from working with this protected technology despite the fact that similar technology is rarely protected where it originates outside the US. Those skilled migrants who are excluded are often from high source countries such as China. There is little that State Governments, without the benefit of global profiles and diplomatic authority, can do to resolve this situation. Even the Commonwealth is limited to lobbying the US to at best mitigate the impact of its regulations upon Australian Industry or, where it can do so, sourcing key technology from markets other than the US. The States have exacerbated this issue by insisting upon the strict application of their equal opportunity laws in a misguided attempt to protect the rights of ITAR restricted citizens to work for the key primes. However, should the States prevail in this right those primes will have no option but to move their protected activities to a more amenable state, or to their home or another jurisdiction the option of breaching ITAR, with their US entities subject to prosecution and possibly locked out of any further US Government work simply doesn t exist. While lengthy and expensive tribunal hearings have found in favour of key primes in South Australia, the Parliament has yet to act on including a broad protection in the relevant legislation. 10

11 4. Case Study, Defence Contractor - SME In further supporting our research and findings, a case study was conducted on a small to medium enterprise (SME) within the Defence Industry and explored their Workforce Planning and development strategies. In reading the following case study, it highlights the need for attention and consideration based on the Strategic Recommendations made, which are explored further in this paper. Background The Company employs approximately 55 people. The business is an SME and today, is a privately owned Australian company. They hold mature relationships with the DMO and in recent years has significantly extended its capabilities such that it provides the full gamut of in country manufacturing, design and engineering support. This business is situated in Australia s newest Naval Hub Techport, in Osborne S.A. Along with ASC Pty Ltd, they are strategically located to support both the Collins Class Submarine fleet and the Royal Australian Navy s upcoming new submarine projects. Goal The business completed a company restructure to meet future growth opportunities and challenges. Their Technical team includes a greatly expanded engineering team and a Technical Advisory Board, comprised of highly qualified and eminent professionals from Adelaide and other states. Due to ongoing success, they recently completed the establishment of a brand new Research and Development centre to develop new and existing products for Defence and commercial markets both at home and overseas. The R&D team consists of both experienced and young engineers of varying disciplines. In building the new Engineering Team, the Company established a workforce planning tool which identified the skills required for future projects. The disciplines varied from Mechanical, Electrical, Chemical and more. The Company required various levels of experience in years and Industry. The planning tools assisted in identifying what was needed and when. This prompted a smooth and structured recruitment process aimed at meeting the business needs for now and the future. Challenges As an SME with little opportunity for growth, how would they recruit, retain and develop a successful team of Engineers? What could they offer candidates that ASC, Raytheon, BAE or other primes couldn t? Due to their size and contract limitations they were restricted to a single product and single customer and lacking internal career opportunities. They faced a challenge. In an effort to attract young, dynamic and professional Engineers, they needed to promote and offer a unique Industry experience. But above all, they needed to pay competitive rates. The main attraction driver was to offer interesting work and promote good employment practices. The recruitment process included a stringent profiling tool, which enabled team leaders to identify key attributes and competencies they required the incumbents to possess. This was a key driver to the successful culture currently held at the Company. With ideal candidates in mind, the Company promised opportunities of overseas travel to young graduate Engineers, along with attractive salaries and personal development opportunities. 11

12 The Company recruited their first 2 Graduate Engineers in November They then pursued with further disciplines and specialist engineering roles including Chemical Engineers, Senior Principal Engineer, CAD Draftsmen, QA Manager and many more. The team grew from one (1) Mechanical Engineer to a team of ten (10) fulltime Engineers and support staff in just 2 years. All were recruited to do interesting work and given the opportunity to be part of a new team, working on the design and manufacture of such a unique product in the field of Defence. Eventually, they completed a purpose built R&D facility to accommodate the team, which was a motivating tool in itself. The Company believed in recruiting the right person first, then developing them over time. By employing ambitious and adaptable employees in the first instance, the Company was able to develop and retain in due course by offering accelerated development programs for young, talented and ambitious Engineers. This included opportunities for engineers to experience other departments and positions within the Company whilst learning leadership and mentoring capabilities along the way. Future Direction By having a plan in place and knowing what the Company needed was a main driver in the success of this exercise. The Company knew what was required and when they needed it. They were able to plan and recruit a team to fit within the business goals. By identifying key attraction and retention strategies, through proper workforce planning initiatives, the Company were able to deliver on their long-term plan by: 1. Attracting 2. Employing 3. Developing and; 4. Retaining This Company experiences an approximate retention rate of 90%. This is mainly due to skills development and retention strategies. Once the employee is recruited, a plan is implemented to ensure the Company possesses the skills required to win and bid for contracts in the future. Training support is offered, in-house mentoring is a key driver and leadership opportunities are available. The Company recognised that not all skills can be recruited. It was about being proactive and not reactive in their skills development. This Company work to ensure the long-term business goals and strategies form part of an overall Strategic HR plan. The case study highlighted the ways to successfully model a Workforce plan in such a competitive market. It clearly displays that Managers and Business owners would need to: Firstly understand their business needs; They would then need to align these needs with strategic goals, linked to a structured workforce plan. They must identify key attraction and retention strategies suitable to their business and the industry They must offer opportunities for internal mentoring and leadership roles positions which help individuals grow professionally. 12

13 5. Findings The depth to which the State Government has sought to conduct effective workplace planning and development in response to issues faced by companies such as the SME explored in the case study, it illustrates the extent to which a highly skilled and trained workforce is a key enabler in the South Australian Defence Industry. A labour force that is well trained, adaptable and up-to-date in its skills, underpins strong Defence sector performance and the world-class manufacturing and business processes that are key to high productivity. Initiatives under this strategic area should address skills and training issues by improving the skills base of the Industry, attracting young people to the sector and improving the linkages between Industry and educational institutions. Improved workforce skills also increase productivity and competitiveness. Strategic Planning Gap Analysis An examination of the targets and objectives of the various workforce development plans at the State, Department, Directorate and Industry level demonstrates a lack of coordination specific to South Australia s Defence Industry workforce. There is a need for improved alignment of strategic goals from the SASP, the Training and Skills Commission Skills for Jobs five-year plan, the Workforce Planning and Policy Directorate s Business Plan, to the objectives of the Defence Teaming Centre s Defence Industry Workforce Action Plan. Whilst the advocacy role of the State government is well defined and prosecuted through Defence SA, the task of well resourced and empowered industry specific workforce planning and development appears to be diluted by competing priorities and interests. One possible causal factor for this may be the lack of a specific Defence Industry focused ISB or similar governance structure. The Defence Teaming Centre has taken on the role of a de facto ISB for Defence Industry workforce planning in South Australia. Whilst there are definitive advantages which arise from such planning being driven through stakeholder interest and demand driven pull factors through an industry peak body, such an organisation may lack the policy and political influence to drive the necessary strategic objectives to a successful conclusion. Best Practice Benchmarks Examination of the state of workforce planning for the Defence Industry in South Australia against best practice guidelines and standards reveals further weaknesses which may also stem from a lack of high level political and policy focus. It appears that Defence Industry workforce planning has not been scoped in sufficient detail to plot the timescale, extent and level of detail required, and clear lines of accountability and responsibility for this activity are not well established. A highly detailed Defence Industry workforce analysis is required to clearly establish the strengths, weaknesses, structural issues and external factors influencing labour supply and demand. Additional attention is required to accurately forecast future Defence Industry workforce demand to align this with the strategic objectives of South Australia s Strategic Plan, through development of reliable forecasting models and scenarios. Through quantitative research the current and future state of the Defence Industry workforce supply may be defined and predicted. Once the problem is known, clear prioritisation of Defence Industry workforce gaps according to the risk of each gap to achievement of State strategic objectives would allow a comprehensive 13

14 business case for the most important Defence Industry workforce strategies and a means of evaluating the appropriateness of current funding levels. Alignment with Australian Standards Examination of South Australian Defence Industry workforce planning against Standards Australia Handbook HB reveals that some of the common barriers to effective workforce planning are applicable including a failure to link strategic objectives at State level with operational targets, a potential reliance on limited data, a failure to manage priorities according to strategic risk and a failure to recognise rigid qualification and role design. It is not clear that an effective business case for Defence Industry workforce planning has been developed. It may be advantageous to establish a high powered team of Defence Industry workforce planning champions such as a dedicated ISB that could bring a similar focus to workforce development that Defence SA has brought to the promotion of the Industry. More attention is required to verify critical job groups and critical timeframes and therefore to identify workforce development strategies that are targeted at supply sources for critical job groups. Finally the strategies must be supported and prioritised through sound governance principles to provide comprehensive risk assessment, continuous monitoring and review. Competing Political Interests While the Defence of the nation is unquestionably a Commonwealth matter, the Industry that equips and sustains the ADF is an important part of states economic bases, and quite rationally, state Governments have an interest in supporting the growth of local Defence industries. The South Australian Government has had a long history in supporting Defence manufacturing, innovation and export. The activities of state Governments can either enhance or hinder the Defence Industry policy of the Commonwealth. State Governments have the ability to induce short term business decisions within the Industry that may not be in the long term interests of the development of the Industry from a national perspective. The risk that actions by state Governments may hinder the development of a national Industry can be exacerbated by the bidding process used by Defence. Given that state Governments are prepared to make investments in the Defence Industry, a more sensible approach would be for states and industry to cooperate with each other, under the general direction of the Commonwealth, to determine the best uses of state Government investment for the nation and the Defence Industry as a whole. Supply of Skilled Workers The need for change in the training system is well understood by Governments and it has been the focus of much discussion and debate. For too long the necessary action to bring about real change has been held back by complex funding arrangements and by the scale of the structural changes needed. It is clear that change must be far-reaching and it must begin now. Industry and Government must agree the need for: more people undertaking training in the areas where skills are needed and at the levels where skills are needed; a training system that engages more effectively with individuals and business and is easier to understand; 14

15 a skills system that responds to the changing needs of individuals and businesses; and a culture of lifelong skills development. Governments have an important role in human resources and skills development, including funding and support for aerospace and Defence Industry training. Educational institutions need to continue to work with Industry to ensure that their programs and curricula are meeting the requirements of the sector, that is, demand driven. The Defence Industry should take a lead role in initiatives that encourage: Increased corporate investment in workforce skills and training; Direct investments in education by offering co-operative education positions, providing equipment to schools and offering staff time to educational programs; Investment in new technologies, capabilities to develop systems integrator capabilities. Developing greater linkages between Industry and educational institutions to ensure that educational programs meet the needs of the sector; Working with academia, particularly programs that support research and the training of undergraduate and graduate students; Promoting the Defence sector as a desirable career choice for youth; Input into the identification and assessment process for selecting programs that could benefit from Government support/participation; Developing deeper domestic and international industrial partnerships to better compete on major platforms. Partnerships will allow South Australian firms, especially small and medium-sized enterprises, to participate on major platforms; and Building competitive domestic supply chains and partners to ensure South Australian companies can compete for major platform work packages. 6. Strategic Recommendations Having identified and realised the above findings, the following recommendations are advocated for improved outcomes in Defence Industry workforce planning and development: 1. National State and Industry Cooperation As the Defence State, South Australia is well placed to champion the cause for greater cooperation between the States and Defence Industry groups at a national level. Under the general direction of the Commonwealth, this cooperation should inform and optimise the use of State Government investment in major infrastructure and workforce initiative for the nation and the Defence Industry as a whole. 2. Demand Driven Training Providing training in a demand driven system has many benefits. Training is better matched to the needs of the economy. This leads to better economic outcomes and better, higher paid jobs for individuals. Demand driven training also drives greater efficiency in funding. As training increasingly meets the demands of employers and individuals, the amount of money spent on wasted or ill targeted training will decline dramatically. 15

16 3. Defence Industry Skills Board This paper has identified the lack of a Defence-specific Industry Skills Board in South Australia as a causal factor contributing to inadequate policy focus on Defence Industry workforce development. This gap should be closed by establishing an Industry Skills Board to play a major role in workforce development within the Defence sector. The board should enable Industry and Government to work together more effectively and should have a range of functions, including identifying workforce skill trends and emerging skill needs, and considering issues relating to career advice and the attraction and retention of a skilled workforce. It should have prime responsibility for the South Australian Defence Industry s role in the national vocational education and training system and promote skills formation and investment in it. A Defence Industry skills board could provide industry intelligence for training, skills development and workforce development issues specific to Defence Industry and promote the importance of integrating workforce development and business development to industries, enterprises and their workforce. 4. Targeted Small Business Support The Case Study illustrated how small Defence Industry businesses employ a large number of South Australians and are critical to the State s economy and Defence Industry. Government and industry bodies should consider initiatives to support small businesses operating in the Defence Industry to attract, recruit, develop and retain workers. It may also be advantageous for major Defence prime contractors to consider policies which support a sustainable local supplier workforce rather than competing aggressively with these companies for skills and resources. The industry should consider incentives to build cooperation in this area and enhance long term productivity and capacity. Specific strategies to support small business to attract, recruit, develop and retain their workforce should be created. Employers and industries that value and reward their staff, invest in skill development and encourage achievement create high performance workplaces. 5. Industry Initiatives The South Australian Defence Industry should consider initiatives that would encourage investment in training, education and new technologies; closer ties between industry and educational institutions to align education and research with needs of the sector; promotion and marketing of Defence Industry careers, input to government decision making on policy and funding for workforce development initiatives; and development of domestic and international partnerships. 16