Analyses the perspectives of employers on the current state of skilling in Australia. Develops an understanding of future skilling needs

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2 Broad context.. Increasing integration of world s economies resulting in changes in competitiveness Emergence of the BRIC economies Accelerating technological innovation Increased pressure to improve environmental outcomes and more sustainable resource use Ageing population

3 The World Class Skills for World Class Industries Report. Analyses the perspectives of employers on the current state of skilling in Australia Develops an understanding of future skilling needs Provides a set of strategic policies to impact on skilling

4 The centrality of skills The Report highlights that skills are seen as integral to competitiveness. There are three main implications for skilling: the need for higher level skills the need for a broader range of skills skills need to be updated more often

5 Skill shortages a major threat to competitiveness BARRIERS TO COMPANY SUCCESS OVER THE NEXT THREE YEARS Inabilty to secure skilled staff 74 High cost of skilled labour 70 Competition from low cost countries Competition from domestic producers Insufficient labour flexibility Insufficient domestic market growth Inability to retain skilled staff Poor innovation culture Inability to secure export markets Percent of sample agreeing

6 Skills in demand: where the skills shortages are Difficulties securing skills (by type of employee) in the last 12 months Trades Technicians and paraprofessionals Engineering professionals Apprentices and trainees Managers Labourers and process workers Other professionals Clerical and administrators IT professionals Per cent of sample agreeing

7 Causes of skills shortages Demographic trends Demand side factors Cyclical factors

8 Higher skilled jobs. Managers and administrators % of total employment 7.85% Growth in past 2 years 1.07% Associate professionals % of total employment 12.7% Growth in past 2 years 0.24% Professionals % of total employment 19.18% Growth in past 2 years 0.76% Tradespersons and related workers % of total employment 12.61% Growth in past 2 years (0.16%)

9 Lower skilled jobs. Advanced clerical, sales & service workers % of total employment 3.87% Growth in past 2 years (0.17%) Intermediate production & transport workers % of total employment 8.48% Growth in past 2 years (0.22%) Intermediate clerical, sales & service workers % of total employment 16.35% Growth in past 2 years (1.03%) Elementary clerical, sales & service workers % of total employment 10.25% Growth in past 2 years (0.09%) Labourers and related workers % of total employment 8.7% Growth in past 2 years (0.16%)

10 Qualifications for jobs and the qualification profile Potential qualifications pathways for jobs % of employment Jobs that currently and potentially have a university pathway 24.0 Jobs that currently and potentially have a VET pathway 62.3 Jobs not requiring qualifications 13.7 Current qualifications profile of the population % of pop. University qualifications 20.0 VET qualifications 29.9 No qualifications 50.1

11 The importance of skills STRATEGIES FOR REMAINING COMPETITIVE OVER THE NEXT THREE YEARS Strengthening growth opportunities 93 Building the skills base 85 Introducing new products and services Upskilling existing and older staff Building strong supply chains Introducing new technology and processes Being lean (driving down costs) Benchmarking company performance 70 Securing export markets 40 Developing offshore production facilities Per cent of sample agreeing

12 Impact of skill shortages Higher overtime levels Added costs to production Reduced productivity Production delays Reduced staff morale Damage to the industry overall Work needs to be outsourced Lost contracts Per cent of sample agreeing IMPACT OF SKILL SHORTAGES ON BUSINESS

13 Action to overcome skills shortages ACTION TO OVERCOME SKILL SHORTAGES NOW AND IN THREE YEARS

14 Employers signal a step-up in their efforts to meet skill needs FORMAL AND INFORMAL LEARNING, AUSTRALIAN COMPANIES, NOW AND IN THREE YEARS, PER CENT OF TURNOVER Per cent of turnover Present Future 0 Apprentices and trainees Other employees

15 Barriers to upskilling BARRIERS TO UPSKILLING NON-APPRENTICE EMPLOYEES Training can't be accommodated around work demands Insufficient financial incentives from government Insufficient experienced people to act as trainers or mentors Insufficient time to plan and co-ordinate training Training is not sufficiently flexible Lack of understanding of skill deficiencies among employees Difficulty in retaining staff after training Relevant training not available Employee resistance Training is too expensive Administrative load/paperwork is too demanding Uncertain what is required to meet future needs Per cent of sample agreeing

16 World Class Australian Firms Approach to Skilling

17 What needs to be done? Australia not yet skilling in a world class way. The responsibility for change is shared between: employers individuals employer groups providers governments

18 Key recommendations 1. Education and training system Governments need to build on reforms to increase training market competition to improve training delivery More buying power needs to be provided to training consumers Governments through COAG need to commit to improving the system including at post-entry level

19 Key recommendations 1.Education and training system (continued) Governments should provide funding for small company training through existing structures Employers need to more fully use the flexibility in the training system Employer groups should provide more information, advice and services to employers

20 Key recommendations 2. Shared funding responsibility Employers need to commit to planned increases in training expenditure Governments need to provide more financial support to post-entry level formal training through incentives and the tax system

21 Key recommendations 3. Employer effort Employers need to adopt world class approaches to skilling This includes formal and regular assessment and planning of skill needs, innovative work design and organisation and effective use of the training system Employer groups should assist by extending the provision of information, advice, tools and examples of best practice

22 Key recommendations 4. The image of industry and trade occupations Employers need to increase efforts to form closer relationships to schools and related groups to change the image of the industry Employer groups and governments need to continue to support these efforts