Chapter 2 - Skill shortfalls and future skills need
Introduction
2.1
An important catalyst for this inquiry was industry’s concerns about the
prevalence and persistence of skill shortages in some key occupations in recent
years, as well as growing concerns about the prospect of serious skill
shortages and skill gaps in the future arising from the combination of
demographic change and new skill needs generated by changes in technology and
business processes. Effective responses will require a reliable and comprehensive
information base, as well as policy and program frameworks that support
investment in a sustainable skills base and short-term responses where
appropriate. This chapter will examine evidence on the nature and dimensions of
current and projected skill shortages as well as on the adequacy of the
information base on current and future skill needs.
Skill shortages and other skill
shortfalls
2.2
The term ‘skill shortages’ is often shorthand for a wide range of
recruitment difficulties as well as skill deficiencies of the existing
workforce. The Department of Employment and Workplace Relations (DEWR), which
monitors skill shortages as part of its labour market information
responsibilities, defines skill shortages as occurring when:
employers are unable to fill or have considerable difficulty
in filling vacancies for an occupation, or specialised skill needs within that
occupation, at prevailing levels of remuneration and conditions of employment,
and reasonably accessible location.[1]
2.3
Shortages are monitored for occupations which require significant
periods of education and training and or experience (usually of at least three
years) generally being in the professions, traditional trades and occupations
in information and communications technology. Skill shortage reports also
include information on occupations experiencing ‘recruitment difficulties’;
that is, where employers have some difficulty in filling vacancies for
an occupation or specialisation within an occupation, even though there may
overall be an adequate supply of skilled workers for that occupation.[2]
Recruitment difficulties may serve as an indicator of possible future skill
shortages, particularly if they persist, although they may also be due to some
specific features of positions on offer or reflect highly specialised needs.
2.4
Surveys of skill shortages do not include information on either ‘skill
gaps’, or deficiencies in the skills of existing workers or labour
shortages, where there are difficulties in recruiting people for less skilled
occupations, that is those generally requiring less than 3 years training
and/or experience. Yet skill gaps, which imply a need for training of the
existing workforce, are of increasing importance for employers in many
occupations, and are expected to increase over time due to the ageing of the
workforce and the increasing pace of technological change.[3]
The need for a sound information base on skill gaps and future skill needs due
to technological and workplace change was raised in many submissions.
2.5
This report will consider the full spectrum of skill ‘shortfalls’ or
deficits of concern to industry, including current skill shortages and
recruitment difficulties, expected future shortages as well as ‘skill gaps’.
Labour shortages will be raised where relevant, but have not been a focus of
this inquiry.
Dimensions
of the problem
2.6
According to the Australian Chamber of Commerce and Industry (ACCI), the
lack of suitably qualified staff has been a major concern for Australian
industry over the past decade, and is one of the most significant barriers to
investment.[4] ACCI reports
that while the relative importance of this issue has varied from year to year,
peaking in 2000, it has remained in the top 10 of industry concerns since 1992.[5]
ACCI does not define ‘a lack of suitably qualified people’.
2.7
The Australian Industry Group (AiG), representing employer associations
in the manufacturing, construction and engineering industries, reports that
several of industry sectors, including manufacturing, are continuing to
experience serious skill shortages which, unless effectively addressed, may
have severe and lasting consequences for Australian enterprises.[6]
2.8
A study for the Australian Industry Group, Training to Compete,
identified three dimensions to the skill shortage ‘problem’: immediate skill
shortages; a lack of quality applicants; and, long term skill gaps including an
expected long term shortage of people with the required key skills.[7]
2.9
The Business Council of Australia submission points to the risk of
future broad-based skill shortages resulting from an ageing population,
indicating the need for strategies to retain and upskill existing workers and
ensure that all young people have the skills that they need to effectively participate in the workforce.[8]
2.10
A study of skill needs in the Hunter region found that knowledge and
skills play a major part in the capacity to create long term sustainable jobs
growth and that just under a third of Hunter industries believed that skill
gaps and shortages will affect their future growth and viability.[9]
2.11
Information from DEWR indicates that skill shortages are currently
evident in many child care occupations and the health professions, and are
particularly severe for nursing, apply to some specialisations within secondary
teaching and ICT, and to many of the traditional trades.[10]
Acknowledging that skill shortages may not apply to all specialisations within
an occupation or to all locations, the committee notes that some trades
occupations have remained consistently in shortage for long periods of time.
Trades skills which have been in short supply for a number of years include:
- pastry cooks, chefs and motor vehicle mechanics continuously from
1994;
- toolmakers and upholsterers continuously from 1995;
- boilermakers, fitter and turners, metal machinists, pressure
welders and sheet-metal workers in all but one or two years since 1995;
- refrigeration and air-conditioning mechanics continuously from
1998; and
- panel beaters, vehicle painters, and automotive electricians
continuously from the end of 1998.[11]
2.12
With the same caveat, in the professions, the occupations or
specializations of electrical or electronic engineers, accountants, registered
nurses, midwives, mental health nurses, development disability nurses,
pharmacists, physiotherapists, speech pathologists, medical imaging
professionals, and secondary school teachers (possibly not all disciplines)
have been in short supply either continuously or in all but one year, since
1996 (and before, in some cases).[12]
2.13
Submissions and evidence to the inquiry confirmed this general picture,
but also reported a large number of other current and projected ‘skill
shortages’ (not defined in any way). These were often specific to an industry
and/or region. For example:
- the submission from TRANZNET identified a current and looming
shortage of truck drivers, with the average age of drivers being over 50,
partly due to insufficient new entrants over the recent past;[13]
- the Victorian Government identified the likelihood of future
shortages in IT, notwithstanding the current downturn in the industry;[14]
- the Recruitment and Consulting Services Association reported that
the nursing shortage is by far the most serious, and there is an overall lack
of qualified trades people, but there are also difficulties in recruiting
people with logistics and supply skills, and legal skills as well as people
with building and engineering skills;[15]
and
- the
Australian Mathematical Sciences Institute reports serious problems with the
supply of mathematics teachers, and teachers of literacy and numeracy for young
people at risk of failing at school, and that there are insufficient teachers
of mathematics among the core TAFE staff.[16]
2.14
These ‘shortages’ may not be captured by DEWR reporting, either because
they are specific to a region, are not sufficiently ‘skilled’ to meet DEWR’s
reporting criteria, or have not yet been manifest in difficulties in
recruitment through standard channels. They are likely, however, to be of
significant interest to industry bodies, policy-makers and educators, because
they suggest areas where a response is required.
2.15
The regional dimension to skill shortages is quite marked: a survey of
businesses by the Australian Industry Group found that 60 per cent of regional
businesses in New South Wales face skill shortages, as well as 48 per cent of
businesses in Victoria and 41 per cent of businesses in Queensland.[17] Shortages can be particularly severe in rural or
more remote areas. The Pastoralists and Graziers Association of Western
Australia reported that 65 per cent of their members find it ‘almost impossible
to engage suitably skilled staff for either seasonal or permanent positions.’[18]
2.16
The impact of regional skill shortages can be felt beyond the region:
there are concerns that shortages of metal and steel trades people are
threatening multi-million dollar projects in the Upper Spencer Gulf areas of
Whyalla, Port Pirie and Port Augusta.[19]
2.17
While skill shortages are said to be ‘a recurring and persistent feature
of the Australian labour market’,[20]
their incidence and severity varies over time. DEWR information on skill
shortages over the past twenty years indicates that shortages have become more
widespread and entrenched since 1994–95. In response to mounting industry
concerns about during the second half of the 1990s, the Commonwealth
government, commencing in 1999, initiated a number of industry-government
(industry-led) working groups to examine skills shortages in selected
industries, under the umbrella of the National Industry Skills Initiative
(NISI). Working groups established since 1999 cover engineering,
electro-technology, retail motor, commercial cookery, building and
construction, the rural industries, retail, emerging technologies and road
freight transport. General issues relating to skill shortages in the
traditional trades, an area of particular concern, were also examined.
2.18
Industry and other participants clearly value the work done through the
National Industry Skills Initiative, particularly the better understanding that
has been achieved of the trends in supply and demand for skills in selected
occupations or industries and the nature and cause of skill shortages.
Nevertheless, industry representatives submitted that Australia still lacks an
adequate national, ‘whole-of-government’ framework for responding to skill
shortages and future skill needs’.[21]
2.19
The Australian Industry Group also identified the need to forestall
future skill shortages through a more strategic approach to skill formation,
based on identifying the trades and post-trade skills requirements four or five
years into the future, given the time required for skill formation at these
levels.[22]
A particular concern is the need to identify the full range of skill needs
associated with some of the major resource or infrastructure projects planned
to come on stream in Central Queensland and Northern and Western Australia over
the next few years and to develop national strategies to meet those needs.[23]
Contributing
factors
2.20
The causes of skill shortages and skill gaps are often complex and multi-faceted
with the specific causes varying with the industry and occupation. National
industry advisory bodies identified the following factors as contributing to
current and future skill shortages and skill gaps: an ageing workforce and
impending retirement rates; poor image translating into smaller and lower
quality pool of applicants; inadequate apprenticeship rates to ensure
replacement training; problems in attracting and retaining people; changing
employment arrangements increasing the demand for skilled workers or decreasing
the supply of skilled workers; and changing skill needs within
occupations.[24]
2.21
Cyclical factors can contribute to fluctuations in training and the size
of the workforce in many traditional trades, with engineering and construction
the prime examples, but can also affect the professions. For example, the
decline in ICT course during the current industry downturn is fuelling fears of
a shortage in the next three years when demand is projected to
increase.[25]
2.22
The seasonal nature of many agricultural industries, and the effect on
social security entitlements of casual work, can also contribute to labour
shortages in agriculture.[26] This suggests the need for workers who are
multi-skilled in a range of seasonal agricultural work, but may also require
restructuring of work opportunities. As the Recruitment and Consulting Services
Association observed, for some occupations or industries, no training strategy
in itself will reduce the gap between the supply and demand for skills: ‘In
some cases fundamental change of the industry is required to attract people to
work in the areas.’[27]
2.23
Attrition rates contribute to shortages in traditional trades where
apprentice completion rates average around 70–80 per cent and up to half of all
trade qualified work outside their trade occupation. Progression within the
industry, as well as dissatisfaction with limited career options, salary,
working conditions or the physical demands of the job, and personal reasons,
such as care of family may be factors. Uninformed career choices can also
contribute to attrition rates, an issue currently of concern to the automotive
industry.
2.24
The professions are not immune from skill shortages partly caused by
attrition of skilled workers: the number of registered and enrolled nurses
outside the nursing workforce represented more than 10 per cent of those in the
workforce in 1999,[28] with salaries and working conditions,
pressures in the hospital system and work intensification contributing factors.[29]
The engineering and medical professions are currently concerned that the rising
costs of personal indemnity insurance will drive qualified people from the
professions, giving rise to, or intensifying, skill shortages in some areas.[30]
2.25
While inadequate training levels are not always the cause of skill
shortages, they are often a factor. Skill shortages within the ICT industry in
the late 1990s, for example, were partly attributed to inadequate training of
existing workers in new technology.[31]
There is a growing concern that, despite the decline in employment growth in
the traditional trades over the past fifteen years, even steeper declines in
the apprenticeship training rates for some occupations are contributing to
current and future skill shortages. While Ms Kaye Schofield, an expert witness,
submitted that the majority of current skill shortages in Australia are simply
manifestations of the normal lags in labour market adjustment and do not point
to systemic skill training deficiencies, she considered that the decline in the
apprentice training rate in the metal and other manufacturing related trades is
alarming evidence of systemic market failure in this industry. Ms Schofield
submitted that:
If the current situation continues in the manufacturing
industry, it will have major implications for general industry growth and the
sustainability of employment levels in key occupations and even alternative
approaches such as skilled migration will be unable to supply the number of
skilled people needed by the industry.[32]
2.26
This market failure largely reflects the impact of significant
changes to training patterns in the engineering and related trades over the
past ten years, discussed further in the following chapter. The major factors
are the decline in trades training associated with the privatisation of public
utilities and ‘mean and lean’ strategies of large private enterprises, which
previously provided a steady pool of skilled labour for small and medium
enterprises. While small and medium enterprises are now being expected to step
into the breach, the competitive pressures under which they operate, and
current industry structures built around niche specialisations and supply
chains,[33]
limit their capacity to do so. The
longer term effect of a decade of inadequate levels of training of new entrants
is now beginning to be felt in the manufacturing and engineering related
industries. A report for the Victorian Learning and Employment Skills
Commission found that the average age of a Licensed Aircraft Mechanical
Engineer is more than 55 years. As it takes seven years to train an aircraft
engineer ‘the skills regeneration point has been reached and exceeded’ for this
industry area.[34]
2.27
The casualisation of
the workforce and work intensification has also contributed to the declining
investment in the training of existing workers and the erosion of the skills
base, a problem which applies across a broad range of industry and occupation
sectors from manufacturing[35]
to nursing, TAFE and university teachers.
2.28
Compounding
this problem, a series of major construction and resource projects will come on
stream over the next few years, boosting demand for manufacturing and related
trades skills at a time when that skills pool is essentially empty. The AiG
argued for a strategic national approach to assess the total demand for skills
against the available supply and for accelerated approaches to trades training
to fill the gap within the next two years.[36]
The committee gained the sense that, if there is not an adequate national
response to this issue within the immediate future, skills shortages in
mainstream manufacturing will become critical, and undermine the viability of
an industry of strategic economic importance.
2.29
Changing social and education trends are also contributing to skills
shortages in many of the traditional trades. The National Industry Skills
Initiative working groups identified a perceived decline in the size and
quality of applicants for apprenticeships at a time when the skill requirements
of most trades are increasing significantly.[37]
This was perceived to be major factor contributing to current and projected
skill shortages. The poor image of the trades, a community and education sector
emphasis on higher education, and the demise of technical high schools in many
jurisdictions are all blamed for the smaller pool of suitable applicants for
apprenticeships. Increasing school retention rates, which result in later entry
to the workforce, are also said to make apprenticeships, with their low wages
in the early years, less attractive to young people. Proposed solutions include
increasing the status of the trades and vocational education and training and
improved career advice in schools, as well as a more diverse range of pathways
for trades training.
2.30
Strong employment growth can also contribute to skill shortages,
and is one of the reasons for the shortages being experienced in occupations
associated with child care and aged care.[38]
Recruitment practices can also
play a role. Shortages of TAFE teachers are projected in the near future, at
least in some states. The committee was told that approximately 24 per cent of
TAFE teachers in NSW are now eligible to retire. With up to 60 per cent of the
teaching workforce employed on a casual or contract basis, there many be
insufficient experienced teachers to replace retirements.[39]
2.31
Changing skill requirements relating to new technology and work
practices are also a major determinant of new skill needs in many industries
and occupations and unless met with an effective training response, will
contribute to future skill shortages and skill gaps.[40]
In the automotive industry, for example, the skill sets have changed
significantly over the past ten years, with a significantly increased need for
skills in electronics and information technology. Training programs will also
need to respond to the need for new skill sets associated with photonics in a
wide range of occupations and industries.
2.32
A number of submissions also pointed to the growing need for people
‘multi-skilled’ in a range of occupational areas. According to GlaxoSmithKline,
increased automation within pharmaceutical manufacturing is generating a demand
for people with knowledge of electrical systems and IT skills.[41]
2.33
Shortages do not only apply to specific occupational or technical
skills. A major issue for the ACCI and AiG is the need to lift the generic or
‘employability skills’ of the workforce, in response to the demands of a more
competitive business environment and greater reliance on technology and complex
information. Employer surveys indicate the need for workers of the future to
have a greater capacity to adapt to change, promote innovation, solve problems
and communicate effectively, and a shortage of people with the required generic
skills. Language and literacy skills are also becoming more important for all
occupations, and yet a large proportion of the Australian workforce has a
‘skill gap’ in this area.
2.34
Changes in the nature and composition of skills need to be reflected in
changes to the content of training and for new approaches to meeting skill
needs of new entrants and existing workers. According to the Western Australian
Chamber of Commerce and Industry, globalisation and rapid changes in technology
require training programs (including apprenticeships) to be continually
re-developed to meet rapidly changing skill requirements, and for a strong focus
on upgrading the skills of existing workers.[42]
Consequences
of skill shortages
2.35
There is some debate about whether skill shortages eventually
self-correct. While some economic theories suggests that labour markets
ultimately adjust to eliminate skill shortages and skill gaps, there are
clearly cases where this does not occur without government or other
intervention to address the root causes. The shortage of nurses is a clear
example. In any case, the long lead time required for skill formation in many
of the higher and intermediate skill areas, usually results in a long time lag
before supply adjusts to meet demand.
2.36
The consequences of skill shortages can be long lasting and serious. In
the short term, enterprises may suffer increased recruitment or operating
costs, reduced productivity, and constraints on business development and
expansion.[43]
In the longer term they may adapt their operations to a lower skills base [44]
or occupations or industries or national importance may disappear, and the
economy as a whole may follow a ‘low skills equilibrium.’ In the aged care
industry, for example, the shortage of registered nurses is blamed for an
increasing use of lower skilled or unqualified people, with potentially adverse
consequences for the quality of care.[45]
The skilled occupation of ‘forging’ has apparently disappeared from Australia
and the skill of ‘toolmaking’, critical to many areas of manufacturing, is
considered to be ‘on the brink.’[46]
A study of skills formation in Victorian manufacturing found that unless decisive
action is taken soon, a number of key trades necessary for a healthy
manufacturing sector will effectively disappear.[47]
Similarly, emerging industries may wither and die in their infancy if there is
not an adequate skills base to support their growth and development.
2.37
Skills are often an important source of comparative advantage for
nations or communities and shortages may inhibit investment. The Northern
Territory government has identified the need to address persistent skill
shortages in some of the trades in the territory, if investment opportunities
are to be realised.[48]
Persistent skill shortages in key services such as teaching and health can also
affect the long term viability of some communities. Several states and
territories have developed or are developing skills strategies to ensure that
the composition and distribution of skills meet their economic and social
development objectives.
2.38
Minimising the incidence and severity of skill shortages, and
unemployment resulting from skill mismatches, through improved identification
of current and future skill needs and appropriate responses, can therefore have
important benefits for enterprises, the economy and society more broadly. This
is an appropriate and important role for government.
Identifying
current and future skill needs
2.39
Industry, individuals, communities and education and training providers
all need access to information on current and future skill needs so that they
can make appropriately informed decisions.
2.40
Evidence to the inquiry indicated that, while the quality of Australia’s
current labour market information is generally high and the development of
internet-based career planning information in recent years is a positive
feature, there is need for a significantly upgraded information base on current
and future skill needs for both VET planning and other purposes. Particular
concerns include:
-
the outdated nature of the current occupational classification
system that underpins labour market and occupational shortage information,
limiting the value of such information as a planning tool;
- significant gaps in the information base, particularly concerning
skill gaps, the dimensions of skill shortages, regional skill needs and
shortages, and the skill needs of emerging industries;
- the need for more qualitative research on the nature of changes
to contemporary industry and workplaces and the implications for current and
future skill needs;
- the need for a more complete range of indicators for assessing
the adequacy of current and future skill supply, going beyond trends in
employment growth and job turnover. This may include the need for a more
precise analysis of the imbalance between skill supply and demand, sometimes
referred to as more sophisticated ‘forecasting’ approaches;
-
the need for a national ‘joined up’ approach to identifying the
skill needs of major resource and infrastructure projects as the basis for a
national co-ordinated response;
- a lack of a comprehensive integrated, readily accessible,
information base, capable of analysis at industry, regional, state and national
level;
-
the need for a more strategic approach to identifying current and
future skill needs; and
- the need
for improved mechanisms for matching job vacancies in a region with people who
could fill those positions either immediately, or with some additional training
(covered in Chapter 3).
2.41
The common message was that industry, state and territory governments,
regional communities and education and training providers do not currently have
ready access to the broad range of information they need for identifying the
priorities for current and future skill development.
2.42
The need for a diverse and comprehensive information base reflects the
varied dimensions of skill requirements (industry or occupation, location,
participation and equity considerations) and the diverse factors influencing
skills supply and demand. An NCVER study for the Victorian government on key
factors influencing the demand for skills found that:
...there is no linear pattern to the trajectory of skills
requirements in Victoria. There are a number of complex interacting factors at
play which determine the requirements for skills. These factors often pull in
different directions and may be regarded as forming a multi-dimensional
model for skills requirements.[49]
Overview
of current information
2.43
This section provides a brief overview of current information on skill
needs and skill shortages as a basis for considering the criticisms raised
during the inquiry and the suggestions for change.
2.44
At the Commonwealth level, agencies are responsible for the collection
and distribution of information on current and future skill needs include the
Department of Employment and Workplace Relations (DEWR), the Department of
Education, Science and Training (DEST), the Department of Health and Aged Care,
the National Centre for Vocational Education Research (NCVER) and the
Australian National Training Authority (ANTA). State and territory governments
and regional bodies also collect a diverse range of labour market information
and some public institutes of technical and further education (generally known
as TAFEs) also collect information. The lack of integration and coordination of
this information was a major concern raised during the inquiry.
Commonwealth
agencies
2.45
DEWR has primary responsibility for providing labour market information
for widespread use, including trends in occupational demand and skill
shortages.[50]
The key information products, from the perspective of identifying current and
future skill needs, are:
- Job Outlook, which includes information on the job prospects
(including occupation and industry trends, earnings, vacancy levels, job
turnover, proportion of full-time jobs and age and gender profile) for 400
occupations for six years into the future, and is available on-line and in hard
copy format. Job Outlook draws on forecasts of trends in employment by industry
and occupation prepared by the Centre of Policy Studies (CoPS) at Monash
University, adjusted by DEWR to take account of other quantitative and
qualitative information on industry and occupation changes provided by
employers, recruitment agencies and education and training institutions;[51]
and
- national and state-based skill shortage lists, produced annually
covering occupations in the trades, professional occupations and ICT fields,
based on a Survey of Employers who have recently advertised (SERA) (and other
methods for ICT vacancies) and on training commencements and completions data.
2.46
The Job Network system within the EWR
portfolio reportedly now has the capacity, with the introduction of vocational
profiles, to better match registered unemployed people with available
vacancies.
2.47
The Department of Education, Science and Training (DEST), in line
with its responsibility for national policy on education and training, provides
a detailed range of information on IT skill needs through the IT Skills Hub,
has undertaken reviews into nursing and teacher education,[52]
and has managed the National Industry Skills Initiative (NISI). For selected
industries under the NISI, information on skill supply and demand, and some of
the underlying drivers, were provided by DEWR, NCVER and the ABS, and further
information was collected where necessary. Participating industries thus
acquired a sound basis for understanding the nature, causes, consequences of
skill shortages and formulating appropriate responses.
2.48
The Department of Health and Aged Care also collects information
on trends in the medical workforce.
2.49
The National Centre for
Vocational Education and Research (NCVER) collects and publishes a wide range
of statistical information on the Australia’s training system including
training and completion rates. NCVER also undertakes research on the changing
skills of the Australian workforce and the VET sector’s capacity to respond to
future industry training needs in support of the national training strategy.[53]
2.50
The Australian National Training Authority (ANTA) draws on a wide range
of information on current and future skill needs for planning VET resource
allocations. Information sources include the forecasts of employment growth by
occupation and industry prepared by the Monash University Centre of Policy
Studies (CoPS), NCVER research, the annual state and territory annual VET
plans, which set out their priorities for skill development, as well as advice
from the national industry advisory bodies, which prepare annual industry
plans.
States and
territories
2.51
State and territory agencies responsible for VET planning use a range of
approaches to identifying the needs and priorities for skill development within
their jurisdictions. While some, if not all, take account of occupational and
industry employment forecasts based on economic modelling, they generally give
more weight to other information, including expert opinion from Industry
Training Advisory Boards (ITABs) and other sources, such as regional
organisations, on industry needs and trends, and to considerations of national
and state and territory priorities.[54]
Some examples of the information collected by state governments follow.
2.52
As part of its VET planning process, the Western Australian Government
develops forecasts for employment growth by industry, occupation and region and
consults with Industry Training Advisory Bodies (ITABs) and other stakeholders
throughout the state. It also undertakes analyses of the current and future
skill needs of particular industries or projects.[55]
2.53
The Victorian Government reports that it is currently
developing more thorough, regular analysis of skill needs and shortages and has
begun the design and implementation of a methodical, multi-tiered analytical
system to quantify skills shortages and needs.[56] During 2002, it commissioned a
number of studies into the demand and supply of skills in Victoria as the basis
for its policy statement on skills and innovation. The studies include a
detailed analysis of the expected demand for training in Victoria based on
projections of employment growth to 2006 by occupation, prepared by the Centre
of Policy Studies (CoPS) and the net replacement needs forecasts by Monash
University–ACER Centre for Economic of Education and Training. This will
provide estimates of net job openings for new entrants by occupation and
qualification levels.[57]
The Victorian Government also continues to collect information on current and
future skill needs through the state Industry Training Advisory Boards (ITABs)
and has commissioned specialist studies, such as skills needed to support the
new synchrotron. It has also commissioned the IT Skills Hub to develop
and maintain an information base on IT industry supply and demand in Victoria as a means of better identifying the changing nature of
skill needs in that industry.[58]
2.54
The Northern Territory government has commissioned an analysis of the
territory’s labour market, partly due to concerns about the skill needs
associated with a number of major development projects.[59]
2.55
At the local or regional level, local councils or Area Consultative
Committees may undertake audits of skill needs and employment trends within
their boundaries.[60]
For example, in 1999 the Hunter Area Consultative Committee undertook a study
of changing skill requirements and skill shortages and gaps, in response to the
profound structural changes in the region over recent years. The Hunter
Engineering Network and the State Development Department undertook a follow-up
study on knowledge intensive manufacturing in the region. These studies
provided the basis for a more detailed understanding of the nature and
dimensions of skills gaps and shortages, as a guide for corrective action.[61]
2.56
Some institutes of TAFE also undertake some planning and assessment of
the skill needs of the local community and the Victorian TAFE Association
submitted that TAFE Institutes can contribute to the data collection and
analysis process, if there were a consolidated attempt to collect and
synthesise that information and they were resourced accordingly.[62]
An NCVER study, however, suggested that the information collection arrangements
of TAFEs are often ad hoc and lacking reliability.[63]
2.57
Local networks such
as the Victorian Local Learning and Employment Networks (LLENs) also collect
information on the skill needs of their local area. Evidence to the committee
indicates that this type of information can be very valuable for local
education authorities and employers.
Is the information base adequate?
2.58
The following section will examine the adequacy of the current
information base on skill needs, focusing on the specific concerns raised as
major issues during the inquiry. The committee observes that a recent paper
provided by ANTA acknowledges the need for improved, early identification of
the skill needs of new and emerging occupations, notwithstanding the challenge
that this presents.[64]
Information
on occupational trends – the ‘ASCO’ system
2.59
The Australian Standard Classification of Occupations (ASCO) underpins
all DEWR’s labour market information, including Job Outlook and skill shortage
information, and the Australian Bureau of Statistics (ABS) labour force
surveys. ASCO is a skill-based, hierarchical system of classifying and grouping
jobs comprising a particular set of tasks into occupations organised by skill
level and specialisation. The formal education, training or prior experience
required for entry to the occupation is used as a proxy for skill level. ASCO
uses five skill levels, which are aligned with the qualifications in the
Australian Qualifications Framework.
2.60
ASCO was introduced in 1986 and a second edition released in 1996, with
the intention of providing a framework for analyzing Australia’s occupational
labour market for the following ten years.[65]
DEWR, in conjunction with the ABS and Statistics New Zealand, is now in the
process of revising this edition with the aim of introducing a replacement
system, the Australian and New Zealand Standard Classification of Occupations
(ANZSCO), in 2006.
2.61
Many submissions from industry and professional associations asserted
that many of the classifications in ASCO fail to reflect contemporary skill
sets, diminishing the usefulness of much current labour market information,
including Job Outlook and DEWR’s skill shortages reports.
2.62
The Master Builders Association and the Australian Industry Group (AiG),
submitted that the pace of occupational change in the interval between ASCO
revisions results in a growing mismatch between ASCO’s classifications and
contemporary job titles or skill sets.[66] Shortages in skill sets that do not align
with current occupational classifications are not captured by current DEWR
surveys. Thus, the looming shortage of people with data communications skills
is said to be ‘hidden underneath the data’ because there is no ASCO code for the occupation at present.[67]
2.63
The Engineering Working Group under the NISI found that the ASCO codes
and many of the job advertisements for the engineering trades reflect outdated
occupational titles (such as welder, fitter and boilermaker) rather than the
new skill sets and job structures introduced over the last decade as part of
fundamental structural reform to the manufacturing industry. This creates
‘confusion and difficulties in reporting and interpreting skill shortages.’.[68]
2.64
The lack of an ASCO code for new occupations such as photonics can also
means that the demand for these skills is not reflected in standard employment
forecasts: the Working Group on Emerging Technologies under the NISI estimated
that emerging technologies could lead to the creation of 28,000 new jobs by
2010 and generate the need for new skills sets and changes to
generic and existing skills.[69] Employment based forecasts such as those
produced by the Centre of Policy Studies, and widely used in Australia for VET
planning, cannot capture this trend. A recent study on the demand for training
concluded that given current rates of technological and organisational change,
a potential delay of ten years in capturing occupational trends may be too
long.[70]
2.65
More generally, many current jobs do not conform to standard
occupational classifications. The Victorian ITAB Association advised the
committee that:
... what a lot of industry people are telling us is that there are
actually other shortages and they are not occupationally based shortages; they
are actually skills shortages. They are looking for people, and it may be that
they have not got a name for these people yet who are working in offices, but
they want a set of skills that does not necessarily match with an occupation. [71]
2.66
The link between skills sets and occupations appears to be becoming more
tenuous, with more skill sets transferable across occupations and the skill
sets associated with particular occupational titles (such as office manager)
varying from employer to employer.[72]
There is a growing need to find better ways of defining and measuring skills
over time, particularly in occupations experiencing rapid technological or
workplace change.[73]
One solution suggested in the UK is for studies of the tasks and skills
underlying occupations as a complement to occupational forecasting.[74]
2.67
ASCO is also said to include insufficient information on skill
specialisations, and higher level skills within an occupation, limiting the
value of some shortage information.[75]
The committee was told that, because there are 90 disciplines in engineering
and only eight or nine main engineering categories in ASCO, ‘any statistical
process to identify skill shortages that is underpinned by ASCO codes is fundamentally
inadequate for whatever use’.[76] Manufacturing
Learning Victoria also stated that the skill shortages in processing industries
identified by DEWR in reality only apply at the advanced skill levels.[77] In recent years, however, DEWR has included
more information on specialisations that are in shortage, even where these are
not captured by ASCO: for example, they report on the specific cuisines for
which there is a shortage of chefs, even though ASCO only
records the broad occupation.[78] Nevertheless, the shortage lists may not
pick up some smaller specialisations where the occupation as a whole is not in
shortage. The complaints raised during this inquiry suggest the need for more
consultation with a broad range of stakeholders on the level of detail that
they require in terms of skill needs. In addition, information on employment
trends based on ASCO will continue to suffer from this lack of requisite
detail.
2.68
The Engineering Working Group recommended that a cross industry and
government committee be considered to review changes to their occupations and
identify the skill sets relevant to industry for the review of ASCO. It also
recommended that an interim arrangement be introduced to capture more relevant
occupational information on skills shortages in the period before the revised
ASCO is released.[79]
2.69
DEWR addressed some of these criticisms in a response to a Question on
Notice from the committee. They report that the review of ASCO is considering
strategies for updating the classification in the interval between reviews, for
information to be captured at the 6 digit occupation level to assist in
identifying emerging occupations, and for reporting more information on
specialisations. DEWR argues, however, that the ANZCO will not be modified for
use in reporting skill gaps, although it will allow skills to be linked to the
occupational structure. DEWR also noted the value of information on higher
skill levels but indicated that this needs to be sourced separately and then
linked to the ANZCO structure. The committee is pleased that DEWR and the ABS
are considering amendments to the classification to address some of the
concerns but believes that it must make a commitment to maximising the
potential of the revised classification for monitoring current and future skill
needs.
Estimating
skill shortfalls
2.70
Estimating the level of training required for an occupation or
area of skill specialisation requires an estimate of net job openings (derived
from trends in employment growth, replacement needs and job turnover) for the
occupation,[80]
as well as other demand stemming from skill shortages (unfilled vacancies),
skill gaps (or skill deficiencies of existing workers) and changes in
technology and work practices within occupations which generate the need for
new skills.[81]
There is also a need to determine changes in the type of training
required, both for new entrants and existing workers.
2.71
Evidence to the inquiry indicated that there are some clear gaps in
Australia’s information base on skill needs. Particular problems are inadequate
information on the nature and dimensions of skill shortages, particularly at
the regional level, ready access to a broad range of indicators of supply and
demand and underlying drivers, the nature and extent of skill gaps, and the
changing nature of skill needs. This section deals with the information on
skill shortages and skill gaps.
2.72
As noted, DEWR undertakes an annual review of skill shortages in the
professions, trades and information and communications technology fields.
Occupations are included in the skill shortage assessment program where some or
many of the following indicators apply: strong employment growth; low
unemployment; large numbers of vacancies, particularly many hard-to-fill
vacancies; upward pressure on earnings; difficulties in finding suitably
qualified people; strong demand for new graduates and use of migration to meet
skill needs.[82]
The Australian Industry Group and Engineering Employers Association of South
Australia questions the credibility and validity of these surveys as apparently
based on job advertisements and follow up and contacts with employer
associations, whereas many vacancies filled by means other than advertisement,
especially in specialist occupations and in regional areas.[83]
2.73
Based on the results of those surveys, DEWR produces an annual national
and state skill shortages reports. These have begun to identify specialisations
in shortage, where relevant by state and territory and also provide an
indication of states and territories and affected and distinguish between the
less severe ‘recruitment difficulties’ and the more severe ‘skill shortages’.
While information provided on the national and state lists is very much in
summary form, up to 1500 pages of more detailed information is available at
state level, including narrative on the history and nature of the shortage,
supply and demand trends, the nature of recruitment difficulties, workforce
numbers and other relevant indicators. DEWR does not however quantify the
shortages,[84] reflecting a conscious policy stance
favouring the use of indicative labour market information, rather than precise
quantitative estimates, as discussed further in a later section.
2.74
This is a point of criticism from industry, some segments of which
require quantitative estimates to assess the extent of the shortage and to
formulate a response. During the NISI examination of commercial cookery, for
example, the industry undertook its own numerical analysis of the
shortfall of skilled workers[85]
This allowed the industry to conclude that, while it experiences entrenched
shortages, a solution should be achievable in a reasonable period of time.[86] The Engineering Working Group under the NISI
also criticised the skill shortage surveys as not measuring the size of the
applicant pool, limiting their value as a tool for understanding the dimensions
of a shortage.[87]
2.75
Industry is also critical of the lack of information on skill shortages
at the regional level, a defect acknowledged by DEWR.[88] The Engineering Working Group under the NISI
noted that the Commonwealth was working with Area Consultative Committees,
ITABs and industry to develop a process and procedure for collecting accurate
and consistent regional skill shortage information.[89]
2.76
A major concern for many industry and professional groups is the lack of
robust information on skill gaps, which are not captured by DEWR skill shortage
surveys and often only identified in general form by industry training advisory
bodies. The Institution of Engineers observed that the shortage managerial
skills among engineers is a major policy issue facing the profession, but this
is not apparent from DEWR’s skill shortage reports.[90] The inquiry was told by many industry
sources that skill gaps, due to changing skill needs, are now a significant
determinant of training needs, and, as such, require more rigorous and
consistent analysis.
2.77
ANTA advised the committee that it has tasked industry advisory bodies
with advising on specific skills (not simply occupations) that are in shortage
or which are priorities for development, and the contributing factors such as a
change to regulatory requirements or poor training practices.[91] While this information will contribute to a
better understanding on skill gaps, from the evidence before the committee it
is not apparent that it provides the level of detail that industry requires.
Forecasting future skill needs
2.78
The submission from the AiG called for an improved a national labour
market forecasting system that adequately ‘predicts’ industry needs now and
into the future, particularly in emerging industry sectors.[92]
However, as noted, Commonwealth agencies have pointed out that they
deliberately refrain from trying to ‘predict’ future skill needs in a precise
forecasting sense.
2.79
The Australian National Training Authority (ANTA), in its initial
submission, referred to the futility of attempting to predict the nature of
future skills needs when new occupations and skill requirements often arise
quickly and in ways that cannot easily be foreseen:
In 1992, it is doubtful that anyone could have predicted the
skills required today, particularly in the areas of the emerging technologies.
It is even more doubtful that we will know what the skills needs of the nation
will be in 2013. However what we can do, and what we have done, is to ensure
that the education and training system is as responsive as possible to the
changing skill needs of the Australian workforce – that industry knows that if
it needs the skills and knowledge, it can turn to the VET sector for a quick
response. We cannot predict the future, but we can plan for it.[93]
2.80
In a similar vein the Department of Employment and Workplace Relations
(DEWR) stated that:
This Department contributes substantially to Australia’s
knowledge base on current and emerging skill shortages across Australia and
occupational trends, characteristics and prospects. This approach does not
entail the ‘prediction’ of future skill needs – the Australian and world
economies are experiencing rapid evolution in specialised skill needs and such
‘prediction’ is not prudent. The focus is rather on providing information on
prospective skill needs that will help to guide the response of the employment,
education and training markets.[94]
2.81
Predicting future skill needs’ embraces two different issues: estimating
the expected demand for skills in existing occupations as a measure of training
needs; and, identifying the changing nature of skill needs associated with
emerging industries and technological and workplace change. Evidence to the
inquiry suggested improved approaches to both aspects of forecasting are
required.
2.82
ANTA’s current approach to estimating the demand for VET can be
described as an ‘indicative’ or ‘indicators’ approach under which a range of
statistical indicators of the supply and demand for skills are considered,
including forecasts of employment growth and job openings and skill shortages,
and judgements are made on how these will translate into the need for VET.[95]
ANTA has recently commissioned a
study on the demand for VET over the next ten years to forecast job
growth by industry and occupation, along with the demographic profile of the
existing workforce, and an estimation of the effect of policy initiatives.[96]
2.83
Qualitative indicators, including advice from industry training advisory
bodies on current and future skill needs and state and territory needs and
priorities as set out in their annual VET plans, as well as studies of changes
in the nature of skills due to workplace and technological change, are also fed
into the mix. The weighting given
to each of these indicators is not clear, although employment projections
appear to play an important role, as discussed in the following chapter.
2.84
Some researchers argue that model-based forecasts of employment growth
and job openings are the most useful tool for identifying skill needs because
of their capacity to integrate a large amount of data from a range of sources,
and generate forecasts for demand for particular occupations (or any other
variable) that ‘make sense within the forecast development of the economy overall’.[97]
These experts argue for employment forecasts to play a major, if not the major
role in skills planning, but with further refinements to improve their capacity
to incorporate information on supply and generate estimates of skill
imbalances.[98]
This may be what some witnesses anticipate when they call for more
sophisticated forecasting of skill needs.
2.85
Other NCVER research, however, supports the merits of an indicators
approach to planning over ‘manpower planning’ or ‘manpower requirements’
approaches, under which training programs or supply of training places are used
to correct projected imbalances in skill supply and demand. According to the UK
Department of Education and Skills (DFES) and a study for the NCVER, fine
detail manpower planning has never worked effectively,[99]
at least on a broad-scale or national level.
2.86
The committee agrees that the need to take account of regional
considerations, such as the mix of skills needed by communities or groups
within the community, and the growing importance of technological and workplace
change in generating new skill needs, also argue against a over-reliance on
employment-based forecasts and similar methodologies for determining current
and future skill needs. The relevance of such forecasts can also be limited by
outdated underpinning occupational classifications (as discussed in previous
sections) and an inability to forecast sharp changes in direction (such as the
technology downturn in 2002–03) or take account of factors such as turnover
within occupations,[100]
which can be an important determinant of skill needs.[101]
As well, employment projections for small occupational groups and small
populations may be unreliable, due to small sample sizes, but this is ‘a
problem which would be prevalent in any alternative approach.’[102]
2.87
Despite these caveats, forecasts of employment growth are and should
remain an important ingredient in planning for skill needs and are also of keen
interest to job seekers or future entrants to the labour market, including
students and prospective migrants. The committee therefore supports efforts to
improve the accuracy and relevance of these models and considers that this
issue could be discussed by stakeholders as part of the development of a
national integrated database on skills supply and demand, as recommended later
in this chapter.
2.88
While employment growth, job turnover and projected retirements are
among the key indicators of skills demand, a range of other indicators,
particularly on skills supply trends, are required. The committee notes that
ANTA is reviewing the indicators for VET Planning and the NCVER has
commissioned several studies into this issue. It also notes that the NISI
exercise was instrumental in drawing out the relevant indicators for several
industries, at least in terms of assessing the extent and nature and possible
causes of skill shortages.
2.89
The committee notes that NISI demonstrated that industries and
occupations need a broad range of quantitative and qualitative indicators of
the supply and demand for skills and the underlying drivers. Commonwealth
agencies such as DEWR, DEST, NCVER and ANTA currently collect much of the
required information, but it is often not easily accessible to clients, such as
industries. Indeed, industry has suggested that one of the main benefits of the
NISI exercise was to provide robust information on the indicators and drivers
of skill supply and demand – information that was clearly otherwise either
unavailable or difficult to access. As well as the indicators developed under
the NISI umbrella, there are a range of other indicators that industry may
need, according to NCVER studies. These could include trends in employment,
training outcomes and enrolments, supplemented by ‘derived measures’ or
comparisons of supply and demand.[103]
2.90
While industry’s focus is on the supply and demand for occupational and
related skills, from a community perspective, other indicators such on Youth
Transition, and the participation of groups such as people with disabilities
and Aboriginal and Torres Strait Islanders, can also be important. Indicators
of intermediate skills can also provide an insight into Australia’s progress
towards a high skill workforce,[104]
given the apparent correlation between intermediate skills and progress to a
knowledge economy.
2.91
Quantitative indicators may need to be supplemented with qualitative
information on the changing nature of work and skill sets within key
occupations as a basis for identifying new skill needs (and training content)
and skill gaps. A study for the Victorian government used a series of case
studies of leading edge firms, which are at the forefront of workplace and
technological change as a means of identifying the changing skill sets within
occupations or industries. They report a similar, multi-faceted approach being
adopted by the German government in a bid to identify emerging skill needs.[105]
At the national level, analysis of future skill needs is mainly the
responsibility of the industry advisory bodies, although ANTA has also
commissioned a number of studies on emerging technologies and their
implications for training. Links with relevant Cooperative Research Centres
will provide another means of enabling skill councils, and through them ANTA,
to improve understanding of the changing skill requirements associated with emerging
technologies.
2.92
The committee considers
that there is a compelling case for the development, collection and regular
publication of a broad range of indicators of skills supply and demand, in each
main industry and/or occupation. The new national skills councils should play a
key role in identifying or formulating the relevant indicators for their
sectors, as suggested in the recommendations made at the conclusion of
this chapter.
2.93
The committee also
considers that there is a need to supplement
statistical information with a range of studies, such as those of leading edge
firms, and other analytical approaches, to identify the changing skill needs of
industry as a result of technological change, in a more systematic, rigorous
and proactive way than appears to have been done to date.
Integration of information
2.94
The need for better
integration of information on supply and demand for skills was raised as an
important issue by a number of submissions and witnesses. Some of the key
points made in submissions on this issue are:
- A joint ACTU-employer training council favours the integration of
all relevant Commonwealth and state labour market data, including information
on skill shortages, employment, training and demographic change in a way that
permits analysis at a national, state or regional level;[106]
- The Institution of Engineers Australia (IEA) recommends the
establishment of an independent, government-supported centre for labour market
research that could engage citizens, industry, education providers and professional
associations in the collection and dissemination of sector-specific labour
market information.[107]
They also favour an expanded range of analytical approaches including
occasional large studies to explore skills shortages in more detail and a map
of the scientific skills base to identify the potential for skills shortages to
emerge;[108]
- the AiG and the Engineering Employers Association also support
the need for a national labour market forecasting system that integrates
information from the Commonwealth and states, but suggested that responsibility
for the system should lie with ANTA. They indicated the need for a system that
enables a better understanding of current and future skill needs, particularly
in emerging industries or technologies and a more proactive approach to skill
shortages;[109]
- Australian Business Ltd submitted that there is a ‘vast range of
data gathered on training, employment and business development’ which is often
not combined and analysed to identify trends around developing local, state and
national economic capability and called for greater consistency and integration
of data collected through Commonwealth, state and regional consultations with
industry;[110]
and
- The Victorian TAFE association recommended a ‘more appropriate
and targeted approach to the collection and dissemination of advice on industry
training needs.’ In their opinion, data needs to be more regionally focused,
current and useable, consistent and accessible.[111]
2.95
Mr Stephen Ghost of the AiG advised the committee that there is also a
need to have a ‘joined-up’ process for identifying the skill needs of
large-scale resource or infrastructure projects, such as those projected to
come on stream in Western Australia, Queensland and the Northern Territory over
the next five years. While most state and territory governments are developing
strategies to deal with the implications for skills needs within their
jurisdictions, there is no adequate mechanism for considering the national or
downstream impact of these projects.[112]
Given the skills shortages already affecting the manufacturing, construction
and engineering trades across most of Australia, there is a significant concern
that, without a coordinated national strategy for identifying and meeting the
additional skill needs, for example through accelerated training programs and
cross-skilling projects, there will be a significant leakage of skilled trades
people from metropolitan and regional areas to the high-paying projects,
bringing some existing businesses and industries to a standstill.
2.96
As indicated in previous sections, the information that enterprises,
industry associations, the VET sector and governments and communities need to
identify current and future skill needs is collected by a wide range of
Commonwealth and state agencies and is not accessible from a single point. No
one publication or agency provides the full set of information that most
industries require. The NISI exercise drew some relevant information from
various sources together, but only for the selected industries and on a one-off
basis.
2.97
The message to the inquiry from a range of sources is that industry and
other clients need, at the least, easy access to a broad range of indicators of
the trends in demand and supply of skills for major occupations. There is also
a need to ensure a more consistent approach to the collection of information at
national, state and regional level to enable greater integration. This will
require a cooperative approach between a range of Commonwealth or Federal
agencies such as DEWR, DEST, ANTA, the Department of Health and Aged Care and
NCVER, state and territory governments and regional bodies such as the Area
Consultative Committees.
2.98
ANTA told the committee that as part of its role in supporting the
national skills councils to undertake a more strategic approach to identifying
future skill needs, and following the work of the National Industry Skills
Initiative, it will be providing the councils with information on skill needs
that it collects (presumably including occupational forecasts) and ‘brokering’
with other government agencies which have an interest in future skill needs,
such as the Department of Industry and DEWR to identify the full range of
factors that will impinge on future skill needs.[113]
The role of the councils will not be to undertake research themselves but to
provide ‘market intelligence’ to inform and supplement research from government
agencies.
2.99
The committee
acknowledges that while this approach will overcome the need for each council
to separately undertake information collection or modelling, it does not meet
the need for a more comprehensive, integrated, national database of information
identified during the inquiry. Given the wide range of stakeholders with an
interest in the trends in the labour market and skills supply and demand more
generally, the committee considers that a better approach would be for a
comprehensive national information database to support the work of the skill
councils. The committee agrees, however, that the skills councils should play a
major role in advising on the range of indicators that they require for
monitoring the trends in skills supply and demand and the underlying drivers of
these. The national database should include information on the level and
location of the projected demand for skills associated with major resource
projects, which may not be apparent from standard models of employment growth.
2.100
The committee observes that a possible model for the distribution of
information on indicators of current and future skill needs is the Skillsbase
online collection of labour market information, established by the UK
Department for Education and Skills (DfES) in 2000.[114]
Aimed primarily at those with a professional interest in skill issues, rather
than casual users, Skillsbase provides a one-stop shop of comprehensive
information on labour market trends, education and skills data as well as
narrative and qualitative information including skill surveys and reports on
skills needs.
2.101
The committee considers that NCVER would be the most appropriate body
for managing a national information database on current and future skill needs.
Final
comments
2.102
Finally, the committee notes that, while planning for future skill needs
based on projected and changing demand from industry is an essential element of
effective VET planning and strategies to forestall skill shortages, investments
in skills formation are not simply a matter of identifying and responding to
the level and nature of skills required. Governments also need to take a
‘leading’ role in terms of identifying the priorities for economic and social
development and allocating resources in line with both areas of skill demand,
and priority areas.
2.103
The committee notes, in this context, that the Victorian Government is
developing a new, broadly-based framework to both assess demand and establish
priorities for skills development in Victoria. The framework is expected to
help to anticipate VET needs flowing from
industry restructuring and redundancies, and will also aim to: ensure that
there is a sufficient flow of new and replacement workers to address future
skill needs resulting from structural change in the economy and from an ageing
workforce; overcome skills gaps and upgrade the skills of the existing
workforce to boost productivity and support industry restructuring; address
future skill needs in key areas including biotechnology, advanced
manufacturing, design, ICT and environmental technologies; address the new
skill sets needed for new and emerging industries and for innovation and
knowledge creation in industry; and, address the skill needs of priority groups
including young people, unemployed and underemployed workers, people with
disabilities, Indigenous people and those in disadvantaged communities.
2.104
The framework integrates a comprehensive range of quantitative and
qualitative information sources and key relationships, including a research
program, which incorporates a range of data and intelligence input and
analysis; a strategic planning and priority setting process that includes
strong relationships and continuous strategic dialogues with industry, the
community and between Government Departments; and a resource allocation process
and dialogue with training providers.[115]
This framework may be worth investigating for its broader application to VET planning,
particularly in relation to the proposed approach to help anticipate VET needs flowing from industry restructuring and
redundancies.
2.105
The committee also notes that VET planning will need to take
account of the skill needs associated with major resource projects, and
believes that the National Industry Skills Forum could play a role in
developing a coordinated national response to this.
Recommendation 1
The committee recommends that the Commonwealth, in conjunction with state and
territory governments,
develops a new, integrated,
nationally consistent approach to the collection and reporting of the complete
range of statistical information on the labour market and current and future
skill needs. This would entail:
- agreement
between all stakeholders on the relevant indicators of skill supply and demand,
including underlying drivers, and consistent collection approaches;
- inclusion of information on skill shortages and regional labour markets; and
- inclusion of information
on the skill needs of major resource and construction projects, from the
earliest possible stage.
The National Centre for Vocational Education Research
(NCVER) should be tasked with:
- facilitating this
process in consultation with relevant Commonwealth agencies, state and
territory governments, the Australian National Training Authority (ANTA) and
industry, through industry skill councils; and
- developing a
national database for recording the information and for permitting analysis of
key trends, to be accessible to stakeholders and to the general public.
Updated
information should also be continuously available through a website and
disseminated in an annual report on the status of skill formation in Australia.
Recommendation 2
The committee recommends that the Commonwealth, in conjunction
with states and territories:
- examines the
feasibility of a nationally integrated approach to collecting and reporting
information on skill gaps, and for inclusion of such information in the
national skills database; and
- considers the most appropriate means of incorporating
qualitative information on current and future skill needs, including the
training needs of emerging industries, and the changing nature of skill needs,
in the national database and reports on skill formation.
Recommendation 3
The
committee recommends that DEWR and the ABS, in developing the Australian and New Zealand Classification of Occupations (ANZSCO)
in conjunction with Statistics New
Zealand, commit to
the implementation of strategies that they are considering to:
- improve ANZSCO’s
value as a tool for monitoring occupational change and changing skill needs;
- update the
classifications regularly as occupations change, to capture labour force data
at the occupation level;
- report on
specialisations and higher skill levels within occupations; and
- make provision for information on skills to be linked to
occupational structure.
Recommendation 4
In
conjunction with the work to be undertaken in recommendation 1, the
committee recommends that DEWR, in consultation with industry representatives, including skill councils, reviews
its current approach to assessing skill shortages with the aim of capturing
information: on a broader range of vacancies, including vacancies that are not
advertised in the print media; on regional skill needs; details of
specialisations and the extent or severity of the skill shortages. This skill
shortage information should be included in the national database developed by
NCVER, and distributed by DEWR.
Navigation: Previous Page | Contents | Next Page