CEET 14th Annual National Conference

Issues for the VET sector in the context of the

National Workforce Development Strategy

29 October 2010

Robin ShreeveCEO, Skills Australia

Skills Australia – activities and initiatives

Skilled

Occupation

List

(SOL)

March 2009

The challenges ahead: how is Australia faring?

Productivity?

Sustainability?

Participation?

Social inclusion?

How can the Australian VET system best provide the workforce capability required for a productive, sustainable

and inclusive future?

Process for the development of Australian Workforce Futures

Australian Workforce Development Strategy

Workforce and education

trends

Modelling and projections

Planning for an uncertain future

3 Scenarios(Shell Group)

Analysis historic data

Workforce Futures - Overview and background papers

Where are we headed?Where do we want to be?

How do we get there?

Access Economics

Consultation with industry, providers, states/territories and peak bodies

Possible futures: workforce growth to 2025 Access Economics modelling

Projected total employment growth rates 1

Source:1 Access Economics Pty Ltd for Skills Australia, Economic modelling of skills demand (Oct 2009)

Number of people in the

Australian workforce in

2025 (based on the three

scenarios):

Open Doors: 15.3 million

Low Trust Globalisation:

13.7 million

Flags: 12.5 million

------------------------Current:

10.7 million

Workforce participation levels

Australia

Comparison of OECD countries: people aged 15+

Source:1 OECD, Online OECD employment data base statistics for 2008, people aged 15 and over (accessed Feb 2010)

Groups to target► Men of prime working age (25 to 64 years) --- 10th lowest of OECD countries

► Women (aged 25 to 34 years) --- 10th lowest of OECD countries► Older Australians (55 to 64) --- below NZ, Canada and the US

Supply and demandAccess Economics modelling

THE THREE SCENARIOSOpen Doors Low-trust

GlobalisationFlags

By 2015 Demand 770 000 Demand 646 000 Demand 540 000

Supply 533 000 Supply 524 000 Supply 506 000

BALANCE -237 000 BALANCE -122 000 BALANCE - 34 000

By 2025 Demand 828 000 Demand 645 000 Demand 500 000

Supply 659 000 Supply 620 000 Supply 556 000

BALANCE -169 000 BALANCE -25 000 BALANCE +56 000

The projected supply of students less the projected labour market demand 1

Skilled migration plays a significant role in supplementing the supply of qualifications, and if domestic supply remains at current levels, these deficits may be made up through Australia’s skilled migrant

intake.Source:1 Access Economics Pty Ltd for Skills Australia, Economic modelling of skills demand (Oct 2009)

Modelling findings

2025

A shortfall in the supply of qualifications – most pronounced up to 2015, reducing by 2025.

Demand is greatest at diploma and above levels under each scenario with strongest demand for graduates at bachelor level.

Skilled migration will contribute to the supply of qualifications.

Key findings and recommendations

► Forecasting for all occupations is both impossible and impractical. Our focus

should be on ‘specialised occupations’ which we can and should plan for.

The 80/20 rule applies.

► The current capacity of our tertiary education system will need to increase

by 3% p.a, to deliver the qualifications and skills Australia needs.

► Workforce participation needs to rise from 65% to 69% to provide the

workers and skills we need plus improve social inclusion.

► Numeracy and literacy are a major barrier to increased participation and a

national plan with targets and funding is needed.

► Enterprises need to make better use of the skills of

their employees. While some employers are

concerned about future skills shortages, at the same

time 30% of workers say their skills are not being

effectively utilised.

It’s not just skills: it’s how well they’re used

People (numbers in ‘000 and %) with a non-school qualification employed at a lower level 1

In 2005 and 2007, 37 per cent and 40 per cent of employers

respectively reported that the current skill level of

their staff was above what

was required in terms of

organisational needs. 1

Source:1 Skills Australia, Workforce Futures Background Paper Two (Oct 2009)

The challenges ahead...

► Australian productivity has been negligible

► Have had recent periods of negative growth

► Innovation levels are lagging

► Challenge is to keep abreast of rapid changes in the labour

market, new occupations and ways of working

► Requires new ways of working flexibly with learners – especially

those from disadvantaged backgrounds and on the margins of the

workforce

► LLN training, mentoring, case management and partnering with

other service providers (especially adult and community education

sector) will be an increasing focus if participation is to grow

► What type of VET products are best for the future? Are training

packages flexible enough? Or do we need looser concept of skills?

An opportunity to be grasped

• Skills Australia’s targets for increased tertiary enrolments – 3% per annum for next 15 years

• Skills Australia’s targets for increased workforce participation – 65% to 69%

• COAG growth targets – halve number of people without certificate 3; double number of people with a Diploma or above

Issues will move from the supply to the demand side

Is VET up to the challenge?

A lot to be proud of:

Australia has a very well developed VET system, which

enjoys a high degree of confidence…..

Positives and achievements of the system

• National System

• Industry led, competency based

• Strong recognition of Institute and TAFE brands

• Strong performance amongst disadvantaged groups

• Strong connections to industry and engagement with employers

• Formation of large public providers the size of universities

• Wider choice of provider – but TAFE still dominant

Negatives for system

• Flat lining enrolments

• Declining funding contributions from many states and territories

• Declining $/AHC ratios

• Poor completion rates - apprenticeships

• Quality of system called into question by improper activities of some providers with international students

• Lack of transparency about outcomes

• Ageing and often casualised workforce

NCVER Projections of State and Territory Completion Rates

Course completion (all)

Course Completion (FT Under 25 – no previous VET qual)

Module (all) Module (FT under 25- no previous VET qualification)

NSW 40.7 49 79.3 78

Vic 22.4 30.6 77.5 76.4

Qld 19.6 27.7 81.4 77.3

SA 27.7 39.2 87.4 84.5

WA 24.4 36.8 74.7 77.7

Tas 19.5 33.1 79.9 80.3

NT 11 17.9 72.8 77.6

ACT 41 58.9 80.4 79.4

Australia 27.1 34.7 79.1 77.5

Year Whole course success rate

Retention rate

Achievement rate

2006/07 75.3 85.6 87.9

2007/08 78.8 87.8 89.8

2008/09 79.2 88.3 89.6

Qualification Success, Retention and Achievement rates in English FE Colleges

Governments find Apprenticeship attractive –but do employers, employees and students?

Inconsistency

Focus on quality of workplace learning overdue

Unclear responsibility for support: AACs; S/Ts; providers; employers?

Re-engineering apprenticeships for lifelong learning

Fragmented leadership

Regulatory culture

Completions low-are they an attractive option?

Complexity

A more attractive option for employers and

learners?

Source: NCVER (2010) Apprenticeships and trainees 2009 annual, supporting data, state and territory tables

Apprenticeships – an attractive learning pathway?

Measuring outcomes, rather than inputs

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Commenced

Completed

Possible reasons for non-completion? 3

Changed jobs Lost job

Low wages Not liking the type of work

Problems with the workplace or the employer

Trade apprentice commencements and completions 1

Sources:1 NCVER Apprentices collection, unpublished data2 Ball, K & John, D (2005), Apprentice and Trainee completion rates; NCVER (2009) Apprentices and Trainees Annual 2009. There is a break in series between the 1999 cohort and the 2003 cohort, so figures are not directly comparable3 Snell, D & Hart, A, (200*) ‘Reasons for Non-completion and Dissatisfaction Among Apprentices and Trainees: A Regional Case Study’ and NCVER

Apprenticeship

completion rates

however are falling (as

a proportion) 2

For those who

commenced in:

1995: 54% completed

1999: 48% completed

2003: 44.2% competed

Revitalising the apprenticeship model

Skills Australia proposes the following areas

as essential reforms for revitalisation of the

apprenticeship system and making it an

attractive option for a vocational outcome

► Quality and flexibility

► Shifting from a regulatory to a

learner-centred culture

► Overcoming fragmented leadership

► Competency-based progression

Source: Proposed apprenticeship structure, BCP Consulting

A new qualification pathway for apprenticeships?

Government funding for TAFE has flat-lined

Public VET funding relative to other sectors 1

Source:1 Peter Noonan Consulting (March 2010), Investment in VET (Report to the Board of Skills Australia), unpublished

Skills Australia has raised concerns about Government funding for VET in recent years… compared to funding for schools and higher education.

VET operating revenue - by stream

Source:Peter Noonan Consulting (March 2010), Investment in VET (Report to the Board of Skills Australia), unpublished

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Ancillary trading & other Student fees and charges Fee for Service Australian Govt State & Territory Govt

Trends in funding and resource allocation

• Entitlement models – funding follows the individual student (Victoria and SA)

• Entitlement model “last nail in the coffin of an industry led system” – John Hart, Restaurant and Catering Association

• “Firstness” – public subsidy to first qualification only at a particular level

• Enterprise responsive stream – like Enterprise Based PPP

• “Dead weight” – enterprises using public funding to support training they would have done anyway

Who should pay for growth-what’s a fair balance?

► Governments►Overall contribution growing►Shifts in respective shares

► Individuals►Whom/what should be subsidised?►Scope for increased contribution?

► Enterprises►Scope to leverage increased

contribution?

► Fees for service growing►Risky dependence on international

education revenue?

Quality

• Inadequate regulation – bureaucratic but ineffective. (Overseas students). Lots of audits. Being addressed through new National VET Regulator

• Lack of transparency about outcomes (collected but not made public)

• Inadequate external moderation or validation of assessments

New remit....

• Assisting with better utilisation of skills

• Innovation in industry

• Sustaining the green agenda

VET in a new Tertiary Sector

• More “Duals”

• Uncouple institutions from sectors

• Polytechnics

• Degrees in TAFE

• Distraction from core business of Foundation, Trade and Technician Training

• Accentuate division between Institution and Workplace Learning

Lifting VET’s reputationproviders leading from the front

► Quality and delivery of outcomes – from

‘compliance focus’ to excellence► Using data and intelligence► Key performance indicators that

focus on outcomes and outputs

(completions and student

destinations) rather than volume

and activity (ASCH and enrolments)

► Transparency (and accountability)

► Linkages between sectors

► Investment levels and market design

► Governance arrangements

Creating a future direction for VET: three pillars

Improving the VET

Experience

Lifting performance

Governance and funding

Opportunities for

• Higher proportion of workplace and work-based delivery

• Better support for innovation in enterprises

• Better support for more effective skills utilisation

CEET 14th Annual National Conference

Thank you

Robin ShreeveCEO, Skills Australia