robin shreeve - skills development in australia

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Robin ShreeveCEO, Skills Australia

13 December 2011

Skills for Inclusive and SustainableGrowth in Developing Asia-Pacific:

An International Consultative Forum

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Skills Development in Australia:enhancing an industry led,competency based system though an

emphasis on workforce developmentand demand-based funding


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Australias Skills Development System

Industry led

Competency-based

Co-funded bygovernment,enterprises andindividuals

For both existingworkers and job-seekers

Se arate from2


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What is Skills Australia?

Skills Australia will provide the Government withrecommendations on current and future skills needs (and)

inform Australias workforce development needs

Expert independent Board withexpertise in industry,economics, education andacademia;

Provides independent advice tothe government on current,emerging and future skillsneeds and workforcedevelopment needs

Remit expanded in March 2009to look at full scope of labourmarket and give advice on HE &VET

2011 Budget announcements-extended role as NationalWorkforce and ProductivityAgency. Responsible forNational WorkforceDevelopment Fund- started

early - 1 October 2011

Back row (L to R):Keith Spence, Ged Kearney,

Dr Michael Keating AC,Prof. Gerald Burke.

Front row: Heather Ridout,

Philip Bullock (Chair),Marie Persson.

New Interim agency membersPeter Anderson ACCI

Paul Howes AWUDr John Edwards

Source:

1. Julia Gillard, Second Reading Speech Skills Australia Bill 2008(14 Feb 2008)

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Advice Skills Australia has provided toGovernment

Foundations for the Future June 2009

Australian Workforce Futures: anational workforce developmentstrategy March 2010

Advice to Department of Immigrationon Skilled Occupation List for GeneralSkilled Migration program February2011

Skills for prosperity: a road map forvocational education and training May 2011

Energy efficiency in commercial andresidential buildings: Jobs and SkillsImplications May 2011

2011 interimreport on resourcessector skill needs July 2011

2012 report on Defence MaterielIndustries

Scenario development - phase II ofAustralian

Workforce Futures

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Why all the fuss about skills?

Skill shortages - as the economy shifts to recovery and growth, concernsare raised again about constraints due to skills shortages

Productivity- the positive growth in productivity earlier this decade hasflattened, and turned negative

Participation - Australia ranks only 10th out of 34 OECD countries onworkforce participation

Population -Ageing of the Baby Boomers, Migration and Internationaltrends

Underemployment- there are 1.4 million Australians unemployed orunderemployed

Foundation Skills - currently 50% of the population has lower language,

literacy and numeracy levels than they need for their jobs

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VET Business Model

Australian Skills Quality Authority(ASQA)

SkillNeeds andSkill Gaps

Endorsementand

Accreditation

Qualificationsand

CompetencyStandards

Regulation

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The COAG 2020 targets

COAG has agreed to aspirational reform targets for VET for2020 to:

half the proportion of Australians without qualificationsat Cert III level or above

double the number of higher level (diploma andadvanced diploma) qualification completions

As at 2009, approximately 47.1% of 20-64 year old

Australians were without Cert III or above levels

Based on this, the 2020 target is to reduce the number of20-64 year olds without Cert III or above to 23.6%

In 2008, there were approximately 48,091 higher VET

qualification completions in Australia

Based on this, the target would be to double this to 96,182by 2020

Source: National Agreement for Skills and Workforce Development: Performance Report for 2009, COAG 2010

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Australia the challenge of prosperity

Glenn StevensGovernor of ReserveBank of Australia

To put it in very simplifiedterms, five years ago, a shipload of Australian iron orewas worth about the same asabout 2,200 flat screentelevision sets

Today it is worth about22,000 flat-screen TV sets partly due to TV prices fallingbut more due to the price ofiron ore rising by a factor ofsix

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Source: ABS cat. no. 5204.0 and Treasury. Dr Ken Henry, Post Budget address to the Australian BusinessEconomists 18 May 2010

Australia - Three Speed EconomyOutput by selected industry sector

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Possible Futures: workforce growth to 2025

Number of people inAustralian workforcein 2025 (based onthree scenarios)

Open

Doors: 15.3 mill

Low TrustGlobalisation:

13.7 mill

Flags: 12.5 mill

Current: 11.3 mill

Projected total employment growth rates 1

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

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Making Better Use of Existing Workforce Improving Participation

Source: OECD, Online OECD employment data base statistics for

2009, people aged 15 and over (accessed March 2011)

Groups totarget

Men of primeworking age (25 to64 years) ranked

21st in OECD

Women (aged 25to 34 years) - 10thlowest of OECD

countriesOlderAustralians(55 to 64) - belowNZ, UK and the US

Per cent

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Qualifications and skill shortfall

THE THREE SCENARIOSOPEN DOORS

LOW-TRUSTGLOBALISATI

ONFLAGS

By2015

Demand 770,000Demand 646,000Demand 540,000

Supply 533,000Supply 524,000Supply 506,000

BALANCE

-237,000BALANCE

-122,000BALANCE -34,000

By2025

Demand 828,000Demand 645,000Demand 500,000

Supply 659,000Supply 620,000Supply 556,000

BALANCE

-169,000BALANCE

-25,000BALANCE+56,00

0

However, skilled

migration plays a

significant role in

supplementing the

supply of

qualifications, andif it remains at

current levels,

these deficits may

be made up

through Australias

skilled migrant

intake

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

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Qualifications and skills demand

1. Access Economics Pty Ltd for Skills Australia, Economic

modelling of skills demand (Oct 2009)

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0

2

4

6

8

10

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trained at Cert III andFrom 2010-2025

Demand for 12 millionqualifications

Demand for nearly 7million people withqualifications atCertificate III and above

Demand by 2015 foradditional 2.3 millionworkers withqualifications at

Certificate III and above but not all new jobs replacement and skillsdeepening

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What areAustralian Workforce Futureskey findings?

The current capacity of our tertiary education system willneed to increase by 3% per annum, 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. Women (aged 25-34); men (aged 25-64); olderAustralians (55-64)

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 ofthe skills of their

employees

Forecasting for all occupations is both impossible and

impractical. Our focus should be on specialised

occupations which we can and should plan for. The 80/20rule applies

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Australian VET is world class

A lot to be proud of:

Australia has a very welldeveloped VET system,

which enjoys a high degreeof confidence..

Source: Learning for Jobs, Hoeckel, K. 2008

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VET: a multi-faceted, inclusive, geographically diverseengine of this nation

Not just about trades and traineeships (approx 20%)

Catering for all ages - 56% of VET students are 25+

Over 40% from areas of extreme or high socioeconomic

disadvantage

40% of Year 11 & 12 doing some form of VET in Schools

5000 RTOs in almost every town and suburb

Over one-third of all workers depend upon VET as their

highest qualification

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VET has some challenges

Our completion rates could be improved

Quality has been inconsistent

Vocational education in schools is of variable quality

Funding is often tied to enrolments not outcome

Industry at times feels the system is inflexible

The system is complex

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Skills for Prosperitysets out an integratedset of recommendations

A demand-based system of individual leaner and enterpriseresponsive funding as the best means of growing the systemquickly and effectively. Users know better than central planners

Co-funded by those who benefit the most with the greatestsubsidy going to the most disadvantaged

But dependent on:

Better regulation and quality assurance of providers able toreceive public funds including, for example, external validation ofRTO assessments

More transparent information about individual providerperformance. Research indicates greater contestability leads togreater responsiveness and efficiency but needs to beaccompanied by better market information or providers will tendto compete solely on price. This will jeopardise the necessaryimprovements in quality

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Major proposals in Skills for Prosperity

Entitlement system for individual students

Demand based funding for enterprise training

Commonwealth funding for degrees in specialisedareas

Co-funded by Government, Industry and Individuals

(where appropriate) Funding clients rather than RTOs

Stronger quality and regulation

Mandatory external validation of a sample of RTOsassessments

Higher delivery standards for Cert IV in Training andEducation

Outcomes based funding

Increased investment

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It is important to use skills effectively

2020

Skills utilisation is an important element ofworkforce development and is increasinglyrecognised by governments andpolicymakers as just as valuable to

productivity as skills acquisition.

Skills Utilisation is how well employersharness and develop their workersabilities and talents to gain maximumvalue.

Skills Australia, 2011


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Critical success factors in better using employee skills

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Questions?

Thank you

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VET in Australia did you know?

VET is largely funded by the AustralianGovernment and state and territory

governments. However, companies andindividuals can contribute to the cost of training

VET is provided by training organisations whichregister with the government to teach accreditedcourses and include government and privateproviders

VET aims to provide people with the skills andknowledge they require to:

Enter the workforce for the first time

Re-enter the workforce after absences

Train or re-strain for a new job

Update their skills

Move into further study in VET or university

Government RTOs TAFE institutes; secondaryschools and colleges; universities; agriculturaland technical colleges

Private RTOs enterprises training employees;Source: Did You Know? A guide to VET in Australia, NCVER2007


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VET in Australia did you know?

Over 11% of Australias population aged

between 15 64 years participate ingovernment funded VET. About 30% of youngpeople (aged 15 19 years) living in Australiaundertaking some form of VET

The typical student in Australia is more likely to

be an adult, already employed and upgradingtheir job skills, rather than a school leaver

Almost 80% of graduates are employed 6months after completing their training, and

almost 3/4 of graduates report that theirtraining was highly or somewhat relevant totheir current job

VET qualifications are based on a set ofcompetency standards, thus students canstudy for differing amounts of time to completeSource: Did You Know? A guide to VET in Australia, NCVER

robin shreeve - skills development in australia

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