Workforce Futures : A national approach to workforce development

1. Workforce Futures: A national approach to workforce development October 2009

2. Why have a National Workforce Development Strategy? Participation Productivity Social inclusion Sustainability How can we best ensure Australia has the workforce capability required for a productive, sustainable and inclusive future?

3. Addressing workforce development threeways National Industry Workforce Futures National Workforce Development Strategy Enterprise Individual Upskilling What skills do we need? Skills Utilisation How are skills used? Participation Who works?

4. Demand for future skills Current workforce trends Planning for an uncertain future Modelling and forecasts Analysis current& trend data 3 Scenarios (Shell Group) Access Economics Background Paper 1 – What Does the Future Hold? Where are we headed? Are skills enough? How do we get there? Agreement on national skill priorities and a shared approach by governments

5. Qualifications supply and demandAccess Economics modelling Qualifications needed………Projected supply of students less the projected labour market demand

6. Modelling findings 2025 A shortfall in the supply of qualifications – most pronounced in 2015, reducing by 2025. Relatively weak demand for Certificate III and IV under each scenario and strong demand for graduates at bachelor level. Skilled migration will meet demand for qualifications except in highest growth scenario. What policy responses are needed?

7. ‘Matching’ skills and jobs in fluid labour markets? People may not seek or find careers in their field of learning 40% end up in jobs which match their VET study Initial education or training becomes less relevant over time 45% workers change jobs every three years Importance of generic, cognitive and interpersonal skills in a service-based economy Skills are more than qualifications

8. Proposed ‘targeted approach’ nationally 1 Long lead time – skills are highly specialised and require extended learning and preparation time. High use – skills are deployed for the uses intended (that is, good occupational ‘fit’). Significant disruption – the opportunity cost of the skills being in short supply is high. High information – the quality of information about the occupation is adequate. 2 3 4 + Data on the rewards and growth rates for each occupation for consideration as part of the analysis.

9. ‘Digging deeper’ on those occupations identified… 1 Profile who, where, what, of workforce and student body (occupational structure, industry spread) Dynamics where are there issues? (who enters education and industry, who leaves and why) Future needs industry advice on how job will change; educational provider advice on the response Current action how effective are current strategies? What more is needed? 2 3 4

10. Way forward? 1 Monitor broad trends – periodic changes which have varying effects Local forecasting, investigating, reporting (core role of education providers, large employers) Ensure information is freely available and people have the know-how to use it (DEEWR, Skills Councils, State Governments) 2 3 + 4 • Emerging thinking around ‘risk’ rather than match – more appropriate for government?

11. Our proposal: A workforce development response • Identifying and meeting Australia’s future skills and workforce demands.  • Among other things, this will require: • the development of a nationally agreed ‘targeted’ approach to skills and workforce planning • agree on national challenges to be addressed eg literacy and numeracy (just under half of Australians have poor functional literacy) and generic skills • streamlining workforce planning responsibilities and ensuring adequate information and capacity at all levels • consideration of how resources flow

12. Addressing workforce development threeways National Industry Workforce Futures National Workforce Development Strategy Enterprise Individual Upskilling What skills do we need? Skills Utilisation How are skills used? Participation Who works?

13. How can we best realise Australia’s skill potential? ‘The fact that people at work are not given the opportunity to contribute to their full potential may well be the biggest skills and productivity crisis we face today' Society for Knowledge and Economics: Workplaces of the Future, 2009 ‘The ability to use particular skills and knowledge in the production process, not merely acquiring them, is what really matters for productivity and income’ Treasury: Perspectives on Australia’s productivity prospects, 2006

14. Evidence of skill under-use People (number in ‘000 and per cent) with a non-school qualification employed at a lower level 30% of tertiary graduates have qualifications exceeding job needs Source: ABS, Survey of education and work 2001 and 2007, unpublished data using ASCO coding, Cat no.6227.0. The bars are percentages, with actual numbers of students in ‘000s also noted.

15. Workforce development Those policies and practices which support people to participate effectively in the workforce and to develop and apply skills in a workplace context and where learning translates into positive outcomes for enterprises, the wider community and individuals throughout their working lives.

16. Realising potential: Productivity and participation dimensions

17. Workforce development at different levels National level Understanding global and national trends Establish frameworks, build capacity Collaboration across policy silos Individual level Learning opportunities suit changing needs Flexible career paths Ability to use and enhance skills at work Industry level Creating sustainable industry workforce Anticipating trends and skill impacts Collaboration on common challenges Enterprise level Work organisation and job design favours complex skills Leadership and culture supports skill development and use Competitive advantage through innovation

18. Is a coordinated national approach needed? Stronger linkages across government programs and initiatives Build excellence evaluation/learning cycle and sharing expertise Shared understanding and language Resource flexibility for education/training organisations to promote change Common principles and success indicators where government funds are involved Working together through cluster-based/ locational approaches

19. Why? 1 Address wastage of people and skills Build industry capacity to manage skills Increase the return on public and private investment Realise life-long learning outcomes 2 3 4

20. Helping us answer the questions? • What does the future hold? What futures can be envisaged? What could be the demand for future skills in these futures? What exactly should we plan for?    • How can we best realise Australia’s skill potential? How can we improve the value from our skills investment? • What could be better relationships between productivity and skills? • What exactly could a workforce development response look like?    • How can we best co-ordinate across sectors and agencies? How can we join up separate areas of government action on workforce participation? How can we co-ordinate better across education, government and industry sectors?  

21. THANK YOU

22. Addressing workforce development in three ways What does the future hold? How can we best realise Australia’s skill potential? How can we best co-ordinate across sectors and agencies?

23. First cut • Architects, designers, planners and surveyors • Air and marine transport professionals • Engineering professionals • Natural and physical science professionals • All of the education professions including schools teachers, tertiary education teachers and miscellaneous • All of the health professionsincluding health diagnostic and promotion professionals, health therapy professionals, medical practitioners, midwifery and nursing professionals • Business and systems analysts, and programmers • Database and systems administrators, and ICT security specialists • ICT network and support professionals • Legal professionals • Social and welfare professionals • Automotive electricians and mechanics • Fabrication engineering trades workers • Mechanical engineering trades workers • Panel beaters, and vehicle body builders, trimmers and painters • Bricklayers, and carpenters and joiners • Glaziers, plasterers and tilers • Plumbers • Electricians • Electronics and telecommunications trades workers

24. How does Australia perform? Strong recovery from GFC but … Global competitiveness: Australia has slipped from 18th to 14th place during 2000s Innovation: decline in multi-factor productivity growth since 2004; just one-third of firms are ‘innovators’ Ineffective business use of internet: e-commerce just 10 per cent of turnover

25. Workforce participation challenge > 1.5 million Australians underemployed > 1 million not in the workforce but want to work Relatively low participation rate for women of child bearing age and prime working age men compared to OECD Certain groups face profound barriers, eg Indigenous Australians (48% employment in 2006)