LLN, skills & productivity: making the leap

1. John Benseman Critical Insight LLN, skills & productivity:making the leap

2. Productivity Workplace productivity refers to how efficiently and effectively a workplace can turn its inputs, such as labour and capital, into outputs, such as products and services An on-going concern for most Western governments over past decade - closely linked to international competitiveness New Zealand Cabinet adopted the Workplace Productivity Agenda (WPA) to foster productivity development at the workplace LLN has ridden on the back of productivity?

3. New Zealand has slipped to 20th among 58 economies measured on the world competitiveness scoreboard, the just-released IMD World Competitiveness Yearbook says. The drop of five places significantly worsened the trans-Tasman gap, with Australia improving two places to rank fifth in the world (NZH21/5/10).

5. What drives productivity? UK: New Zealand Treasury: • Investment • Innovation • Skills • Enterprise • Competition • + 16 more specific levers • Innovation • Skills • Investment • Access to natural resources New Zealand Institute • Entrepreneurship • Skills & talent • Innovation • Investment • Natural resources

6. Factors driving productivity (DoL,NZ) • Building leadership and management capability • Creating productive workplace cultures • Encouraging innovation and the use of technology • Investing in people and skills • Enables innovation • more capable with new technology • Work more quickly with fewer mistakes • require less supervision • accept more responsibility • better communicators • Training leads to higher skills and wages and lower staff turnover. • Organising work • Networking and collaboration • Measuring what matters

7. From the literature(Mayhew & Neely, 2006, Keep et al, 2006) Most research at the macro level Investment is the key No one factor is sufficient – ie skills are a necessary, but not sufficient condition Wide range of strategies, also diverse outcomes Productivity: increasing efficiency or increasing quality Need for micro studies at company level – what happens inside the black box?

8. Skills and productivity • Empirical evidence overwhelmingly demonstrates link between skills & labour productivity • But, variations from company to company & at different stages of development • ‘Need for the right type of skills, at the right level & for the right groups of workers. Blanket approaches may waste a lot of money & produce minimal results’ (Keep et al, 2006)

9. Skills… • ‘Skills are the simplest, best, most direct way to boost productivity. Skills investment is the only way to maintain productivity’ (UK Sector Skills Development Agency, 2006) • Seen as a scapegoat? (Keep et al, 2006) • 1/5 – 1/8 of UK’s gap with Germany & France • Seen as ‘easy lever’ for policy? • LLN not specifically mentioned

10. Skills, but what skills? • Qualifications (generic vs. specific) – poor proxy for skills? • Specific, technical skills (e.g. machinery) • IT skills • Soft skills • LLN skills • Generic • Contextualised • ‘More skills (= quals) are needed’ mantra

11. LLN & productivity Primarily about changes in workplace practices Working smarter, not necessarily harder How to demonstrate LLN’s uniqueness vs. rock climbing or other workplace skills?

12. Improved Productivity The ‘Black Box’ Changes in ESs

13. Workplace Productivity Projects evaluated by DoL (2009) Partnership approach – firms, govt. depts., industry bodies, unions & business consultants 28 workplaces Direct tailored assistance: needs analyses by business consultants Implementation (or not) by company Range of interventions

14. WPP identified needs strategic and operational planning management capability and leadership skills organising and understanding workflow workplace culture and communication

15. WPP outcomes • ‘Some’ improvement across all 28 sites • ‘Moderate’ to ‘considerable’ improvement at 20 sites • Improvements: • increased worker participation • increased knowledge and skills • improved business planning • improved work processes

16. Claimed impacts of LLN programmes • Better quality work • Fewer rejects/re-works • Greater efficiency • Better use of technology, incl. computers • Improved health and safety • Increased self-confidence • Better communications

17. King Salmon

18. ES to Productivity: the ideal • SHINPOH 1ST GRADE • Slice Height: minimum 30mm • Slice Length; 120-175mm • Bloodspot: 1-3mm up to 10 spots in a Pack • Freckles: less than 1/3 of Pack • V. Gapes: < 5mm over 1/3 of Pack • Tears: No Tear > 10mm in length

19. Outcome: 40% increase in top grade products

20. ‘Proving’ the link between learning & application • The ‘black box’ of learning transfer • 8 case studies at Fletcher Aluminium • Transfer varies according to: • Relevance of teaching content • Generic skills vs. specific skills for transfer • Nature of LLN skill • Degree of LLN need • Time • Management factors

21. LLN & productivity – what do we know? • Not a simple input/output/outcome chain • Variations across workers & contexts • LLN does have an impact on workplace practices, but not necessarily productivity • LLN skills are a ‘logical’ form of workplace skills • We need to be selective about LLN • Who participates • What is taught

22. LLN changing workplace practices – what don’t we know? What can realistically be changed – micro level, nationally? How do changes in workplace practices contribute to productivity? What does LLN need to be ‘bundled’ with?

23. References Mayhew, K. and A. Neely (2006). "Improving productivity – opening the black box." Oxford Review of Economic Policy 22(4): 445-456 Keep, E., K. Mayhew, et al. (2006). "From skills revolution to productivity miracle - not as easy as it sounds?" Oxford Review of Economic Policy 22(4): 539-559

24. Questions and/or comments? Contact: john.benseman@criticalinsight.co.nz