Market Facilitation Industry engagement in a demand driven VET system

1. Market Facilitation Industry engagement in a demand driven VET system

2. The challenge • We all find ourselves increasingly competing to attract and retain our workforces, to provide an increasingly complex range of goods and services, operate within austere budgetary parameters and do so in an increasingly competitive global market • The skills, knowledge and attitudes of all members of the workforce can and must be improved across the whole skills spectrum, including technical, problem solving, communication & customer service skills, project, risk, financial, people & quality management, and strategic & workforce planning.

3. ageing population … ageing workforce

4. Market Facilitation • the aim of the market facilitation is to empower Victorian employers and organisations to self-advocate and successfully negotiate to achieve the training products, supports and services they require to meet their productivity, quality and workforce needs, and; • the market facilitation unit works provide information andmodel new ‘best practice’ behaviours to both the purchasers and providers of training. It will demonstrate what is possiblein the new system.

5. Market Facilitation … Removing barriers and supporting opportunities for increased training uptake: Across industry / employers For hard to reach / disadvantaged learners Informing and equipping employers to take advantage of new bargaining power Ensuring alignment between the supply of and demand for training Supporting emerging industries and needs through market design activity and interventions such as demonstration and innovation projects

6. Where are the opportunities? Partnerships that a mutually beneficial in terms of content, delivery, location and cost of training. Foundation level skills training Efficient and effective workforce development Fostering and embedding expertise and innovation Solution focussed partnerships

7. some of the issues raised by industry? • What skills does my workforce need to meet my operational and strategic goals? • How do I ensure that the training consistently recreates my ‘best practice’? • How can I influence the way training is delivered and where it is delivered? • How can I ensure that training is relevant AND required? • What do I have to do to ‘leverage’ the VTG to reduce costs? • How do I ensure that I am getting the workforce I need?

8. Skills in context … it’s not just about skills acquisition ‘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 Working paper 2006)

9. It’s about planning …what? When talking to employers it’s about workforce development 1: The operational and strategic plans of the business inform the resourcing, skills and workforce requirements of the business 2: The skills requirements of the business are reflected in the position descriptions and duty statements of the staff 3: The position descriptions and duty statements are current and comprehensive 4: The business is able to describe ‘best practice’ for each of the duties identified PRODUCTIVITY GROWTH Driven by Innovation INCREASED COMPETITIVENESS

10. It’s about planning …how many? • 5: The business knows the ‘churn rate’ of the workforce. • The average employee turnover / churn rate is 17% (Skills Aust 2010) • 6: The business knows the demography, intentions and qualifications of the existing workforce • 300,000 people per annum will be retiring in 2012 (ABS 2007) • 7: The business knows size, skills and composition of the workforce it needs • 90% of businesses identified a shortage of skilled labour as being a moderate – extreme risk by 2015 (AIG 2010) PRODUCTIVITY GROWTH Driven by Innovation INCREASED COMPETITIVENESS

11. The training plan defines the partnership • 8: The business needs a training plan: • How many new entrants will need to be recruited and inducted? • How many existing workers need to be trained? • What do they need to be trained in? • How are they to be trained? 70/20/10 – 50/30/20 – 25/0/75? • What do they already know / can they already do? • What qualifications do they have? • Can the training be one level above what the majority already have? • What equipment and resources are required? • How much will this cost? • How can the return on investment be measured? PRODUCTIVITY GROWTH Driven by Innovation INCREASED COMPETITIVENESS

12. How are they to be trained? • 70% on the job / 20% coaching and mentoring / 10% formal classroom • 50% on the job / 30% coaching and mentoring / 20% formal classroom • 25% on the job / 0% coaching and mentoring / 75% formal classroom • Model of delivery impacts business productivity • Backfill often costs more than the cost of training • Qantas spends $380m per annum on training and development but they identify the main cost as being backfill PRODUCTIVITY GROWTH Driven by Innovation INCREASED COMPETITIVENESS

13. Qantas spends $380m per annum on training and development but they identify the main cost as being backfill • Upfront assessment / RPL recognises the existing skills and knowledge of the workers and reduces the risk of delivering what is not needed. • Gap training provides the necessary specialist inputs to consistently recreate the best practice of the business in a time efficient manner. • On site training further reduces the down time of employees PRODUCTIVITY GROWTH Driven by Innovation INCREASED COMPETITIVENESS

14. Types of training • Entry Level Skills • Advanced Technical Skills • Management & Leadership • Quality & Compliance • Coaching & Mentoring

15. In summary … 5 W’s and a couple of H’s Who needs to be developed? (the audience analysis) Why do they need to be developed? (What are the business drivers? What arethe performance gaps, both short & long term?) What are they developed for? (Are there specific skills, knowledge,abilities, competencies, measures, jobs / positions that are targeted? Whatresults am I trying to drive?) How will they be developed? (Multiple delivery & development methodsare employed – formal training, self paced assignments, mentoring etc.) When will they be developed? (Are there time critical time frames that needto be met to address workforce demographic issues or introduction of newprocesses / technologies?) Where will they be developed? (On site training reduces downtime and increases opportunity for collaboration) How will I know that development is occurring/has occurred? (What is mybaseline and what are my targets?) How will I track development progress? PRODUCTIVITY GROWTH Driven by Innovation INCREASED COMPETITIVENESS

16. What measurable value does the partnership between the RTO and the employer generate? • Improve recruitment • Increase or maintain productivity • Reduce errors & inefficiencies • Consistently recreate best practice • Reduce unplanned separation • Improve knowledge management • Improve strategic workforce planning • Improve succession planning • Improve work readiness of new graduates or new recruits • Improve talent management • Improve enterprise sustainability • Improve safety, health & wellbeing • Improve management & leadership • Improve strategic and business planning

17. Labour and Skills Victoria relies on its human capital to generate productivity: to grow businesses, create & sustain jobs, & generate the wealth to invest in infrastructure & services.

18. Important considerations • How should government facilitate the market? • Industry, enterprise or regional level engagement • Data challenges – how do we know we’re making a difference?

19. Thanks