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Australian governments, national and state, have a range of approaches to forecasting skill needs. Those approaches change frequently, not because we’ve necessarily found a better way to do it but because the way we’re doing it always seems to have shortcomings. We’re not alone though. Other nations have struggled with the same challenge for just as long. If we could get a whole lot better at it we’d have a much better idea about how to spend our VET dollars, and prospective students would have a much better idea about how to commit their future study time for a job outcome.
Forecasting is a treacherous business because you don’t know what you don’t know. Will robotics recast the skills profile of the construction industry, and when will it happen? Will artificial intelligence reduce the legal workforce by 30% or 50%, and how quickly will that happen? Is there another invention like the internet just around the corner? How quickly will renewable energy industries take off and where will they be located? If there’s an economic downturn, how will that affect employment in each industry sector? If there’s eventually a big infrastructure spend in Australia, when will it be and how many tradies will we need?
Not easy questions. Nevertheless, the OECD decided to ask them and think about how best to answer them. Where they have got to thus far is explained in Getting skills right: Assessing and anticipating changing skill needs (98 pages), released earlier this year.
There’s a bar chart on page 22 which shows, for selected countries, the percentage of all firms with ten or more employees facing skills shortages. Australia comes in 12th of 33 nations, with managers at about 50% of firms saying they have skills shortages. In Japan it’s 80%, in Canada around 35%, in South Africa around 10%. Explaining those variations between nations is a long story in itself. At a guess, Japan is high because of rapid population ageing and a tiny immigration program. But New Zealand, which is also high at 60%, would have neither of those problems.
The OECD report doesn’t have definitive answers about how to do skills forecasting better. It does have a couple of general observations to make about how skills forecasting might improve.
One observation is that if there’s agreement among stakeholders about how forecasts will be used in policy making you tend to get better outcomes. For example, ‘employment and education authorities are jointly involved in the design and development of the forecasts carried out by Statistics Norway.’
Another observation is that if forecasting is linked to specific policy outcomes, say youth employment in regional areas, then you get more useful data, but you lose the ability to make more general assessments.
Good tips in here for Australia’s governments, not least the way that Canada goes about skills forecasting by focusing in part about what skills are common across occupations rather than looking only at what skills are different for each occupation.
A very early post on the VET Blog is worth dipping into if skills shortages are your thing. Posted in April 2013, What is a skills shortage? follows Sue Richardson’s excellent analysis of four kinds of skills shortages. Other posts from the VET Blog that refer to skills shortages include:
- Employer demand for stem skills – AiG report (posted 11 April 2013)
- School work – VETiS and job placements (posted 23 June 2014)
- World class skills for world class industries (posted 17 March 2014)
- Skill demand and skill preparation in growth industries (posted 12 December 2014).
The NSW government’s new ATLAS mobile app gives apprentices and trainees a one stop online shop for their training plans, uploading documents, getting units signed off by their supervisors, information about workplace safety and bullying, what to do if they lose their jobs.
ATLAS also provides advice for RTOs about a range of things from linking ATLAS to in-house systems and setting up a training plan using the app.
We’re in a bit of a fix here. According to the NCVER’s Apprentices and trainees 2014, the most recent annual report published in July last, trade ‘commencements decreased by 21.9% from 2013 to 2014, with non-trade commencements down 25.3%’. The double whammy is that commencements are down and so are completions – again according to NCVER data, ‘Contract completion rates for apprentices and trainees in trades occupations were 46.0% for 2010 commencements, and are projected to decrease to 41.4% for the latest 2014 commencements’ (Completion and attrition rates for apprentices and trainees 2014).
In light of that glum news, it’s good to see the likes of ATLAS – we need smart supports to assist apprentices and trainees get to the end of their programs. It’s not all glum news though. After falling in 2012, 2013 and 2014, according to the Victorian training market report 2015 apprentice enrolments in Victoria went up a shade in 2015 – from 42,650 to 42,940.
Across the Ditch, the NZ Ministry of Business, Innovation and Employment has a nifty app too. The VET Blog mentioned Occupation Outlook in October 2014. It’s worth investigating and you can download the app from the Occupation Outlook page. On that page you’ll also find information about the purposes and design of the app.
Occupation Outlook provides an overview of income and job prospects for about 60 occupations, and tells prospective students what fees they’ll pay to train in each occupation. You can also download pdfs for these occupations, with the detailed data in static form, from the Occupation Outlook page.
This has been in the inbox for a year now, so it’s lightly old for a blog post with the ring of a new brass bell, and not old enough for a tolling post from the past. Maybe the time is just right.
In April 2015 the Queensland Centre for Population Research at the University of Queensland released a report called Changing post-school pathways and outcomes: Melbourne and regional students (18 pages). The report is part of a larger study funded through an Australian Research Council Linkage grant, which involved University of Queensland, Latrobe University Bendigo, Graduate Careers Australia, and the Victorian Government.
What’s interesting about this report is the way in which post-school choices differ depending on which of three groups you belong to:
- Regional movers – you moved from regional Victoria to Melbourne after completing school
- Regional stayers – you grew up and stayed in regional Victoria after finishing school
- Melbourne stayers – you grew up and remained in Melbourne after leaving school.
The study and work outcomes for each group are distinctive. As the authors note, young people brought up in regional Victoria tend to be educationally disadvantaged and to be employed in less skilled occupations. They are:
- 1.3 times less likely to complete Year 12
- 3.8 times less likely to hold a bachelor degree
- 1.6 times more likely to be employed in a technical and labour occupations at the age of 23
The researchers compared the experiences of young people who grew up and stayed in regional Victoria with those who moved to Melbourne after leaving school. They found that young people who moved from regional Victoria were 1.3 times more likely to complete a university degree and to be employed in a managerial and professional occupations.
What’s interesting is that regional stayers are much more likely to set their sights on a post-school VET qualification than either regional movers or metropolitan stayers. This personal objective is driven according to research, by limited regional access to university education, combined with a lack of support from parents and teachers.
There’s a sense in this report that university education is preferable to VET. That’s a narrow view, but it is clear that access needs to improve to cater for as many post-school options as possible. Perhaps there might be a little more focus on the research finding that
… non-metropolitan youth displayed greater participation in lower-level VET qualifications, including entry-level certificates (certificate I and II), apprenticeships and traineeships, rather than higher certificates (III and IV), diplomas or advanced diploma qualifications.
There’s a riddle to be solved about encouraging more regional stayers to set their sights higher up the VET qualification ladder, not just to encourage them to make a university qualification a priority.
Perhaps it’s a reflection of the research study partners’ perspectives on the world that it’s assumed a degree is a university qualification. Degrees are higher education qualifications and offered by non-university higher education providers. Indeed, TAFE Institutes in particular are making their own degrees available, co-deliver degree programs with universities, and provide partnered pathways to university programs.
So access and aspiration are both important. Both have particular resonance in regional areas. VET providers have a social task on their to do lists – generating demand from capable young regional school leavers for higher level VET qualifications, and meeting that demand locally. VET and higher education providers – and sometimes it’s one organisation straddling both sectors – also have to continue working together to generate demand for, and ensure regional access to, higher education qualifications.
There’s a good deal more in this report that’s worth mulling over, particularly the different (and less positive) employment experiences of regional movers. Australia is an overwhelmingly urban nation. On one reputable ranking we come in 18th – very high when you consider that some of the countries ahead of us are Singapore, Vatican City, Iceland, Nauru and Japan. (There’s a Wikipedia entry here that gives you the lowdown.) Maybe we need to think more carefully about how to help country kids make the transition to the city – it isn’t as procedural and simple as we sometimes think.
We have done good work in improving the language, literacy and numeracy (LLN) skills of the existing workforce. But the end of the journey is a good distance away yet. A recent Australian Industry Group (AiG) report, Tackling Foundation Skills in the Workforce (21 pages), offers a pretty good idea of how far there is to go and what the direction of travel ought to be.
Released in January, AiG’s report, paints in clear colours the employment backdrop to the need for getting Australia’s LLN act together. The report notes that ‘In Australia worker access to the internet as part of their job is higher than the OECD overage for all enterprise sizes’ – and that means, in addition to ICT literacy, having the LLN skills to find your way around a screen. The report’s authors write that:
The change in employment by industry sector is reflected in the growth in the service sector. The fastest growth in this sector requires the highest level of skills such as finance, insurance, business services and real estate. These services are highly dependent on computer and ICT skills. The same is the case for high-technology manufacturing where growth occurs counter to the trend for an overall decline in manufacturing.
A little later they write about the importance of writing, and therefore reading. Note too the significant relationship between reading and numeracy tasks inferred in the following quote from the report:
Given the centrality of written information in all areas of life, workers must be able to understand and respond to textual information and communicate in written form. Many occupations now require the use of numerical tools and models. The presence of ICT in the workplace and the related changes in the delivery of many services make the mastery of literacy and numeracy skills even more important for full participation in modern life. A certain level of proficiency in literacy and numeracy is also a pre-condition for success in undertaking more complex problem-solving tasks.
The OECD has also reported that labour productivity and the use of reading skills are positively associated. Differences in the average use of reading skills explain about 30 per cent of the variation in labour productivity across countries.
That’s the backdrop to the growing significance of foundation skills in getting into work and getting the job done. How does the Australian workforce stack up against these demands? Well, we’re off the pace really. The economic club for wealthy nations, the OECD of which Australia is a founding member, runs an international survey called Programme for the International Assessment of Adult Competencies (PIAAC).
To grasp the urgency behind the following takeouts from AiG’s report you need to know that on PIAAC level 3 is the minimum requirement to operate effectively in workplaces and society – below level 3 and it’s going to be a struggle in the workplace:
- in literacy proficiency, 44 per cent of Australians had skills below level 3
- in numeracy proficiency 55 per cent of adult Australians had skills below level 3.
The case for investing in foundation skills in the workplace is further made by results from an AiG survey which asked employers about the impact of low literacy and numeracy skills on their business. High proportions of employers reported the following:
- poor completion of workplace documents and reports (almost 42%)
- material wastage and errors (almost 32%)
- teamwork and communication problems (over 28%)
- time wasting (over 27%).
The Workplace English Language and Literacy (WELL) program ended in 2014 and was rolled into the Industry Skills Fund. This move has diluted attention on LLN skills. Some aspects of WELL are still running strong though; for example, there is still an intake of 50 people per year into the Language, Literacy and Numeracy Practitioner Scholarships Programme. But AiG is saying we need to get back to tin tacks – LLN needs very close attention via a structured national strategy.
AiG recommends the skills improvement terrain we need to cover which include:
- The Australian Government initiate consultations with industry about the system implementation of strengthening foundation skills in the workplace.
- The Australian Government, in collaboration with industry, develop and implement a national awareness campaign about the benefits to employers of investing in workplace foundation skills programs.
- The Australian Government initiate the process to develop a new national foundation skills program to be delivered in workplaces to directly address the identified and widespread low levels of literacy and numeracy in the workforce.
- The Australian Government dedicate the resources to the expansion of the Language, Literacy and Numeracy Practitioner Scholarships Programme beyond 50 participants per annum and investigate the potential of linking the completion of scholarships to offers of employment.
On 11 April TAFE Directors Australia (TDA) released Trends in public and private VET provision: participation, finances, and outcomes (120 pages). TDA commissioned the NVCER to undertake the research and write the report. It’s quite a complex read because you need to familiarise yourself with a blizzard of categories about provider types and funding arrangements. But don’t let that put you off because the report offers an intriguing insight into how a marketised VET system produce different results.
In a managed market like VET the aim would be to design the market so that outcomes are maximised for all students. This report is a strong indication that maximisation isn’t yet within grasp.
The analysis shows that while TAFE had the majority share of training from 2010 to 2014, it had lost market share, mostly to private RTOs, and especially for Certificate III qualifications. That’s widely known, but perhaps it’s worth drilling down for a little more detail. Regarding Cert IIIs the analysis shows that:
TAFE continues to have the overwhelming majority shares of government-funded enrolments for plumbing and electrical apprentices. By comparison, private RTOs dominate the market for aged care trainees. ‘Other’ RTOs and providers, including enterprises, are gradually moving into the market for electrical apprentices.
The NCVER’s analysis indicates that in 2014 TAFE had around 77% of electrical apprentice enrolments and private RTOs around 14%. What’s notable is that the share of enrolments for ‘other’ RTOs jumped from 2% in 2013 to 10% in 2014. That ‘other’ group of RTOs is a diffuse category and includes include schools, universities, non-government enterprises, professional associations, industry associations, equipment and product manufacturers, and suppliers.
Completions data shows that:
The greatest shares of program completions for the top five training packages (in government-funded training) for TAFE are for qualifications in construction, plumbing services and integrated framework, followed by training and education, and community services. For private RTOs the top five shares of program completions were for qualifications in tourism, hospitality and events, followed by business services and community services.
Digging a little further into the completions data, the report notes that ‘The highest completions of nationally accredited course qualifications are those produced by TAFE, with the share produced by private RTOs being almost half that of TAFE.’
On the all important front of employment outcomes, NCVER’s analysis shows that:
85% of graduates from fee-for-service TAFE and other government (domestic) providers were employed six months after training; they had the best employment rate performance. By comparison, 80% of graduates from private providers found employment six months after training.
The report also picks apart where VET FEE-HELP funding is going and the outcomes for learners who have a HELP loan. We’ll leave that for another time!