Monthly Archives: April 2012

Boosting productivity by harnessing skills, Robin Shreeve, CEO, Skills Australia

 Individuals, enterprises and governments all intuitively recognise the links between completing a training program and getting a job. Large numbers of research reports have charted the impact of qualification completions on workforce participation. As a result individuals, enterprises and governments are all prepared, to varying degrees, to invest money, time and effort in both vocational education and training and higher education.

Skills Australia believes, however, that skills development is only part of the equation.  How skills are utilised in the workplace is critical to maximising the investment of all the participants . At a national level, Skills Australia has recommended that both the Australian Government and individual enterprises use increased amounts of public and private funding to leverage workforce development initiatives at industry and enterprise levels, with a special focus on small business.

In  our National Workforce Development Plan, published as Australian Workforce Futures, we outlined how our modelling indicated that the Australian economy  will need by 2015 over 2 million more people with qualifications at Certificate 3 and above if employers are going to have  the skills they need to keep  a booming economy going. It should be stressed however that we are not saying there will be over 2 million more jobs in 2015. Part of the demand will be for upgrading the qualifications of those already working as well as reflecting that labour force entrants tend to have higher levels of qualifications than those who are retiring.

It is therefore somewhat ironic that the Australian Bureau of Statistics estimates that 30 per cent of Australian tertiary education graduates have qualifications exceeding the occupation skill classification.   Additionally, while it was a small sample size, the Head of the National Institute of Labour Studies at Flinders University, Professor Kostas Mavromaras estimates that approximately 41 per cent of employees believed themselves to be over skilled.

Qualification mismatch, the discrepancy between the qualifications held by workers and those required by their job, has become a growing concern among policy makers. It is also a concern for employers as the effect of qualification mismatch on wages and job satisfaction may have implications for the mobility behaviour of workers.  Skills Australia encourages organisations to ensure that workers are well-matched to available jobs as this is essential to promoting growth and to make the most of investments in their labour pool.  This is not an argument about an over supply of skills. Rather it is about better organisational and job design at the enterprise level.  A modern economy requires more and higher levels of skills. Those skills are being developed but they also need to be used efficiently and effectively.

There is much scope for improvement by employers and employees working together with assistance from training providers and governments, to re-examine how individual workplaces can be organised to make better use of skills. According to Society for Knowledge Economics: “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.”

Enterprises seeking to harness and develop their workers’ abilities should address how work is organised and how skills are aligned to the needs of the business.  Effective practices include conducting skills audits and redesigning or rotating jobs as needed.  I would also like to stress the importance of strong leadership and employee support from management. By enabling measured risk-taking and providing opportunities for staff to have a say in business process, managers can encourage creativity and innovation in their employees. An organisational culture that promotes the development of leadership and people management skills leads to an environment in which skills and talents are fully recognised and used.

Implementing change requires time and effort, but when an employee feels their skills are being utilised and their talent nurtured, our research has found that it pays dividends in business efficiency, productivity and innovation.

Skills Australia’s Better use of skills, better outcomes: Australian case studies showcases organisations in industries as diverse as health, finance, resources and manufacturing who have implemented tailor-made initiatives to benefit both the business and employees themselves. Australia’s continued prosperity relies on businesses like these.  One example is Murrumbidgee Health redesigning and expanding the role of therapy aides into allied health assistants. By better utilising the assistants’ skills to take over the routine administrative tasks and implement care plans, which previously only the professionals were permitted to do, the professionals were able to see more patients. It has resulted in positive outcomes such as significantly reducing waiting times from two months to two weeks.

Australian organisations like these are showing us that effective adoption of such practices can provide benefits both to employers, such as a lift in profitability, innovation, and staff retention and to employees, including gaining skills, a higher level of engagement and job satisfaction.

Skills Development – a pressing development challenge. Shanti Jagannathan, Senior Education Specialist, ADB

Skills development is currently occupying center stage in development discourse– to sustain growth, increase employment, reduce inequalities, strengthen human capital and advance knowledge based economies.  Unprecedented interest is directed to policies and strategies that governments and business must adopt for skills development. UNESCO is scheduled to release two major reports on skills this year: the Global Monitoring Report on Skills and the World TVET report.  The OECD’s emerging Skills Strategy talks about skills as the global currency for the 21st century. The ADB’s Education by 2020: A Sector Operations Plan emphasizes strengthening quality, inclusiveness and relevant skills at levels of education. The World Bank’s recently launched Education Strategy for 2020 states that it is knowledge and skills of people, not years spent in a classroom, that contribute more to economic growth.  The skills-employment nexus has become an overriding priority. The G20 Declaration of November 2011 put employment at the heart of policy action to restore growth and set up a task force to tackle youth unemployment. The special chapter on employment in the ADB’s Key Indicators for Asia and the Pacific 2011 discusses the transition to higher quality employment as a key link to economic growth and poverty reduction in developing Asia. The Asian Development Outlook 2012 discusses rising inequality in Asia despite high growth rates. Employment intensity of growth in Asia is lower than global average and has declined in recent years.  Inequality of opportunity, particularly education and skills, contributes to growing income inequality.

The writing is on the wall that a major revamp is needed in skills development and training. More of the same will not do in terms of policies and strategies. New thinking is required to handle a complex set of inter-related issues.

Education and training systems are not in step with the needs of the market as witnessed by the paradox of increasing demand for skills co-existing with skills shortages and skills mismatches. Assuring adequate employment is a pressing challenge as students of emerging from technical and vocational education and training are not finding jobs. On the one hand, there is a need for developing countries to increase the skill base of their work force to serve high technology industries and for moving up the value chain. On the other hand, with burgeoning tertiary education systems, problems of graduate unemployment are increasingly surfacing even in developing Asia, which bode ill for countries with youthful populations. The Arab Spring is seen as a possible precursor to more unrest if the youth unemployment issue is not tackled. In countries that are facing an aging population, skills will be the crucial determinant of people’s ability to stay in the labor market for a longer time. Fast growing sectors in Asia, are not necessarily offering growing employment opportunities as well. Employers are looking for not just technical skills but an array of soft skills that encompass problem solving and behavioral skills. The private sector is playing a dominant role in anticipating and contributing to skills development, calling for appropriate regulatory regimes and incentive structures for skills development. The large prevalence of informal markets poses unique challenges to skills training systems that support workers in small and medium enterprises and entrepreneurs. There is a need to mesh together and bring congruence between policies for economic growth and industrial development, education and skills development and labor market and social protection. All easily said than done!

This space will provide an informal platform for individuals and professionals to discuss and deliberate upon pressing challenges and possible solutions. Exchange of experiences and practices can lead to enriching the dialogue between developed and developing countries and peer exchanges within developing nations. We look forward to an active debate on key themes and issues of interest to the community of practitioners in the skills and training sector!