Skill Shortages

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Skill Shortages
Suzanne Lechte
Prepared by Francarlo Barilla 20 June 2008
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Why The Skills Shortages Debate?

• The issue of skills shortages has dominated the
  popular discussion on training in Australia over
  the past few years
• More than two-thirds of the firms surveyed
  (68.1) claimed skill shortages had impacted on
  their business over the past year
• There has been a marked rise in traditional
  apprenticeship commencements since 2001, although
  it still remains below the long-term average
• Of the 68.2 of business citing impacts from
  skill shortages, 60.2 found they were
  restricting innovation

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Skill Shortages Definitions

• For a skill shortage to occur
• it is necessary for the demand for a particular
  type of worker to exceed the supply of such
  workers, but the notions of supply and of demand
  are themselves quite inexact.
• Shortages are typically for specialised and
  experienced workers, and can coexist with
  relatively high unemployment overall or in an
  occupation

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Skill Shortages

• Occupations may be in shortage in particular
  geographical areas and not in others
• Skill shortages generally involve skills that
  require a significant period of training and/or
  experience
• When workers are abundant, employers develop a
  high expectation of the level and range of
  qualities that new workers should possess
• When workers become scarce, employers are forced
  to accept workers with lesser qualities.
  Employers experience this as a shortage of
  suitable workers

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Assessing Industry Skill Development Needs
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Skill Shortage Trends

• Skills shortages occur for a variety of reasons
• Strong economy with low rates of unemployment
• Growth of new industries with few ready-skilled
  tradespeople
• Relocation of new industries into different
  regions with a different skills base
• Lack of interest in particular industries
  location of industry, or project-based work, in
  rural or regional areas with a small skills base
• Technological changes within an industry
• Changes in underpinning skills needs to
  successfully undertake trade training

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Skill Shortages Victoria

• DEEWR Skills in Demand List
• Trades (August 2007)
• Engineering Trades Metal fitters, Metal
  Machinists, Aircraft Maintenance Engineers
  (Mechanical and Avionics) and Welders (First
  Class)
• Automotive Trades Motor Mechanic, Auto
  Electrician, Vehicle Body Maker, Vehicle
  Trimmers.
• Electrical/Electronics Trades Electrician, Lift
  Mechanic, Refrigeration and Air-Conditioning
  Mechanic, Electrical Powerline Trades
• Health Specialists Occupational Therapist,
  Physiotherapist, Speech Pathologist, Podiatrist,
  Medical Diagnostic Radiographer
• Teachers Secondary School Teacher, Pre-Primary
  School Teacher
• Other Trades Chef, Pastry cook, Cabinetmaker,
  Hairdresser, Boat Builder and Repairer

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Skill Shortages Regional Victoria

• The Department of Victorian Communities (DVC)
  regional skills shortage surveys revealed
  occupations that employers have had the greatest
  difficulty in filling
• Skilled Professionals and Associate
  Professionals Registered Nurses, General Medical
  Practitioners, Real Estate Associate
  Professionals, Civil Engineers, Accountants and
  Chefs
• Skilled Trades Persons Metal Fitters and
  Machinists, Plumbers Electricians Welders, Bakers
  and Pastry Cooks, Shearers, Fibrous Plasters,
  Carpenters and Joinery Tradespersons

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Skill Shortages Regional Victoria (Contd)

• Skilled Labourers and Intermediate Production and
  Transport workers Farms Hands, Cleaners, kitchen
  Hands, Delivery Drivers, Bus Drivers and Truck
  Drivers
• Other Occupations Bar Attendants, Receptionists,
  Special Care Workers, Sales Assistants, Childcare
  Workers, Sales Representatives and General
  Managers

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Demand for Skills

• The demand for skills is, and has been,
  influenced by a number of factors including
• An increase in the use of labour hire and
  outsourcing of specialised activities
• The major shift in the age profile of the
  Australian labour market
• An increased demand for higher level skills
• Advances in information and communication
  technologies, which require workers to have
  computing skills
• Labour supply issues
• Decreases in employment in trades and related
  occupations

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Apprentice and Trainee Completion Rates

• Average completion rates for students whom
  commenced an apprenticeship or traineeship
  between 1995 and 2000. Victorian average for
  apprentices was 65.2, and 54.9 for trainee
  completions.
• Automotive
• Average completion rate of 67.9 for students
  whom commenced an apprenticeship and a 42.4
  average for students enrolled in traineeships
• All 67.9 of apprentices, were enrolled in repair
  service and retail sector
• Building and Construction
• Average completion rate of 68.0 for students
  whom commenced an apprenticeship and a 38.2
  average for students enrolled in traineeships
• General Construction apprentices represented the
  largest sector with 67.2 completing
  apprenticeships
• Community Services and Health
• Average completion rate of 57.5 for students
  whom commenced an apprenticeship and an average
  of 65.6 for students enrolled in traineeships
• Residential and Homecare trainees represented the
  largest sector with 68.2 completing traineeships

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Many Apprentices and Trainees are Not Completing

• Mainly due to personal reasons such as poor
  health, family care responsibilities, changes in
  personal circumstances and relocation
• Other factors that influence completion rates
  include
• Inadequate wages
• Apprentice/trainees having limited understanding
  of the requirements of the occupation
• Poor employer attitudes to training, supervision
  and support for learning
• Inadequate provision of workplace based training
• The employers attitude to training was found to
  be a major factor influencing the likelihood of
  completion of an apprentices or trainees
  contract of training

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Recommendations for improving Apprenticeship and
Traineeship Completion Rates

• Raise wage levels for apprentices and trainees
• particularly for apprentices in the first two
  years of training
• Improve the processes for raising awareness of
  the nature of the work and conditions in
  particular occupations
• development of an A to Z guide to training
  courses and apprentice/trainee responsibilities
• Develop explicit resources for employer induction
  programmes
• ensure that employers adequately understand their
  roles, responsibilities and entitlements
• Promote stronger and earlier relationships
  between training providers and employers
• strengthen employers perceptions of the benefits
  of training
• assist in the early establishment of an
  appropriate training program

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Benefits of a Trade Qualification

• People who successfully complete a new
  apprenticeship are very likely to have a job
  after they complete and are quite likely to
  remain with the same employer
• People who partially complete a new
  apprenticeship are also more likely to be in a
  job than those who have not undertaken any
  education or training
• Those who have completed a qualification are more
  likely to be in full time employment and to be
  working in higher skilled occupations than those
  who do not have a post school qualification
• People who complete a new apprenticeship strongly
  believe that it has improved their job security
  and employment prospects
• a high proportion of those that have changed
  employers or occupations believe their new
  apprenticeship was influential in helping them do
  so

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Assistance for Prospective Students

• Skills Stores
• They provide free professional advice and
  information to members of the public about
  Vocational Education Training
• They provide people with an initial assessment of
  their existing skills, and referral to training
  organisations for recognition of prior learning
  which may give credit against a qualification
• Skills stores can assist young people who are
  looking for employment, a new step in their
  career or personal development
• They provide a point of reference for school
  careers advisors

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Priorities for Government Funded VET

• VSC priorities for Government Funded VET are
  based on an analysis of current training delivery
  mapped against an analysis of industry need for
  training
• Industries where this analysis reveals an
  undersupply of training are 2007 Industry
  Reports
• Automotive
• Building and Construction
• Business Services
• Metals and Engineering
• Transport, Distribution and Logistics
• Wholesale, Retail and Personal Services
• Industries where this analysis reveals an
  oversupply of training are
• Culture and Recreation
• Tourism and Hospitality (excluding Cookery)

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Questions?

• Department of Innovation, Industry and Regional
  Development (DIIRD)
• Skills Victoria
• Level 3, 2 Treasury Place
• East Melbourne VIC 3002
• Suzanne Lechte
• Manager, Labour Market Analysis
• Tel [phone] Fax [phone]
• Email suzanne.lechte_at_diird.vic.gov.au