UPfront: Growth dies in the skilling fields

Is skills shortage stifling New Zealand’s business growth?

The answer, according to nearly 40 percent of companies recently surveyed by the Department of Labour, is “yes”. Not only are more companies reporting difficulties in finding skilled labour, unskilled labour is also in short supply.

A reversal of the “brain drain” has helped ease the skills drought evident in early 2001 but general labour shortage is at its highest since 1985 and labour as constraint on expanding output is at 27-year high.

Manufacturing is hardest hit on both fronts, followed closely by merchants and builders. Some 43 percent of Auckland manufacturers reported labour-finding difficulties.

That’s worry for the Employers and Manufacturers Association (EMA), which has recently set up business unit to focus on vocational education and training and is this month hosting conference on “Developing skills for Growth”.

“We must find smarter ways to get past this bottleneck to our country’s growth,” says George Gerard, director of EMA Learning.

The statistics highlight problem but are less helpful when it comes to identifying where and how specific skills gaps occur.

“A key issue in some firms is just providing the basic literacy and maths skills employees need in the workplace.”

Employers are in the best position to know what skills are needed, he notes.

“Training on the job in the workplace has faster turnaround time than many institutional programmes, and is ideal for the specific needs of many firms.” However, he’s concerned it’s an option less accessible to the country’s small to medium-size enterprises. That’s because the existing structure through which 80 percent of training costs can be reimbursed by the Government is quite complex.

“To get the necessary skill upgrade at this level, SMEs must be able to access government funding more easily,” says Gerard.

He also wants more apprenticeships both at entry and “adult” levels. While the modern apprenticeship scheme has boosted numbers to 3250, this represents only about one third of what he believes is needed to meet future skill demands.

“That raises another issue, which is the value placed by teachers and other role models on an academic rather than technical career. There are really no substantial paths prior to year 12 or 13 to develop vocational paths – it’s all academic.”

The reality is that some youngsters are probably better suited to vocational training at an earlier age, perhaps moving on to more academic learning once they’ve discovered what fires their interest.

“At the moment, there is shortage of transition options between school and work environments.”

EMA’s response is to bring together expertise from top educational institutions and combine it with the experience of businesses that “have enjoyed big successes by ugprading the skills of their employees”, says Gerard.

Participants in the upcoming conference include The Warehouse, Carter Holt Harvey, Sensation Yachts and GUD Enterprises (filter manufacturers) plus the chair of the new Transition Tertiary Education Commission, representatives from NZQA, Business NZ, Skills NZ, the polytechnics, Creative NZ, industry training organisations, and the unions.

The first such conference of its kind will bring concerted focus onto accelerating skill development in the workplace, says Gerard.

The two-day event will happen at Auckland’s Carlton Hotel on October 23-24.

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