In the attached presentation given at the SkillsDMC Conference on 11 September 2014, the MCA’s Chris James explores the key issues of VET Quality and Industry Led Training. He also asks whether the deregulation of the VET sector has been allowed to work. Below is a summarised version of Chris James' discussion:
MCA is the mining industry’s peak body, and our members are responsible for 85% of Australia’s minerals output.
Skills can’t be seen is isolation from the industry’s overall key challenges. The industry is currently in cost-down mode, while attempting to produce more volume from the mines built during the construction boom and beforehand. Thus productivity is the magic word for our industry at the moment – how do we produce more at lower cost? This is where skills and training come into their own from an economic, bottom line point of view. How do we produce that application of skills at the right time in the right place at the right price?
In terms of challenges, the minerals sector has been characterised by skills gaps rather than an overall labour shortage:
- Skills shortages have tended to be around experienced professionals such as engineers, geoscientists and project managers, as well as key tradespeople and operators.
- These skills shortages have eased over the past year, although we take a medium term view.
- We also have a macro-trend of the Baby Boomers beginning to retire, a process that started in earnest in 2011 when the first Baby Boomers turned 65.
- The challenge is to keep the skills pipeline open and stocked with talent.
In order to do so, the industry has been forced to be innovative to attract and retain skills. MCA's policy basis is the notion of an uninterrupted skills pathway, regardless of the business cycle. The industry has developed a strong training culture with around 5.5 per cent of payroll going into training expenditure, especially on-site, more details of which later.
The MCA’s partnership with universities and companies through the Minerals Tertiary Education Council (MTEC), has underpinned the tertiary disciplines with $40 million worth of funding over the past decade. Under MTEC, we have been developing an Associate Degree program that will train paraprofessionals to do some of the work that engineers are currently doing, freeing the engineers up for more strategic work and reducing the skills pressure on the profession – this also represents a new pathway from VET qualifications to a full 4 year engineering degree.
Partnerships are important, too. The Federal Government introduced in 2012 the National Workforce Development Fund, which puts training funds in the hands of the employer – this has been replaced by the Industry Skills Fund, more of which later
VET Quality – we are currently engaged in a Project with SkillsDMC to improve the quality of training; this obviously goes to employee engagement and productivity, more of which later.
Advanced apprenticeships – the NAP is an MCA, Govt and union backed mechanism for workers with partial qualifications to take advantage of Recognised Prior Learning and do an 18-24 month apprenticeship on site,
96% retention rate, $200,000 net economic benefit per apprentice.
Cross-training – we recognise that economic cycles can affect the labour market, particularly in regional areas with a narrow economic base; we are involved with the NFF, SkillsDMC and Agrifoods Australia in a program that cross-trains young people in both resources and agricultural disciplines to Cert 2 level.
Diversity – some of the best minds in the industry are working on ways to ensure more indigenous, female and other non-traditional candidates participate in the industry, broadening the skills pool.
Labour mobility is also important and we believe it is crucial to allow resources to move freely in line with economic imperatives rather than trying to put ‘sand in the gearbox’.
Skilled immigration is important to the industry - over the medium term, we have been graduating 250 out the 500 skilled engineers we need for the industry, and we have relied somewhat on 457s.
Although we are a strategic user of the 457 scheme we are not a large one – our use of 457s is at a long term average of only some 3 per cent of the mining workforce.
Industry Training Commitment & Industry-Led Training
The NCVER report Training and Education Activities in the Mining Industry put forward the figure of industry training at 5.5% of payroll. Apprentices and trainees are around 5% of the workforce, with a lot of additional nationally recognised and non-accredited company training.
The clue to Industry-led training is in the word “Vocational” = it is related to vocations = which in turn is related to jobs.
A job is the best guarantee of effective and ongoing skills development as knowledge needs to be applied continually.
The only people providing those jobs when I last looked are employers.
The training outcome we seek is a worker being able to operate safely and competently in the workplace, with broader workforce development outcomes as specified by the employer on top of this. Therefore, industry must have a major say in how training occurs. This is why we are generally supportive of co-funded models, as the money is in the hands of the employer and can be readily associated with the firm’s economic drivers eg. productivity
To this end, the mining industry’s past track record with co-funded models such as the NWDF, which saw industry outspend government.
So, this brings us to the issue of quality. We believe industry being in the driver’s seat will help ensure quality training associated with workplace drivers rather than training for training’s sake or to tick a box.
Training has been prone to provider capture and, in terms of market impacts in our industry, this is manifesting itself in patches of poor quality training or unresponsiveness to industry needs. We must remove the mystique around education and training – this is a procurement exercise for industry and, as always, it’s about training outcomes.
As such, there will be a level of responsibility on companies around quality procurement to ensure those outcomes. When quality issues have arisen, Governments have tended to reach for the regulatory lever.
The problem is that this begets compliance, and a lot of red tape for providers, but compliance does not always equal quality –this is why we support the idea of a regulator managing by exception and dealing with the real miscreants. Our view is that an outputs-based approach is superior because the magic happens in the marketplace.
Governments and regulators cannot possibly regulate every transaction. But industry can, through its procurement processes, and trainers, through responsive and intelligent actions. Everybody in the sector now agrees that quality is paramount, like motherhood, but I have seen no definition yet outside of the compliance paradigm.
This is why we have had a go at defining it. In conjunction with industry groups such as the ADIA and the CCF, we are working with SkillsDMC, who have been piloting a VET Quality Tool that is being produced for widespread industry application.
The Tool provides a series of questions companies can ask trainers before signing a contract – it also assists with a training needs analysis and a mid-term tollgate review. It is of industry, for industry and by industry, tested in 2 live trials by industry. The better trainers we have tested it on are also very positive.
Government Drivers & Reform
The Government is concerned overall with Australia’s global cost competitiveness and productivity.
It has rightly described skills and training as core to its productivity agenda.
In terms of progress, the Government have announced a reform vision that mirrors ours, with industry in a lead role – but the proof will be in the pudding as the initiatives will take a while to roll out.
It would be a mistake to focus on the training system itself at the expense of the outcomes being produced. The temptation is to take an Inside Baseball approach to tinkering with and shaping the system, but at the end of the day, the customer – industry and learners just want an outcome.
I often hear that there are 5,000 RTOs, as if it’s somehow a bad thing – so what? The real question is “are customers satisfied with the outcomes”. If the answer is yes, there could be 50,000 RTOs! The answer is certainly not consolidating RTOs, nor lumping RTOs and TAFEs with a truckload more regulation. but through managing the miscreants by exception and empowering companies and learners to make better choices.