Assessment and Recommendations

The Skilling Australians Fund can secure better employment outcomes provided that employers take a leadership role in steering design and delivery

The Skilling Australians Fund is a recent commitment by the government to help more Australians acquire the skills they need through apprenticeships, traineeships and employment-related training opportunities. From 2017-22, approximately AUD 1.5 billion will be available from the government, combined with matching funding from the state and territory governments with the goal of creating thousands of additional apprenticeships, traineeships and employment-related training opportunities.

This joint effort with the state and territory governments is an excellent opportunity to strengthen the design and delivery of apprenticeship programmes, ensuring that they are fit for purpose to meet employer demand at the local level, while also stimulating productivity improvements across all regions of Australia. By placing a strong emphasis on accountability, transparency, and clear outcomes, this programme can ensure that resources are allocated efficiently to boost apprenticeship participation in occupations across industries of future growth and that face skill shortages at the state and territory level.

Employers will play a critical role in driving more participation in apprenticeship and work-based learning opportunities. The government should examine how best to ensure programmes provide the right incentives for employers to participate in the vocational education and training system. It is important to foster and encourage business-education partnerships to ensure that the supply of skills meets industry demands.

Strengthen local leadership networks to generate stronger apprenticeship outcomes

In-depth fieldwork undertaken for this study has identified the importance of having a coherent and close network of local stakeholders including government, industry/employers and training sectors involved in the implementation of apprenticeship policies. This is essential to ensure that the design and delivery of programmes responds to different local needs and demands, while also improving communication among relevant parties to provide the necessary support to employers. As implementation of the Skilling Australians Fund goes ahead, state and territory governments should examine opportunities to stimulate collaboration at the local level, which will be a critical success factor in fostering apprenticeship participation for both individuals and employers. Appointing or delegating a local co-ordinator can help ensure that collaboration delivers real results on the ground.

For example, as part of the Sydney Metro project, the Skills and Employment Advisory Group (SEAG) was created which includes different government agencies (both state and national level) as well as industry partners with a shared interest in Sydney’s workforce development objectives. This type of partnership facilitates knowledge and information sharing relevant to training and as well as examining solutions to address skills shortages within local industries. The SEAG members had decision-making powers, met regularly and came from a cross-section of different organisations such as TAFE NSW, NSW Department of Industry, Australian Government Department of Education and Training, Sydney Metro contractors, and Training Services NSW. Sydney Metro led the work of co-ordinating the group to convince the involved stakeholders to recognise the value of having a shared approach and working together towards that goal.

In North Queensland, the Cowboys rugby league club initiated the Dream, Believe, and Achieve (DBA) programme to increase youth engagement in the labour market. This programme also emphasised local community and business networks to generate partnerships with training providers to deliver individually tailored VET programmes in the hospitality sector for Aboriginal and Torres Strait Islander youth.

Similarly, the Tasmanian government emphasised partnerships and worked on a new system called Collective Ed, together with the Paul Ramsay Foundation, that focuses on collaborative design and adaptive leadership in educational programmes. As suggested by the name, at its core, Collective Ed adopted a new approach to gain collective understanding of the challenges and achieve common goals by bringing together students, teachers, parents, schools, communities and business and industry leaders.

Building and forming formal local governance networks can be challenging. It requires co-ordination, governance structures and leadership within the community. A common theme that emerged from the case studies was the difficulty of convincing employers of the value of working with government to co-design training programmes. In these cases, having strong leadership from the government as well as a formal co-ordinating organisation is critical to leverage existing local networks of employers. For example, Sydney Metro took the co-ordination lead and had strong leadership from Transport for NSW, the state government department in charge of transport services in New South Wales. The creation of SEAG recognised the need for a close formal industry-government-training partnership.

Another common success factor relates to a long-term commitment to build collaboration among different stakeholders. It takes time to convince different parties about the importance of working together so that the training provided to students improves their chances of finding a job. For the STEMship project, RDA Hunter took on the co-ordinating role, had extensive consultation sessions with local industry, and worked with Hunter TAFE (the partner RTO) for delivery. RDA Hunter has been engaging with businesses, schools, universities, government agencies and community leaders since 2009 through STEM education and workforce development programs. With this active engagement and track record of successful delivery of different programmes in schools, RDA Hunter was able to gain respect and trust in the local community.

Encourage vocational education and training providers to conduct more outreach with local employers and industry experts

Another important factor for success will be ensuring that vocational education and training providers do active outreach with local employers. This is crucial to ensure that curriculum development as well as training delivery are tested and informed by local industry. Results from the OECD survey of employers suggest that collaboration between employers and training providers needs to be strengthened. This is primarily because local employers and industry experts are seldom involved in defining the current training packages. Consequently, survey respondents felt that this can lead to programmes that are not necessarily relevant and/or have students leave pre-apprenticeship programmes without relevant experience and knowledge.

Creating these types of partnerships may involve the creation of local employer networks, which directly engage TAFEs in training design and curriculum development. In some cases, it might be best to engage more directly with professional associations or sector bodies that represent a group of employers. This is particularly the case for small and medium-sized employers who face unique barriers to engagement.

Looking at lessons from the case studies, STEMship focused on building a close relationship with industry and engaging local employers through RDA Hunter in order to design and structure more customised training activities. With the local economy shifting towards knowledge-intensive sectors that traditionally do not engage much with the VET sector, it was essential to actively engage employers in the design of the programme. By involving industry partners and consulting employers in STEM-related fields to drive curriculum development, the STEMship project was able to identify the necessary skills and align the training design with local industry demands. Despite the small number of students (in absolute terms) who participated in the programme from its beginning, in 2017, 100% of the participants went on to continue an apprenticeship or other VET programmes upon completion.

Different parts of the Sydney Metro project had close partnerships with local employers. The Sydney Metro Upskilling Programme has contractor-led training to ensure the training meets both business and individuals' training needs. Another flagship programme of the Sydney Metro project is the Infrastructure Skills Centres, which focuses on providing up-to-date infrastructure for skills training and addressing the skills requirements of jobs across major construction projects in the region. Infrastructure Skills Centres work in conjunction with TAFE NSW and provide industry-led and co-designed training curriculum that is responsive to the needs of the local economy.

Look at opportunities for City Deals to enable policy innovation within the skills training and apprenticeship system

City Deals in Australia aim to bring together different levels of government alongside community organisations and the private sector to build long-term partnerships at the local level. Given the diversity and characteristics of the cities across Australia, City Deals acknowledge the importance of tailoring the approach from design to delivery and implementation. The Australian Government has highlighted six general themes for City Deals: infrastructure and investment; livability and sustainability; housing; innovation and digital opportunities; governance, city, planning and regulation; and jobs and skills. The Western Sydney City Deal also delivers on the Greater Sydney Commission’s Western City District Plan, which involves collaboration with the eight local government authorities in the Western Sydney region to co-ordinate land use and development over the next 20 to 40 years.

Western Sydney was one of the first three City Deals implemented in Australia and includes several good elements for building public-private partnerships within the community. The skills and education elements of the Western Sydney City Deal are strongly linked to the City Deal’s major infrastructure projects, including the construction of the new Western Sydney Airport and surrounding Aerotropolis precinct at Badgerys Creek. One of the key features of the Aerotropolis will be an integrated education facility, the Aerospace Institute, which will focus on education and skills training opportunities for emerging industries in the local area. This new Institute will include a high-performance secondary school, a VET facility and a STEM university that focus on the region’s growth industries such as aviation and construction. Also, TAFE NSW will work with the Australian Government and Western Sydney Airport (WSA) Co to create a Skills Exchange near the future Western Sydney Airport to provide local skills training to develop the workforce needed to construct the Airport and other major projects.

Evidently creating such new facilities involves extensive planning and resources in addition to close public-private partnerships. The Aerospace Institute will be made possible through public-private partnership and co-investment from the government and industry. As an effort to engage three layers of government effectively, the Western Sydney City Deal includes a long-term governance arrangement as well as an agreed implementation plan. In order to increase funding and investment opportunities, the NSW Government is establishing the Western Sydney Investment Attraction Office to draw interests for both domestic and international investment.

Australia can look to other OECD countries for important lessons regarding the implementation of City Deals and their potential role in fostering more participation in skills training at the local level. In the United Kingdom, City Deals have provided regions with more autonomy to develop skills training approaches in partnership with employers. For example, in both Manchester and Leeds, City Deals have led to the establishment of local apprenticeship hubs, which aim to provide a “one-stop” shop service model to employers, with the goal of ensuring a co-ordinated outreach approach to employers (especially SMEs) among public agencies. Both of these UK cities have been successful in promoting and encouraging increased apprenticeship participation within their communities.

Ensure multidisciplinary pathways and flexible training arrangements within the VET system

Flexibility within apprenticeships programmes and having a multidisciplinary training model in VET curriculum proved to be essential for success across the case studies examined for this report. The Sydney Metro Apprenticeship programme, a flagship programme under the Sydney Metro project, was developed so that apprentices are hired by a Group Training Organisation (GTO) rather than a specific contractor to allow rotation of apprentices among companies when required. GTOs play a key role in the apprenticeship system by employing 8.5% of Australian apprentices and trainees as at end of 2017. This arrangement has allowed apprentices to complete their apprenticeship training within a network of companies as opposed to a single employer. This type of flexible design can enable both employers and apprentices to find a better match and more opportunities, particularly for apprentices to have exposure to different types of training, skills and industries.

The STEMship project also had a multidisciplinary learning framework with 19 competency units and 7 different training packages including computer assisted design, electronics, mathematics, basic engineering, and workplace skills. Most of the learning is done on a project and modular basis, where students work in teams and learn modules of different units of competency in a single project.

In order to scale up these cases, aligning the traditional VET funding and delivery models with a multidisciplinary model is essential in Australia. Currently, VET funding policy tends to favour more specific qualifications. However, while VET qualifications comprise core units of competency from a specific training package, a large number of VET qualifications offer a range of elective options, often enabling students to add units of competency from other training packages to their qualification. At the higher education level, funding for multidisciplinary training exists, where students can graduate with a substantive share of elective units. Policy makers should consider how to further strengthen the offer of multidisciplinary training options within the VET sector. In this context, the Australian Industry and Skills Committee (AISC) is working towards the development of cross-sector units of competency across range of areas that could support a multidisciplinary model. Areas where this work is being developed include: automation, big data, digital skills, cybersecurity, supply chains, environmental sustainability, work and participation, inclusion of people with a disability, consumer engagement through social media.

Finally, it should be noted that a multidisciplinary approach could also pose some financial as well as administrative challenges to RTOs. Delivering multiple training packages at once means drawing on more resources (e.g. trainers and equipment) per student than what is required by traditional VET courses in Australia. During the two years of STEMship delivery, TAFE NSW has been able to restructure resources, schedules and systems in an effective way, but other RTOs might find this process challenging in terms of resource allocation.

Recognise the importance of mentoring and support for apprentices to complete their training

Having supportive mentors who have had similar apprenticeship experience or those from the same industry is critical for apprentices, particularly for those coming from a disadvantaged background. One of the main concerns that Australian employers expressed in the OECD survey regarding apprenticeship participation was issues related to the retention of apprentices. Mentoring can be effective in identifying the concerns of apprentices and tracking their progress and satisfaction throughout their training, which in turn can lower the likelihood of attrition. Thus, putting more importance on mentoring can be beneficial for both the employers and apprentices. Programmes such as the Industry Specialist Mentoring for Australian Apprenticeships (ISMAA) go in the right direction of providing assistance to apprentices and trainees who are experiencing barriers to completing their training.

All of the case studies emphasised strong mentoring support as one of the success factors of the projects. The Dream, Believe, Achieve Programme (DBA) is an excellent example which incorporates mentoring in its delivery. Mentors actively work with apprentices to identify goals and barriers to participating in training programs. Both STEMship and Sydney Metro Apprentices Programme also had mentoring support for students throughout the programme.

Consider setting social procurement targets to have a binding commitment from employers on skills training

Another lesson learned from the case studies is the possibility of integrating training and employment requirements within the public tendering process. This can sometimes be challenging as it can cause administrative delays in issuing and finalising a contract. One approach taken by Sydney Metro is to require tenderers to include their approach to contribute towards Sydney Metro's workforce development goals in any proposals. Although the results are yet to be measured, this has been successful so far because the bidders compete based on finding innovative approaches to meet Sydney’s workforce development objectives. It is also important to ensure that contractual targets have broad minimum requirements for the whole project with specific and tailored targets for each contract package (based on the type of contractor and project delivery phase). Lessons from other OECD countries highlight the important role social procurement targets can play in fostering inclusion at the local level. In Switzerland, cantons (states) often include social responsibility measures within their procurement targets to promote apprenticeship and skills training, especially among disadvantaged groups. In the Czech Republic, a best practice manual on setting social procurement targets has been developed by the Ministry of Labour and shared with local municipalities.

Provide more customised and targeted support to SMEs to offer apprenticeship opportunities

Finding and training apprentices can be a challenging task for employers, particularly those without support or administrative capacity. Not surprisingly, the OECD survey found that the most commonly cited barrier to apprenticeships among employers was the lack of resources and support for training apprentices, which can be a time-consuming and resource-heavy process. This was commonly reported by small-sized firms regardless of the sector. Nearly 90% of the large firms with 100 to 249 employees that participated in the OECD survey provide apprenticeships, whereas less than a quarter of firms with less than 10 employees report that they offer apprenticeship opportunities. However, it should be noted that the results from the OECD survey cannot be generalised, and that the Australian Government provides support for employers and apprentices through the Australian Apprenticeships Incentives Program (AAIP), the Australian Apprenticeship Support Network (AASN), and Trade Support Loans (TSL) programmes.

A larger share of micro-sized firms indicate that they usually retain their apprentices than larger firms. For instance, 50% of employers with 2-9 employees reported they keep all of their apprentices, while about 12% of employers with 250 or more employees reported retaining all of their apprentices. This may suggest that the demand and intention to retain apprentices may be higher among micro and small firms relative to larger employers in Australia.

It can be challenging for small and medium-sized firms to have sufficient capacity and resources to participate in apprenticeship programmes. While this may not be the sole reason for not providing apprenticeship opportunities, policy makers should consider ways to better channel resources and support to SMEs to hire and train apprentices. Given that the retention rate of apprentices is higher among small-sized employers than large firms, it is even more important to provide support for SMEs that seek apprentices to maintain or improve the future skills levels of the organisation and to improve productivity.

Smaller employers can benefit greatly from apprentices. Governments and social partners can support smaller employers by encouraging employers to find ways to share the responsibility and risks associated with the provision of apprenticeships; promoting bodies that work with groups of small employers to co-ordinate training; supporting small employers with the administration and provision of apprenticeships.

Align training offers and delivery with the demands of emerging and growing industries

The OECD survey of Australian employers showed that a frequently cited reason for not offering apprenticeships related to inadequate off-the-job training that is not relevant to the company's needs. Most of the Australian employers in the OECD survey agreed that they value apprentices with advanced numeracy and literacy skills. Training organisations need to ensure they deliver programmes that provide apprentices with relevant skills, including digital skills, for emerging industries in the local economy.

The Western Sydney City Deal focuses on aligning skills development programmes (across schools, VET, and higher education) to the industries that are growing in the local economy, such as construction, aerospace and aviation. This involves building a new Aerotropolis precinct to act as a hub drawing relevant industries together and generating synergies between them. In order to provide relevant and high quality training and to ensure access to these training opportunities, the NSW government plans to establish a permanent VET facility focusing on these emerging industries. Furthermore, in line with the VET facility and the connection to the aerospace and aviation industries, the NSW government will build a new public high school focusing on STEM and other relevant skills needed for future jobs in the local area.