Skill shortages and future skill requirements for the labour force Angel Calderon and Lucy Stockdale VISTA Conference, May 2008

Project Overview Research focussed on the skill shortages and future skill requirements of the labour force in Victoria over the short to medium term in the following industries: –Manufacturing –Transport, Distribution and Logistics –Finance Services –Retail.

What is meant by the term ‘skill shortages’? What does skill shortages mean to each of the targeted industries? What are areas of commonality between the industries in terms of skills needs? What are the skill requirements of the labour force over the short to medium term? Research questions

Research Methodology Action based research. Qualitative in scope and nature. Use current debate to inform process of gathering data - qualitatively. Consult people in industry and experts in the field. Consolidate findings and validate with industry.

Research Method Flowchart Literature Review Formulation of key themes/elements Development of Work Evolution Framework Skill Matrix determined Industry Consultations Industry validation of Skill Matrix data Targeted industry follow up Report Skill Matrix data gathering

Issues from literature review Different definitions/interpretations of term ‘skill’. Skill is often confused with qualifications, occupations and competencies. Talk of shift in the ‘nature of work’. Occupational emphasis on highly skilled labour. A prevalence of the academic and interest groups view.

Issues from literature review Reconciling the quantum and qualitative dimensions of the issues. Question to what extent –Skill shortage is a skill deficiency or recruitment difficulty –Skill shortage is more a reflection of an industry experiencing a skills gap. Expanding the size of the labour market. Enhancing the broad skill base and competencies of the labour force.

Skill dimensions adopted in research Skill shortages due to insufficient workers being trained Skills shortages as a result of people choosing to work in occupations other than that for which they have been trained Skills gaps – the difference between the skill level of existing workers and skill level required by industry Future skill requirements

Key elements/themes The following elements were assessed as critical in the analysis of skill shortages and future skill requirements: Drivers of change in society and individual. Individual work cycle patterns. Cohort trends. Regional issues. Contemporary challenges (technology, mobility, etc). Career structures / trends.

Drivers of change Demographics Globalisation Changes in society Public policy, national reform and regulation Technology Environmental issues Changing nature of work in itself Industrial Geography Time Function Cohort Evolution of work Evolution of skills SocietyIndividual

Casual Permanent On going Multi mode Background:  Culture  Educational  Socio-economic Individual:  Motives / Expectations  Cognitive  Characteristics / attributes (eg age) Drivers of change in society FunctionGeography TimeSkill setsCasual ExperiencedMiddle years Teens / early careers X X - Y X – Y + Z Middle years Cohort Location MobilityRolesProgression Careers Experienced Politics Sustainability Skilling, Re- skilling and Up- skilling Early career Framework: Individual Work Evolution

Framework: Development, testing and validation Conceptually the model encompass all aspects of an individual work life. Avoided a simplistic model that would create a sense of time or restriction in its application. Considered work evolution from an individual perspective.

Framework: Data gathering / validation - Steps Framework development Framework testing and refinement Framework conversion into matrix Matrix development and testing Matrix application – unpopulated four dimensions Matrix application – populated four dimensions Key findings – List of skills Matrix validation, verification August November Data gathering and validation involved more than 100 people across TAFE institutes, industry and other experts.

Literature: Skill shortage typology Level 1 shortage: Few people have the skills and who are not already using them, and there is long training time to develop the skills. Level 2 shortage: Few people have the skills and who are not already using them, but there is a short training time to develop the skills. Skills mismatch: Sufficient people with skills and who are not already using them, but unwilling to apply for vacancies under current conditions. Quality gap: Sufficient people with skills, not using them, who are willing to apply for vacancies, but lack some qualities considered important.

Manufacturing Finance Transport, distribution and logistics Retail Cohort Geography / Environment Occupational level Skills Matrix Data gathering and validation process: Elements and dimensions considered by industry Skills shortages: insufficient workers being trained Skill shortages: people choosing to work in other occupations Current skills gaps in the labour force Future skills requirements of the labour force

Skills Matrix Proforma - applied to each industry and skill dimension - Categories/DimensionsIndustry skills Cohort Early Career Established Mature Geography Metropolitan Regional Occupational/Functional Level Managers/Professionals Technicians, trades & related Intermediate Elementary & others

Key observations –Identification of skill gaps and needs is a complex, ambiguous and challenging process. –Identifying emerging and future skill requirements is difficult given the rapid changes in industry activity

Ability to adapt to change Capacity to think / to learn Communication skills Customer handling / relations Employability competency Foreign language skills Generic skills Global awareness IT skills Leadership skills Numeracy skills Literacy skills Management skills Mechanical awareness Relationships Team working Technical and practical skills Problem solving Sustainability Manufacturing Finance Transport, distribution and logistics Retail Cohort Geography / Environment Occupational level Industry consultation key findings - Employability skills

Mapping of employability skills: Generic skill sets against skills required for employability (Metro Study Area)

Research key findings (common to all industries) - 1 Importance of having a set of well developed key generic skills across all sectors. Ability to further tune skill sets and acquire new skill as individuals progress throughout their working careers. Emphasis on portability of skills within an industry and across industries. Difficulty in identifying emerging skills: progressing from uniqueness, differentiation to specialisation.

Research key findings (common to all industries) Implicit agreement that employability skills of the future are drawn from the generic skill list, with variations based on specialisation, differentiation and recognition of being part of a local yet globalised labour market. Notably, two additional elements were consistently drawn to our attention: –Global awareness, and –Sustainability. Whether these are skills (or enablers, or drivers of change), these two elements are influential in the development of individual’s skills.

Research key findings Growing demand for the on-going addition and renewal of skill sets by individuals as they move through their working careers, in order to remain competitive and current in the labour market. Individuals need to develop the agility to adapt rapidly to change and embrace the use of new technologies Emphasis on the portability of skills within industries and across industries

Research key findings Importance of having a set of well developed key generic skills across all sectors. Agreement that employability skills of the future are drawn from the generic skill list, with variations based on sector specialisation.

Research Key Findings Important to recognise extent to which the following influence skill needs: –Differences in industrial structures within industries (that is, industries are not uniform) –Geographical variance in employment and industry activity, e.g. Differences in skill requirements in urban and regional conglomerates Composition of ‘local’ communities.

Handouts 1. Summary results - dimension X industry 2. Mapping of employability skills from industry consultation against generic skill sets

What does this mean for VET? Questions for discussion How are these skills sets currently being covered across the system? How could this be improved? Within the training package context, how can these skill sets be developed and enhanced? How can you report against these skill sets?

Contacts Angel Calderon Policy and Planning RMIT University Lucy Stockdale Learning, Research and Design Kangan Batman TAFE