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$11.6m For Skills Forecasting Action Plan

16 May 2002

Budget 2002

The government is investing $11.614 million in Budget 2002 to improve the information available on skills needs in the economy, Social Services and Employment Minister Steve Maharey said today.

With unemployment at a 13-year low skill and labour shortages have been emerging in some regions and sectors of the economy. Poor information about where skills shortages are likely to emerge means it is difficult for the Government, employers, workers and school-leavers to get sufficient training in time to plug the gaps.

Speaking at the AGM of Competenz, the industry training organisation for egineering and manufacturing industries, Steve Maharey said the additional funding would enable the Skills Information Action plan, released last year, to be fully implemented.

“New Zealand’s future prosperity relies on the capability of our people. Making the best of this capability requires the matching of the capacity of the workforce with the job opportunities available - and building skills where capability gaps are identified.

“The new funding will support (all figures over four years, unless specified):

- an integrated website (“portal”) to establish a “shopping mall” offering everything you want to know about the New Zealand labour market for job-seekers, employers and others ($2.82 million);

- a six-monthly Skills Report, written in plain English, that summarises existing information on the supply and demand for skills, including areas of actual or forecast shortage. These reports will be available, six monthly from November this year ($1.228 million);

- integrating data on employees and their jobs, to better understand the processes of job creation, job retention and skill development ($4.495 million);

- a new survey on job vacancies that will improve knowledge of the demand for skills ($2.717 million); and

- designing a survey on the employment and earnings outcomes for tertiary graduates ($354,000 in 2002-03 only).

“This is not a return to the workforce planning approach of the past. Instead we will be forecasting future workforce needs and making this information freely available to industry, education institutions and potential employees so that they can make quality decisions about the needs of tomorrow’s labour market.

“We hope that these new tools will speed up the matching of people’s skills to the job opportunities that are currently available, and reduce skill shortages in the future by helping people make to better decisions about education and training,” Steve Maharey said.

A backgrounder on the Skills Information Action Plan and the new initiatives is attached.

Backgrounder

Skills Information Action Plan

The Skills Information Action is designed to:

- speed up the matching of people’s skills to the job opportunities that are currently available

The goal is to help New Zealand employees improve their ability to find the industries, regions and employers that require their skills, and to help employers find the right employees (whether domestically or by tapping the global labour pool).

- reduce skill shortages in the future by helping people make to better decisions about education and training

The goal is to enable New Zealanders to choose the education and training that is most likely to lead to job opportunities, and to assist education and training providers to better anticipate the areas of study and courses that will be in demand in the future.

Addressing these issues will help to achieve the goals in the government’s innovation framework.

In general, information on the demand for and availability of skilled people in New Zealand lacks detail, is patchy, and is not well co-ordinated, and the Prime Minister’s Science and Innovation Advisory Council has recommended that this be addressed.

Some of the Budget initiatives will have immediate benefits. Others will improve the labour-market decisions of individuals, institutions and policy-makers over time.

Enhancing connections

A number of the initiatives will help to achieve the “matching” between the right person with the right skills existing and the potential employer who needs that person:

Initiative 1: Electronic “Labour Market Information Portal”

$2.82 million over four years.

A Labour Market Information Portal, with the working title www.work.govt.nz, will provide seamless access to labour-market information from a single website, eliminating the need to visit multiple websites or click through layers of links.

The website will assist people to more quickly identify and acquire skills, and more readily find new work -- leading to faster and better matching of available skills to current demand and less potential for future skill mismatches. The portal will meet the needs of a wide range of people: employees, school leavers, the unemployed, potential immigrants, employers, government, and industry groups.

The portal will provide a “shopping mall” offering “everything you want to know about the New Zealand labour market” -- jobs, careers, training, migration, volunteering, self-employment, employer and employee rights and obligations, and forms of assistance available -- whether the information is from the public or the private sector.

The portal will bring together, for example:

- information and research held by the Department of Labour

- KiwiCareers information from the Career Services website

- the Job Bank and Talent Bank of Work and Income New Zealand

- other sources of information on immigration, voluntary work, digital opportunities, community businesses, health and safety, ACC, childcare, employment regulations, taxation, the transition to retirement, and income support.

This Portal is a major undertaking that will contribute significantly to the e-Government strategy.

Timing: Web front linking existing websites in September 2002. Development into a true “portal” over time.

Initiative 2: A Skills Report

$1.228 million over four years.

A user-friendly six-monthly Skills Report will complement the Labour Market Information Portal, providing an alternative way to access current and new information.

It will contain in plain English information to inform decisions on job seeking or changing (for employees), what to study (for students), firms’ human-resource strategies (for employers) and what courses to offer (for training providers).

Timing: Six-monthly from November 2002

Initiative 3: Enhancement of the Work and Income Job and Talent Banks

Previously announced initiative.

Work and Income New Zealand intends to enhance its Job and Talent Banks by allowing direct electronic contact and matching between job seekers and employers. Currently this matching requires a Work and Income staff member (“broker”).

The matching process will be improved by linking the Work and Income Job Bank to private-sector recruitment sites and by allowing other recruitment sites to access the Talent Bank.

This enhancement will significantly reduce the costs of “matching” for both job-seekers and potential employers.

Initiative 4: Dissemination of labour market information

Previously announced initiative.

Existing sources of information on the labour market are being enhanced and better publicised:

The Department of Labour is publishing a number of reports it produces for Ministers that previously were not disseminated publicly. These include the Department’s quarterly skill shortages reports, quarterly labour market outlook reports and six-monthly regional labour market reports. These documents are available on the Department of Labour website (www.lmpg.govt.nz) and will be incorporated into the www.work.govt.nz website.

Career Services, Work and Income New Zealand and Skill New Zealand will provide a joint quarterly skill shortage report on a regional basis. These agencies have, through the community contacts of their regional offices, significant frontline information on the labour market. While their quarterly report will be based largely on anecdotal information, it will provide valuable perspectives for stakeholders and decision-makers locally and nationally.

Helping people identify marketable skills

Initiative 5: Enhancing the KiwiCareers website

Previously announced initiative.

Certain generic skills are critical to an individual's ability to adapt to change, continue learning, and develop skills and knowledge to succeed in the labour market of the future.

Career Services intends to upgrade its website to help workers to evaluate the skills that are needed in their current occupations, how their existing skills may transfer to other occupations, and what new skills would be required to make the transition to a new occupation.

This will facilitate the movement of existing workers from occupations with lower levels of demand to areas of current or potential skill shortage.

Better information on the current demand for and supply of skills

A number of initiatives will help to better understand interactions between the demand for and supply of skills.

Initiative 6: Further analysis of existing administrative data

Previously announced initiative.

Further analysis will be undertaken of the following data in order to improve understanding of the interface between the demand for and the supply of skills.

Where the analysis provides useful insight into skill shortages, the information will be disseminated via www.work.govt.nz and the Skills Report. It will also contribute to improved forecasting.

The initiatives are:

- New Zealand Immigration Service work permit records (information on date, number, approval basis and occupational grouping of work permit approvals)

- Work and Income’s vacancy and skills databases (regional trends in vacancies and placements by job-skill category, plus analysis of job-seekers by skills, qualifications and preferred occupation)

- Pilot survey of Work and Income’s work brokers (monthly report, currently being evaluated, of information from work brokers -- e.g. the percentage of brokers in each region who indicate a shortage of cleaners)

- Public Service skill shortage survey (improve existing survey to provide robust data on skills shortages in the public sector).

Initiative 7: Understanding the dynamic interactions between employees and firms

$4.495 million over four years.

Data about employees and their jobs will be integrated in order to examine questions that currently cannot be answered without increasing compliance costs on firms. These questions include:

- What types of firms create jobs?

- What types of job placements result in the best long-term employment outcomes?

- What types of firms make the most contribution to individuals acquiring skills?

The integrated dataset will provide new insights into how the economy functions, and thereby help to improve policies that support growth, innovation and employment. Integrated data will also support the Government’s education priorities through better information on how skills develop during an individual’s working life, and the role that firms play in this.

Ultimately these improvements will benefit job-seekers (beneficiaries and non-beneficiaries), people who are disadvantaged in the labour market, students, employers, employees, the self-employed, and training providers.

Timing: Fully integrated data set developed by 2006. Intermediate research outputs generated in the meantime.

Initiative 8(a): Review of occupational classifications for statistical purposes

Statistics New Zealand is revising its system of occupational classifications. New and broader definitions of skills and occupations are being created, New Zealand statistics are being harmonised with best practice overseas, and classifications will be better linked to the qualifications system.

This enhanced classification system will provide a more meaningful common language for people to discuss skill-related issues, and has the potential to set a standard for other areas of labour market information.

New occupational and skills classifications will be in place in time for the next Census.

Initiative 8(b): Vacancy survey

$2.717 million over four years.

A new national survey will be put in place to improve quantitative information on current skill shortages by surveying employers.

This initiative will fill a major gap in knowledge about the demand for skills by establishing a robust data of employer vacancies, recruitment difficulties and, if possible, labour turnover. This information will:

- enable firms to adapt their human-resource strategies

- speed the matching of available skills to areas in higher demand

- improve students’ decisions about their investment in education and training, thereby reducing the likelihood of skill shortages

- inform the Tertiary Education Commission planning decisions and its review of the performance of the tertiary sector.

The survey will benefit firms, industry organisations, students, job-seekers or job-changers (including potential migrants), training providers, training purchasers and funders, and those reviewing provider or institutional performance.

The Skilled Vacancy Survey supports the Government’s education priorities by improving decision-making on what courses to take, offer and fund.

Timing: Development, design, pre-testing and consultation with potential data users will occur in first year. The survey will be piloted in year 2, and data will start to become available then. The first full year’s data will be gathered in year 3.

Initiative 9: Further industry case studies

The causes of skill shortages often vary from industry to industry and from location to location. For example, the recent Tairawhiti Forestry Industry case study identified a combination of complex skills issues that are unique to that area and industry.

A number of other further case studies will be undertaken in regions and industries of concern.

Information on job prospects

A number of initiatives will improve the quantitative information on future job prospects in order to help students, prospective students, employers and providers in their training decisions.

The initiatives will improve the information that individuals, firms and institutions have about the potential benefits of acquiring particular skills, the potential for training and development, and the security of potential jobs.

Initiative 10: Development of graduate employment outcomes survey

$354,000 in 2002-03.

The Department of Labour will design a survey of the employment and earning outcomes outcomes achieved by tertiary graduates. If the project proceeds on a continuing basis, two groups will benefit:

- students and intending students will have better information on the likely employment prospects and earnings that follow any particular course of study. Students will be more likely to undertake study in areas where skills are in demand.

- tertiary institutions will be better able to respond to labour market needs, and there will also be improved information for those who review the performance of tertiary institutions.

These two factors will support the transition to a highly skilled, innovative economy.

Timing: To be designed during 2002/03

Initiative 11: Occupational and skill forecasting

Infometrics and BERL have won a tender to develop a model for occupational and skill forecasting. This is a first step in evaluating the potential value of quantitative occupational forecasting to supplement the “outlooks” currently produced by Career Services on the KiwiCareers career information website.

These “outlooks” identify the key factors that are currently influencing the future of that occupation or industry, and those that are likely to influence it in the future. The “outlooks” also give an indication of whether the forecast for each occupation is good, fairly good, average or poor over the next two to three years. This information will also be available through the Skills Report and the work.govt.nz website.

The Department of Labour is also analysing the extent to which historical occupational trends in New Zealand align with those overseas. Where New Zealand and global trends are found to be similar, then overseas data may help to predict future skill requirements in this country.

Improved industry strategic planning

Initiative 12: Enhanced strategic role for Industry Training Organisations

Each Industry Training Organisation will undertake strategic planning for its industry and lead the consideration of wider pressures on the supply and demand for skills in that industry.

This is critical in a country with a preponderance of small businesses who are not prepared to train unless their competitors are doing likewise, and was recommended in the Industry Training Review.

The Tertiary Education Bill currently before Parliament provides that the criteria for recognition and re-recognition of an ITO include:

- that the ITO provide leadership in skill and training needs for its industry

- that the ITO undertake planning to identify and meet current and future training needs

- that the ITO promote National Qualification Framework-linked training to employers and employees in order to meet these needs.

This will lead to increased training by firms, and a better understanding by potential employees and training providers of industry skill needs. This in turn should assist in preventing skill shortages in the future.


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