Industry Skills Report indicates slow and cautious recovery for industry
MSQ’s bi-annual Industry Skills Report is the second since the onset of the Global Financial Crisis and it indicates the training priorities for industry.
The report also includes data from the AI Group Performance in Manufacturing Index (PMI) and relates it to the findings emerging from the activities conducted in the report. Key issues affecting the industry include:
Impact of the Global Financial Crisis on the Manufacturing industry
Employment fell in over one-half of manufacturing firms (52.2%) surveyed, however many companies have also have worked hard to alleviate the impact on the downturn in relation to employment levels. For example, over 2-in-5 firms reduced working hours or shifts to maintain employment levels during the crisis.
Green shoots of recovery for the manufacturing sector
The data indicates that Queensland’s manufacturing sector has turned a corner. The Australian PMI has moved into positive territory for the first time in 17 months, new orders are up, and a greater proportion of manufacturing businesses believe that business conditions are already improving. However, the positive news is yet to extend to employment conditions.
Skill shortages are still a problem
The data backs up the anecdotal information about skill shortages, and the fear held by many employers that a very significant skills shortage is again likely to be present when economic conditions improve, and major projects get off the ground. The data confirms the anecdotal reports from employers about fears of another looming skills shortage, particularly in relation to the persistent shortage of trades and technical workers.
Skilling of the existing workforce
Survey data contained in this report indicates that its top priority for companies to meet their skilling needs. This is consistent with previous research undertaken by Ai Group –which indicated that nearly all businesses in the research are engaged in the skilling of their existing workforce in some form, whether through formal training such as off-site or in-house training courses or through more informal skilling methods such as coaching and mentoring.
Furthermore, Ai Group asked almost 500 companies to identify the most effective means of meeting skills requirements. Across both firm size and industry sectors, the retraining of existing staff is considered the most effective method for meeting current skills needs (61.2%). This was almost twice as high as the number who favour taking on and training unskilled staff, the second most popular method (30.4%). Manufacturing firms are the strongest proponents of retraining existing staff (83.4%) and smaller firms.
There is a strong set of economic and demographic reasons behind the focus on skilling the existing workforce, such as the ageing of the population has resulted in the need to retain existing workers, that a large proportion of the existing workforce does not hold post-school qualifications, and that the skills required in the modern workforce are rapidly changing and developing.
Skills development and training remains a top priority
Increased discretionary spending for skills development is the first priority for Queensland firms when business conditions improve, second only behind “developing new products” and ahead of capital investment in plant and equipment, research and development. In terms of what will encourage manufacturing employers to spend more on training, whilst the survey notes increased financial incentives are important, qualitative data would suggest that other factors are equally important, particularly in relation to the recruitment of apprentices and trainees, such as the quality of support systems surrounding the engagement of an apprentice.
However, it would appear there is a variable level of interest in prioritising skills development across manufacturing sub-sectors. For example, almost 3-in-10 metals manufacturers and 1-in-4 consumer manufacturers see skills development as either "no priority" or "low priority" when conditions improve.
Green skills
It would appear that manufacturing companies believe that efforts to raise green skills should be especially focused on lower skilled workers (eg labourers and process workers) and managers. In terms of types of skills: waste management and energy/water efficiency skills were highlighted as most important.
Generic employability skills IT skills, and employability skills from university graduates. Businesses (in particular leadership change management skills) requiring to culturally change and shift with the dynamics of the climate. This is a major issue that is very current and quite obvious.