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22
OCT 10

Industry training too important to cut




The Government has announced the intention to move $55 million of funding from industry training to universities to make more places for tertiary students. The rationale behind the decision is that Industry Training Organisations (ITOs) cannot use this money during a recession (apprentice training numbers are down around 18%) and the demand for university places is there. This narrow analysis ignores the problems with industry training that make it barely affordable for employers even in the good times.

With employers footing most of the bill for their apprentices, many are not getting the return on their investment. It can take up to four years for apprentices to reach their productive peak and there is no guarantee that the employer which funded the training will keep them at this point. The benefit permeates out into the industry as a whole, so the costs should not simply sit with those firms that are committed to trade and technician training.

Statistics on advertised job vacancies (below) are showing that demand for trade skilled workers is on the rise again.

Skilled Vacancies Index for highest-skilled groups

Occupation April 2010 - July 2010 July 2009 - July 2010
Managers 5.7%  37.2
Professionals 9.2%  36.3
Technicians and trades workers 9.0%  52.7
All skilled occupations  8.2%  36.7%

The next table shows the percentage of the total tertiary education spend going to each sector, and on the right, the percentage of total tertiary students in each sector.

 Government Funding and Participation

Training provider Tertiary funding allocation Participation percentage
Universities 55% 27%
ITPs 23% 15%
ITOs 8% 46%
Wananga 6% 5%
PTEs 6% 6%
OTEPs 1% 1%

Source: Ministry of Education & TEC

ITOs train 46% of students on only 8% of the funding.

Trade and technician skills feed through benefits faster to industry, the community and the economy. In hard times short-term needs take precedence, but down the track low levels of apprentice training will be a major problem. We went through this in the early 1990s and that hole has not yet been repaired. Trade training has significant spillover benefits and this should be recognised through more support for this effort, not less.

High levels of productivity are essential for sustainable growth and trade skills are one of the main drivers for productivity, especially for a country like New Zealand with a small population. More effort is required to ensure that the trade training is viable for employers by increasing, not reducing, the support for trade training via the ITOs.
 


tags: itos, apprenticeships, skill shortages, productivity, industry training
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