Industry-based skills training offers young people an entry to the workforce
Once again the universities are the big winners in the Budget. Unfortunately, despite international research increasingly pointing to the value of workplace training and apprenticeships, the 2015 Budget failed to increase the inflation-adjusted rate at which the Government funds industry-based skills training. This needs to change.
Our tertiary education system is turning out a record number of graduates, yet university education is no longer the passport to success it once was.
In New Zealand, as in the UK, many graduates struggle to find work after completing their studies and employers, particularly in the engineering, manufacturing and construction industries, are struggling to find employees with the right skills and experience.
In its Tertiary Education Strategy 2014-2019, the New Zealand Government's long-term strategic direction has named "delivering skills for industry" as its number one priority. I agree: urgently, we need to increase the availability and scope of apprenticeships to meet the changing demands of our economy.
I also believe the expansion of high-quality apprenticeships is the key to solving productivity shortfall and wage stagnation. I'm not alone. International Skills Standards Organisation CEO Tom Bewick highlights the same sentiment in a new international report.
"University education is becoming more expensive across the developed world, student indebtedness is growing, and graduate-level jobs are not necessarily resulting in gainful employment for every former student. Meanwhile, the learning-and-earning approach associated with formal apprenticeship models reveals positive data that generally shows higher completion rates, more limited indebtedness for young people and financial gains to companies," he says.
The report says, "The best available evidence internationally shows that, where structured apprenticeships exist, they nearly always achieve substantial returns on investment for individuals, employers, and society as a whole."
Gaining a qualification by way of an apprenticeship gives predominantly young people the opportunity to earn while they learn - which importantly means they are not contributing to the country's eye-watering student debt. There are rich opportunities for school leavers (and older learners) to follow their passion and learn a trade that will reward them with well-paid and interesting work. Often the work can take them around the world or keep them in New Zealand where they may even start their own business.
Apprenticeships are a win-win for apprentices and employers alike. Companies that take on apprentices get to employ someone they've trained and whose skills are relevant to their business. Usually apprentices learn on the company's equipment, meaning they hit the ground running. They immerse themselves in a company's culture and learn its systems and processes. It's a strong relationship formed from day one.
Despite these clear benefits, we have a chronic national shortage of apprentices and apprenticeships in a country that needs more skilled people, especially in the engineering and construction industries.
I recently spoke to two companies which are changing the way they do business as a result of the lack of trained workers. One is bringing in skilled fabricators from overseas; the other is scaling back its operations. Increased demand for skilled tradespeople is also being seen in Christchurch, as the city rebuilds.
With youth unemployment so high in this country, why are more young people not entering into vocational learning? Apprenticeships as career pathways have often suffered from bad press. In the past, an apprenticeship was frequently offered as a choice for kids who weren't doing well at school.
Outmoded thinking of what apprenticeships can deliver to the learner is also a problem in secondary schools. It is an attitude incongruous with the high level of technical skill today's modern factories, engineering workshops and other trades-based workplaces demand.
The majority of secondary teachers remain focused on setting up students for a university education, and with nearly a third of all school leavers enrolling in university courses, it's working.
Last year the Economist wrote that the emphasis on work-related skills for a world of lifelong learning, rather than the "three or four years and you're done" university system, will make trades training better suited to post-industrial economies.
"It will also challenge the dominance of universities as students realise that they no longer have to amass huge debts in order to acquire marketable skills."
More than 418,000 people were enrolled in formal tertiary education - including workplace training - around New Zealand in 2013, with about half studying toward a degree or higher level study. Student debt is accumulating and for the past seven years New Zealand's student debt has expanded to $14.2 billion with more than 720,000 debtors - roughly 16 per cent of the population.
I accept apprenticeships are not for everyone. But in an increasingly technical world, the practical skills they teach can help turn ideas into reality. Supplementing apprenticeships with higher qualifications at "technician level" further increases the value of those skills.
Giving New Zealand industries the training programmes they need is vital. The qualifications Competenz develops are driven by the industries themselves. Industry experts define a role's skill set and we translate it into a nationally recognised qualification. Often an industry will approach us. For example we are currently designing a cellar operations qualification at the request of the wine industry.
There are over 4,300 apprentices in the Competenz system and we are looking to grow that number. When the Government introduced its bonus incentives funding for apprentices and the new apprenticeship scheme (New Zealand Apprenticeships) in early 2014, it estimated there would be an extra 14,000 new apprentices beginning training during the following five years. That increased funding has certainly helped boost the number of apprenticeships, but we need more to meet the economy's skill demands.
Along with the right participants, we also need companies willing to make the investment and we must change the outdated perception that some hold about apprenticeships.
It's time for New Zealand to rethink its approach to skills development: for Government and employers to strengthen their support for the apprenticeship system, and for parents, schools and other influencers to recognise the value of this form of training and the rewarding careers it can lead to.
• Bill Sole is industry training organisation (ITO) Competenz's Industry Engagement Manager. He leads a team which manages relationships with 37 industries and works with them to develop qualifications. Competenz helps Kiwis build skills, careers and businesses.