Q: Do you think the vocational education sector is in need of reform?

Wenman: We think of the vocational education system as being a spectrum from fully ‘on-the-job’ (industry) training at one end, to fully ‘off-job’ (classroom) based learning at the other, with a blended model in the middle. To date, Industry Training Organisations (ITOs) such as Careerforce support employers to deliver training at the on-the-job end, and Polytechnics and Institutes of Technology (ITPs) deliver to the off-job end.

Clearly, there are significant issues with ITPs, as reflected in the bailouts for many of them ($100m +), and this is undoubtedly an untenable position for the Minister. We agree that the financial stability of the polytechnic sector must be addressed.

However, by and large, most ITOs have been performing very strongly. Careerforce for example, has been experiencing 20% year on year growth for the last three years. Industry training is working well, and we can’t help but feel that the Minister is draining the harbour to save a sinking ship.

We are however adopting a constructive approach to this consultation, as there is always room for improvement. The Minister has recently started citing the low levels of industry training as being a root cause for industry skills shortages – we can’t see how the proposed reforms will at all address this issue, but knowing the actual concerns, we can certainly feedback our thoughts on initiatives that will. Workforce skills shortages are a function of wider systemic issues that run much deeper than the provision of vocational education. For example, changing perceptions of vocational learning versus other ‘default’ tertiary pathways (i.e. university) which are not necessarily ‘best -fit’, and that do not at all address workforce skill gaps.

Q: Do you think the proposals on the table will improve how the health and wellbeing sector operates? Why or why not?

Wenman: Careerforce is due to celebrate its 25th anniversary later this year – that is 25 years of evolving on-the-job learning to drive better outcomes for employers, for trainees, and for NZ Inc.

Many industry trainees and apprentices are second chance learners who have historically not achieved via traditional classroom-based learning but are flourishing with on-the-job learning. Many of our employers have expressed concerns that with the transition of industry trainees to the new New Zealand Institute of Skills & Technology (NZIST), with its classroom-based learning legacy, there may be a gradual shift over time away from fully on-the-job training.

Many of the sectors that Careerforce has responsibility for, such as aged care and mental health & addiction, are already under immense pressure from workforce shortages. One of our core concerns is that they can ill-afford the workforce disruption that these reforms will create, a considerable risk when it is not at all clear how they will deliver better long-term outcomes.

A further concern is the potential for costs to employers to actually increase, which could actually have the net effect of reducing training. Such cost increases would result from employers continuing to pay for programme costs as presently, but also the stipulated expectation within the proposal that employers would have to additionally contribute to the costs of the new Industry Skills Bodies (ISBs). There has been minimal financial modelling around the proposed reforms.

Q: How do you think the proposed reforms will impact ITOs in general?

Wenman: If the reforms were to proceed as currently proposed, they would effectively dismantle ITOs as they exist today. Presently, ITO’s have two key functions; 1/ to set skill standards (e.g. qualifications), and 2/ support the delivery of workplace training. 

ITO’s such as Careerforce will have the opportunity to apply to become one of the newly proposed Industry Skills Bodies which would maintain the skills leadership function (note that the level of sector granularity of these ISB’s is not at all clear). However, ITO’s would cease to support employers with the delivery of workplace training (which currently generates most revenue for ITOs). Our strong contention is that each function ‘feeds’ the other, and the proposed reforms break this critical continuous feedback loop.

As an Industry Training Organisation, we are ultimately industry-led, and need to act in the best interests of industry. Accordingly, we have spent considerable time meeting with our stakeholders to understand their concerns with the proposed reforms and ensure these are reflected in our formal submission.

Q: What are the specific implications for Careerforce trainees and employers likely to be?

Wenman: The Minister has made it very clear that pending how the reforms proceed, the first priority would be the merger and settling in of the new Institute of Skills & Technology, a mammoth task. It is expected that any subsequent transition of the support of workplace training would be at least 2-3 years away.

Our key message to employers and trainees is ‘business as usual’. Regardless of how the reforms proceed, trainees will be able to commence and complete programmes, and be awarded with their qualification.

Each ITO has gazetted coverage, and Careerforce for example has responsibility for 9 sectors, and we endeavour to champion the workforce development needs for each of these. We believe that employers across these sectors should be concerned about the risks of a diluted voice if 16 ITPs and 11 ITOs are merged into the one national Institute that will then have responsibility for nearly 150 industry sectors.

Q: One of the driving factors for the reforms has been to reduce competition between the ITP and ITO sectors. Do you think there are other ways we can achieve this, beyond what the Minister is proposing?

Wenman: One of our biggest frustrations has been trying to actually understand what the problems are that the Minister is trying to solve (beyond the financial woes of ITPs).

We are not sure the extent to which reducing competition has been a consideration, and regardless, competition also means choice, and creates incentives for improved performance. If reducing competition is indeed a concern, the Minister also needs to address Private Training Enterprises (PTEs) as the proposal is largely silent on these.

For many ITO’s, there are greater opportunities for more collaborative working between ITOs and ITPs due to the requirement for the likes of classroom-based block classes. For Careerforce, and reflecting the nature of trainees and the challenges facing the sectors, training is almost completely on-the-job. Workers simply can’t be released for off-site training due to rostering and cost issues.

What we would like to happen is for the Minister to slow down, and take the time to more fully consult with industry about what is and isn’t working. One thing that has become clear during this consultation period is the lack of understanding people have of industry training, including that of officials.

Submissions close Friday 5 April, and we are encouraging our employers and trainees to take the time to understand the proposed reforms and their potential impacts. We are also encouraging them to have their say via the formal submission process. We have created a form of our website to make this easier for those wishing to make a submission.

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