Helen Frances looks into a new approach to raising labour productivity
KEY POINTS:
Working "smarter" while learning, earning and producing more is the scenario people will be working towards once the New Zealand Skills Strategy is under way.
The strategy discussion paper, developed by a partnership of government, business, union and industry groups was launched at the end of April for a period of five weeks' consultation. It addresses some of the factors that are key to this country's continued prosperity - the skills of its people and the support they need from firms and industry to work to their potential.
New Zealand has had a long-term problem achieving productivity and raising living standards. In 2006, its level of labour productivity ranked 22nd out of 30 countries in the Organisation for Economic Co-operation and Development - about 25 per cent below the OECD average and 30 per cent below the level of Australia.
With recent high employment, growth in the economy has relied more on the increased utilisation of labour rather than on growth in labour productivity. Raising the level of workers' skills, technical and "soft", can increase how efficiently an organisation can turn its inputs, such as capital and labour, into outputs in the form of goods and services.
Skilled workers are better communicators. They are more innovative and entrepreneurial and adapt more easily to new technologies.
The skills strategy sets out four priorities and associated actions for improving the skills of people across all industries and at every level.
These are:
* Raising the level of literacy, language and numeracy skills.
* Supporting firms to attract, retain, develop and use skills across the entire workplace.
* Ensuring the tertiary education system matches the needs of industry.
* Supporting young people in work to continue developing their skills.
The Government has budgeted $168 million over the next four years to support the implementation of the strategy's literacy, language and numeracy component.
Carol Beaumont, secretary of the New Zealand Council of Trade Unions, is working on the skills strategy in partnership with Business NZ, the Industry Training Federation and other agencies.
"From NZCTU's point of view, the skills strategy is important in building the sort of high-wage, high-skill economy we all want," she says. "The workplace is an important location to engage in skills development. People spend a lot of time there and eight out of 10 workers of the workforce of 2020 are at work right now."
Workers can benefit in many ways from increased investment in skills, which will improve access to employment opportunities and allow greater employment security.
"There are also broader implications such as being able to help support their children's learning or take part in a wider range of community activities. We think a focus on lifelong learning is fundamentally important for our society."
Investment in skills that are portable across an industry is important to provide employment security and a supply of skilled workers.
"This means developing 'soft' skills such as the ability to solve problems, to adapt to change and to be innovative," she says.
Advocating for training has historically been one of the roles of unions. The Learning Representatives project is a more recent initiative she hopes will be developed further through the skills strategy.
"We plan to develop a group of Learning Representatives that will be champions for learning with co-workers and employers in much the same way as Health and Safety reps are champions for health and safety. They will also work with the ITF to embed literacy, language and numeracy into industry training."
Raising skill levels will improve job satisfaction as well as productivity.
She says many employers among the larger best-practice companies have taken on board the need for greater investment in workers' skills by factoring new learning into jobs. But a change in company culture may be needed in other firms for workers to be able to participate more fully.
"It isn't going to work in a hierarchical, top down management structure where everyone 'knows their place'. The skills strategy also addresses changing attitudes at management level."
According to the key players, the tri-partite initiative has been a productive exercise with unions, Business NZ and other business organisations working on the same page.
Nicholas Green, the manager of education, training and productivity, for Business NZ, says the organisation is on board with all the actions of the skills strategy.
"Results from surveys found that 40 per cent of the adult workforce in New Zealand had literacy skills beneath the level of other OECD countries," says Green.
"That doesn't mean these people are illiterate. It means they have some difficulties processing the information they need on an every-day basis. About 300,000 adults have problems around things such as finding information from maps, reading instructions from fire extinguishers, pretty basic skills."
Deficits in staff literacy place considerable constraints on how companies can change, adapt and grow in a global economy.
The skills strategy is different from other work done by the Government in the areas of education and skills.
"We have approached it from the point of view of firms and the labour market, and what employers and employees need rather than focusing on universities and schools," says Green.
He understands there will be government assistance for small and medium-sized businesses to meet the costs of literacy, language and numeracy training.
The Industry Training Federation represents 40 industry training organisations that work with 35,000 businesses each year, with an emphasis on lifting productivity and performance.
ITF executive director Jeremy Baker stresses the importance of people using the new skills they learn.
"Training is about change. It's not a passive activity where you just send someone off on a course. It's an active and deliberate process," says Baker.
He believes it is in employers' interests to be clear about why they are training staff, to discuss with them what it will mean for the business and how things will change as a result.
"Rather than saying, if we train more people we might get productivity, we are being more systematic. Let's sit down with employers as much as with workers and plot out how any investment in training they make is going to result in productivity."
While all sectors will be involved in the skills strategy, the retail industry is one area he says will benefit from a greater focus on skill development.
"Increasingly, high-quality retail is focusing not just on selling the product but on delivering a really good service to the customer. Retailers are facing some relatively difficult times over the next year or so. It's going to be those who deliver good quality service that will differentiate themselves because price is going to be a hard thing to compete on."
The ITF has been working over the past two years on literacy, numeracy and "soft" skills development and will use part of the money awarded in the Budget to assist in developing more programmes.
The depth of discussion Baker has heard around the country during the consultation process bodes well for implementation of the skills strategy.
"I'm impressed by the amount of labour market and economic literacy among communities. The kind of dialogue we are having today is a quantum leap from the sort of conversation we were having five or 10 years ago."
He says people are talking about the importance of context and the bigger picture.
"They're saying the context matters as much as the skills people are learning. Teams matter, careers matter; how industries operate as a collective; why some industries have higher levels of training than others and the drivers behind that."
