SPECIAL REPORT: A 19 per cent drop in the number of trainees and apprentices in WA over the past five years is a challenge for the new state government, but also an opportunity to grow the sector.
Concerns are mounting that the downward trend in the number of apprentices and trainees in Western Australia during the past five years could jeopardise the future pipeline of the state’s skilled workforce.
WA Department of Training & Workforce Development figures reveal that, in 2016, there were around 15,600 apprentices and 19,000 trainees in training, which was 19 per cent fewer than numbers five years ago in total.
That trend is mirrored nationally, with apprentice and trainee commencements last year at the lowest rate since 1998, according to the National Centre for Vocational Education Research.
And completion rates across Australia were the lowest in 14 years.
The Chamber of Commerce and Industry of WA has predicted training commencement numbers in the state for 2017 to drop to half of the rate in 2012 (34,000).
CCI WA chief executive Deidre Willmott said there were several reasons for the decline in overall numbers.
“The cost of training, the weaker economic conditions and red tape have all come together to create a perfect storm in training,” Ms Willmott told Business News.
“Businesses are concerned; they’re telling us that if training numbers continue to decline the way they are now we will see skill shortages as soon as in the next three to five years.
“And as the economy does strengthen we will see skilled workers moving to higher level jobs and a lack of people coming through those entry-level roles.”
Ms Willmott said while the payroll tax deduction for staff engaged in training (an exemption only offered in WA) had helped make the process financially practical for many employers, training requirements were costly in terms of the time burden.
Long processes, including requirements for employers to submit individual training contracts and respond to numerous questions about the structure of their company, had contributed to the overall cost of an entry-level role.
“While the intent of the policy is to ensure that state government training funding is spent wisely, what we are seeing is that some employers are just too busy to jump through those red tape hoops,” Ms Willmott said.
“It becomes a barrier to employers actually investing in training; making it easier for the employer is an important priority.”
Most major industry areas experienced a fall in training activity in WA between 2015 and 2016, with the exception of hospitality and tourism, which lifted slightly as projected growth is underpinned by more than 20 new hotels set to open in and around Perth in the next three years.
Traineeships in the finance, property and business services sector still accounts for the largest number of those in training (4,684), despite last year’s numbers falling 12 per cent.
While apprenticeships in building and construction rose in 2014-15, supported by the state’s record levels of residential construction activity, numbers dropped from 4,380 in 2015 to 3,798 last year.
Electrical apprentice numbers continued to fall, as did those in metals and manufacturing trades, where apprentices in training have decreased by 40 per cent since 2012.
Ms Willmott said there had been an increase in demand for shipbuilding and defence skills training at CCI’s Industrial Training Institute at Henderson, with those sectors expected to grow over the long term as more work came to WA.
Electrical and metal skills, currently in decline, made up a big part of defence and manufacturing work.
“We need to make sure that the next generation of young people receive training and that we have the right skills base when we see the economy begin to grow again,” Ms Willmott said.
“We've been watching this decline and it is becoming urgent that government and business work together to turn that around.”
Ms Willmott said the new government would also have to address the expiry of the current National Partnership Agreement, which could lead to Commonwealth training funding to WA decreasing by at least $50 million a year.
A focus on creating more collaboration and communication between businesses and government is on the agenda for new Education and Training Minister Sue Ellery.
“We intend to beef up the state training board and I want to make sure they have my ear and that they are regularly feeding to me the voice of industry,” Ms Ellery told Business News.
“The core of the premier’s election commitments were jobs, and at the heart of jobs sits training; it’s a critical part of how we deliver on the whole jobs platform.
“At a time of economic stress and a soft labour market, in fact that’s the time that we really need the training sector to be stepping up.”
The government is planning to put more of an onus on businesses, particularly those securing infrastructure and resources projects, to map out their training plans and skilled local work agreements as part of the skilled local jobs bill and industry participation plans.
One area for which Labor has a specific plan of action is the Priority Start Policy, which was introduced under the Carpenter government.
The policy places specific requirements on businesses undertaking government construction work to employ apprentices and trainees, once the labour component of the job reaches a certain value.
Ms Ellery said among the government’s proposed changes were an increase in policing, as the Barnett government had allowed successful tenders to count existing apprentices as meeting a contractor’s employment obligations, instead of creating opportunities for new trainees.
The government has also announced its intention to freeze Tafe fees, a decision Ms Ellery said was critical despite the state’s finances.
“We also need to diversify the economy and that means looking beyond manufacturing and construction and looking at tourism, hospitality and a whole range of services industries,” she said.
“Kids are going to be doing jobs in 14 years’ time that don’t exist today.”
Ms Ellery said Tafe colleges would also be established as industry skill centres by becoming a ‘one-stop shop’ to provide a single point of contact for assessment facilities, employers, unions, apprentices and trainees.
The detail of what exactly this means is yet to be developed and seen in practice.
Beyond the Tafe realm, an ongoing audit of private training organisations to ensure quality and compliance will also be introduced.
“There was serious reputational damage done with the debacle around the federal government’s VET fee help system and what impact that had in allowing some dodgy operators,” Ms Ellery said.
“There’s room for everybody to play a role in how we diversify the economy but we want to make sure whoever is delivering the training that it’s quality, real, recognisable and authentic.”
According to BNiQ Search Engine insolvency data, at least four WA-registered training organisations have gone into administration since January this year, including Coastal Enterprises and Core Skills Education Advantage Training.
While the current economic climate could be one contributing factor, many RTOs have also had to compete with cheaper online course options.
However, the operators of Training Course Experts, an East Perth-based fee-for-service training provider for mining, construction and logistics, believe that while there had been a move towards online, many people were starting to realise the limitations of online training.
“There has been a real awakening that online training cannot truly deliver the skills necessary for safety in the workplace,” managing director Jonathan Huston told Business News.
“Authenticity is important, so I don’t think online is a threat; it becomes a race to the bottom on pricing.”
Mr Huston said the White Card, a work health and safety course for the construction industry, had changed its assessment conditions late last year from being online based to make observation of performance a mandatory requirement.
“The course descended into a tick-and-flick exercise,” he said.
“Training is a kinaesthetic experience, online is just not the same.”
Mr Huston said Training Course Experts’ central location and the availability of courses, which he had tweaked to suit the demand of employers, had contributed to the survival of his business.
On average, the organisation trains 12,000 people each year, just 2,000 down from past peak levels.
“Even in a downturn there will be training,” Mr Huston said.
“And I think the next wave of Australian services to hit exports could be the VET sector.
“We’ve already had the tertiary education sector, why couldn’t our intellectual property be rebranded for India?”