Next Steps to Fix New Zealand’s Skills Gap

Claudia Reiners
December 19, 2019

Next Steps to Fix New Zealand’s Skills Gap

4bf428ed6af9ff680b7ac8b24b046f3d?s=50&d=mm&r=g Claudia Reiners
Head of Strategy

A recent Press Release from the Government has announced the next steps in a comprehensive plan to fix New Zealand’s skills gap.

Following the sweeping changes to the vocational sector announced earlier this year, the government plans to, ‘shift the perception of vocational education and training as a positive and attractive career path, and ensure critical sectors in our economy have the access to the skills they need to grow’.

The steps announced include:

  • Education to employment brokerage services to strengthen connections between local employers and schools
  • Funding for more events to connect schools with employers
  • Promotional campaigns to raise the profile of vocational education

The Current Skills Gap

Recent government estimates predict that New Zealand will need about 47,000 more workers a year in the near future, which is an alarming statistic.

A recent survey on global talent shortages outlines the ‘Top 10 skills in demand across New Zealand’, and interestingly enough, Skilled Trades sits at the top as the most in-demand skill area for employers across the country.

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employers say that filling skilled trades roles was harder in 2018 compared to the previous year.

As stated in the most recent reforms, 43% of businesses are having trouble finding skilled labour and this has been steadily increasing since 2009.

The Top 10 Skills In Demand Across New Zealand

  • Skilled Trades

    Electricians, welders, mechanics

  • Sales Representatives

    B2B, B2C, contact centre

  • Engineers

    Chemical, electrical, civil, mechanical

  • Health Care Professionals

    Doctors, nurses and other non-nursing health professionals

  • Technicians

    Quality controllers, technical staff

  • Professionals

    Project managers, lawyers, researchers

  • Drivers

    Truck, delivery, construction, mass transit

  • Teachers

  • Management/Executive

    Senior managers, board level managers

  • IT

    Cyber security experts, network administrators, technical support

With these skills shortages front of mind, the vocational reforms are focused on unifying the vocational system across the country, and making sure that ‘New Zealand’s workforce is fit for today’s needs and tomorrow’s expectations’.

One of the four major challenges identified in the Reform of Vocational Education, was the ‘need to address a serious skills shortage across a number of industry sectors’.

The idea of making vocational training more relevant to the ‘changing needs of the workplace’ isn’t new, but many of the new vocational reforms, such as the new Regional Skills Leadership Councils and the amalgamation of the existing ITPs under one system, are all initiatives aimed at addressing the skills gap in the short and long term.

The ‘changing nature of work’ means that the vocational education system will need to address the upskilling requirements that are a direct result of technological change and industry progress. However, there is still an increasing need for skilled trades, as well as skills across a whole range of industry areas.

It is also important to note that most of the roles within this list of in-demand skills require post-secondary training or education, which means that the vocational sector is of vital importance when addressing continuous ‘skills development’.

This is also the case, for the more traditional, skills-based roles such as trades that are also impacted by emerging technology and industry changes.

The Vocational Reform hopes to provide employers with ‘more support for their employees, and ensuring greater consistency in vocational education across the country’, and recent announcements look to support this overarching strategy.

Where To Next?

It’s difficult to predict how quickly these reforms will have an effect on skills shortages and the economy, but by all accounts, one could say that the government is heading in the right direction.

Months before the vocational forms were announced, Prime Minister Arden was already touting the vocational system, and it would appear that there is a considered, long term vision for the sector:

I want the vocational training system to be the backbone of our productive economy, and of our regions. I want students and parents to proudly choose a career in the trades and I want businesses to have confidence that the system is flexible and preparing a workforce for the future of work.

The recent government Press Release also mentions the Ministry of Business Innovation and Employment (MBIE) forecast on the demand for skilled workers, noting that the demand for plumbers, electricians, shearers and tilers is set to increase by over 5,000 on average per year over the next three years.

“To make sure there are enough skilled workers to fill those roles, we are tackling the long-term challenge we inherited of getting more young people to take up trades and work skills training.”

More concerning than these ‘persistent and widespread skills shortages’ is the continued perception of vocational education in the minds of New Zealanders, which the latest initiative has identified as a key problem. It is said that ‘53% of parents surveyed would rather their child attend university than enrol in a polytechnic on on-the-job training.’

The perception and attitudes around vocational education in neighbouring Australia are somewhat similar, and their current government is also undertaking significant reviews to revitalise and bring back confidence to the sector.

It is hard to gauge the effectiveness of any reforms and initiatives so early on in the process in New Zealand, but the focus on critical skills shortages is much needed.

We will continue to follow announcements and the results of reform over the coming weeks and months.

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Claudia Reiners
Head of Strategy
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