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Employers' perspectives on training: three industries

By Chandra Shah Research report 14 August 2017 978-1-925173-79-6

Description

This report investigates employer perspectives of workforce training, across three industries (red meat processing, road freight transport, and international freight forwarding) in both urban and regional areas. The findings provide an insight into the factors which influence employers’ training decisions and practices.

The report is one part of a larger suite of research, which broadly examines employer-supported training in Australia. This is an important topic because such training accounts for the majority of adult education delivered in all Organisation for Economic Co-operation and Development (OECD) countries.

Summary

About the research

This research examines workforce training from the perspective of employers in 10 firms across three industries which span urban and regional areas throughout Australia’s eastern seaboard.

The industries included were: red meat processing, road freight transport and freight forwarding.

Key messages

  • Employers believe in the critical importance of ongoing workforce training for the survival of the firm. Some firms are placing ongoing, whole-of-workforce skills development at the centre of their strategy for the future sustainable growth of their businesses.
  • While training practices vary across industries, and sometimes across firms in the same industry, there are many similarities.
  • Employers’ training decisions are affected by a number of issues. These include the:
    • need to comply with industry regulations, particularly those relating to hygiene, and health and safety
    • quality and source of entry-level labour supply, which is affected by working conditions and turnover in the industry
    • availability of a public subsidy for training, which may affect whether firms support full qualifications
    • quality and flexibility of training providers
    • availability of reliable information on the training market.
  • Public subsidies for training help firms to offer formal training and partly offset costs, but a firm’s decision to provide training support to an employee is generally independent of the receipt of a subsidy. However, in the absence of a subsidy some firms may choose to ration training support for formal qualifications.
  • A co-contribution for the cost of training is usually only expected from workers for higher-level qualifications.
  • Firms use a combination of learning modes — formal, non-formal and informal — for the delivery of training, with the emphasis often reflecting industry practices, the availability of a public subsidy, the level of employee experience and the logistics involved in organising training delivery.
  • The experience of small firms in the training market can be quite different from that of large firms. Small firms could benefit from access to reliable and objective information about the training market.

Dr Craig Fowler
Managing Director, NCVER

Executive summary

This study explores employers’ perspectives on workforce training from 10 firms in three industries located in urban and regional areas of five states on Australia’s eastern seaboard. The analysis draws on data collected at interviews with senior managers and internal and external trainers in these firms.

The study shows that, while training practices vary across industries, and sometimes across firms in the same industry, there are many similarities. All firms believe that ongoing training of the workforce is critical for the survival of the firm. Many factors determine how employers make decisions on what training to provide, which employees to support and how to deliver the training.

Employer-supported education and training accounts for the largest share of adult education and training in all Organisation for Economic Co-operation and Development (OECD) countries. The benefits flow to individuals, firms and society.

Scope and method

The study included firms from three industries: red meat processing, road freight transport and freight forwarding. The two industry skills councils that agreed to collaborate in the study, Transport and Logistics Industry Skills Council (TLISC) and AgriFood Skills Australia, had responsibility for training package development for the three industries.

About 30 firms were approached to participate in the study but only 10 agreed. The firms vary in size from a small ‘paddock to plate’ company with nine employees to a large firm with about 1650 employees. All are privately owned, with a majority operating in both domestic and international markets.

Four main research questions provided a framework for the interviews and follow-up discussion:

  • What are the drivers of investment in workforce training? Is there an overarching rationale for the decision? What are the benefits?
  • What models of skill acquisition and development are used, and why? Is there a preference for a particular type of learning — formal, non-formal or informal?
  • How are employees selected for training and what support is provided?
  • What are the barriers to implementing a training strategy? What are the enablers?

Findings

Red meat processing

Red meat processing is an important domestic and export industry in Australia. With its reputation for high-quality disease-free produce, Australia is well positioned to take advantage of the expanding export market. The industry is regulated by strict hygiene, health and safety standards. A large number of employees in the industry are process workers or labourers and a significant number are skilled boners, slicers and slaughterers.

The training practices of firms in this industry are driven by a combination of factors, including regulatory standards, the quality and availability of labour, labour turnover and public subsidy for training. The labour supply is largely from a pool of people with limited employment experience and low educational attainment.

All new entrants to the industry undergo training on commencement of work. While new entrants who are permanent residents are enrolled in formal qualifications (attracting a public subsidy), temporary workers (417 and 457 visa holders) are only trained in basic hygiene, health and safety protocols. As a consequence of the high turnover of labour, only about half of all workers complete the qualification. Non-formal and informal training complement the formal training. All firms encourage and support workers who complete the initial qualification to enrol in a higher qualification or skills sets. Almost all of the training is delivered on the job. Workers with language or literacy problems are assisted, but these problems do not appear to be an impediment in completing lower-level qualifications because most training is on the job and practical. These problems only become an issue when it comes to higher-level qualifications.

Road freight transport

The road freight industry dominates the non-bulk freight market in Australia, with larger trucks used for the long distance movement of goods and light commercial vehicles for the final-stage delivery in the cities. Most businesses in the industry are small- and medium-sized enterprises (SMEs) and predominantly employ males, who often have low educational attainment.

There has been no culture of formal qualifications for work in the road freight transport industry. Training practices are changing in some segments of the industry and these are mainly driven by changes in customer service expectations, the rapid growth in online shopping and increased regulations associated with attempts to increase the safety of road users.

The firms included in this study have made strategic decisions to reposition their businesses for a sustainable future and are adopting an approach of whole-of-workforce skills development using accredited training as the core part of this strategy. They expect benefits to flow from adopting the strategy, in the form of: improved road safety; reduced occurrence of workplace injuries; increased potential for adopting new technologies; and formal qualifications for employees who have typically never completed a qualification.
The public subsidy, through the National Workforce Development Fund (now closed), was an important enabler for implementing the strategy, providing all employees with an opportunity to enrol in a formal qualification. However, even without a government subsidy, firms indicated that they would have still gone ahead with implementing their training strategy but that there would have been restricted support to specific skills sets only, thus establishing the foundation for continuous skills development.

Freight forwarding

Freight forwarding organises the movement of freight by air, rail, sea and land in an efficient, safe and cost-effective manner, at the same time meeting increasingly stringent security requirements. In Australia, the industry is highly fragmented, with many small local companies operating as well as subsidiaries of major international firms.

Over the last 20 years, work practices in the industry have been transformed by technology, from a paper-based to an online system. Some firms have been considering offshoring some of the backroom functions. However, these trends have not obviated the need for skilled employees with problem-solving abilities.

Qualifications are generally not required for entry-level positions in the industry, but being younger and having good communication skills and a willingness to learn are essential. A mixture of non-formal and informal training on the job is used for skills development and includes online learning of modules from standard industry proprietary software. The current entry-level qualifications in the transport and logistics training package were considered too generic to be of any practical use in freight forwarding, especially international freight forwarding.

Once the employee has achieved the necessary breadth and depth of experience, they are encouraged to enrol in an industry-developed diploma. These diplomas are automatically recognised by the international peak body; this recognition is perceived to be more important than the national accreditation in firms operating internationally. While some employers provide full support for undertaking the diploma, others provide only partial support.

Concluding comments

All firms believe in the critical importance of ongoing training for the survival of the firm. Firms use a combination of learning modes — formal, non-formal and informal — for delivering training, with the emphasis often reflecting industry practices, the availability of a public subsidy, employee experience and the logistics involved in organising training delivery.

Public subsidy for training (for example, traineeships, apprenticeships and enterprise training funds) helps firms to offer formal qualifications and offset part of the total cost of training, but a firm’s decision to provide training is generally independent of receipt of a subsidy. In the absence of a subsidy, some firms may choose to ration training support for qualifications to fewer employees or offer support only for those skills sets necessary to meet regulatory requirements. Temporary workers under 457 and 417 (working holiday) visas, when employed, often receive only the training necessary to meet hygiene, health and safety requirements, as they are not eligible for a public subsidy. Only rarely is a co-contribution for training expected of workers and then usually only for higher-level qualifications.
The experience of small firms in the training market can be quite different from that of large firms. Small firms could benefit from access to reliable and objective information about the training market. Currently they have to navigate often-aggressive marketing to get to this information.

This study has shown employers’ decisions on training are affected by a number of factors, including: industry regulations; the quality of entry-level labour supply; conditions of work in the industry and labour turnover; the quality and reliability of registered training organisations (RTOs); information about the training market; and the availability of a public subsidy for training.

While caution should be taken not to over generalise the results from this study to all firms and industries, the study has provided insights into employer-supported training that may resonate more widely.

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