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Australian companies rank skills as number one priority

17 May, 2006

A new study has found that more than eight in 10 Australian companies believe that building their skills base is the key to achieving international competitiveness as most continue to be frustrated by chronic skill shortages.

Australian Industry Group

The Australian Industry Group report, World Class Skills for World Class Industries, has been launched at the World Skills Summit in Melbourne by the Minister for Vocational and Technical Education, Gary Hardgrave.

Ai Group Chief Executive, Heather Ridout, says the report reveals the severity of the skills shortages and highlights the need to accelerate reform to Australia's training system.

"The report, World Class Skills for World Class Industries, marks a sea change in management thinking.  It reveals that skills have never been more important to Australian business.

"Modern Australian enterprises confronting the pressures of increased global competition appreciate that it is essential that they become smarter and learn faster than their competition and skilling has emerged as the new corporate imperative.

"Companies across the board are seeking in a big way to up-skill and re-skill their existing staff and are taking on increasing numbers of apprentices and trainees.

"According to the survey, the demand for skilled employees will be shaped by three characteristics: employers will require a higher level of skills, skills will need to be updated more often than in the past, and a broader range of skills will be necessary.

"To address this new skilling challenge will require concerted action by industry, government at all levels and training providers.

"According to the report, industry will increase spending on skilling by 30 to 50 percent over the next three years.  Governments and training providers also need to take action to ensure Australia has a training system that enables industry to prosper in the increasingly global environment," Ridout said.

The study was prepared for the Ai Group by the Allen Consulting Group which was commissioned to report on the state of skilling in Australia from the employers' perspective.  The survey of 526 companies across a range of industry sectors - together with interviews and panel discussions - establishes a direct correlation between world class skills in the workplace and world class competitiveness.

Among the other findings:

- 85% of companies nominated the building of their skills base as critical to their competitiveness (topped only by the broader strategy of strengthening growth opportunities at 93%).
- 74% identified the inability to secure skilled staff as a barrier to success over the next three years, ahead of all other factors.
- Companies experienced the most difficulty in securing skilled tradespeople (64%), technicians and paraprofessionals (48%) and engineers (46%).
- The most common employer strategy for overcoming the skills shortage was to retrain existing staff (85%), followed by increasing investment in training (69%), redesigning jobs (65%) and retention of mature age workers (63%).
- 65% said they were satisfied with TAFE services (for non-apprentice training) while 77% were satisfied with private providers, but less than a third of companies considered TAFE or private training providers to be world class.

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