WITH the high Australian dollar and increased overseas competition causing contractions in Australia’s manufacturing sector, a number of business managers are hesitant to raise staff numbers until stability in the sector improves.
At the same time, continuing skills shortages in many areas of manufacturing are being compounded by a drift of skilled workers to better remunerated sectors, including resources and infrastructure projects.
So if managers aren’t hiring, and the pool of workers from which to choose is getting smaller, how can Australian businesses ensure they have the technical know-how to keep up with their competitors? Especially with production technology becoming increasingly technical and the pressure from rising utilities and materials costs worsening.
The Sage SME Business Sentiment Index 2011 highlights new challenges that are emerging as manufacturers adjust to a lower-growth business environment.
Major challenges identified by the research include rising costs, while revenues have not increased by the same amount, and this in turn is reflected in cash flow management issues. In particular, the research shows that there is concern regarding recruitment of new employees, with manufacturers realising that in a tightly-fought market, having access to the right skills is essential.
Increasingly, companies are looking at what they can do to up-skill their existing staff. According to Alan Maguire, education and training advisor with Australian Industry Group, it is important that manufacturers prepare a workforce development plan that clearly identifies the skills required.
“Ai Group can provide advice on developing a plan to meet current and future skill needs, and then tapping into funding sources, including government grants for opportunities such as apprenticeships or traineeships,” he said.
“Apprenticeships can be an excellent way to up-skill existing employees or to introduce new personnel who can be moulded to a company’s needs and culture. Although automation is leading to a lower requirement for process and manual workers, there is an increasing need for higher skills in trade areas, as well as business management.
“Ai Group can assist in brokering successful partnerships with training providers, introducing pilot training initiatives, implementing competency standards, and accessing specialised training such as lean or competitive manufacturing.”
CEO of Manufacturing Skills Australia (MSA), Bob Paton, observes that nationally some 45% of employees in manufacturing do not have a formal post-school qualification, so he says there is firstly a need to recognise the skills these people have, benchmark them, and then build from there.
“There is a range of government funded programs, such as the enterprise-based Productivity Places Programs, that are directed at up-skilling existing workers. Many firms have a competitive manufacturing focus with a view to improving productivity, and lean and agile manufacturing elements can be rolled into training and qualifications,” he told Manufacturers’ Monthly.
“Substantial benefits can also be achieved by taking people with trade-type skills and building on that to produce fully qualified tradespeople in a significantly reduced timeframe.
“Although multi-skilling has eased off in more recent times following earlier demarcation disputes, it is still a common practice in some areas. It sometimes applies to those with a dominant trade background who wish to develop other skills, or perhaps production workers who want to broaden their skills by getting involved in scheduling for example.
“Companies are increasingly happy to take advantage of government supported training programs because they can see a good return on their investment.”
On-line training (or e-learning) is providing a growing pathway to workforce development, and is often used to support other types of training.
Hayley Beck, manager brand management at the Australian Flexible Learning Framework (AFLF), says the Framework provides the national training system’s e-learning strategy.
“We offer mostly free e-learning products, resources and support networks to help training organisations, business and industry to adopt or expand their use of e-learning,” she said.
“A benchmarking survey has revealed that 50% of respondents use e-learning as part of training they provide to employees; 60% expect their use of e-learning in the provision of employee training to increase in the next two years; and 85% said they would encourage their employees to use e-learning if it was available.
“There are two Flexible Learning Toolboxes which assist the delivery of nationally accredited training packages for the manufacturing sector: Optimake (Certificate lll in Process Manufacturing); and Sustainable Manufacturing (various qualifications).”
PaQS (People and Quality Solutions) has launched an online safety course that is designed to fit into safety induction programs for trainees and apprentices.
The company’s managing director, Carl Reams, points out that young people are almost one and a half times more likely to be injured at work than the average worker, and the statistics show that more than 70 percent of these cases occur within the first year of employment.
“The new competency based Advanced Safety Awareness (ASA) course targets human error by developing and enhancing individual safety thinking and responsibility. This course is there to support skills training, and is suitable for application in a wide range of enterprises, regardless of size. In fact the smaller the employer, the more exposed they are to not following procedures,” Reams said.
SPCArdmona (SPCA), which processes fruit and vegetable products in the Victorian regional towns of Shepparton, Mooroopna and Kyabram, has some 690 permanent employees.
In 2009 the company offered a training program to 420 permanent production and distribution employees. According to SPCA’s employee engagement and training manager, Nick Bartholomew, these workers were skilled in how to do their jobs but lacking in the knowledge and theory underpinning their competency. “Basically, they knew ‘how’, but didn’t know ‘why’,” he said.
“An initial step was to develop a strategy linking training with employee classifications and pay rates, and then a training plan and training bonus was written into a new Enterprise Bargaining Agreement negotiated with union support. Advice from Skills Victoria was obtained in relation to eligibility and the training process, and the National Food Institute was selected as the registered training organisation to provide the training.
“149 of the original 162 employees that commenced the Certificate of Food Processing or Transport and Logistics training program, are continuing on in 2011 as they see the benefits for the business and themselves.
“The Standard Operating Procedures that were formally written during the training programs means that knowledge from the heads of SPCA’s mature workforce has been captured in written documents.
“Other benefits include improved communication between workers and a decrease in the lost time injury frequency rate from 21 to 13. The program has also contributed to a 50% reduction in manufacturing variances.”