Investing in people pays bottom line benefits

22 March 2005

Investing in people pays bottom line benefits

New Zealand manufacturing must change from a culture of fix when it’s broken to one of proactive maintenance if industry wants to become more profitable.

Carmen Gray, chief executive of Maintain NZ, the new National Centre for Maintenance Excellence, says investing in maintenance staff with the right skills and right training can significantly boost a company’s bottom line.

She is speaking at this week’s Regional Development Conference in Napier, which is focused on moving regional development in New Zealand up a level to meet the demands of a changing international environment.

Carmen Gray cites Fonterra as an example of a company that has identified the potential to increase its turnover by $25 million a year through investing in staff with the right skills, the right training and the right philosophy.

“Maintenance best practice is all about operating efficiently rather than breaking down. Fonterra has got itself to 95% operating efficiency through improving its processes. Increasing operating efficiency by another 4% is worth $25 million a year – and the way to achieve that is to invest in people.”

However, Carmen Gray says that in New Zealand, the opposite has been occurring. The manufacturing industry, which produces approximately 64% of New Zealand’s gross domestic product, is facing several skill shortages in the maintenance and engineering fields due to a lack of investment in training, an ageing workforce and a training education system that has not been able to produce enough graduates with the right skills.

In addition, companies competing in a global environment have been driven to extreme reductions in costs, first on cutting training budgets and then on maintenance. As such, a culture of repair had developed – fix when it’s broken, rather than investing in proactive maintenance, she says.

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It was to address this workforce crisis that Maintain NZ was formed through a partnership of community, industry, education providers and unions with support from New Zealand Trade and Enterprise.

Maintain NZ has partnered with Auckland University of Technology to redesign a new four-year diploma-based apprentice programme, which starts this month with 12 trainees.

All 12 apprentices are already in paid employment, starting on salaries of $25,000-$30,000, Carmen Gray says.

“After four years, they’ll have a university diploma, no student loan, and they’ll have the potential to earn salaries of around $70,000-$80,000 when they graduate.”

In addition, the apprentice programme has been designed to give students high-level academic qualifications in addition to the trade and practical skills required. This means apprentices can continue study towards a university degree. Maintain NZ will offer up to four scholarships for two further years of university study.

The demand for apprentice positions is high, Carmen Gray says. Fonterra, which applied for 10 of the 12 spaces available on the new programme, recruited and turned away more than 250 applicants.

“We don’t train for training’s sake. We’re training what the industry wants,” she says.

In addition, Maintain NZ is providing in-service training for another 500 people already working in the trade to upskill and enhance existing capability.

As well as providing industry-led training and education, Maintain NZ will also be a centre of excellence for research and development, expertise, knowledge and resources and help maintenance practitioners forge networks and linkages nationally and globally. This year’s Regional Development Conference is the third to be held and runs from March 21-23. It is jointly hosted by the Minister for Industry and Regional Development Jim Anderton, the Ministry of Economic Development, New Zealand Trade and Enterprise, EDANZ and the Hawke’s Bay region.

ENDS

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