Employers speak out on proposed industry training reforms

148 businesses employing tens of thousands of workers across New Zealand have signed an open letter opposing the government’s proposal to dismantle the ITO-led training and apprenticeship system as part of its wider vocational reforms, Industry Training Federation Chief Executive Josh Williams says.

The government is due to decide on its proposal to transfer responsibility for trainees and apprentices to polytechnics and other vocational providers, away from industry owned and governed training organisations (ITOs).

"We strongly support these employers' concerns about the continuity and quality of training and associated support for on-job trainees and apprentices.

"Industry trainees and apprentices are workers whose training is part of their employment. Their training has to be organised around their workplace, or it doesn't work," Mr Williams says.

ITOs currently qualify people in several industries where there is no polytechnic or provider-based training, because that's what works for those industries.

"We don’t believe a compelling case has been made for removing the role for industry-owned bodies to manage and support industry trainees and apprentices. We are very concerned that the proposed structure creates the wrong incentives, resulting in a reduction in employer participation.

"We are also concerned that with all the other structural change proposed, vocational providers will be less able to support fast-moving areas of the workforce. Employers will still train their staff, but those workers may not have credits or qualifications to show for it, making them less resilient in the workforce.

New Zealand currently leads the OECD for our participation rate in formal on-job training. Our workforce demographics mean we need more formal workplace training to upskill our workforce. "Industry training is the only part of the sector where we have seen growth in the last five years, along with higher earnings, and comparable credit completion rates between European, Māori and Pasifika learners".

The New Zealand system works because businesses lead a national training system through their ITOs, which develop and maintain skills standards and arrange training on behalf of employers. This provides a critical continuous feedback loop that employers value, and ensures that skills development matches industry needs. Industry contributes time and money, and the trainees pay tax rather than get student loans.

“Now is not the time to pull the pin on our industry-led training and apprenticeship system. New Zealand’s strong performance suggests we should be focusing on ways to grow our numbers, and support many more New Zealand employers to train and qualify our workforce.”

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