Industry Training stocks and flows... and the effects of the economic downturn

Conclusions

Increases in government funding between 2003 and 2007 may have maintained the number of existing industry training learners in recent years – but the number of new learners has not increased substantially from year to year.

Flows of participants into and out of industry training and Modern Apprenticeships appear to have been affected by the economic crisis. This was seen mostly in 2009, though some industries appear to have felt the effects of the financial markets crisis some time earlier than this. Some industry sectors, such as manufacturing, have been in decline for a number of years.

Where broad industry areas can be matched to ITO coverage, there is some congruence between the broad industries whose GDP growth declined and declines in those industries’ industry training. Agriculture, textile and apparel manufacturing (apparel and textile ITO) forestry and furniture (covered by FITEC), construction (building and construction ITO) and mining all declined in GDP growth around the same time as declines in new starts and increases in withdrawals occurred. However, there is a degree of ambiguity around the coverage of specific industries.

Employers may have reacted to the economic downturn by taking on fewer new staff, shedding staff and/or curtailing new investment in workplace training, resulting in fewer new starts. Training for existing employees may have been temporarily suspended until enterprise profit margins improved. All of these scenarios may have contributed to the increase in withdrawals in 2009 and, overall, fewer new starts compared to previous years.

Some industries saw big drops in the number of new starts in 2009, both in absolute terms and relative to the total throughput of trainees. This effect was mitigated somewhat by the large increase in new real estate trainees, brought about by new real estate entry qualification regulations, and net growth in NZITO and the flooring, equine and hospitality ITOs.

Some ITOs (NZITO, flooring, equine and hospitality ITOs) maintained their level of new starts. They continued to sign up new entrants, but the new entrants were more likely to be older, and perhaps already established workers rather than young, less experienced or non-European workers. New starts for younger people saw the sharpest decline in both industry training and Modern Apprenticeships, while new starts for older people in industry training actually increased in 2009. Māori and Pasifika new starts declined faster than those of other ethnic groups.

Modern Apprenticeships had fewer withdrawals proportional to throughput than seen in industry training, but the relative reduction of new starts in 2009 was greater than in industry training. Existing Modern Apprentices may have been better protected during the economic downturn than industry trainees, possibly because of the more formalised structure of training, the wider transparency, and the greater observance of and adherence to training agreements than is seen in non-targeted industry training.