AREEA training coordinator Shane O’Brien explains how quality training can boost business performance during times of economic downturn.

As the economic cycle in Australia changes, many enterprises look to reducing expenditure wherever possible and one of the first areas targeted is training. Recessions are often flagged with drops in workforce training expenditures as businesses bid to save money and reckon with a decline in recruitment and overall employment.

In the United States, for example, the City and Guilds Centre for Skills Development found average training expenditures per employee fell by 11% in 2008 from the previous year, while the corporate training market saw its biggest fall in a decade, from $58.5 billion in 2007 to $56.2 billion in 2008.

However, the overall proportion of employees receiving training is widely shown to stay unchanged during recessions, with the drop in training volume staying largely in line with the drop in levels of employment.

Reducing fund allocation despite consistent participation levels in training programs can have adverse effects on the quality and intensity of training, whereby:

• Training courses become shorter;
• In-house training replaces qualification-based external training;
• Responsibility for training is shifted from central training departments to production units; and
• Training is reserved for managers and others perceived to have the greatest impact on company performance.

Employer surveys also suggest that although businesses are compelled to reduce their overheads, several factors actually encourage increasing efforts to train the workforce. These include:

• Competition – Particularly in global downturns, competition for customers becomes increasingly fierce, leading to a need for greater quality products and services and ability to engage customers. This is often achieved through implementing firm-specific standards of training.
• Industry transformation – The effects of changes in public investment and consumer demand in a recession may force companies to diversify in order to survive, venturing into new markets, new production methods and processes. All of these changes require significant levels of recruitment and/or retraining.
• Cost effectiveness – When restructuring is needed in a company, internal recruitment and retraining is likely to be more cost efficient than redundancies and external recruitment.

The National Workforce Development Fund (NWDF) is a new approach to skills training that places business at the heart of the training effort and eases cost pressures in the same context.

The NWDF is an innovative, industry-driven model that enables businesses to co-invest with the government to train, reskill and up-skill workers in areas of skills demand. The fund operates on a sliding scale, with large enterprises contributing up to 66% of costs and small and medium businesses contributing between 33% and 50%.

The AREEA Training and Development team are currently working with resource industry partners to deliver a range of NWDF projects in the following qualifications:

• Certificate IV in Training and Assessment – TAE40110
• Certificate IV in Frontline Management – BSB40812
• Certificate IV in Human Resources – BSB41013
• Diploma of Human Resources Management – BSB50613
• Diploma of Management – BSB51107
• Certificate IV in Work Health and Safety – BSB41412
• Diploma of Work Health and Safety – BSB51313
• Certificate II in Surface Extraction Operations – RII20209
• Certificate III in Surface Extraction Operations – RII30112
• Certificate III in Underground Metalliferous Mining – RII30311
• Certificate III in Resource Processing – RII30411

Investing in skills and training through industry-driven initiatives like the NWDF is vital in helping businesses to meet the challenges of a transitioning economy. It will also ensure Australia is able to maintain its global competitiveness in the 21st century.

To learn more about how AREEA can help your organisation through the application, compliance and administration process for training at your project, contact AREEA Training and Development on 1800 891 662, e-mail [email protected] or click here to visit the website.