Investing in the future business workforce

Education and training play a vital role in the New Zealand workplace, enhancing skills and productivity and supporting innovation.

Last week Prime Minister John Key and Minister for Tertiary Education, Skills and Employment Steven Joyce announced a major revamp of New Zealand’s apprenticeship system, that aims to boost the number of apprentices nationwide.

The new apprenticeship scheme is largely positive and aside from more overall funding, will also offer financial incentives for those entering into apprenticeships from April 1. 

The incentive payments, significantly for the priority construction trades, will particularly benefit Christchurch in the coming years. The extra money will hopefully help secure the labour and skills needed to help with the rebuild of the city. The extra subsidies will be available for a list of trades in the construction, infrastructure, engineering and electrical sectors.

While the funding will provide a welcome boost to a number of key industries and address critical skills shortages in the trades, the scheme doesn’t take into account the training demands of the majority of the country’s businesses. 

In most businesses, the cost of staff training is borne by the employer. While this is seen as an investment in their own business development, in the modern workforce, employees move between organisations quickly. So those businesses investing in their employee’s training and development for the benefit of their own business are also contributing to the overall national economy when those employees move on. 

Many New Zealanders get their start in the workforce in a small business, with SMEs providing around 40% of the nation’s employment. For these businesses, providing training at this stage in career development can be  onerous because finding a few hundred or a few thousand dollars for training can be well beyond the reach of the small employer.

In a slow economy, training is also one of the first budgets to be cut – meaning the skill levels in some sectors of the economy remain static – potentially for years. 

This raises the question: should the government allocate funding, incentives and subsidies for small to medium businesses that hope to achieve the same things as the trade sector? 

The emphasis placed on education and training is critical to the success of any business and, like apprentices, those receiving further education or training as part of their employment are equally contributing to the overall economy.

Making further education or training more widely available, whether an apprenticeship trade or not, not only improves business standards but also helps lift the skills base of the entire economy. If New Zealand is serious about avoiding a future as a low-wage economy, the training needs of the whole workforce should be addressed – and the onus should not fall only on employers, particularly small ones, to support the skills development of all New Zealanders.