Feedback from the CEO Consultation Forum

Investing in the value of our future through training
10 – 11 November 2009 Christchurch

The following feedback was received from Careerforce's inaugural CEO Consultation Forum, held in November 2009. The views expressed are not those of Careerforce, but of the individuals attending the Forum.

“The effect of the economy on your business”

Tony Alexander, BNZ Chief Economist, Wellington

• Interpreting current economic view
• Success is setting up business for the future environment
• New Zealand is ‘less munted’ than rest of the world
• We are fully on the way to another depression
• Before September 2009 we were already in a recession
• Retail, housing, exports down 8.25% in the middle of 2007
• Drought affected rural output
• Finance companies collapsed, liquidity problems then credit crunch late 2006
• Food prices up 15%
• Petrol prices up16%
• During late 2008 interest rates reduced
• Mid September confidence picked up until Lehman Brothers fell over making banks more reluctant to lend to companies and other banks – the whole core of the financial system froze up
• Trillions of dollars into bank system by governments (opposite of the first crash)
• Mid September 2008 cancelling of orders, more redundancies, retirees losing their investments in closure of several finance companies
• New Zealanders don’t save enough money
• October 2008 New Zealand paid back investors but investors didn’t re-invest
• Farmers were buying more land, sign up, pay deposit, then phone the banks but the banks can’t lend monies so the farmers lost their deposits
• First week in March 2009 we saw green shoots – economic indicators showing interest rates still falling – only less than had been forecast  
• Great depression scenario off the table 
• Shares being purchased again and money invested
• Go for floating mortgages now
• Kiwi $ shot through the roof, volatile asset February/March 2009
• Economy grew almost 0.54%, retail spending up 1.2%, registration of cars increased, houses (not apartments) picking up
• Housing turnover up 3%
• Where from here? - economy picks up 2.5% to 3.5%

Positive factors:

• Improving commodity prices ie Fonterra’s surprise payout
• Exports up 24%
• Trading partner growth – usually 3%pa  - this year shrunk 1% next year expected to grow 3%
• Australia didn’t really have a recession. Population growth
• China buying coal, aluminium, natural gas
• Half of New Zealand-manufactured items go to Australia
• Retail, cars, (replacement cycle) stock rebuilding
• Fixed rates rolling off
• Housing sector.  New Zealand has a problem with affordability.  Need 23,000 build each year? Lowest now at 14,000 = shortage
• Above average migration flows – not sufficient houses - housing now picking up

Negative factors:

• Tourism, lost savings overseas, hard year
• Dairy (was a negative now moved to the positive side)
• Banks were willing to overextend credit leading to
• too much money into farming sector – farmers will use any money to pay off debt
• Land prices fall 25 – 30%
• Purchase of farm implements ie tractors suppressed for next  2 years
• Banks lending less with more conditions
• Kiwi $ - Asian crises same as late 1988 - Worst economic crises since the 1930s
• Oil prices going up
• Short term interest rates will go up, budget for floating rate up 3% mid 2010 – end 2011
• Kiwi $ higher – look at imported equipment
• Labour market – executive HR hunting, health sector shortages
• 6.5% unemployment may go up to 7.5% even 8%
• Migration – cycle due to go down within 2 years
• Build now, in 18 months time you won’t be able to find a builder
• 29% reduction in New Zealanders leaving for Australia
• Budgetary restraint – Government will return to surplus 2019

Questions from the floor:

Q         What do you think about people trading in currencies when there is no growth in commodities eg having US$ in the bank?

A.         Over 95% transactions are not related to exports, imports, lending, repatriation etc most in the middle.  No way less than 5% transactions can match up $10m Fonterra bringing in.  No chance exports/imports will meet.  Machinery needs to be more efficient.  Some specific financial instruments out of wack.  France, for example, has more restrictions on currency trading .  At the G20 meeting recently, Gordon Brown, British Prime Minister, suggested putting a tax on transactions.  It won’t happen as this would open up the whole industry to those who don’t put a tax on it, resulting in speculative buying.

Q         Did we have this in 1988? Banks tightened up etc?

A.         New Zealand had no growth for five years.  Government bail out for BNZ.  Around the world in 1987 not a big enough shock.  We tightened up.  Reserve bank of Australia and New Zealand finance sector grew strongly.  The Australasian banking sector best at the moment - four banks in NZ with rating.  

Q         Fixed interest mortgage rate – should I move to floating?  I have a section - should I sell?  Access to affordable housing.  Lack of housing.  Just below income people.  What can we do?

A          “Munted, Munted, Munted”.   Should have fixed before now.   Difference from float to fix is too great, you’re in for the ride so float.  Budget for rising mid 2010 – 2011; uncertain for 2012.  Get principle down, hold onto the sections.  There will not be any in the future because finance companies cannot finance them.  The need for affordable housing will come back, hold on to the sections.   No easy answer on affordable housing.  Kiwi culture is home ownership or ability to own. 

We almost had a great depression, but we got away with it.   Rocky road ahead.  No change from the Minister for next three years.  Labour will see the same problem. 

Training and Funding Workshop:

Q1       What are the key messages about training and workforce development that you want to give Careerforce for inclusion in the three-year investment plan for TEC?

• A pick and mix approach to all competencies and electives
• Autism specialist topics
• Ability to go to from Level 2 to Level 7
• Using community-development model
• Greater alignment with other ITOs
• Relationships with the organisations/employers/trainers
• Identify priorities
• Connect with innovators
• Education delivery
• Training across the sectors
• Widen scope for career pathways
• Maintain generics of workforce
• Career pathways developed in accordance with skills and attitudes
• Separate units of training – enabling smaller chunks of learning
• Other priorities take over from training
• Working solo – don’t know what they don’t know
• Genuine, timely and transparent information
• Access to information
• Share successes and challenges
• Share resources
• Take responsibility and accountability
• Training across the entire sector
• Core competencies Level 3, 4, 5 & 6
• Trained people to deliver quality care
• Workforce matched to changing service developments
• Future funding
• Employers take financial responsibility at all levels
• More flexibility in qualifications
• Equity of access for rural as opposed to urban workers
• Training for higher level workers
• Practical competencies to practical knowledge
• Recognise people’s complex needs
• Nothing wrong with training – need more of it
• More TEC funding flowing through to employers to enable them to either do the training or arrange the training
• Consultation not timely. 
• Careerforce use funding to put together pathway in secondary schools to encourage students toward this sector
• Get into schools, 3 years away
• Solidify and achieve
• Attract 30, 40 and 50 year olds into the sector
• Getting back to basics
• Ability to look at return on investment
• Funding and training delivered through employers
• Training is individual organisation’s option
• Break down the barriers to meet individual organisation
• Support from ITO – freedom of choice
• Commend innovation of Careerforce
• Industry-specific qualifications
• Separating aged care is a backward step
• Generic cultural qualifications
• Key messages
• Lack of transparency and accountability to employers
• Funding for innovation fund is coming out of reserves
• National training fund not expended each year -  Board reviewing
• Time lag to provide training and qualifications

Q2       What are the barriers to achieving a trained and flexible workforce?

• Services for older people
• Don’t need a separate ITO
• Potential conflict of interest
• Careerforce’s core responsibility is qualifications
• Independent activity or Trust – what about it?
• IT not being used smartly, making use of this in training ie video conferencing,
• Need Workbooks on CDs
• Competency in safe service delivery
• All staff able to undertake Unit 5012
• Not about the deliverer but what is being delivered
• Political agendas
• Structure which allows development of core competencies
• Still arguing 25 years on
• Dignity and respect
• Loss of workers’ seasonal occupations
• Loss of qualified trainers ie nursing
• Backfilling of roll
• Things take too long
• Youth bring a new perspective to the workplace
• Time lag to provide training and qualifications
• Inflexibility
• Use of IT
• Political barriers driving fragmentation in the sector
• Lack of respect

Q3       What are the solutions to achieving a trained and flexible workforce?

• Time, money and energy into one ITO with modifications rather than reinventing the wheel
• Look into e-learning
• Mentoring of new trainees
• Efficient use of resources, IT
• Break through resolving trust
• Build ongoing trust and cohesion
• Identifying the critical success factors within organisations
• Greater access of sharing of workplace assessors
• Training venue space
• Materials, resources being brought in from overseas to be picked up and used
• More client focus
• Incentives in the workforce
• More advanced approach to qualification
• Retention of core competencies with additional flexibility of components
• One ITO
• E-learning
• Mentoring
• Collaborative relationships
• Technology-led training
• Sharing best practice and resources locally
• Client-focussed delivery
• Incentives

Q4       Is there any additional capacity, or resources, the workplace needs to achieve a trained and flexible workforce?

• Acknowledgement of the cost of training by our (health) funders
• Network of people from learning environments
• Costs of training staff consistently high – drop in funding recently
• Basic PowerPoint presentation linked to modules, adaptable for trainers to their own culture
• Computer-aided learning
• Qualifications to allow more flexibility
• Amalgamate the ITOs
• Literacy projects
• Recruitment   will be a big issue as population ages.  A Marketing Plan is needed
• Encouraged to learn in group situation – Careerforce to provide tools
• Resources in training the trainers
• Push the Gateway programme
• Push school leavers through the Gateway programme, give them a taste of working in the health sector
• Diversity of training to meet diverse cultures
• Different delivery for different learning styles           

“Governance Review”

(Click here for more information on the Governance Review)

Questions from the floor:

Q         Whose role is it to determine who should be on the Board in relation to skills?  Is it the people governing, the stakeholders or the shareholders or some other body who make the choices?   Whose view is paramount?  Is it the people being governed or the governors.  Who should select the style of Board.

A          Everyone should have a chance to have a say.  If there is an existing board it is tasked with the ultimate responsibility.  Legally the Board is held responsible and accountable.

Q         How the Board performs will be based on the information given to it by management.  The board doesn’t always know what it doesn’t know.

A          I don’t agree that the Board doesn’t know what it doesn’t know.  It will know the key tasks and ask for them.   A competent Board keeps up to speed with sector issues.  Board members should not make assumptions.  Decisions should be relevant, up-to-date and accurate.

Q         In your experience is there a predetermined method of governance?

A          There are a range of methods.

• Simple series of bullet points to judge evaluation 
• SPARC has a good evaluation which is available on the web 
• Also the Institute of Directors.  
• Board process could be that the Chair meets with members individually
• Could be by peer review. 
• Budget set for evaluation of board. 
• Bring in a facilitator. 
• Encourage evaluation in annual report.

Comments from the floor

• The scope of the review should be wide enough to include the views of a range of members who may not be peak bodies or already involved
• Last point potentially suggests a lack of transparency.
• Identify the context in which the review happens to help figure out the end result. 
• First sentence in terms of its literacy is clumsy (relates to Terms of Reference)
• 2 part E.  States interviews may be held.  Corrected this to read will be held (relates to Terms of Reference)
• Why are they with major employers versus medium and smaller employers? (the interviews)
• We have to be accountable and put forward our views.  We are the stakeholders
• We need to know whether the current structure is the most effective structure
• Given this review is in the context to establish a second ITO
• Unlikely to front up to become a shareholder of the company
• The ability to participate in the process is limited and could end up with an effective Government review but could still have a large proportion of stakeholders feeling disengaged. 
• Very important that people within the scope of the ITO - who have chosen not to engage are involved– not only current but potential membership  
• We need to have as many ITOs as is necessary to train the workforce.
• How many shareholders currently?  (43)
• Stakeholders number approx 1200 within all sectors
• The TEC indicates there has to be support from employers for Careerforce to continue
• The TEC also states there has to be support from the stakeholders covered by the ITO.   We hope to convince people to change. 
• No timeframe on the scope of the review.  Must be done in a timely manner.  Re recognition will happen with agreement with the Board.  There needs to be some progress in terms of where to from here to fit in with the re recognition timeframe
• Following an outcome there will be another re-engagement process.  Services for older people and home support providers disengaged from the review.  If this large stakeholder group is not satisfied another ITO will be established.  We want one well-functioning ITO.
• Identify the point the review is required to unblock. Next step needs to be timely with consultation alongside Careerforce. Otherwise an alternative is required to take training into the future.
• The disability sector has waited a long time.  We need much further debate and open communication. 
• There have been wasted energies.  Moving forward – there is not enough background knowledge and unless there is they will listen to innuendo.  Many people don’t have the necessary background.
• Need commitment by all parties
• How will the review be selected?  Board is tasked by the Ministry of Education to go through this process.  No suggestion of not liking the result.  There needs to be a level of independence then people will commit.  
• Last page – combination board.
• Birth to death services have spent 20 years fragmented.  Need to engage and commit as people are feeling disenfranchised We are one sector and cannot be any more fragmented
• Skills and representative combination.  We need the Board to be skills-based also somewhere below Government there should be influence. Very important to have the wider skills.  Interests must be represented. 
• Move forward positively.  No matter what we do or whatever the process is, we must  get the foundations right in the beginning. What is at the seat of the whole issue?
• Can’t you have a Representative Board with all the skills ie both representative and skilled – not exclusive?
• What are the core activities of the ITO?  What are the others?  This review isn’t looking at the scope of the functions.  This review is not necessarily dealing with all the issues.  In order for the sector to have all the issues dealt with they need to be well and truly articulated.
• I am frustrated that we haven’t discussed this topic earlier.  There is a need to be organised within seven months to apply for re registration. The Ministry of Health supports a second ITO. \We need to fight to save this organisation.  This is the guts of it!
• I am frustrated we have only discussed this issue for 20 minutes.  More consultation is needed around the future of Careerforce.  My organisation of 3,500 employees is unhappy with the path the training is taking.  We are disappointed that people don’t understand the issues at stake – it is not debated sufficiently. I want to add my dissatisfaction to that of my colleagues.
• We were the pilot of New Zealand for homecare.  Nurse Maude was doing this privately and the Country Women’s Institute.  We have been going since 1977 and currently employ 750 staff.  Now, for the first time in the last three years, we have clarity on where we are going.  I’ve had two good days - a wonderful two days.  Our staff is very very happy with what we’ve received from Careerforce .

Additional Comments from Handout sheets

Contents of the hand-ins from the CEO consultation:

• Requirement for publication of report, and transparency
• Scope of review must include ‘make up of the board and the election process’
• Outcome of the review needs to accomplish the highest functioning board, with mix of skills, competencies and sector knowledge – education sector is also important
• Independent panel to ensure board competency is a good idea – representative board members appointed or elected, then skill / gender/ geographical gaps filled through appointment
• Publish timeframe for review
• Would a company structure suit the ITO better? Should the role of the ITO include the development of training materials?
• Board member rotation important – 3 years
• Review MUST put major emphasis on employers views, large and small and whether or not are shareholders.  ALL INTERESTED PARTIES should have easy access to have input into the review. The review process cannot override the outcomes employers want. A combination board is preferable
• Small employers left out of representative board structure
• Consultation must go beyond peak bodies – include smaller organisations
• Review needs to have broader context so outcome can be judged for effectiveness
• What does the Min of Ed require from this review?
• Healthcare of NZ strongly request interviews with the reviewer
• The CFO of Rymans asks that the Ryman CEO is interviewed