Skills Action Plan Reports

Towards a high skill, high wage, high value economySkills Action Plan for theFood and Beverage Sector

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Skills Working Group Priorities

The following sections outline key labour market issuesunder each of the three Skills Working Group priorities- better labour market information, more strategicinvestment in training and attractive careers.

Better Labour Market Information

The purpose of this priority is to ensure robust data andinformation is available to enable sound decision makingabout food and beverage skills, training, employment andproductivity issues. This priority includes improving theinformation base by:

• Being able to forecast labour demand in sub sectorswithin food and beverage.
• Better understanding of the link between productivityand skills in food and beverage businesses.
• Better understanding of how to increase the adoptionof science and technology in food and beveragebusinesses.
• Determining the extent of current skills shortages inkey food and beverage occupations.

Each of these components is explained in detail below.

1.1 FORECASTING FRAMEWORK

Action Points

• The food and beverage forecasting framework willbe implemented and applied to all food and beveragesub-sectors and maintained on an ongoing basis.This would involve food and beverage ITOs (as part oftheir strategic skills leadership role) assisting in theimplementation of the framework in conjunction withother relevant organisations.
• STAG will guide consistency of application of thisframework within the food and beverage sector,improve the framework, and test its robustnesswith respective industry organisations and trainingorganisations.

Background

A forecasting framework for the food and beverage sectorwas considered necessary to process relevant and availablelabour market information using appropriate modelling offuture labour and skills demand in the sector. A forecastingframework has been developed by BERL (Business andEconomic Research Ltd) and tested on the dairy and winesub-sectors, which included industry consultation. Thisframework is designed to be used by industry organisationsto assist in their workforce planning.

The numbers generated for the dairy and wine sub-sectorsare not forecasts, rather they provide an outlook for thesub-sectors and are the result of specified scenarioswhich demonstrate how the framework can function.The framework is a starting point requiring further work,industry ownership, data integrity and interpretation offacts and trends that are identified as a result of ‘runningthe numbers’. The interpretation is necessary within astrategic context that includes the impacts of ‘soft’influencing factors on the flows of labour.

This framework will enable the food and beverage sector,education and training organisations, industry associationsand government agencies to make better assessmentsabout future labour and skill needs in this sector and howto address them. It may assist in education, training andrecruitment decisions and assist the taskforce in planningits development agenda. There is a distinct need forprojections of the trends in the demand for labour over themedium term in relation to future growth or changes in thefood and beverage sector.

The framework needs to be further tested with respectto the assumptions (labour turnover, productivity, outputgrowth, extent of part-time work) used and integrity of thedata. It could then be extended to other food and beveragesub-sectors. It will be critical to improve the informationused in the framework and data updates, including useof the 2006 Census information on occupations andqualifications within the food and beverage sector. Inimplementing this framework, future population changes (fertility and migration) and workforce changes (ie. greaterparticipation of women and older workers) will be taken intoconsideration.

The forecasting framework developed for the food andbeverage sector has suggested an approach which utilisesavailable forecasts (of product output) and existing dataand parameters to derive future employment levels atsome level of detail. In that process, the need for moreup-to-date and consistent data has also been identified tomake the results (eg. occupations and qualifications) morerelevant.

The key components of the forecasting framework areoutlined above.The inclusion of labour turnover allows for an assessmentof replacement demand of the existing workers in eachvalue-chain to be estimated along with the additionalderived demand for labour as a result of output changes.The share of occupations in each value chain and thequalifications of those employed are based on the 2001census results and have been maintained at this level overthe forecast period (2006-10). These can be updated whenthe 2006 census results on occupations and qualificationsshares in food and beverage sub-sectors and value chainsare made available by Statistics New Zealand (SNZ).

APPLICATION OF THE FORECASTINGFRAMEWORK

Overview of Results

Comparisons of recent (2000-05) changes in employeecounts and full-time equivalent employment in the foodand beverage sector, in comparison to the overall labourmarket are summarised below:

• Over the five year period (2000-05), excludingagriculture, the employee count in food and beveragehas grown by 23% compared to 17% for the whole ofNew Zealand over the same period.
• Over the last ten years (1995-2005), total food andbeverage employment by full-time equivalents (FTEs)increased by 8% (including all agriculture) compared tototal New Zealand FTEs which increased by 22% (SNZand BERL calculations);
• The food and beverage value chains with thehighest employee count in 2005 were food service,manufacturing and retailing, with lower number ofemployees in marine fishing, horticulture and foodwholesaling.
• Between 1995 and 2005, the share of FTEs inagricultural production activities declined from 40%to 33% of total food and beverage employment. Thefood service share increased from 16% in 1995 to over20% in 2005 while the manufacturing share remainedrelatively unchanged at about 20% and the retailingactivity share at about 15% over the 1995 to 2005period. The wholesaling share rose very slightly from6% to 8%.

An example of how the framework can be applied in theform of the value chain is outlined below:

The Food Industry Model developed in the Coriolis reportshows that the food industry begins with natural resourcesand ends with sales to domestic consumers or to exportmarkets.

The applicability of employment data depends on howwell the data can be applied to the value chains of thevarious sub-sectors. As a test BERL have incorporatedemployee count data into the Coriolis Food IndustryModel (see below).

CORIOLIS FOOD INDUSTRY MODEL WITH EMPLOYEE COUNT

Examples of Sub-sector Outlook for Dairy and Wine

The comparisons include outlook results (2005-10) ofoverall employment in the dairy and wine sub-sectors underthe “default” scenario in relation to recent developments(2001-05) in these sub-sectors. This is followed byobservations on the occupations and qualifications shareof employment in each of the value chain3 activities fordairy and wine sub-sectors based on the 2001 Census.The overall employment results, are also provided, takinginto account replacement demand (under the defaultand an alternate lower turnover scenario), the impact ofhigher output (ie. milk solids and wine grapes) and lowerproductivity scenarios on dairy and wine sub-sectoremployment.

Employment: Sub-Sector Totals and by Value-Chain

• Total employment in the dairy sub-sector rose by fewerthan 5,000 FTEs (or by 9%) between 2001 and 2005 andthis is forecast to grow by about 3,750 FTEs (or by 7%)over the 2005 to 2010 period. Wine sub-sector totalemployment grew by about 3,500 FTEs (or 28%) overthe recent period (2001-05) but is forecast to growonly by about 2,100 (or by 14%) over the forecast period(2005-10).
• During (2001-05), the greatest increase in dairysub-sector employment was in the processing/manufacturing (22%) and the retail service (15%) valuechain activities. Over the forecast period (2005-10),the increase in processing/manufacturing employmentis expected to rise by only 9% while retail and retailservice employment is expected to rise by about 15%.
• During (2001-05), the greatest increase in wine subsectoremployment was in production (about 50%),followed by wine making (18%) and wholesaling (24%)value chain activities. Over the forecast period (2005-10), the increase in employment in production activitieswas considerably less (under 10%) and the rise inemployment in all other value chain activities was inthe range of 12-18%.
• In the dairy sub-sector, activities at the paddock orfarm level account for over 60% of the employmentfollowed by processing (18%) and retail and retailservices (7-8%). In the wine sub-sector, activities atthe vineyard level account for only about 30% of theemployment closely followed by retail (29%), retailservices (24%) and processing (15%).

Occupations by Value-Chain Activities

• In terms of occupations by value chain activities, dairyfarmer/farm worker and grape grower/wine makeraccounted for over 60% of the production relatedoccupations. In the case of processing activities, about50% of the occupations in the dairy sector were in the “other” category and hence specific occupations wereundifferentiated. This “other” category accounted forjust under 30% in the case of wine processing.
• In the wholesale value chain, administration andmanagement related occupations accounted for about20% in dairy and were over 30% in wine wholesaling. Technicians and associate professionals made up about15% of the occupations in dairy and 17% in wine, whileservice and sales workers in wholesaling accountedfor about 11% in dairy and 14% in wine. Professionaloccupations in dairy had a 14% share, however thenumber of professionals was not separately identifiedin the case of the wine industry.
• In the retail and retail service value chain, service andsales staff accounted for about 40% and 60% of theoccupations, respectively in the case of dairy and wine.Administrative and managerial positions representedabout 15% and 20% of the occupations in retail andretail services, respectively, in the case of both dairyand wine sub-sectors.

Qualifications breakdown for sub-sectors

• Based on the 2001 Census, over 28% of the dairysub-sector and about 22% of the wine sub-sectorworkers had no qualifications while over 40% of thedairy sub-sector and almost 50% of the wine subsectorworkers had high school qualifications. However,qualifications are not always necessary for someoccupations.
• About 20% of the dairy sub-sector workers and 15%of the wine sub-sector workers possessed either basicvocational or advanced vocational qualifications whileabout 6% of the dairy and 9% of the wine sub-sectorworkers had a bachelors or higher degree according tothe 2001 Census.

1.2 Productivity

Action Points

• Complete the productivity study currently underway,which will identify productivity issues specific to foodprocessing businesses.
• The New Zealand Council of Trade Unions will usethe findings of the productivity study to inform theWorkplace Productivity Education Programme and indeveloping resources for union delegates and futureproductivity initiatives.
• A first phase of science and technology adoptionresearch has been completed. The findings will betaken forward with industry and relevant agencies.

Background

Although all sectors of the New Zealand economy havebeen enjoying an increased level of productivity growthin recent years, the country’s productivity measured inabsolute terms still lags behind the OECD average.

The graph (next page) illustrates the differences in labourproductivity between OECD countries based on GDPper hour worked across all sectors of the economy.It illustrates that New Zealand is also below the OECDaverage for labour productivity.

AVERAGE ANUAL GROWTH IN PERCENTAGE, 2002-2004 OR LATEST PERIOD AVAILABLE

Over the past decade, New Zealand’s economic growth hasbeen driven by a significant increase in hours worked andthe volume of human capital in work. David Skilling from theNew Zealand Institute outlines the downside of the picture:

“…..Labour force growth accounted for about two thirdsof New Zealand’s growth over the past fifteen years,with labour productivity accounting for just one third.Labour productivity over this period grew at just 1.0%a year, which is in the bottom quartile of performanceacross the OECD.

…..New Zealand’s labour productivity, in terms of outputper hour worked, is just 79% of the OECD average. NewZealand’s hour worked per capita on the other handstands at 113% of the OECD average.”⁴ The Treasury provided an analysis that examinedproductivity performance of the primary, and food,beverage and tobacco and manufacturing (FBTM)industries. It indicated that output and labour productivitygrowth in the primary and FBTM industries has beenstrong, as illustrated over the page (total manufacturingis included for comparison). Some of this growth could beattributable to factors such as increased intensity of foodand beverage production practices.

LABOUR PRODUCTIVITY

New Zealand now has more people working but for longerhours than most other OECD countries - 21% of NewZealanders work 50 or more hours per week, second toJapan at 28%. Working smarter, investing in capital andmoving higher up the value chain is a more sustainable wayof increasing GDP than increasing hours of work.

In order to improve productivity, the Workplace ProductivityWorking Group identified seven drivers in 2004 (listedbelow) that can assist with improving productivity, each ofwhich is explained in more detail online: http://www.dol.govt.nz/workplaceproductivity/

• Building better leadership and management
• Organising work
• Networking and collaborating
• Investing in people and their skills
• Encouraging innovation and using technology
• Creating productive workplace cultures, and
• Measuring what matters.

Business and employer groups, unions and governmentare working together to help lift workplace productivityin New Zealand through implementation of the WorkplaceProductivity Agenda. To assist in this process (from afood and beverage point of view) a productivity study hasbeen commissioned (part ‘a’ below) and research has beencommissioned into science and technology adoption in thefood and beverage sector (part b).

A. PRODUCTIVITY STUDY

The study on productivity in the food and beverage sectoris intended to:

• Assess the current state of productivity specificto food processing businesses (ie. confectionery andsnack food sector) within the food and beveragesector utilising the framework provided by the 29Workplace Productivity Working Group (ie. the sevendrivers of workplace productivity). This industry hascharacteristics that will enable the research findingsto be generalised across manufacturing/processingparts of the food and beverage sector.
• Provide suggestions on how productivity in the sectorcould be improved and how government, trainingorganisations and sector groups can better assistworkplaces to improve their productivity.
• Identify what workplace practices are working well andconversely not so well in the confectionery and snackfood sector.
• Identify impediments to lifting productivityperformance of businesses in the confectionery andsnack food sector.
• Provide methodological insight to inform futureresearch.

Early observations from the Deloitte team undertaking thestudy, indicate that investment in production technologyhas a discernable correlation with:

• The requirement for upskilling and commensurateinvestment in people and human resource programmes.
• The organisation’s ability to compete in more thanjust national niche markets and therefore to achievereal production and productivity growth.

Investment in infrastructure and technology oftenprompts investment in upskilling. Alternatively, it is alsoknown that investments in upskilling can drive increasedinvestments in technology to complement a new skill set.

Within the confectionery and snack food sector thereis a proven ability to innovate with some very successfulhigh value niche products being developed by both largeand small organisations. This sub sector has a strongentrepreneurial spirit and a flexible workforce able tobe deployed in a manner that supports highly productiveorganisations.

Issues that impact on the confectionery and snackfood sector’s ability to be productive include:

• The need for more effective deployment of supportmechanisms for New Zealand owned organisations toachieve increased productivity through export growth.
• Market drive to invest in machinery, technology andinnovation, leading to training for higher level skill needsand ultimately to higher productivity performance.
• A shift from applying the seven drivers of productivityto reduce costs per unit of production, to applying theseven drivers to create an environment that supportssuccessful research and innovation, therefore callingon a more significant investment in skills.
• The need to focus on developing specific technologicalexpertise that could advance the confectionery andsnack food sector.
• The need to develop catalysts and sustained supportto improve networking and collaboration in the sector.
• Access to affordable capital.

B. SCIENCE AND TECHNOLOGY ADOPTION

The Skills Working Group, in collaboration with theInnovation Working Group, identified the need to conducta research study to better understand constraints toscience and technology adoption (focusing on the attitudes,skills and behaviours of owners, managers and staff). Thestudy investigated how more active interactions acrossthe supply and value chains could be encouraged toincrease adoptive capacity: Why it is that some companiesadopt science and technology innovations and others, whoknow about their potential benefits, choose not to?

The vegetable and savoury foods sub-sector was selectedfor this research because of this sub-sector’s potentialfor sustainable growth (i.e. the convergence betweenmarket demand for healthier, stylish and convenient foods and science and technology’s ability to provide solutions ‘palatable’ to a wide range of consumers).

Increasing demand for vegetable-based foods thatcombine health, style and convenience can best bemet by growers and processors developing skills andnetworks to make use of science, technology, marketingand organisational innovations. These innovations are inrelation to growing produce; environmental management;understanding emerging market demand; adding valuein processing, storage and packaging; and enabling moreefficient distribution to maintain freshness, goodness,flavour and appearance.

A two-phase approach to the research has been adopted.Phase one has been completed with findings outlined below.

The first phase aimed to help stakeholders understandand be able to take action to improve adoption rates.In the first instance it is exploring the range of attitudes,behaviours, skills, relationships, and networks that decisionmakers and ‘ground floor’ staff need in order to assess:

• The potential of an innovation.
• The nature of the change process that would beinvolved in adopting it.
• The requirements for successful implementation.

It also sought to understand the impact that the presenceor absence of highly qualified staff or PhD students has onassessment, change management and implementation. Theresearch looked at the impact of organisational cultureand organisational practices on openness to adoption, andadoption rates.

Key findings from phase one are:

• There appear to be three primary drivers as tohow open or otherwise businesses are to adoptingscience and technology. The most significant is thefocus on survival, either through increasing efficiencyor matching competitors’ products. The second isthat lack of scale means using cash flow rather thandebt/equity to fund improvements, which biasesinvestment towards incrementalism rather thandisruptive innovations. The third is the impact of thecharacteristics of the owner or manager – the highertheir levels of confidence and vision to take risks, andanalytical skills and education, the more likely it is theywill adopt science and technology.

Secondary drivers include the:

• Speed with which investment decisions can be made.
• Style and structure of management.
• Level of in-house scientific and technical expertise;where high transaction costs with sourcing seasonalstaff lead to technology substitution for labour.
• Difficulties to do with the availability and suitabilityof labour where it has been a factor in decisionsto increase levels of automation so as to reducereliance on labour. This is in part to do with theseasonal nature of the industry, especially in growingwhere there is no guarantee that next year’s labourpool will be the same as last year’s, leading tosignificant transaction costs.
• At the commodity growing and processing end ofthe vegetable industry value chain, there are wellestablished systems, processes and networkssupporting the adoption of technology for survival(for now).
• Few companies are targeting niche local and exportmarkets with high quality and differentiated products,where science and technology adoption (innovation)are critical success factors, and the real returns lie.This appears to relate to there being no apparentmodus operandi or development pathway available fornew products and for creating the value chain neededto get them to market successfully. Furthermore,large scale science and technology adoption, to driveeconomic transformation, requires the industry asa whole to develop the willingness and capability to collaborate to create a New Zealand Incorporated-scalenew value stream.

There are however, opportunities to improve the systemto better facilitate science and technology adoption.A number of suggested improvements for both industryand government to consider are:

• Improving availability and accessibility (perhaps throughpooling) to key technical skills (eg. engineering processdesign, food technology).
• Creating a service for the collection and disseminationof pragmatic and up-to-date free market intelligencein the vegetable and savoury food sub-sector to beaccessed through a single portal.
• Provision of brokerage skills to connect generatorsand users of technology and science.
• Actively identifying and developing opportunities toachieve higher levels of collaboration, especially inexport markets.
• Promoting ‘good practice’ within Crown ResearchInstitutes as to how scientists and business worktogether to solve real problems within particularbusiness contexts.

Phase two will involve progressing these findings fromphase one with relevant industry and government agencies.

1.3 Skill Shortages

Action Points

• Information has been gathered for the Skills WorkingGroup on genuine skill shortages and recruitmentand retention difficulties for bakers, butchers, chefs,dairy farmers and dairy farm workers, and foodtechnologists. Appendix two outlines ways to addressthese issues. The Skills Working Group will consider howbest to promote these solutions.
• Efforts will continue to improve the quality of labourmarket information about skill shortages in thefood and beverage sector to better inform tertiaryeducation and training strategies and priorities.

Background

Skill shortages can indicate a healthy, dynamic economycreating new jobs and expanding existing jobs at a fastpace. However, shortages may also be imposing a cost onthe economy, by constraining the outputs of a business.The education and training system is crucial to raise skilllevels and adjust the skills required to match the currentand future workforce. To attract and retain a highly skilledworkforce, businesses need to offer appropriate wagesand fund appropriate levels of training, introduce worklife/flexible work practices and address recruitment andretention difficulties.

It is important that tertiary education and traininginvestment and strategic decisions factor in the need toaddress skill shortages in the food and beverage sector.

There are different types of skill shortages⁵ and thecauses are varied, as are possible solutions relevant toeach sub sector within the wider food and beverage sector.

The Skills Working Group selected a few occupations forwhich there was either statistical or anecdotal evidence ofcurrent skill shortages likely to have an impact on futuregrowth of the sector.

Selected occupations included: baker, butcher, chef, foodtechnologist, dairy farmer/dairy farm worker, electrician,fitter and turner, production manager, sales/marketingmanager. Some of these occupations are generic (i.e.production manager, sales/marketing manager, fitter andturner and electrician) and some are specific to food andbeverage (i.e. chef, dairy farmer/farm worker, baker andbutcher). Food technologists are one of several closelyrelated occupations that are subsumed under the broadoccupational grouping ‘Chemical Engineer’.

The approach used to analyse these occupations is basedon the Department of Labour framework for analysingskill shortages in New Zealand. This framework is explainedbelow and considers demand (or opportunities); supply(or capacity) and the balance between them.

A summary table below outlines some key shortageindicators for each occupation, as well as the skill shortageassessment for each occupation:

• Both genuine skill shortages and recruitment andretention difficulties clearly affect the followingoccupations namely: baker, butcher, chef, dairy farmer/dairy farm worker, and possibly also impact on foodtechnologists.
• Electrician and fitter and turner both suffer from agenuine skill shortage and sales marketing managerprobably also face such a shortage.
• Production manager⁶ is probably not suffering fromskill shortages, although this does not precludeshortages existing in specific niche manufacturingindustries.

There are a variety of ways to address skill shortages(ie. enticing expatriates back home, immigration, attractingpeople from similar/related occupations, substitution withtechnology and/or up-skilling the existing workforce). Othersources include providing incentives for older people towork for longer (before retiring), incentives for non-workingparents to re-enter the workforce earlier, and incentivesto attract non-traditional workers to occupations (eg.women to become fitters and turners).

While skill shortages can be addressed throughmeans identified above, there is a need for integratedconversations between training providers, unions,employers and government agencies.

A summary of potential ways to address skill shortagesfor each selected occupation is outlined in Appendix 2.The potential solutions are specific applications of prioritytwo and three approaches.

The following table 1 summarises the results of the skillshortage indicators and assessments for each occupation.Appendix 3 contains an explanation of terms and sourcesused in the development of this information.

Table 2 contains demographic and qualification relatedinformation about each selected occupation.

TABLE 1: SKILL SHORTAGE ASESMENTSThe following table summarises skill shortage indicators and assessments for each occupation (also refer to Appendix 3for an explanation of terms used and more detailed statistics and source information).

TABLE 1a: SKILL SHORTAGE ASESMENTS

occupation	fill rate	Training rate	retirement rate
Production Manager	-	-	0.9%
Sales/Marketing Manager	-	-	0.6%
Food Technologist	-	-	0.9%
Chef	51%	4.1%	0.3%
Dairy Farmer/ Dairy Farm worker	-	-	1.7%
Electrician	30%	2.6%	1.1%
Fitter & Turner	27%	3.0%	1.5%
Butcher	62%	1.9%	1.0%
Baker	37%	1.2%	0.6%

TABLE 1b: SKILL SHORTAGE ASESMENTS

occupation	vacancy growth rate	wage rate	genuine skill shortage	recruitment & retention difficulty
Production Manager	-36%	$39.87	Probably not	Probably not
Sales/Marketing Manager	7%	$52.06	Probably	Probably not
Food Technologist	37%	$28.56	Possibly	Possibly
Chef	14%	$15.18	Yes	Yes
Dairy Farmer/ Dairy Farm worker	17%	$18.07	Yes	Yes
Electrician	-10%	$23.89	Yes	No
Fitter & Turner	3%	$22.86	Yes	No
Butcher	38%	$16.12	Yes	Yes
Baker	24%	$17.07	Yes	Yes

TABLE 2a: DEMOGRAPHIC AND QUALIFICATION DATA PER SELECTED OCCUPATION

occupation	male (%)	female (%)	non-Pakeha (%)
Production Manager	86	14	13
Sales/Marketing Manager	67	33	9
Chemical Engineer	67	33	17
Chef	64	36	34
Dairy Farmer/Dairy Farm Worker	66	34	6
Electrician	99	1	10
Fitter & Turner	100	0	11
Butcher	96	4	25
Baker	70	30	34

Source: Statistics New Zealand 2001 Census

TABLE 2b: DEMOGRAPHIC AND QUALIFICATION DATA PER SELECTED OCCUPATION

occupation	age (15-29)	age (30-49)	age (50+)
Production Manager	13	64	23
Sales/Marketing Manager	18	64	17
Chemical Engineer	26	55	19
Chef	50	43	7
Dairy Farmer/Dairy Farm Worker	22	54	25
Electrician	25	53	22
Fitter & Turner	20	56	25
Butcher	34	43	23
Baker	42	45	13

Source: Statistics New Zealand 2001 Census

TABLE 2c: DEMOGRAPHIC AND QUALIFICATION DATA PER SELECTED OCCUPATION

occupation	school (%)	Post school (%)	degree or higher (%)	>50hrs per week
Production Manager	54	34	13	46
Sales/Marketing Manager	54	24	22	42
Chemical Engineer	23	25	51	20
Chef	58	39	3	24
Dairy Farmer/Dairy Farm Worker	74	22	4	64
Electrician	24	75	1	22
Fitter & Turner	41	58	1	24
Butcher	70	29	1	28
Baker	78	20	2	22

Source: Statistics New Zealand 2001 Census

Based on the above census data, the following informationabout each of the selected occupations has been identified:

• Bakers and chefs reflect a distinctly different agedistribution of their workforces compared to otherselected occupations. These hospitality occupationsare heavily weighted in the young to middle agedcategory and lightly weighted in the old-aged category.
• Training, work experience and attitude count for morethan educational qualifications for occupations suchas baker, butcher, chef, dairy farmer/dairy farm worker,electrician and fitter and turner. Very few of thempossess a degree. Although 51% of chemical engineerspossess a degree, followed by sales/marketing manager(22%) and production manager (13%).
• In terms of hours, dairy farmer/workers work longhours with 64% working more than 50 hours per week,followed by production manager (46%) and sales/marketing manager (42%).
• All the occupations except chef are insignificant usersof work permit holders. For chefs, 21.9% of theirworkforce have work permits.
• Eight of the nine occupations are male dominated, withfitter and turner showing 100% male, followed closelybehind by electrician (99%) and butcher (96%);. Theexception is food technologist where the survey showsthat 63% of the workforce is female.
• The ethnic group composition for all nine occupations ispredominately pakeha. However, 34% of both chefs and34% of bakers are non-pakeha.

2. More Strategic Investment in Training

This priority was designed to identify how skills and trainingissues could be better addressed.

A process for tertiary education reform is underway which will provide solutions to enhance the quality and relevance of tertiary education provision. While this is a major initiative over several years, it needs to be complemented by sectoral work that more closely links education and training provision with industry needs.

The Department of Labour and the TEC prepared background material for two workshops. The first workshop was with Agriculture Industry Training Organisation, Competenz, Lincoln University, AgResearch, Horticulture Industry Training Organisation, the TEC, the Department of Labour and New Zealand Trade and Enterprise. The second workshop was with the New Zealand Council of Trade Unions, Business New Zealand, the Department of Labour, and the New Zealand Beer, Wine and Spirits Council. This work was complemented by discussion at the Skills Working Group and the taskforce as well as analysis of the feedback generated by the taskforce’s consultation process.

Background material for the workshops included:

• A draft report from the Tertiary Education Commission called “Report to the Skills and Training workshop for the Food and Beverage Skills Workshop Group” .
• A draft report from the Department of Labour called “Draft Food and Beverage Skills Working group - Discussion Paper”.

Common skills and training themes arising from the workshops (and other sources), were:

• Workplace practices.
• Community awareness.
• Responding to changing occupations and skill needs.
• Quality and relevance.

The Skills Working Group has indicated that in order for change to occur in food and beverage skills and training, that collaboration of key players (incl. training providers) is necessary. The STAG will facilitate this collaboration and oversee implementation of issues identified below.

2.1 Workplace Practices

Action Points

• Promote and explore industry best practice and incentives in relation to skills development.
• Increasing employee participation in training, and support for the Council of Trade Unions’ Learning Representatives Scheme.

Background

Employers, and employees and their representatives have important roles to play in creating high quality, productive workplaces which support access to appropriate opportunities for skill development.

There is an opportunity to invest in knowledge building about the future ongoing changes in the nature of work for food and beverage companies, and the impact of these changes on workplace practices for employers and employees. The work to date has identified a pressing need to share best practice within industry and promote the value proposition of investing in skills development for managers and staff.

2.2 Community Awareness

Action Points

• Develop learning resource materials for curriculum in primary and secondary schools that reflect the importance of the food and beverage sector as a major employer and contributor to New Zealand’s economy.
• Promote careers to parents, youth, teachers and careers advisors that reflects the reality of working in the food and beverage sector (ie. how sophisticated jobs are now).
• Support initiatives from the Human Capability Group in Horticulture and Agriculture, which involves a schools’ curriculum strategy with goals to increase the profile of the sector, change schools’ perception of the sector, increase the number of people seeking careers in the sector (eg. more science students), and introduce resources across the curriculum. In addition and alignment with this work, encourage a coordinated cross sectorial approach to career promotion in schools.

Background

It is apparent that for education and training to be taken up, there needs to be greater awareness of the opportunities such occupations offer. This is an area in common with priority three, “Attractive Careers”. The focus of this area in priority two is the way the primary and secondary parts of the education system communicate the realities of working in the food and beverage sector.

2.3 Responding to Changing Occupations and Skill Needs

Action Points

• Explore ways to improve the ability of the skills and training system to adapt to rapidly changing and new occupations.
• Increase support for initiatives that could be undertaken by Learning Representatives and build on current work with a group of ITOs to integrate literacy training with industry training (eg. in seafood and agriculture).
• Communication of the relationship between high levels of foundation skills in food and beverage businesses and favourable productivity results.
• Increase support and encouragement for the uptake of relevant vocational qualifications (inclusive of higher level qualifications) that provide a good match to associated job opportunities.
• Continue and extend active support for alternative employment (preferably in the food and beverage sector) with tailored programmes for individual workers and investment in education and training for employees affected by business closures, downsizing and relocations. This would involve working with employers, unions, ITOs, other education providers and agencies of government and local government.

Background

Due to the introduction of new technology (incl. upgrades), integration of production processes, productivity innovations and convergence with other sectors (eg. food and health, food and hospitality), traditional occupations and career paths are changing (ie. from low to high value work). It is important that education and training reflects these needs, for which employees are able to adapt existing skills and develop new ones. It is also important that employers provide a flexible work environment. Education and training should not only be provided to those whose jobs are changing but also to those whose jobs have changed.

As with other industries, the food and beverage sector has a spectrum of skills that range from top talent to foundation level. Investment in foundation skills may be just as important as investment in relevant vocational qualifications and higher education.

There is usually a strong relationship between a workforce’s foundation skills and the level of labour productivity within a business, thus demonstrating the need for employers and government to invest in foundation skills. ITOs are currently piloting the integration of foundation learning (work in progress) into industry training and ensuring training and foundation learning is available to low skilled workers.

While industry training is an appropriate avenue for delivery of foundation skills in the workplace, there are issues associated with the capability of the system to support its integration. For example, this requires ITOs to undertake additional/new work to identify specific foundation needs, assess individuals’ needs, train existing trainers to incorporate foundation learning, and assess gains made as a result.

High proportions of food and beverage employees have no or low qualifications, although this needs to be balanced with the fact that some food and beverage occupations do not require sophisticated skill bases. Given parts of the food and beverage value chain are increasingly becoming more sophisticated and consumers are demanding better quality, there will be pressure on some food and beverage occupations to deliver to a higher standard. This will generally require a more developed skill base and capability within the workforce.

Government will shortly consider proposals for how employers will be engaged and learners motivated to take part in the upskilling strategy, including a model for developing demand and ensuring a balance with the provision of training in the workplace, and specific initiatives. It is possible that the proposed upskilling initiatives could be reflected in the Skills Action Plan for the food and beverage sector and the work by STAG, following decisions by Government.

2.4 Quality and Relevance

Action Points

• The Skills Working Group recommend that in relation to the tertiary reform process, that funding must be linked to the new Tertiary Education Strategy and the Statement of Tertiary Education Priorities. This should include a stronger feedback loop between the TEC and industry, and a greater capacity for ITOs to influence funding and priority setting.
• The TEC and other government agencies will facilitate greater partnering of delivery between ITOs and TEIs to better meet industry needs and enable them to be more responsive to emerging demand through its profile negotiation process and support for the ITO leadership role.
• Review the quality and relevance of the large number of food and beverage related qualifications with a view to consolidating them into a smaller number of higher quality courses. In specialist areas, the option of consolidating into one centre of excellence in New Zealand should be considered (eg. fishing, dairy and meat processing and grape processing).
• Review the relationships amongst polytechnics, ITOs, industry and unions in setting food and beverage related qualifications and ensuring quality and relevance of training.

Background

There is a need for the quality and relevance of education/ training provision at all levels and by all providers to be better aligned to the needs of industry and reflective of changing occupations. It is critical that the resourcing of education and training for people already employed in New Zealand industries (including the food and beverage industries) as well as those undertaking full-time or preemployment tertiary education, is allocated in a manner that is strongly linked to appropriate tertiary education strategies and priorities (ie. investment in highly relevant qualifications). There is an opportunity for greater partnering of TEIs and ITOs to meet changing skill needs, and for more involvement of ITOs and industry in funding processes and priority setting.

The Skills Working Group is concerned at the number of food and beverage courses being offered by a myriad of organisations, all of whom are to a greater or lesser extent seeking funds from government to support their provision. This may have led to unnecessary duplication and possibly lower quality provision. An example of where the quality of provision could be improved can be found in comparing New Zealand with Australia in the provision of education and training in wine making. A number of New Zealand organisations offer a range of wine making courses in New Zealand, compared with the Australian Roseworthy Wine Centre of Excellence. Focusing on quality and not quantity and having one centre of excellence is a model New Zealand could consider adopting in food and beverage sub sector areas.

There is a need for fund allocation to be:

• Targeted in a manner that rewards high performing education/training provision and best practice.
• That provides incentives for centres of excellence in areas of potential growth in the economy.
• Encourages collaboration of various providers to reduce duplication of provision.

Tertiary Education Commission – Funded Education and Training Supported by Student Component Funding

In the period 2002–2005, the number of learners enrolled in food and beverage related qualifications has nearly doubled, from 22,541 in 2002 to 44,010 in 2005. Similarly, the government Student Component Fund EFTS subsidy for the food and beverage sector has increased, from almost $60 million in 2002 to over $86 million in 2005.

This enrolment growth was driven largely by increases in enrolments during 2002-2005 in the subject area Pest and Weed Control and also in Agriculture subject areas. Overall the figures suggest enrolments in food and beverage related provision across this period shifted towards introductory-level qualifications (NQF qualification levels 1–3), and part-time study.

Institutes of Technology and Polytechnics (ITPs) have provided the greater part of food and beverage related education and training supported by the Student Component Fund. The proportion of all food and beverage related provision facilitated by this sub-sector increased nearly 10% between 2002 and 2005. Of the total EFTs funding in 2005, for example, the distribution amongst provider types was as follows:

• 63.5% ITP enrolments;
• 19% University enrolments;
• 10.5% Private Training Establishment (PTE) enrolments; and
• 3.5% each to other tertiary education providers (OTEPs) and Wananga.

The number of qualifications in which learners have enrolled has steadily increased in most food and beverage subject areas between 2002 and 2005. During this time, the number of qualifications at least doubled in Animal Husbandry, Food Hygiene, General Land Skills, Hospitality Management, Pest and Weed Control and in Agriculture subject areas.

Three food and beverage subject areas consistently had the highest number of different qualifications in which learners were enrolled. For example in 2005, there were 71 in Cookery, 67 qualifications in Horticulture, and 45 in Food and Beverage Service.

Tertiary Education Commission – Funded Education and Training Supp orted by Industry Training Funding

Of the approximately 40 ITOs that have been in operation since 2002, eight are important in facilitating industryspecific tertiary education and training relevant to the food and beverage sector. These are:

• Agriculture Industry Training Organisation Incorporated (Agriculture ITO);
• Hospitality Standards Institute (HSI);
• InfraTrain New Zealand Limited (InfraTrain New Zealand);
• New Zealand Engineering, Food and Manufacturing Industry Training Organisation Incorporated (COMPETENZ);
• New Zealand Horticulture Industry Training Organisation Incorporated (Horticulture ITO);
• New Zealand Industry Training Organisation Incorporated (NZITO);
• New Zealand Seafood Industry Council Limited (SITO); and
• NZ Retail Meat Industry Training Organisation Incorporated (Retail Meat ITO).

Overall, the number of trainees engaged in ITO-led food and beverage training more than doubled (114% growth), from just over 28,000 in 2002 to just over 60,000 in 2005. This compares with the slower overall growth of about 60% in the number of trainees engaged in all ITOs over the four years.

An example of how the seafood industry has sought to better align with education provision is outlined below:

The seafood industry, working with its ITO, has developed strong workplace-based training at levels 1-4 and recognises the need for full tertiary education pathways. In the Nelson Marlborough region, local aquaculture companies are working with Queen Charlotte College to run aquaculture courses at years 11, 12 and 13, which include the opportunity for students to gain the Level 2 National Certificate in Aquaculture.

At the higher end of tertiary education, the Nelson Marlborough Seafood Industry Cluster is partnering with TEIs in two TEC-funded projects to develop seafood-relevant curriculum at levels 5-9. Working with the Nelson Marlborough Institute of Technology and Canterbury and Otago universities, the cluster aims to have undergraduate and post-graduate diploma and degree programmes developed that will be directly relevant to the industry. The cluster and universities are also working to improve opportunities for post-graduate student research with the seafood industry.

3. Attractive Careers

Priority three is about how to make food and beverage careers a more attractive option for youth, older workers, those already in the workforce and those that could potentially be in the workforce. Work to date on this priority for food and beverage has been preliminary and will require further time and effort.

3.1 High Quality Workplaces and Career Opp ortunities

Action Points

• The Department of Labour will contract a stock-take of current initiatives in the areas of improving the attractiveness of careers in this sector and promoting opportunities offered. The findings of the stock-take will be shared with industry.
• Involve unions in developing solutions, including the establishment of industry standards and the uptake of technology and other productivity improvements, to assist in improving productivity, wages and conditions and therefore recruitment and retention.
• Tailor education and training provision to include an increased focus on developing management and leadership capability, including the mechanisms to grow this capability over time.

Background

Some parts of the food and beverage sector are not seeing sufficient numbers of youth coming through the education system (to replace those retiring or leaving careers in the sector). The Human Capability and Agriculture and Horticulture Group have an initiative to improve the perception of agriculture and horticulture careers in schools, which should assist youth to make decisions about their future career⁷.

At the other end of the spectrum, with an aging workforce, there will be a high proportion of workers retiring over the next 20 years. The sector needs to consider what can be done to retain these workers for longer to avoid skill shortages. With an increase in the number of workers retiring, there will be increased pressure to find suitably skilled and qualified managers and leaders within the sector to continue the success and growth of food and beverage businesses. Tertiary education training institutions will need to consider how to ensure a sufficient supply of highly skilled leaders and managers for the future.

Career paths need to provide for development, progression, retention and be flexible enough to reflect fast moving changes in consumer demands (eg. food technologists are experiencing the impacts of an increasing consumer health focus and demand for more sophisticated food and beverage products).

Career paths may move within food and beverage subsectors, within the sector as a whole, across other sectors and across different parts of the food and beverage value chain (eg. pathways for manufacturing workers to move into retail and wholesale, or where similar skill sets can be deployed). There needs to be greater sharing of information within the sector (and across sectors) to recognise the transferability of skills and experience. A challenge for all sectors (including the food and beverage sector) is retaining workers with key skills and experience. There are many forms of incentives for retaining staff including provision of career promotion opportunities. In addition, the sector needs to consider ways of diversifying its workforce for example encouraging women into nontraditional occupations.

Employment security is a real issue for those that work in seasonal parts of the sector. For example, meat workers and fruit pickers need to know how to access alternative work in off-seasons. A good example of a possible solution for fruit pickers is the “harvest trail” (as mentioned in the Introduction of this paper, under Transferring Learnings across the Primary Sector), which is designed to move groups of pickers around the country to pick different crops at different times of the year. This requires them to be trained in picking a variety of fruit, rather than one type.

Similarily, creative strategies are needed in other parts of the sector. As a first step, the Department of Labour will contract a stock-take to:

• Identify initiatives in the food and beverage sector that are improving its attractiveness.
• Identify work that has been carried out to promote high quality career opportunities in the food and beverage sector (or parts of the sector).

3.2 PhD Integration

Action Points

• The Science and Technology Adoption project has considered the impact of the presence or absence of PhD students (or such qualified staff), on businesses’ ability to adopt science and technology.

Background

At the 17 November 2005 Food and Beverage Taskforce meeting, it was noted that there was an opportunity for greater integration of higher education PhDs within companies. While a long term approach may be necessary, it would be a good way for companies to increase their focus on research and commercialisation opportunities.

If the sector wants to attract more PhDs and people with higher level qualifications, it needs to become more competitive in the labour market, have a stronger focus on research and development and reward research initiatives that contribute toward companies’ commercialisation opportunities. It needs to be considered whether there is sufficient supply of PhDs and those with higher level qualifications relevant to the food and beverage sector, and whether the sector understands the value of PhDs and actively recruits them.

To understand the current supply of those with higher level qualifications in food and beverage, further work is necessary to determine the volume of completions and the relevance of their training to the sector. There needs to be a better understanding of whether the sector needs more PhDs (and higher qualified people), in what field, and whether businesses have the capability to adopt the science and technologies being developed in New Zealand or overseas.

To have an innovative and productive workforce, the sector needs to understand the values of those with higher level qualifications and actively recruit them. This means the sector needs to develop an understanding at the management level of the potentially significant values that PhDs and those with higher level qualifications may bring. Those values may be realised through exposing the food and beverage sector to new technology, and utilising the knowledge of highly qualified employees to transform knowledge into productivity gain and/or to add value to goods and services.

Government already supports PhD integration into companies by enhancing connections between tertiary education/research organisations and businesses, in the hope of increasing the flow of knowledge, technology and ideas that have tangible benefits in the form of productivity growth. For example the Technology for Industry Fellowships programme of the Foundation of Research, Science and Technology (FoRST) is designed to support students studying at senior undergraduate level up to PhD level qualifications, with the opportunity to apply their skill and knowledge to a commercially-focused research and technology development project. A PhD fellow is expected to develop a substantial and original contribution to new knowledge in the field of research, and to work within the company premises for at least 50% of the time.

Other programmes are less direct in supporting the integration of PhDs into business. However, the focus of such programmes is often on assisting businesses to build capability of, and access to, the benefits of research and development. A stronger focus on research and development capability within and between food and beverage companies will help to make the sector more attractive to PhD graduates (and those with higher level qualifications) and consequently lead to more integration of their skills into the work practices of the company.

Footnotes

4. The New Zealand Economy: The Next 20 Years. 4 March 2006.

5. There are two types of skill shortage: 1) Genuine skill shortage - when employers have difficulties filling job vacancies because there are not enough individuals with the required skills in the potential labour market to fill the positions on offer; and 2) Recruitment and retention difficulty - when there is a considerable supply of individuals with the required skills in the potential labour market, but they are unwilling to take up employment at current levels of remuneration and conditions of employment.

6. It should be noted that there are many terms used for production manager such as site, plant, logistics or procurement manager, hence it is possible that not all data relating to production manager has been captured. Also note that anecdotal evidence suggests most production managers come about through promotion rather than by acquiring a relevant qualification. This is an example of where industry training levels may need to be increased above level four.

7. Note that this initiative is aligned to the Markets Working Group recommendation about building business capability.

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