Robyn Wall, Director of DMO's Skilling Australia's Defence Industry Program

As a workplace trainer and group facilitator, Robyn Wall has worked in areas as diverse as retail sector training and the development of a post graduate curriculum for middle-ranking military officers. She joined the Defence Materiel Organisation in January 2002 is currently the Director of the Skilling Australia's Defence Industry Program in Industry Division. She spoke to ADM's Canberra Correspondent, Daniel Cotterill, in early September.
PROFILE - Ms Robyn Wall
2005 - Director, SADI, DMO Industry Division
2004 - Chief Executive Adviser to CEO of the DMO
2002 - Joined DMO
Pre-2002 - Specialist workplace trainer and group facilitator

ADM: How big is the defence skilling issue compared with the wider issue of Australia's industry skills base?

Wall: There are no figures publicly available. We did not construct our view based on comparing it to the wider industry skills base. But our general observation is that it's in line with other sectors. It's just that the areas where there are critical skill shortages across the whole of industry are the areas in which Defence operates. So if you're talking about having critical skill shortages in engineering, in manufacturing, welding and those sorts of areas, as a global issue or as a national issue that's exactly the impact. That's exactly the area in which Defence has a footprint in terms of industry and so it's part of that bigger industry wide problem.

ADM: Has Defence had to push industry to invest in upskilling its workforce? Has industry been reluctant to make that investment for itself?

Wall: What we have found is that companies are already making quite significant investments in their workforce. There is no company out there that I have dealt with to date that does not have a deliberate program of bringing in skilled workers, of providing the workers that they have with skills development and so forth. They are already providing a range of training. So no, I have found no reluctance. The issue for industry of course is how much can they do as part of their normal everyday business, and the idea of the SADI programme is actually to provide an incentive so that they exceed what they need to do for normal business.

ADM: What are the specific levers you can pull to improve the situation?

Wall: What we are doing to encourage industry to do a bit more is to provide them with a financial incentive that can assist in covering some of the costs of providing additional training or some of the costs associated with growing a skilled workforce. The program does not provide for wages, obviously, but most of the direct costs associated with training additional people - not the ones that they are skilling already because that is their status quo.

The SADI program addresses any training activity they can put together that does more than they are already doing. I'll give you an example. Say a company already employs 10 young apprentices on an annual basis. If they can make a business decision that they can in fact put on a couple of extra apprentices each year, they
ADM: How will SADI impact defence companies? Will it mean significant amounts of paper work for support?

Wall: In order to qualify and enter into a SADI agreement, companies are required to respond almost like a tender response except this is a non-competitive situation. So what they are asked to do is provide us with details about what programs they would like to implement, where they see that they can make a contribution to alleviating the skills shortages, what they are already doing - so they actually have to reveal to us the numbers of people that they might already be training in a particular field - and how many extra they think that they can do. So it's a bit like a tender response - a little bit of risk management assessment for us so that we see that they are taking into account the risk factors. And then we enter into a negotiation with them. They certainly have to provide us with sufficient information such that we can make sensible judgements about the practicality of their proposal. They have to show us sufficient information so that we can be assured of the financial aspects of the proposal - and that we can be confident that where the finances are going is appropriate and so forth. Once we enter into agreement with them, which is a contract, they then have to complete a report each six months and it's on the basis of that report and the actual achievement of outcomes as defined in the contract arrangements that we pay the SADI funds. What happens is the SADI funds are paid in arrears after the achievement of outcomes. So they spend the money up front and we reimburse it.

ADM: How will funding and training provision be monitored by DMO to ensure that real skilling does occur?

Wall: Industry has to keep all the material that will provide evidence. Now I don't want it stacked up in the office here - that is not appropriate. But they are required to be able to grant us access to their records, and similarly with all their financial information. Industry will present us with an itemised invoice but they must keep the paperwork that underpins that so that we could go in and check it.

ADM: There have been several reports over the last few years dealing with skill shortages, why is it that this initiative has not come earlier?

Wall: That is an interesting question but in reality the 2004 Defence Capability Plan was the catalyst for this activity. In the 2004 DCP the government committed to roughly a 30 per cent increase in the outputs in terms of Defence capability - money and equipment. It was actually that 30 per cent increase that SADI is in response to. So in fact the 2004 DCP was followed up almost immediately by an initiative to help industry to achieve that. That's a pretty quick response, not a slow one. It is recognised that if we want industry to respond and be able to deliver the DCP, they need some incentive and some assistance.

ADM: Do you see a danger that highly skilled people trained by the defence industry, perhaps with SADI financial support, will be "poached" by other sectors of the economy, or even go overseas to foreign prime contractors?

Wall: No. I think you've got to hold the Defence Industry Skilling Program and look at it in the broader context of the wider national issue of skills and the skills requirement. Any skills growth and development that we do within the Defence industry sector is most likely to stay in there but we live in a democratic society that allows people to make choices about where they work and so forth. If those skilled people that get trained up under SADI happen to move out into another sector, so be it. The whole point is that Company A doesn't skill up just for Company A - Company A skills up for the Defence industry sector. In one sense the Defence industry sector does have an impact on the broader industry sector. And so if we are providing a greater level of skill base to the whole Australian population it is not necessarily a bad thing. And if there's a very, very small proportion that go over to the major overseas primes that is not a bad thing either. The other thing is of course, that, ultimately, people come back and those broader experiences that people might gain - those broader experiences that you gain by working in another sector, in another environment - only add to your value overall.

ADM: Are there structural issues in Australia's tertiary education system which account for the shortfall in industry skills, or are things like engineering and science just not "sexy" enough to attract sufficient students?

Wall: I think it would be a really hard call for anyone to draw a line to that. There are a number of historical reasons why the whole of Australia is suffering from a skill shortage and it's got nothing to do with any particular sector, it is the compounding affect of a whole series of different things that have occurred.

We have got a demographic situation with an aging workforce, the slowing of population growth and those sorts of things. We have got a work value trend where for decades we have been encouraging our children to look towards a university outcome if they can possibly achieve it. Not that this is wrong, it is just a compounding effect and there are many, many other aspects to it. In some states and territories, maths and science are not compulsory at the end of high school anymore. In other states they are. So it is not just that. It has also got to do with the fact that I think as a nation we have got to start looking at how we look at work and how we look at our workforces and recognise that as a norm we are going to have to cross-skill, re-skill, and realign our workforces to meet emerging requirements. A great big pool of people to draw on is not going to be available if you have a look at some of the demographic trending information. We are looking at less than a quarter of the current people available coming online in 20 or 30 or 40 years. It changes the nature of work, and this is just the beginning of it.

ADM: How much work will you need to do with the educational and training sectors, the universities, TAFEs, and so on working in addition to working with companies to address the skilling issue?

Wall: We're not dealing with educational institutions - not directly. What we really want is an education sector that is responsible and responsive to the needs of industry. Just like a Department of Defence point of view, we want an education sector that's responsive to our particular need as a public sector organisation. You need an education sector that is responsive to industry's particular needs and so the way that the education sector becomes involved in SADI is when they are able to work directly with industry and respond to that need, and there is a lot of that happening. The education institutions are very astute and the bulk of them are very able to respond to that kind of requirement without too much hassle at all and have been doing so for a number of years. They are quite good at it. What is different, I think, is that in order to get the economies of scale that are required, industry needs to get together and pool their requirements and work in a more collegiate fashion to get the outcomes from the education sector rather than doing it individually on an ad hoc basis, and we are seeing that.

ADM: One of SADI's objectives is to "encourage skilled employees to remain in the workplace for longer periods of time" - is there a vision as to how this will occur and a strategy in place to ensure it happens? If so, what does it look like?

Wall: That is one of the things that we say to companies, that we would like them to find ways to encourage their skilled employees to stay in the workforce longer. What we are looking for companies to do is provide us with an innovative set of responses that looks more broadly at things. It is pretty well known that if a workforce feels that management is taking an interest in them - that they are providing them with opportunities to skill, to train up - if they are actively seeking ways to keep them employed as opposed to 'oh we don't need that skill set anymore therefore we'll let you go,' that is a big retention benefit in itself. People stay where they are valued.

The second one is that what we really are encouraging in terms of companies coming in with responses to the SADI program is for them to be doing as much as possible of the development of their staff on-the-job so that people are actually learning in real time against work as it is occurring. That means that there is a greater requirement for supervisors, workplace mentors and so forth and transferring skills is another way that you can harness the energies of your aging workforce. For example a much older guy who has been a technical person or a tradesman most of his life starting to physically slow down does not now necessarily have to be let go. It means that there are options, and that is what we are looking at - for companies to look at options for how they can keep those people employed and actually making a contribution to the skilling of the younger workers as they are coming in.

ADM: What has been the reaction of SMEs to the SADI incentives?

Wall: Because of the level of investment required on behalf of a company to actually attract the SADI incentive some, not all, SMEs find it a little difficult to do that in their own right. So we are encouraging the larger companies to take account of the SMEs in their supply chain. Think about them when they put their programs together and provide places for SME participation in the initiatives that they are putting together. We have had some really good responses from the bigger companies in that respect in that they are saying 'well okay, this is our status quo. We would normally put this 20 people through. With SADI funding we can put through an extra 10 and five of those places will be allocated to SMEs'. They become almost like the training provider and the SME then has access to these courses that they would not normally get. Again, it has got to do with scale and they often can't do it and so the big companies are doing it. It is working out quite well. But other SMEs are coming to us and saying 'yes, we want to play and we can make an investment'. It might only be one or two people or it might only be a small program of activity but we won't turn that away either.