The Skills-Productivity Nexus : Connecting Industry Training and Business Performance

Author: Owen Harvey and Peter Harris

This report has been written as part of a joint Department of Labour/Industry Training Federation project aimed at improving the ability of Industry Training Organisations (ITOs) to assist workplaces to raise their productivity. The report sets out results of a literature scan exploring the links between skills, their application, and productivity, and also documents the experience of a number of manufacturing ITOs in expanding the breadth of their services beyond skills development. The report points out that:

- Improved productivity and organisational performance is attributed to a number of "interventions": be those better training, enhanced managerial capability, employee engagement, improved employee recognition and reward, innovative production practices. The key finding though, is that on their own, any one intervention is likely to have limited impact. The additive effects must be recognised, as well as sequencing of change in some cases.

- Interventions of this nature do add cost. They are more likely to add value in firms that have a competitive strategy based on the delivery of high-value products and services, and to have limited (or net negative) returns in high volume business models that rely on minimising cost. They are not a universal panacea. Furthermore, managers can often be certain about the costs and when they will occur but much less so about the rewards and when they can be realised.

- It is not the nature of the interventions that matter, but the manner in which they are deployed. For example, engagement of employees through unions can be a high value intervention, or it can have large negative consequences.

All publications in subject category: Labour productivity

     · A report card on the New Zealand labour market
     · In-house Literacy, Language and Numeracy (LLN) Initiatives in New Zealand Workplaces
     · Potential Output: Concepts and Measurement
     · The business case for firm-level work-life balance policies: a review of the literature
     · The Measurement of Productivity in New Zealand: An Introduction
     · Towards Building A New Consensus About New Zealand’s Productivity
     · Why Workplaces Matter
     · Workplace Reform and the Quality of Working Life: A Tale of Three Workplaces

All publications in subject category: Skills / human capital

     · An overview of New Zealand and international research on the future of work.
     · Aspirations of rurally disadvantaged Maori youth for their transition from secondary school to further education or training and work
     · Changing skills for a Changing World, Recommendations for Adult Literacy policy in Aotearoa/New Zealand
     · Demand-side factors in adult foundation learning programmes - A review of international literature
     · Human Capability - A framework for analysis
     · In-house Literacy, Language and Numeracy (LLN) Initiatives in New Zealand Workplaces
     · International Workforce Literacy Review: Australia
     · International Workforce Literacy Review: Canada
     · International Workforce Literacy Review: England
     · International Workforce Literacy Review: Ireland
     · International Workforce Literacy Review: United States
     · New Zealand''s Labour Market from 1991 - 2001: Evidence of Upskilling?
     · NZ Accommodation Providers: Impact of Technology on Labour
     · Occupational and Skill Forecasting: A Survey of Overseas Approaches with Applications for New Zealand
     · Upskilling through foundation skills - A literature review