Aligning Education with the Future of Work in New Zealand

We are now at the start of the back end of the school year. Secondary schools now start to gear up navigating the evolving landscape of seniors preparing for exams and nailing transition planning.

The need to align post-secondary education with labour market demands has never been more critical.

I am a frequent listener of The Harvard Business School 'Managing the Future of Work' podcast, this particular episode featured Stephen Moret, President and CEO of Strada Education Foundation . Stephen offers invaluable insights into how countries can democratize access to education and opportunity, driving economic growth and social equity.

This article explores these themes within the context of New Zealand, highlighting local data and initiatives to provide a comprehensive perspective.

The Current Landscape: Skills Mismatch and Underemployment

In New Zealand, like many other countries, a significant skills mismatch exists between graduates and labour market demands. According to the Ministry of Business, Innovation, and Employment (MBIE), about 30% of employers report difficulty finding staff with the right skills. Furthermore, a 2023 report by Infometrics revealed that underemployment among recent graduates stands at 25%, indicating a misalignment between educational outcomes and job market needs.

Inclusive Workforce Development: A Pathway to Economic Growth

Stephen Moret emphasizes the importance of inclusive workforce development, which aligns with New Zealand’s commitment to equity in education. The Government's Tertiary Education Strategy 2020-2025 focuses on improving outcomes for traditionally underserved communities, including Māori and Pasifika students. Moret’s approach underscores the need for clear outcomes, quality coaching, affordability, work-based learning opportunities, and employer alignment—pillars that resonate with the strategic goals.

Local Initiatives and Policy Options

1. Clear Outcomes and Data Systems:

- New Zealand's Integrated Data Infrastructure (IDI) provides a comprehensive data system that can be leveraged to track education-to-employment outcomes. Expanding and utilizing this data to inform policy decisions can ensure better alignment of educational programs with labour market needs.

2. Quality Coaching and Advising:

- Programs like Education to Employment Brokers via MSD offer schools connection to networks of local employers and guidance to ākonga from secondary school through to post-secondary education. Enhancing these services, particularly for ākonga from low-income backgrounds, can help bridge the information gap and support better futures planning.

3. Affordability:

- The Fees-Free policy did make the first year of tertiary education free for many ākonga, alleviating some financial barriers. However, ongoing evaluation and adjustment of this policy are necessary to ensure it meets the evolving needs of ākonga and the economy. The change to the last year of study will be interesting to see how this contributes to long term outcomes.

4. Work-Based Learning Opportunities:

- The reform of vocational education, (Like waiting for the next season of your favourite Netflix series) while still a cluster f%#*, it would be amazing to see as the continued expansion of apprenticeships models in NZ (Degree level Apprenticeships) and increased employer support for paid work-based learning arrangements, particularly in high-demand fields like technology and engineering, can enhance job readiness and employability.

5. Employer Alignment:

- Strengthening partnerships between educational institutions and industries is a no brainer. Initiatives like the Workforce Development Councils (WDCs) are steps in the right direction, but more active collaboration and feedback loops between employers and educators are needed to ensure skills mapping and qualification relevance meet current and future industry needs.

Addressing Underemployment

Moret’s discussion on underemployment highlights a critical issue for New Zealand. The stickiness of underemployment suggests that early career experiences significantly impact long-term outcomes. Encouraging internships and practical experiences during tertiary education can mitigate this issue. A University of Auckland study found that graduates who completed internships were 30% more likely to secure relevant employment within six months of graduation.

The Role of Employers and Policymakers

Employers in New Zealand have a pivotal role in shaping the education-to-employment pathway. By offering more internships and engaging in active dialogue with educational institutions, they can help ensure graduates are equipped with the necessary skills. Policymakers, on the other hand, must create an enabling environment that supports these collaborations and incentivizes work-based learning.

In the end

Aligning education with the future of work is essential for New Zealand’s economic growth and social equity. By focusing on clear outcomes, quality coaching, mentoring, affordability, work-based learning opportunities, and strong employer alignment, we can create a more inclusive and effective education system.

As Stephen Moret suggests, this holistic approach will not only benefit individuals but also strengthen our regional and national competitiveness.