Executive summary

	The focus of our audit
	NSW State agencies are faced with changes in the demand for their services as the population ages. Demand is expected to increase for some, and decline for others. They also have an increasingly aged workforce facing retirement.
	The NSW State Plan highlights the importance of improving workforce capability and reducing the risk of shortages. The NSW public sector has had a major focus on: § strategic workforce planning - the Department of Premier and Cabinet workforce planning guide indicated that workforce planning should look at least 3-5 years into the future, with milestones for reviewing expected outcomes § pilot strategies and products to retain mature age workers and retain the critical knowledge and skills of staff who retire.
	In 2003-04, 47 per cent of teachers were aged 45-64, the highest proportion of mature age workers in any occupation. The following graph shows the large proportion of mature aged school teachers.
	Age profile of school teachers
	Source: Department of Education and Training, Workforce Profile 2007.
	The supply of teachers in subject areas such as science, mathematics and technology and applied studies has been the subject of a number of reports at the state, national and international levels. For example, a recent survey by the Australian Council for Educational Research has suggested that there are current shortages Australia-wide in a number of specific areas in primary and secondary schools. The Department’s seven year workforce planning projections indicate: § an adequate supply of primary teachers in all geographical locations, except for a small number of positions in specific geographical locations § an adequate overall supply of secondary teachers except for teachers of mathematics, science, and technological and applied studies, with some shortages in English in isolated NSW, and some positions in particular geographical locations.
	The TAFE workforce is also faced with a tightening labour market, an ageing workforce, and the need to shift its focus from vocational education and training to the broader concept of ‘workforce development’.
	TAFE has indicated that it needs to find new ways to provide its services, particularly for those members of the community looking to re-enter the workforce. To address this, it has developed a consultation document TAFE NSW Doing Business in the 21st Century.
	The following graph highlights the concentration of mature aged workers at a major metropolitan TAFE campus.
	Teaching staff age profile typical metropolitan TAFE campus
	Source: Department of Education and Training.
	Our audit has focused on how the NSW Department of Education and Training including TAFE NSW is managing the impact of an ageing workforce on the educational services it delivers.
	Specifically we examined whether:
	§ the impact of an ageing teaching workforce on the delivery of educational services had been identified and assessed § policies and measures had been developed to reduce the impact of an ageing teaching workforce § the Department is dealing with the impact of an ageing teaching workforce on its educational services.
	Audit opinion
	The Department of Education and Training including TAFE NSW is faced with: § the loss of large numbers of retiring teachers and their associated skills § the need to replace this loss in an increasingly competitive labour environment.
	While the overall impact of the ageing workforce is likely to be gradual, there is still a risk of shortages. This will particularly apply to specialist secondary school teachers and TAFE teachers in certain skill sets or at specific locations.
	TAFE NSW has identified, and has started to assess, the potential impact of the ageing teacher workforce. It is starting to use age profile and retirement data to focus on teaching skills most at risk. For schools, the Department already uses age profile and retirement data to project future supply and demand to assess the likely impact and identify potential shortages.
	The Department has focused considerable effort on recruiting and retaining younger teachers. There is also a focus on attracting new teachers to areas of critical shortage and improving the quality of teaching for new teachers.
	There is a limited but increasing focus on retaining the critical knowledge and skills of staff who are about to retire. There are also moves to introduce phased retirement. There is good guidance material available from the Department of Premier and Cabinet on workforce planning and mature aged retention strategies.
	We encourage the Department including TAFE NSW to continue to develop: § a clearer picture of how big and where its shortages are likely to be § new measures to address potential shortages in the workforce § additional ways of encouraging mature aged teachers to stay on particularly in targeted areas of shortage.
	Key findings
	School Teachers
Identifying and assessing the impact	As part of its overall workforce planning process we found that the Department uses age profile and retirement data as well as a number of other factors to assess the impact of the ageing teacher workforce. We see scope for improved information on retirement intentions to get a more accurate assessment of the impact of the ageing teacher workforce. We also found that the Department focuses on the geographical areas and teaching skills most at risk and projects future supply and demand to assess the likely impact and identify potential shortages at an aggregate level. While the Department has found its workforce planning process to be reliable over a number of years, we  see scope for more localised impact, risk assessment and reporting, as this is where shortages will first appear.
Developing new measures	The Department has a major focus on attracting and recruiting new teachers to the profession. There is also a considerable focus on attracting new teachers to areas of critical shortage and improving the quality of teaching for new teachers.
	The Department has implemented the following strategies to address workforce issues: § the provision of up to 230 Teacher Education Scholarships per year for students who wish to be employed as secondary teachers in mathematics, science, technological and applied studies or English § an Accelerated Teacher Training Program which targets people with current industry knowledge and expertise who would make excellent teachers in potential shortfall areas § teacher retraining in areas of need.
	The Department regularly advises Deans of Education in all NSW and ACT universities of the Department’s permanent teacher demand and supply needs. In particular the Department continues to advise the Deans of Education of its view of an oversupply of primary teachers.
	There is limited but increasing proactive corporate focus towards retaining the critical knowledge and skills of staff who are about to retire or mature age staff in critical areas of shortage. The Department is currently in the process of finalising “Phased Retirement Guidelines”.  We see this as a positive step towards addressing the challenges of the ageing workforce in the Department.
Dealing with the impact	Whilst the Department projects demand and supply on a seven year basis, which is reviewed annually and updated when required, we found that there was scope for more detailed action plans: § focusing on the medium term outlook for their most critical skill sets/areas § showing  how strategies will deal with workforce issues and gaps  § targeting the participation and retention of staff for critical skill sets/areas, such as mature-age workers, through specialised strategies.
	By using such an approach, the Department could provide better assurance that present efforts will be as adequate for the future as they have been in the past. There could be a risk that Departmental aggregate projections indicating an oversupply overall could mask shortages at specific school levels, although the Department regularly reviews the data to mitigate this. The Department has a range of strategies to mitigate against potential shortfalls, for example teacher education scholarships, and we found some formal evaluations of their effectiveness. We see scope to do more of this, particularly in relation to staffing critical areas of shortage.
	TAFE Teachers
Identifying and assessing the impact	We found that the Institutes are increasingly focused on identifying those trades and skill areas most at risk, particularly in the light of changing requirements to suit industry needs. Some Institutes are then projecting future supply and demand to assess the likely impact and identify potential shortages. We see scope for more systematic assessment of this kind, looking further ahead, particularly in critical skill areas and locations.
Developing new measures	We found that TAFE Institutes have focused considerable effort on the recruitment and retention of younger teachers. An emerging area of focus is succession planning. ‘Managing to retirement’ is emerging as an area of focus for the future. The Department is currently in the process of developing “Phased Retirement Guidelines”. TAFE Institutes are able to offer a range of flexible work options. These tend to be negotiated on an individual basis.
	We found TAFE Institute management interested in learning more of Government policy and guidelines and better practice in relation to the mature age workforce. Some Institutes are already looking at phased retirement options, alumni associations and similar measures in recognition of their ageing workforces.
	We see potential for TAFE NSW Institutes to be more proactive in modelling new practices to: § retain mature age staff in critical skill areas § retain the critical knowledge and skills of staff who retire § establish organisational practice and culture whereby this is achieved § promote its use of flexible workforce practices.
Dealing with the impact	Institutes have commenced developing workforce capability development plans, but workforce planning typically only looks forward a year. In our view TAFE Institutes need to strengthen their workforce planning capability with targeted workforce action plans focused on the medium term outlook for their most critical skill sets/areas.
	Recommendations
Identifying and assessing the impact	We recommend that the Department including TAFE NSW develops a clearer picture of its future workforce and potential risk areas by: § improved information on retirement intentions with more frequent use of on-line retirement intentions surveys § more localised impact, risk assessment and reporting, as this is where shortages will first appear § further development of medium term (3 to 5 year) projections of the future supply and demand in critical areas of shortage. (pages 24, 42)
Developing new measures	We recommend that the Department including TAFE NSW continues to develop new measures to enhance its workforce capability, such as by: § encouraging the retention of mature age workers; for example by facilitating a phased retirement § targeting the recruitment of mature age workers from industry, such as by accelerated teacher training program § increasing its focus on knowledge continuity, where critical skills are mapped and mature workers take on a mentoring role to support younger staff § keeping in touch with retired staff and drawing upon their skills, knowledge and expertise in filling short term vacancies (as proposed by the Alumni guidelines by Department of Premier and Cabinet) § requiring exit interviews of retiring teachers as a matter of course. (pages 30, 45)
Dealing with the impact	We recommend that the Department  including TAFE NSW strengthen its workforce planning capability by: § developing targeted workforce action plans, focusing on the medium term outlook for their most critical skill sets/areas § subject to the establishment of a business case, targeting the participation and retention of staff for critical skill sets/areas, such as mature-age workers, through specialised strategies § improving workforce management information on emerging shortages, take-up of new programs, and effects of policy measures § routinely evaluating the success of its workforce programs to ensure that successful programs are enhanced, new programs developed in timely fashion, and ineffective programs discontinued or modified. (pages 35, 48)
	It is also recommended that the Department continues to advise universities and relevant Commonwealth Government departments of the Department’s permanent teacher demand and supply needs. In particular its view of an oversupply of primary teachers and the need for additional teacher education places in areas of shortfall (page 35). As TAFE shortages in particular are likely to have state-wide implications, our view is that it also needs to report annually to the Public Sector Workforce Office on critical areas of need, with specific plans for addressing problem areas (that may or may not involve mature age workers) (page 48).

Response from the Department of Education and Training

I refer to your letter dated 18 December 2007 about the Final Report, Performance Audit, Ageing workforce – teachers. Thank you for the invitation to comment on the report.

The Department of Education and Training welcomes the opportunity to share with other agencies some of the strategies and practices to address the challenges of an ageing workforce.

I am pleased that the report recognises the substantial work we undertake to estimate and address potential teacher shortages in the coming years.

We have for many years accurately forecast the future demand for, and supply of, school teachers.

As the report found, our interventions to address potential shortages have been effective, including teacher education scholarships, the teach.NSW campaign and retraining programs.

Despite our success we are not complacent. We constantly monitor, and as need be respond to, developments in teacher education and demand for teachers in other schools in NSW, elsewhere in Australia and internationally.

The report highlights opportunities to introduce additional measures to encourage mature aged teachers to stay on.

We are, for example, now finalising guidelines for phased retirement. These will advise staff on their options to phase into retirement and issues for them to consider. They will guide managers on how to help staff wanting to step-down gradually from full-time work.

The report’s recommendations focus on three key areas:

§ developing a clearer picture of future workforce and potential risk areas;

§ developing new measures to enhance workforce capability; and

§ strengthening workforce planning capability.

I am pleased to accept the thrust of these recommendations as we already concentrate effort and resources in these areas, especially in workforce planning for school teachers.

I would like to acknowledge the efforts of our staff who develop, implement and support the policies and practices which ensure NSW public schools are staffed by quality teachers.

I would also like to recognise the invaluable contribution of our teachers in public schools and TAFE to the lives and futures of so many people in NSW and the cohesion, prosperity and success of our whole community.

Finally I would like to thank the staff of the Audit Office for their professional and collaborative approach to the conduct of this audit.

(signed)

Michael Coutts-Trotter

Director-General of Education and Training

Managing Director of TAFE NSW

Dated: 25 January 2008