Merger in Motion

Since March 2012, three industry training organisations, the Aviation, Tourism and Travel Training Organisation (ATTTO), Hospitality Standards Institute (HSI) and Retail Institute have been engaged in formal merger discussions. This has followed six years of working closely together and collaboration on some key projects.

On Wednesday 12 September 2012, a Deed of Merger was signed by ATTTO, HSI and Retail Institute, committing to form a new Industry Training Organisation named the Service Skills Institute.

“We are very pleased that the Deed of Merger is now signed, but it is still subject to certain conditions,” said Ken Harris, HSI Chief Executive, speaking on behalf of the three ITO Chairs.

Each ITO must obtain the necessary support for the merger from their respective industry training sectors and the parties need to obtain recognition and extension of coverage from the Tertiary Education Commission and approval as the standard setting body from the New Zealand Qualifications Authority. Satisfactory completion of financial, legal and other diligence processes is also required.

Harris adds that “the merger is based on the shared view that it will enable the three ITOs to better protect and promote the interests of our industries.”

The planned commencement date for the new organisation is 1 January 2013, with a likely transition period of several months as the three organisations complete the integration process. An important condition of the merger is to retain the key capability including the technical skills, knowledge and expertise of each party to ensure that the new ITO, Service Skills Institute, will be able to effectively service and support its industry sectors.

The role of the three existing ITO Boards will be picked up in the Industry Advisory Groups within SSI, representing the interests of their industry sector.  Each Industry Advisory Group will also nominate two Directors to the Board, taking up six board positions, with an additional three external independent board members, one of whom will be a representative of employees, appointed through a board selection process.

During the transition period, the frontline operations of the three current ITOs will continue to function on the current business models, providing the same service. Integration will develop best practice systems and processes, and provide improved services to learners, employers and key stakeholders.

The proposed merger is dependent on the support of industry. All three ITOs are now formally seeking support for the merger from their respective industry sectors.

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For further information, please contact HSI Acting CEO Sandra Daly (Ken Harris not available until 26 September) Telephone DDI 04 802 7810; mobile 027 660 0032; email sandra.daly@hsi.co.nz

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NOTES:

Background: The Tertiary Education Commission (TEC), the primary funder of Industry Training Organisations, has announced a series of funding policy changes designed to improve performance in the industry training sector and to improve the value to Government of funds allocated to that sector. The Minister of Tertiary Education has indicated that the number of ITOs needs to be reduced to achieve the efficiency gains expected by the Government and the parties are responding positively to this initiative.

A Review of Industry Training conducted by the Ministry of Education over the last 12 months has confirmed support for the role of ITOs in developing skill standards and qualifications, for arranging and supporting on-job training and apprenticeships and has made several proposals for improvement. A consultation process on the Ministry proposals is due for completion on 12 September, and final decisions are due within three months.

During the past 12 months the number of ITOs has reduced from 37 at the beginning of 2011 to less than 30 at present. Since March 2012, Aviation, Tourism and Travel Training Organisation (ATTTO), Hospitality Standards Institute (HSI) and Retail Institute have been engaged in formal merger discussions. This has followed on from six years of working closely together and cooperating on several key projects.

The Value Proposition of this Merger: There is true synergy across these sectors; for example, they all support Tourism and their sectors contribute to the $63million per day that Tourism brings in to New Zealand. By merging as a new organisation, the three ITOs will increase their capability and capacity and that will enhance their service to all of their combined sectors.

A merger of ATTTO, HSI and Retail Institute will contribute to increasing the productivity of the many people who work in the New Zealand service industry, in several ways:

• As it would cover the majority of service industries, the merged organisation will provide core skills that are transferable across the service sector for all employees and businesses. This would have better outcomes for trainees, such as the ability to transfer their skills, and to receive better quality training and assessment that a larger-scale organisation will bring.
• The merged organisation will become the one central point of contact for service businesses and employees, reducing duplication and therefore reducing administrative and compliance costs for employers.  
• The merged organisation will continue to work with industry to design and develop qualifications and training programmes that meet industry workforce needs, from entry level through to management.
• The increased coverage and size of the merged organisation will give it, and the service industry it represents, a stronger voice and greater influence with Government.

 

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