2014 ATD (ASTD) State of the Industry Report

Well for those of us fascinated by L&D statistics and the meaning and implications behind them, ATD (Formerly ASTD) have just released their annual state of the industry report for 2014.  So what does it have to say and what implications can we draw from it.

So what did it cost?

Firstly we see that spending on training for organisations has gone up, not by much, around 1%, but still it has gone up to an average of $1208 per employee.  The interesting thing about this number is that it is much higher for smaller organisations (less than 500 staff) at $1,888 and much lower for large organisation (over 10,000 staff) at $838 per employee.  Much of this can be put down to larger organisation being able to take advantage of economies of scale when it comes to development, maintenance and delivery costs of training and have the same dollar spend spread over a large group of employees.

We see also that learning hours used is about 31.5 hours per employee across the board which is relatively the same as last few years.  An interesting wrinkle to this average is that medium size companies (500-9,999 employees)  only come in at about 27 learning hours used per employee and while this might be interesting to attempt to investigate further, it may simply have to do more with the relative size of the data samples then any other actual trend.  Again we also saw that direct expenditure on learning as a percentage of revenue again remained relatively stable at around 1.2%.  The vast majority of this spend is, as it has been for many years, made up by the internal costs to organisations for the delivery of training, remaining again in the mid 60% range.  With external services (27%) and tuition reimbursement (10%) making up the balance.

 

So what did we deliver and how?

The three content areas that made up more than 34% of all the training delivered were;

  1. Mandatory and Compliance Training
  2. Managerial and Supervisory
  3. Profession or Industry specific

with the bottom 3 areas being;

  1. Executive Development
  2. Interpersonal Skills and
  3. Basis Skills

As far as delivery methods for training goes the winner and continuing champion by a long margin is of course – Instructor Led Classroom Based.  Yes folks yet again, face to face classroom bases training got the gong for being the most frequently used delivery method at 54.6%.  Not a bad effort for the old-timer in my opinion.  To be fair to the up and coming, much-lauded new world of learning deliver self paced online learning came in second with 17.9% and the most important game changing learning and development technology mobile or m-learning came in with a massive 1.7%.  All right I apologies for being a little facetious there, but I think what these numbers show is something quite simply for all of the rhetoric about mobile learning being the most important development in L&D ever are simply well not stacking up at the moment at least. Even when we throw all of the technology based delivery methods together they still only account for about 38% with the balance being taken up by options like self based print based learning (which by itself and I find this incredibly interesting  accounts for 4.75% of delivery, three times higher than mobile learning).

So what is this all mean.  Well I think for the most part we as an industry should be happy with the results.  We are seeing consistency in spend and the kinds of training being delivered.  There seems to be no great surprises (well except for those who tout M-learning as the next big thing, ok I will stop now) and seems to be to be much what you would expect from a stable, mature industry that know what its goals are.

 

 

 

 

 

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If not Industry Lead then what. Training packages, VET and the industry connection

With the VET reform process has come a lot of questions around the creation, development and management of the Training Packages which make up the VET system and there are currently two discussion papers released by the Department in relation to this.  Now even at this early point in the discussion there as been some robust discussion around the training packages, their content and their development.

When I start to think about this issue a couple of things come to mind for me, the first is, that I am not terribly interested in how the Training Packages were originally developed, they are what we have and the discussion should I thing focus on what is the best path forward from here.  I don’t think there is much appetite out there for the wholesale reinvention of training packages, but please correct me if I am wrong.

The other thing that sits heavy on my mind is this;

If not industry led, then what?

As most of you know I am a strong supporter of the VET system in this country and it capacity to increase workforce participation, provide a skilled workforce for the current and future needs of industry.  However the only way in which it can meet the needs of industry is if industry are the central to informing what the required skills and knowledge.  If we look at the first principle from which the reform process is being undertaken  namely;

The national system of qualifications must provide a reliable signal to employers about the skills an individual has, and must be underpinned by industry-defined occupational standards that:
• reflect the technical and generic skills and knowledge that are required in jobs;
• provide a basis for consistent assessment of competence in those skills
across the training system;
• provide a mechanism for the national portability of those skills; and
• are flexible enough to cater to the needs of different individuals, employers
and industries, including as these change over time.

A couple of really important things come out of this first principle for me and these are the ideas of providing a reliable indicator to employers about the skills of individuals, the technical and generic skills and knowledge required for Jobs and flexible enough to meet changing needs over time.

For me as I have always said, the VET system is about at its base vocational outcomes, it is about providing matching the skills and knowledge of students to the needs of the industries in which they are going to be employed and for me if the skills of the graduates do not map onto industry need and expectation then the system has failed.

The question that comes out of this for me is, if the system is related to vocational outcomes, the needs and expectations of industry, how can this be achieved without the strong, connected and engaged input from industry.  One of strong criticisms of the current system is that it struggles to keep up with changes in industry and employer  practices.  This along with an apparent mismatch (in a number of qualifications) between the skills and knowledge of graduates with the needs of employers and overly complex and bloated training packages shows what happens when is not as engaged and connected to the process of development as they could be.

So if at least part of our goal is to ensure that graduates of the VET system have meaningful employment outcomes from their qualification and that industry and employers get the skilled workforce that they need both now and in the future it seems to be absolutely necessary for industry to be a the leader in the development of what is required in the various units and qualifications that make up the training packages and that means that there needs to be more, better, consistent and real, actual engagement  and consultation between industry and whoever ends up developing the packages themselves.

The business of Learning – Setting a maximum retail price on VET training

As a lot of you are aware there has been a massive implosion in the Vocational Education System (at this point mostly confined to Victoria and previous market darling Vocation), but it has got me thinking about the business of vocational education again and how best to ensure that business and industry as well as participants and governments, get the best deal, the best bang for buck so to speak.

Now as anyone who has read my blog will know I am a firm believer in the system that currently operates in Australia, I believe there is a place and a necessary, place for both private and public education providers in the VET sector, I also believe that it is in the public good for Governments to make education as affordable and as accessible as possible for every member of our society.  This of course does not just mean the VET sector but across the entire educational landscape from preschool through to university and everything in between.  Education is good for this country.

Education of course has to be regulated, we have to ensure that our providers, both public and private are not simply becoming degree and diploma factories, churning out students without regard for quality of learning, or that what they are teaching has any relevance to the industries in which these graduates might hope to gain employment, we have to know that our electrician’s, support workers, nurses don’t just have a piece of paper  which says they are competent, but that they are actually competent and competent in the things that their respective industries need them to be competent in to work.

On top of this someone has to pay, and I have said this on a number of occasions previously, there is always a cost involved in education, which needs to be paid by someone, be that someone, the individual, business’s or industries, the government or someone else.  There is always going to be a cost.  There is a cost if we try to deliver VET sector training only through public educators like TAFE, there is a cost if we utilise private providers to enable the streamlining of the public system, There is always a cost.  As I said earlier I believe in the system we currently have, I think having a mix of private and public providers to meet the needs of participants and industry is important, it provides flexibility, innovation and if properly organised value for money.  I also think that given the public good of an educated populace it is difficult to see that user pays system is one that can be justifiably adopted.  One only has to look at the American experience to see the problems their tertiary system is encountering, rising levels of debt and the inability of a significant number of Americans to be able to afford to access the education they want and need are but two obvious ones.  It is also obvious though that the Government cannot be held responsible for the funding of every possible permutation of educational wants that people have, particularly in the VET sector.

Why do I say particularly in the VET sector, well the answer to that is pretty simple, it is in the title, vocational education is education that prepares people for specific trades, crafts and careers at various levels, this to me means, and always has, that there needs to be a vocational, employment outcome related to the education that is undertaken.  Now this should not be taken to mean that every person who undertakes a VET program should either be working, or be tied to a specific post study role, before they are allowed to undertake training.  It does however mean that we shouldn’t be providing funded places for people to do study, just for the sake of it, in areas where there is little or no likelihood of them gaining employment, the much spoken about situation from a few years back where there many many more people studying to be personal instructors than there were roles or one could suggest even need is one example.  Of course this only applies to funding, if you want to a course in underwater basket weaving you should be allowed to, you should just have to pay for it yourself.  And lets not even start to talk about VET FEE-Help and the outrageous prices being charged by some providers, both public and private for Diploma level courses, however when the dollar amount set by the government for direct funding for a diploma course is a quarter of what some of these institutions are charging there seems to be something wrong with the system.

Now I understand that there are financial viability issues across the board for both public and private providers however here is an idea about costs and pricing that just seems to make sense to me.  Why isn’t there a recommended or even maximum retail price set by the government for various programs, this price could then be used to set the direct funding that the government was willing to provide for that particular program, if any, but it would set the maximum price that institutions could charge for a program.  How would the price be set, well that is probably the tricky part, but it is something at governments currently do, they set the level of direct funding which they are willing to pay for particular courses, so by extension establishing a fair maximum price from there should not be exceedingly difficult.  The relationship between the funded price, where one existed and the maximum price would be representative of industry need, employment opportunities and other such factors.

This would not only stop what seems to be rampant profiteering in some areas but would also provide potential students with another indicator of how useful or not the qualification they were considering might be in getting them a vocational outcome.  for example;

  • If the cost of a Diploma of Counselling was set at $6,000, but the funding level was say $500 this would be an indicator that this was not a high priority course or that there were not strong employment outcomes from undertaking this course, however
  • If the cost of a Diploma of Disability was set at the same level ($6000) but the funding was say $5000 this would indicate that this was a much higher priority course with much stronger employment outcomes.

Now I know there are going to be people out there that say but you can’t do that, that is restricting the market, or that we provide a better service or a laptop or additional resources or whatever, and my answer is a simple one, so what.  A system like this would weed out, in particular, the VET FEE-HELP profiteers, it would allow students and employers to have a real idea about the potential outcomes of programs  and well maximum or even recommended retail prices are set all over the place on things and everybody else seems to survive, what are we as an industry any different.

Let me know what you think

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