Let’s start being positive about VET

As some of you know I have been out of commission for a couple of weeks due to an injury to my hand, and during this little break from writing, I have spent a lot of time reading commentary, writings and discussions about the sector.  Something has struck me from all of this reading and it is something that really concerns me.  It seems that a lot of the commentators, industry leaders, thinkers and just people in the sector generally are spending a lot of time complaining and focusing on the negative issues which seem to be surrounding us.  Why does this concern me? Well mainly because we know that what it is we focus on and think about is what we see and what we get.  So if we continually talk about what is wrong about this sector, what needs to be fixed, and what all of the problems are, that is what we are going to see, that is going to inform our viewpoint of the sector and more importantly it is going to infect the viewpoint of others about our sector. Don’t get me wrong here, I like everyone am guilty of being critical of the sector and sometimes we do need to verbalise criticism, but too often I think this critical view takes over, so I want to try to change that a little today and see if we can’t just be positive about the sector for a while.

First off I am really proud of the sector that I work in.  I feel privileged to work in the VET sector, this is a sector that changes lives.  I was at a conference recently where a lot of people (and a lot a highly placed people) shared stories about how this sector had changed peoples lives.  Like the (youngish) grandfather who had improved his reading so much while undertaking a VET course that he was now able to read stories to his granddaughter and the massive change in the way he felt about himself that this seemingly small thing had created.  The kids from generationally  unemployed families, in deeply impoverished areas, getting apprenticeships and breaking out of the cycles that had been their lives.  People with Mental illness getting qualifications and training to help them to be able to work with others with mental illness to help those people on their own roads to recovery.

What we do in the VET sector is important!

We don’t just issue pieces of paper to people, or fill their heads with knowledge, or teach them how to perform tasks.  All of that stuff is well kind of the boring stuff of the sector, the nuts and bolts that sit underneath what it is that we really do.  We offer people the opportunity to change their lives, to have the opportunity to do things they are passionate about, to look at the world differently and explore the opportunities that are there.

VET changes lives!

I am so grateful that I have been able to work in the learning sector, be it VET or organisational learning, or professional and personal development for so many years, because it fuels that passion and that idea that what we do is important and let’s be clear it is not just important to the people we teach.  The importance of what we do if is wider than that.  We have seen recently several reports about the return on investment created by the sector, the value of international education, and the range of other important things that this sector does for the country as a whole.

So I have a little challenge for you all, Whether you are from the public sector (TAFE), a private provider, a not for profit or and enterprise RTO, let’s even if only for a little while try to focus on the great things this sector does, let’s talk about and share the good stories, the life changing moments, the things that really matter, because if we do that then we will improve the sector and the image of the sector far more than we ever could by focusing on the negatives.


Anyway, that’s just my opinion.


On the Redesigning VET FEE-HELP Discussion Paper

So as most of you are aware the Redesigning VET FEE HELP discussion paper was released on 27 April with submissions closing on 30 June.  So what I thought I might do today is have a look through the paper and discuss some of the propositions and statements in it and then see where we land after that.

As I have said many times previously, I think income contingent loans for a vital part of the educational landscape, they allow people to study things that they want to study, some of which may not have direct correlation to employment outcomes.  They also provide an opportunity for people, who without these processes may have not been able to upskill themselves in relation to job roles then may be interested in now, or in the future.

The first part of the paper goes through the purpose and reasoning behind VFH and how and why the system was extended into the VET sector from the higher education sector.  Also interestingly I think, it points out some of the differences between the two sectors which have, at least in part have been responsible for some of the problems the income contingent loan process has had in the VET sector which didn’t occur in the higher ed sector.  These differences are things like lower barriers to entry, lower graduate pay rates, competency based rather than a graded system, lack of formal semesters, with the preference being for rolling enrollment dates and a not insignificant number of VET enrolments where the student does not intend to finish the course rather their intention is to only complete a small subset of units, which has an effect on overall completion rates.

It also makes the point that the regulatory landscape surrounding VFH is quite limiting in terms of responses.  Non-compliance with ASQA and the regulations do not have a necessary impact on the right of a provider to payment of fees, the department had only limited powers of audit and information gathering and limited capacity to take compliance action for RTOs who had appealed ASQA decisions.  As it sates in the paper ‘until January 1 2016 the only relevant consideration for determining a providers’ payments was whether or not the providers’ student had an entitlement for VFH’.  In addition it looks at the fact that there was massive growth in VFH between 2012 and 2015 with the highest grow areas being those where the students could be considered to be most at risk or vulnerable.  There was a 649% increase in indigenous enrolments, 503% increase in very remote enrolments, 181% increase for people with disabilities and 172% increase for lowest socioeconomic status quintile.  In fact the lowest increase was in the highest socioeconomic quintile.  Now while this itself is not necessarily a problematic thing as it may point to more people, who would not have usually undertaken training, entering the system, it clearly should have been a red flag given the outcomes we know have occurred.  There was also a significant increase in tuition fees from an average of $5917 for a diploma in 2012 to $14018 in 2015 with VFH loan values doubling from 2009 to 2015.  This caused a massive disparity between the cost of diplomas under VFH and price various state governments were willing to pay in terms of funding for the same diploma.  A Diploma of Salon management for example with a smart and skilled pricing of $6,330 had an average VFH price of $32,941. The other issue that sat along side this, was the issue that a great many of the qualifications with the highest levels of enrollment had little or no actual links to employment outcomes.  A prime example of this is the Diploma of Community services where there is little or no job outcome as the vast majority of employers in the sector want people with a certificate III or IV in aged care or disability or similar as these are the qualifications which are required for the vast majority of roles.  The paper then goes on to discuss a range of other issues, including the dominance of the system by a very small number of providers, before moving on to look at the current and future reforms to the system.  It does appear however, that the 2015 reforms are having an effect on VFH providers with all areas of complaints (with the exception of debt dispute, which is a lagging indicator of previous poor performance) have dropped, in most cases significantly.  It is also acknowledged in the paper the capping of enrolments at 2015 levels may have had an effect on some ethical providers, but that it was necessary to reign in the soaring costs associated with the program.

So now let’s move on and have a look at the discussion questions posed.  The first question posed is whether there are additional eligibility requirements which might be necessary for the VFH system, with an additional question around administrative complexity in relation to LLN skills for potential students.  Now I am going to be a little controversial here because I think to a large extent both of these questions can in fact be answer quite easily.  Yes there should be an additional requirement for VFH students (which should if done well solve the LLN issue) and that is at a student not be eligible for VFH unless they have already successfully completed a course of study at Certificate IV or lower.  It is important I think to remember that is would not be a course prerequisite but rather a policy setting around eligibility for the VFH loan scheme.  If you have not completed a lower level qualification then you are not eligible for a VFH loan.

In terms of the lifetime loan limit for students I see no problem with it being part of and the same as the general Higher Ed FEE HELP system, providing of course there are some other refinements to the system put into place, particularly around the rising cost to students of obtaining a Diploma.  I have on a number of occasions suggested that the government rather than limiting the loan amount or price setting (setting a price that all providers need to charge) it rather needs to simply develop and publish, and force (through its VFH contacts) all providers in all of their materials to publish, a ‘recommended’ price.  I do however think that attempting to calculate this price, factoring in mode of delivery over complicates the process without adding significant value.   With this recommended price openly published providers can then still choose to charge whatever they wish.  Those who wish to charge lower than this may justify it by them being a TAFE or a not for profit or any other number of reasons, and equally those who charged a higher fee would then need to justify why their course costs where higher.  The justification process could also be one that was part of the VFH application process as well, where providers were asked to justify why their course costs were at the level they had set them if they were significantly over or below the recommended price.  I also think the concept of linking VFH funding levels to industry need, employment or pathways to further study has value.  A priority system (similar to that used in some of the states) could then be used to determine the level of VFH funding applicable to the course.  A level one priority program would have a VFH loan rate of 100%, Level two 75%, Level three 50% for example.

It is my opinion and one which I have held for some time now, that external, third-party brokers, should simply be banned from the VET sector.  They add zero value to system and only serve to drive prices up.  All marketing should be done by the RTO themselves and directly controlled by them.

Rather than simply a VFH ombudsman a far more elegant solution would be to  appoint a VET sector ombudsman, however it is acknowledged that given the way in which various powers are spread across the states this may be significantly more difficult to achieve therefore it seems that an ombudsman to deal with VFH.  It would be my suggestion that this simply be a short-term appointment to deal with the current issues with its continued necessity being considered after changes to the system had been implemented.

I am also in favor of provider cap of some description.  A provider should on application to utilise VFH estimate the number of VFH students they will have within the next financial year.  This initial estimate should be capped at a level not exceeding 75% of their current student enrolments.  This estimate process could then simply occur each year which any increase on the previous years cap of more than 10% requiring justification as to why the number of enrollment will increase that significantly.

In terms of quality measures the links between results of ASQA audits and non-compliances and continuing VFH approval should be significantly strengthened, with higher quality standards being applied to all VFH providers through the provisions of the contractual arrangements.  This should include student completion and progression rates and additional outcome measures around employment and further study outcomes resulting from the various courses of study.

It should also be the case that with any new standards/contracts that all current providers be required to reapply for VFH status under any new system.  There should be no providers who are simply moved to the new system.  The current system should be finalised at the end of 2016 and all students either given two years from their initial enrollment date to finalise their course of study or moved onto the new system where appropriate.  In addition there should be a legislative time limit placed on all approvals (no more than 3 years) which should also be at the discretion of the minister to alter or removed as deemed  necessary on a provider by provider basis.  All providers approved to deliver under VFH should be, as with most funding contracts with the various state governments, required to report their avetmiss data on a monthly basis.

I think the current tuition assurance system is solid though there needs to be stronger links between the government and the providers of the schemes in order to ensure that students are provided with the range of protections which they require.

It is and continues to be my position that upfront payment of fees is in general a mistake and the system should be moved to a model which is more reflective of completions rather than commencements.  A fuller discussion of this can be found here.

Anyway that’s my opinion.


Quality of assessments in VET Discussion paper – A discussion.

So the Federal government has just released its discussion paper on Quality Assessments in VET.  This is part of some ongoing movements around the Certificate IV in TAE and other matters that has seen the new qualification being held back while the powers that be see what they can do about the perception at least, that there is a significant problem with how assessments are being carried out in the sector.

My initial comments on this are simple.  There is nothing wrong with the Certificate IV in Training and assessment, particularly as an entry-level qualification into the sector.  The problems with assessments in my opinion have very little to do with the Qualification and a whole lot to do with;

  • Inappropriate delivery and assessment of the qualification itself by unscrupulous providers simply out for a quick buck, and
  • pressure being put on trainers and assessors to ensure that people are deemed competent, again by unscrupulous providers out for a quick buck.

The problem here is not the qualification.  The problem lies squarely at the feet of providers themselves.  If the TAE is delivered and assessed properly, and the assessment processes within providers were up to scratch then there would be no issues.  The Department, ASQA and the sector itself needs to man up and end the shonky delivery of this qualification.  We all know whose TAE qualifications aren’t worth the paper they are printed on, but no one seems to want to do anything about it,  and when someone suggests that we do, the old catch cry of not more regulation leaps out of the woodwork.


Now that I have got that out of the way let’s have a look at the questions/proposals in the first half of the discussion paper.

  1. RTO Limitations
    • Is it appropriate for large number of RTOs to deliver the TAE qualification – NO.  The TAE should be a qualification for which obtaining approval to deliver is a rigorous process, including having not just the assessment tools, and staff audited, but also to have the delivery of the program audited.  TAE should be a special scope item outside of other areas as it is the key component within the system.  The number of RTOs delivering the qualification should be reduced by ensuring that there is a heavy and continuing compliance and regulatory burden on any RTO that decides to place a TAE qualification on scope.
    • Should RTOs be restricted from issuing to their own trainers and staff – NO.  If the audit and compliance system is rigorous enough there should be no problems with issuing to internal staff.
    • Should TAE be available through RPL – YES.  There are significant number of people within this sector who are highly skilled and whom undertaking a full assessment process whenever there was a package change would be overly burdensome.  Again if the regulatory controls are right RPL is appropriate.
    • Should TAE only be delivered by practitioners with a specific period of training and assessment within the Sector – YES.  At least 2 years FTE.
    • VET trainers should have higher qualifications – YES.  Anyone training the Certificate IV TAE, should hold that qualification plus and additional higher level qualification relation to VET.
    • Should there be a practical component – YES.  There should be either a work placement (for those not currently employed) or evidence of work (for those currently employed).  It does have to be long 50-80 hours would be more than sufficient.   This would ensure that graduates had actually spent time with real students and undertaken real assessments.
    • Should participants in TAE be employed in the sector prior to entering the course – NO.  This would overly constrict entry into the sector of people who might otherwise be able to undertake a TAE course and become quality additions to the sector.
  2.  Skills and Qualifications of Trainers
    • Should a design and development unit be made a core part of the Certificate IV and would this improve outcomes – NO and NO.  Including a unit on design and development would do very little to improve student outcomes at a certificate IV level.  Design and development of assessment tools is skill which is above the AQF level of a certificate IV.  Assessment tools should not be being designed by someone who only holds the entry-level qualification unless that person has substantial experience within the sector and in relation to design and development
    • While there should be some weight given to majority considerations, these majority considerations should be tempered strongly with the views of key stakeholders (as long as those key stakeholders are chosen wisely) and the strength of the arguments made.  The idea of who are the key stakeholders for the TAE is an interesting one to ponder.  I believe there needs to some representation from the sector itself, but which must include representation from both the coal face of delivery through to RTO/provider management.  There must also be strong representation from government (The department of education) as they are the major stakeholder in this (you can disagree with me if you like).  In the long run it is the government who is the ultimate customer for the vast majority of VET work that occurs, be that through funding or loans, or special purpose project or what ever.  The system belongs to the government so it is the major stakeholder.    Now I know that there are going to be calls here for the unions (AEU etc) to be involved and the academic VET research set, but in the long run the decisions about the TAE have to be made by the sector itself and the government, others can have input and ideas and the decision should and must sit with these two groups.
  3. VET Professional association
    • Is there a need to have a national VET professional association – YES.  This to me is a no brainer, of course there should be.  Should membership be mandatory in order to work in the sector, yes, but there needs to be levels.  So the first would be an associate member shall we say which would be open to anyone who had a TAE with very little additional in the way of requirements.  From there, various level could exist depending on the experience of the person, continuing professional development, independent evaluation of their work and skills etc.  This would make it easy to delineate between those at the top of the profession and those just beginning and would also encourage the continuing improvement of skills.  There should also be categories for  Trainers/Assessors, Management, compliance etc and a person should be able to be in multiple categories.
    • The big barrier to this is of course money.  It would either need to be funded by the government or it would need to be a membership fees based process.  The problem with being funded is obvious, in that money would be need to be found somewhere.  With membership fees two things would need to happen, one, it would need to be ensured that membership was not just a you pay your money you get your piece of paper deal or there would be no point.  On the other hand the process would need to not  be overly convoluted or expensive as this may be a disincentive to gaining higher levels of membership.
  4. Activities of a VET Association
    • It needs to be a register of VET practitioners
    • Develop and implement a CPD system for the sector
    • Approve professional development activities for CPD points
    • Promote VET sector work as an attractive career path.
    • While these activities need to be coordinated at a National level, but in particular the CPD program could be achieved through existing groups and or other external structures which were approved as CPD
    • There are a number of bodies with significant sectoral membership which could be utilised.  One example would be ACPET, although this might be met with resistance from the public sector, another might be something along the lines of AITD, which is already a membership organisation for the learning and development sector and which has a significant number of VET sector members.  In addition a private sector organisation like VELG which already has a solid VET membership base may also be an option in this area.
  5. Models for a VET association
    •  I have a preference for the type B model, it is the simplest, funding can be easily accounted for, and maintenance and management of registration and CPD needs to be held centrally anyway in my opinion.
    • While model A has advantages in that it takes into account things which already exist, I think it would be too hard to manage overall and membership would not be centralised.
    • Model C is simply a registration model as far as i am concerned and would add nothing to the sector.

Well so there you have it, my thoughts on at least the first half of the paper.  I will make some comments on chapter two of the paper later in the week.

How did you get here? How did you become a trainer?

So while reading through some LinkedIn posts this morning I came across a post on how trainers are recruited, what people looked for and the like.  There was also a number of people who commented that they were having difficulty finding work in the Learning Sector, because they didn’t have enough experience, but they couldn’t find anywhere to get experience.  One of the people who posted asked how people started their career in training or learning or whatever you want to call this space in which we work which prompted me to think about a couple of things.  Firstly how I got started in this industry and secondly the differences for people trying to get into this industry today.  So first off I thought I would share my story about how I got here and then look at how things are different today.

I started in the sales and motivational training arena many, many years ago with a large financial services and insurance brokerage and then moved through a range of HR/L&D roles all with differing levels of actual training delivery, across a range of employers and industries.  A lot of it was contract work or startup work (before startups were all tech and cool).  I work in cleaning, manufacturing and distribution, project management and IT.   I had a couple of short stints with TAFE in the late 90’s and early 2000’s, while I was finishing up some university study and after having a break from working on a range of large projects including the Sydney Olympics.  Once university was wrapped up and my head had got over the horror of the Olympics, I went on higher level degree work and teaching at university. After that I went back to training, mostly non-accredited, where I was training between 1500 and 3000 people a year and managing a team of trainers, and at the same time did an RTO initial registration and start-up with the organisation I was working with.  I then moved into enterprise level L&D in government, managing accredited and non-accredited training across a range of teams.  From there I moved to the same kind of roles in the not for profit and community services sector, though the connection with VET was much more pronounced.  All throughout this though and even now I still train, in some roles there was a lot, in others not much, and now as with the last couple of jobs, I have the luxury of training pretty much only when I want to actually train.

I had no qualifications when I started, but to be completely fair and honest, pretty much no one did (I fear I am giving away my age here a bit as well) as the BSZ only came into being towards the end of the 90’s and I only got that after a long argument about how stupid it was that I could teach at Uni but not a TAFE (Yes, yes I know there is a difference).  There was also way back then, less separation between L&D and HR, a lot more cross over of skills and way less specialisation, so it was much easier to move organisations or change roles.  There was also less unemployment it seemed, but you know rose-colored glasses and all of that.  So this all got me thinking about people trying to get into the adult post-secondary training/learning industry today and whether if I was starting out today a journey like mine would be possible or if the whole thing was far more complicated now.  The other thing I got to thinking about is how I hire people today to be trainers or L&D people and what my hiring practices meant to people who were trying to get a start.

A number of people have commented that they have found it difficult to get work in the industry, because while they have relevant qualification they don’t have experience, primarily experience in training and assessment and these people have legitimately asked well how do I get experience if no one will hire me.  This is I think particularly telling on the assessment side of the picture.  The only place were VET assessments are done, are in the VET sector, so where else are you going to get experience except in the sector you are trying to break into.  It is relatively easy to get experience in delivery of training or presentation skills, but experience in assessments is far more difficult to come by.  I have occasionally done deals with people, mostly ex students or people otherwise connected with the organisation around giving them experience in assessment work and training delivery, but only in cases where the skill set they had, was one that was useful or where we needed someone to meet a particular niche need.

I don’t necessarily pay a lot of attention to qualifications though when I am looking to hire a new trainer.  I have found over the years that unfortunately too often people who look good on paper unfortunately don’t stack up that well in the interview stage.  As part of the interview process I always insist that someone who is going to be in a training role, even if it is only a small part of the role, delivers a 15 minute presentation on a topic of their own choosing, first up, before the formal interview process begins and I am always stunned by how many people who look good on paper fail at this step.  Skills and attitude are way more important to me than qualifications, particularly TAE qualifications.  I can get you up to speed and am more than happy to invest the time to get you through you TAE properly if you are good at delivery and have the right set of other skills and the right attitude.  So what do I look for;

  1. Relevant, recent industry experience (if you have been a trainer for 10 years and haven’t had any real industry hands on experience in that time I am probably not going to hire you)
  2. Good front of room skills (you had better engage me in first 5 minutes of your presentation time)
  3. Great Communication skills
  4. A real willingness to work (don’t start asking me about how much time you spend in class vs how much assessment or things like that, because you will do the work that needs to be done, and if that means you spend a week or two doing nothing but delivering training that is how it will be)
  5. Some actual knowledge of the VET sector (if you don’t know the basics of how it works why are you even here)
  6. Qualifications (industry first and then Training)

And finally it will help if you know someone who I know or am aware of, because I am going to look at your LinkedIn profile (you had better have one) and if there is someone linking us in some way who I can ring and have a chat to about your skills then that will help a lot.  I don’t really trust references that much unless I know them.

Now I can see the people who were talking about not having experience thinking well I am never going to get a job, but think about what I am interested in.  I want you to have skills in the industry that you want to train in, good communication skills and a willingness to work and what sells me in the long run is your 15 minute presentation and whether you really are willing to work and trust me if you aren’t willing to work you won’t make you first 3 months.

Two things I say to people who want to be trainers or work in learning roles

  1. Figure out why you want to do this, what is it that drives you to be part of this profession
  2. Figure out what you are good at and just how good you are at it.

Why, because this profession isn’t for everyone, I have seen so many people over the years, come and go, struggle to find work, or be unhappy with their roles simply because they never figured these two things out.


Anyway that’s just my opinion.


So why is TAFE so stressful for trainers?

So I have read a couple of articles recently about how being a teacher at TAFE is so stressful, particularly at the moment and over the weekend I was having a discussion with a friend of mine (who doesn’t work in the sector) who only half-joking suggested that VET people had the life because they got all this extra time off that people in other job didn’t on top of their actual working hours being really flexible and things like that.  I corrected him and said that conditions like that really only existed in the public system and that most people working in VET in the non-public arena didn’t have those kinds of arrangements and really just worked the same kind of hours and had the same conditions as pretty much everyone else.  I found his response to this quite interesting he said,

Why? It’s no wonder that TAFE is stuffed then.

It actually got me thinking a little bit about this whole situation and in particular the rhetoric from the education unions about how working conditions for TAFE people have been so badly eroded, are under attack and how TAFE teachers are so stressed because of it.  Now this is not a swipe at TAFE teachers in general as I know that the vast majority of people who work in the TAFE system, like those in the non-public system are hard-working, committed people, who just want to achieve the best outcomes they can for their students.  However I am legitimately wondering what is so stressful;

  • Being asked to be at work every day of the working week?
  • Not getting 10 weeks leave a year?
  • The possibility that you might be made redundant?
  • Having to teach more than 3 days a week?
  • Being asked to do some more work?

Outside of the TAFE system this is simply called having a job.  Now I know that I am being a little naughty here and little tongue in cheek, but I really do want to know what is so stressful.

One of the other stressors that has been raised is the concept of increased casualisation of the TAFE workforce.  Sensible business practice suggests that you only employ enough staff permanent staff to cover the standard ongoing workloads, if there is more work, or specific skills or knowledge that is required that is not currently in the organisations, you hire it in, usually on casual, or contract basis, this is what happens everywhere.  It is a waste of organisational resources to have people sitting around with nothing to do, while you are still paying them, just on the off-chance that you might need them 3 months down the track.  As a lot of you know I ave been around the L&D, VET and organisation learning scene for quite a while now in a variety of roles and often these roles were contract roles (3-24 months) to do specific jobs, using my specific skill set.  This is also the case for a substantial amount of the people I know who work in the sector, with the exception of a few who have had long-term enterprise level positions, I think for most of us our careers have been a mix of permanent, part-time, casual and contract work, it is the way the industry works except it seems in the TAFE sector.   It seems to me that the only part of the VET sector where there appears to be this concept that a role would be a job for life, is the TAFE sector.

So here is my question;

Why are TAFE teachers so stressed?

Is it just that they are used to a certain level of conditions and expectations, or is it that really they aren’t and it is just a beat up by the unions or are there some actual stressors outside what would be expected if you worked outside the TAFE system?  I don’t know, but I would love to know what everyone else thinks.


Anyway that’s just my opinion

Managing your RTO like a business

While I have spoken about this a little bit before and also about career progression in VET the really positive reactions to yesterdays post on financial viability for RTOs and a couple of discussions that have arisen out of that have prompted me to revisit this idea managing learning and RTOs like a business.

We are often quite critical of some (particularly the bigger) providers in the sector on the grounds of their organisations being run like businesses and while there may in some cases be other good reasons for criticizing some of these providers, I actually don’t think that being critical of them for running the delivery of learning like a business is one of them.  One of the issues I see in the sector, and one that has been there for quite a long time is that we have fantastically skilled trainers and educators and compliance and admin people, but it seems that we have very few truly great educational business people.  People who understand both what quality education looks like and what quality business looks like and can bring them together into a cohesive whole.  Yes we are seeing more people and organisations with high levels of business experience moving into the sector, but often what is lacking there is that understanding of the quality education piece, which brings about a disconnect between the delivery of learning and the delivery of business imperatives.

Before I go any further thought let me just cover off on one thing.  I know that at least some people will shout, learning is not a business.  Well the act of learning may not be,  but the delivery of learning is and in my opinion has to b.  Whether it is delivered by a public or non-public provider there are critical business skills and concepts that need to be part of the arsenal of any learning provider, otherwise, quite simply they will not survive or the return on investment (be that social, financial or whatever) for governments, industry, individuals and nation in general will not be what it should be.

We have seen the problems that not thinking about the delivery of learning as a business has had across the sector for some time now, both in the public and non-public space.  We have seen TAFEs struggling to survive when their seemingly constant stream of government funding has been cut or curtailed.  We have seen non-public providers in the same situation when governments make changes to funding models or when there is a drop in enrolments from a particular source (such as international students).  Why, well one of the reasons is that they have failed to pay enough attention to the business side of the equation and fallen into the trap of thinking that things were always going to remain the same as they were last year.

The biggest issue I see with people from outside the sector moving into management style roles in the sector is that they tend to fail to understand that the delivery of educational services is costly, both in financial and in terms of time and resources and the cash flows, particularly from funded training may vary wildly from month to month.

The biggest issue I see with the trainer and educator side of the picture is that they tend to fail to understand that at some point the money runs out.  There is only so much time you can spend with a class or individuals, or so much new technology you can have, or support that can be given before the value of the each dollar you are spending starts to become radically diminished or there is simply no more money in the coffers.

Unfortunately simply focusing  on the bottom line and financial viability will not produce great learning outcomes, but also focusing just on student outcomes and forgetting about the money will create massive problems for both public and non-public providers.

All providers need a mix of both sets of skills, not just in their teams, but also in the people charting the course of the ship.  There needs to be within every provider, whether big or small, public or non-public at least one person in a significant position, with sufficient significant decision-making power who understands deeply both sides of the picture and how to get the best out of each side in order to benefit the other.

Every provider should know some very simple things about their business such as:

  • Projected cash flow  every single month for at least a year in advance
  • Projected student commencement numbers and completion numbers the same as for above
  • Which are the busy months and which are the slow months (does anyone in training actually do any business over Christmas)
  • How much of their income comes from what streams and what are the risk factors around each of those streams
  • Exactly how much it costs to deliver a day, or a unit of training to one person and how that changes with changes in scale
  • Exactly what it is that the amount someone pays for training actually pays for  (resubmits, individual support hours, %of admin and management costs)
  • What are your direct costs and indirect costs
  • How much time do staff spend doing income generating work (like training and assessment) and how much is spent doing non-income generating work

The problem is that even some very good providers of high quality educational outcomes both public and non-public, struggle with what would be considered some very basic metrics in terms of business viability.

People talk a lot about the need to have high quality trainers and assessors and high quality compliance people, but often there is not enough talk about the value that a high quality education management person, with a good understanding of the actual business of learning can bring to an organisation particularly in terms of its continued viability.  Over the years I have seen too many high quality providers go to the wall not because they weren’t delivering fantastic student outcomes, but because they weren’t watching the financial football closely enough.

Remember the industry is changing and only those providers both public and private who understand that the delivery of learning is a business and what is needed to successfully deliver that business will survive.


Anyway thats just my opinion

Staying afloat in the volatile world of VET

RTOs, Funding and Financial Viability

We have seen a whole lot of changes in the VET sector recently, particularly around government funding and who is being expected to be paying for VET in Australia.  A couple of weeks ago I looked at the major ways in which VET in this country is paid for, that is income contingent loans, entitlement style funding, trainee and apprenticeships and special purpose funding programs.  In that piece I left out (on purpose) the concept of Fee for Service training, where a person or an organisation simply pays a provider to deliver a qualification, but in the context of what I am talking about today, fee for service training is an important element in how VET is paid for.  So given all of the changes that have happened to funding in the sector recently, what does an RTO need to do in order to ensure that they are financially viable both now and into the future.

The first two things are obvious (well at least I think they are), but sometimes as we have seen spectacularly in some cases they are often overlooked or their important placed second to maintaining a constant flow of new students  and financial considerations.

  • Provide High Quality training, and
  • Be compliant – Not just on paper, but be really compliant.

Anyone who doubts the importance of these two things in terms of continued financial viability, should perhaps think seriously about whether or not they have a place in this industry.  It doesn’t matter whether you are a very large provider or a very small one, if you are not providing high quality training and maintaining your compliance you will pay for it in the long run.  Take for example a large provider who is heavily reliant on VET FEE-HELP whose quality of training is called into question, or their compliance is off.  Their risk rating for their Tuition assurance scheme might risk substantially or worse still it could be revoked, leaving them without the ability to utilse the funding source that drives their business.  What about a small provider who is heavily reliant on government entitlement funding like Queensland’s Certificate III guarantee program, who is delivering courses that don’t meet time requirements (Volume of learning and nominal hours for example), who find as a result of this that the government decides to radically reduce the level of funding for the course, to match the amount of time it is being delivered in.  Both of these circumstances would be extremely detrimental to the financial viability of an organisation, but also point to the next thing the providers really need to think about when they are thinking about their business.

  • Don’t rely on just one source of income!

Unfortunately a lot of providers, both big and small and even both public and private rely far too much on single sources of funding or types of funding and fail to spread their exposure to variations in the market place.  Contestable funding made things more difficult for the public providers because most of their delivery and services were based on a model where government funding remained constant.  The proposed changes to the funding of training in South Australia, could have huge effects on those non-public providers that have relied on it for years.  A change to how VET FEE-Help is paid (for example if it moved to a completion model rather than a census date model) would have an enormous effect on the cash flow for those providers for whom it is a substantial proportion of their income stream.

So what can providers do to ensure that they can be financially viable over time.

  • Spread your funding risk
  • Build income streams not related to funding sources.

If providers are going to rely heavily on funding, be it income contingent loans or other sources of funding, then they need to make sure that their risk is spread as much as possible, add special programs to your entitlement funding programs, become an apprenticeship and traineeship provider as well as a VET FEE-Help provider, make sure that if funding changes in one area that your business can absorb those changes through the income from the other funding streams.  The most important thing you can do however, is to try to build income streams that don’t rely on government monies.  All providers who want to continue to be viable should be ensuring that they look at things like

  • Fee for service for individuals and organisations
  • skill sets as opposed to full qualifications
  • non-accredited training and
  • partnerships with organisations and other providers.

Building your fee for service base is one of the best ways that providers can continue to remain financially viable as it untethers them from the vagaries of government policy and funding decisions. The problem is that most providers don’t do this very well at all.  The biggest problem for most RTOs is that, that is all they see themselves as, providers of VET qualifications and in some cases skill sets.  The best way for providers to build their fee for service business is to start to look at themselves as training organisations rather than just RTOs and look at developing their skills and programs in the non-accredited space.  Look at what you are good at and capitalise on that.

Anyway that’s what I think.


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