NDIS, workforce planning and VET

I have been thinking a lot recently about the roll out of the NDIS across Queensland and the rest of the country and I have been to a lot of forums and discussions about how the community sector is going to find, and more importantly train, the 19,000+ workers in Queensland alone which estimates are suggesting will be needed over the next 5 years to accommodate the new system.  Apart from the sheer numbers of people that will need to be found and trained to be able to work in the sector, there are what appears to be a range of other issues floating around in relation to this workforce.

One of the problems for the community services sector has been that progression and advancement in terms of job roles, is virtually non-existent.  We talk a lot about upskilling staff and giving the skills to move into management and supervisory positions but the real truth is that with the vast majority of roles being at that coal face, support work level the chances of advancement are for most people is quite small regardless of the levels of qualifications which are held by the person and I only see this as getting worse not better.  There has also been a lot of talk and discussion around the need to professionalise the sector and make sure that the training outcomes for participants at any level are of high quality so that there are skilled staff available to meet the increasing need for staff.  It is my opinion, which I have to say is contrary to the views which are being widely spoken about, that rather than seeing more professionalism and more opportunity for staff to change roles and advance we will actually less.  The main single reason for this is the way in which the NDIS system itself is structured.  We will in my opinion see more and more staff employed for single functions rather than as general support workers in a lot of cases.  We will see staff employed as cleaners for example, whose sole role will be to assist clients with their general domestic duties around the house.  We will see staff employed solely as drivers, personal care assistants, community access workers, and the like.  Whereas at least some if not all of these roles could have been undertaken by a single support worker in a lot of instances we will see these roles split out and made roles themselves.  We will see this because it makes economic and business sense, it will be easier, and more effective in terms of both man power and costs for both niche and large multi channel providers to have specialists in various areas rather than simply generalist support workers.  The problem with this of course is that it will further restrict movement of staff across job roles.

The next question which raises it head here then is what role VET should play in this, what qualifications should we be considering and how can we ensure quality of the provision of these services. As I have often said, I saw the massive proliferation of Diploma of Community services and Diploma of counselling courses delivered under the VET FEE Help system as for the most part significantly damaging to the sector.  It was damaging in a two main ways firstly a lot of the students who were undertaking these courses were obtaining, at least in my opinion quite low quality training which really did not prepare them for the realities of the sector.  Secondly, it was in my opinion the wrong qualification for most people who undertook it.  It was undertaken by a significant number of people who were sold on the idea that it would be a pathway into roles within the community sector and that is, in short, a lie.  Obtaining a role as a counselor with nothing more than a Diploma and very little actual experience is virtually impossible, as is obtaining a role as anything other than a support worker with a diploma of community services.  Getting a role as a support worker is probably actually easier with a certificate III or IV, because the units and the skills and knowledge taught are designed for that style of role, whereas those in the Diploma are generally not.  There is also the additional issue that in a significant number of cases employers pay higher rates of pay to people with a diploma rather than a certificate III which make people with diplomas even less attractive in the market place.  When we add to this the issue of funding, where the vast majority of entitlement style funding is aimed at the certificate III level as well, I think we will see significant issues in relation to how employers, providers and the governments will need to deal with the NDIS workforce.

What does this mean for VET providers.  One of the significant shifts I think, will again be the rise of skill sets around certain job roles within the sector.  If you require staff to undertake cleaning or driving roles, an employer will be better served by employing people with appropriate skills and qualifications in that particular area and then providing them with skill sets to meet sector needs.  There will I think also be a market for somewhat niche certificate III qualifications where electives and imported units are utilised to formulate qualifications for very specific job roles. Someone whose primary role was going to be transportation could have a fairly standard certificate III in individual support but the inclusion of something like TLIC3011 – Transport passengers with disabilities (a standard elective) transforms it into a quite specialised qualification.  This is not only of use to employers seeking to train new staff for specific job roles, but may also make a graduate of a certificate III program more employable as they have a specific skill which may be in demand.

One thing I know for certain, the workforce requirements of the NDIS, and the reaction of various governments to this requirement is going to have a massive effect on the way in which community sector qualifications are delivered, funded and utilised.

Anyway that’s just my opinioni.


The business of vocational education – revenue streams and models

So today I really wanted to talk about some more specific items rather than theoretical positions.  What is often called where the rubber hits the road, and the obvious place to start is around the idea of revenue streams and business models.

Before I go any further I want to reiterate something I have said many times before.  There is always a lot of discussion around the topic of the cost of education, which is often framed by the statement ‘ education should be free.’  Now while I would hold it as a fairly self evident truth that education is a social good and that the ability of people to access quality educational outcomes should not by necessity be contingent on their own personal ability to pay for those outcomes, what is sometimes lost or can perhaps mislead people when this statement is used is the undeniable fact that there is always a cost associated with the delivery of these outcomes.  Someone, either the government, an organisation, an employer or an individual has to pay for the costs associated with the delivery of educational outcomes.  So with that said let’s move on.

Revenue streams

Realistically when we look at revenue streams within the delivery of vocational education (and I would argue education in general) there are only two types.  I will look at both of these types and the issues and advantages they have and then move onto the kinds of models which we have seen grow from these streams.

Government supported.

Those with a keen eye will notice I have used the term government supported rather than government funded in the title of this section.  The reason for this is simple.  In terms of what I am talking about here I want to include not just direct funding, say through entitlement programs or apprenticeships, but also also things like VET FEE Help, which is often considered fee for service, and targeted or one off government funded programs which have training as a component.  The reason for this is simple there is a common denominator across all government supported training, this denominator is the simple fact that how this funding is allocated, its level and even it very existence is utterly at the whim of government.   We need look no further than this year to see the issues which reliance on government supported revenue streams can have.  Changes to models in most of the states have irrevocably altered the landscape, with particularly in Victoria a significant number of providers either struggling or leaving the market because their funding contracts were not renewed.  We are in fact seeing the ramifications of removal of funding (albeit for different reasons) from a provider currently playing out with Dawkins/Vocation debacle.  The freezing of VFH payments at 2015 levels also had a similar effect where even quality providers have struggled to maintain their businesses as a result of the changes.  So given these issues what are the advantages to delivering government support training?  Often the big sell shall we say, is enrollments. people, and by people I mean potential students seem more likely or willing to enroll in these sorts of programs.  There is a consumer attraction operating for providers who are able to offer government subsidised positions in training courses.

Fee for service.

For the sake of this discussion I am going to take fee for service training to be any training for which there is not some component of government support.  This would therefore be where an individual, organisation or employer directly contracts or pays a provider for the delivery of an educational outcome.  It is an interesting side note I think that in the world of organisational learning and development fee for service training is the norm rather than government supported training.  There is a view, quite strongly held by some that fee for service training is the more secure and safe basis on which to build a training business. Now while I do not by necessity disagree with this as it is clear that there are definite advantages to fee for service training there are also still significant risks.  While the advantages are things such as generally higher levels of revenue, less time spent on reporting and other administrative activities and in general more flexibility in terms of the range of qualifications which can be delivered, it needs to be remembered that as with supported training, while it is less susceptible to the vagaries of government it is susceptible to the vagaries of business, particularly where providers deal with only thin segments of the market or where the market is highly competitive.  I know of a number of companies who were exposed heavily to particular market segments, one to the mining sector and one to government who had 60-90% of their business disappear overnight as a result of the GFC.  In one case the business has survived but is now a much smaller entity than it once was and in the other they have folded altogether.

Business Models

So with these revenue streams in mind we can then look at the various business models that have arisen as a result of them which will then eventually allow us to consider which of these models or others might be the most ethical and sustainable.

Rapid growth model (The VET FEE Help Model)

This type of business model exploded over the last few years since the introduction of VET FEE Help driven by government support, the ability to charge significantly higher prices due to that support, commencement payments and significant enrollment numbers driven by brokerage.  This perfect storm created an environment where an expansionist business model could thrive in a way that it had not been previously able to.  Organisations enrolled large numbers of students, which generated significant commencement payments from the government supported program (VFH) took that money, a significant portion of which technically should have been used to support the students learning experience and ensure that educational outcomes were met, and ploughed it into the expansion of the business, primarily in order to increase the size of the business to be able to then enroll more students, to access more payments and further expand.

Now while there is nothing intrinsically wrong with this model or approach, it is contingent on the actual delivery of the education outcomes which are part and parcel of the government support. I think most people still feel the anger and the ramifications which followed on from when it was discovered that in some cases these rapid growth model businesses were producing completions rates in the low single digits

Funded delivery model

This is a model which has been adopted in a number of areas, one area where it has and is used a lot is in the community services sector and in particular by not for profit organisations.  This is a model which seeks to develop a scope of delivery which maximises the access the provider has to programs which attract direct government funding. (rather than support) The costs associated with a student entering the course are kept as low as possible, which then allows, hopefully, volume of enrollments across the range of courses to offset the costs associated with delivery.  Given that this model is popular within the NFP sector the drive for profitability is generally less and there is also usually lower overheads produced by thinner staffing models and often training being part of a larger business.  Under for profit models however, as with the Rapid growth model, there is a need to continue to generate enrollments across the suite of programs offered in order to maintain both sustainability and profitability.  It is in general difficult for providers delivering under these models to expand without external or organisation investment, or through debt raising.

Fee for service niche model

A significant number of providers in the fee for service market apply a niche market model to their delivery in order to limit costs and to enable a targeted spend in terms of marketing and positioning.  This model often sits at both the top and bottom end of the market in terms of qualification level with providers tending to either deliver high level qualifications or their own accredited courses where while numbers are small, associated fees can be quite large due to low competition.  Or at the other end they tend to deliver low level (often short course programs like white card, RSA or First Aid) where while competition may be significant, volume is very large and recurring, so that even a small margin on low cost programs multiplies out to significant revenue.

Everything to everyone model (The public provision model)

This is a model where the provider has a massively large scope, spanning foundational and certificate I programs through to very high level programs, across multiple training packages, with the vision shall we say of being able to cater for the needs of any student regardless of their choices in terms of study.  While the other models I have spoken about above generally apply to the non-public side of the education market this model is or has been the model in which the public provider has operated also since the beginning.  It is important however, as I said early on in these pieces that regardless of models we should expect our public providers to operate as businesses, at least with regards to providing the best possible ROI on investment and value for money in terms of costs of delivery, given that by in large most public providers would cease to be able to operate without the support they receive from their respect government owners.  Problematically given that they are owned by various governments essentially they are seen as having to provide services across markets and areas where there is little or no chance of breaking even let alone creating even a small profit margin.  There is significant tension between the ability of these providers to naintain cost effective delivery and ROI and the demands placed upon them by their governments.  Of course the argument is that the purpose of a public provider is to ensure that services are available in markets where without significant government support such provision of services could not occur.  Additionally it is also argued that often there are other social assistance requirements which public providers have, which increase the tension between their delivery of programs and the costs associated with the delivery of those programs, particularly, though not limited to administration costs, which if we look at various reports and budget submissions may be as high as 60 cents in every dollar of funding in some cases.

It is important to note that I have here only covered, in broad strokes some of the models which exist in the sector, primarily to see how streams of revenue impact upon the kinds of models of delivery which exist and how those models in turn utilise the revenue streams on which they are most focused.


How to choose a good RTO/Training provider

I wrote a piece about this subject a long while ago and the problems associated with people who don’t know a lot about the learning industry trying to find a provider that is going to give them the outcomes they want.  Recently the QLD Minister for Skills and training, talked about people needing to scrutinize providers before they started training, particularly VET-FEE help funded training.  She mentioned things like making sure they were registered, making sure you knew who, that is which company, was actually doing the training, was it RTO or someone else, shopping around to look for value for money and other things like that.  This all got me thinking again about how people can choose a good, high quality provider who is going to be able to meet their needs.  Now some might be quick to suggest that if you want quality you should just go to TAFE, but as we all know the TAFE system is not the answer for everyone and not there are plenty of non-public providers that will give a student, the same if not better outcomes than they would get from a public provider.

So then how do you choose?  As we know you can’t just trust the fact that a provider is approved by a regulator, it seems obvious that this is a necessary but not sufficient condition to ensure that a provider is going to be a quality one.  Price is not an indicator of quality either, there are providers at both ends of the price spectrum who produce quality outcomes for students.  Simply because you are paying more does not mean you are getting better quality, particularly when a significant number of providers are actually using the same or very similar resources for their training and assessment.  What about things like testimonials?  I have always been very wary of these unless I am actually able to talk to the person who has given the testimonial myself and even then they are a bit like references, you are never going to use someone who is going to give you a bad wrap anyway, so you are not actually getting a balanced view.

As a lot of you know I have a background in enterprise level L&D, and I also have a number of community services providers who often ask me to help out with choosing a provider for one of their clients, where the client wants to do something we don’t offer, or the we are not going to be able to meet the clients needs even if we do offer it.  So how do I choose providers from the ocean of choices out there and the numerous phone calls and emails I get each week.  The first thing is that in all honesty I don’t, because if I don’t know you for a start I am just probably not going to use you.  I as I have said before have a list, it’s not written down, its in my head and when someone asks me who I would recommend, I simply pull the name from the list that I think best suits their need.  Now to be fair, that is not going to work for the vast majority of people, I have been in this game for a while now and I know that good from the bad and who is good with certain client groups and in certain market segments and who isn’t, but most people don’t have the time or the need to develop this knowledge.  So what about an education broker, they would be able to help wouldn’t they, they would know the good from the bad.  (Ok that was tongue in cheek and you can keep reading after you have stopped laughing)

But here is a real question, is it really that hard to figure out who the good providers are and what are the key things people should be looking for.  I think the first thing is something that is not even related to the quality of the provider, it is related to why the person wants to study in the first place.  Here is the thing, if you signed up for a course just because you got a phone call or talked to someone in a shopping center and because you really didn’t have anything better to do, then may I suggest you actually spend a little bit more time thinking about what it is you actually want particularly in terms of outcomes.

Speaking of outcomes, that is the first thing I would want to know.  Not this how many people have competed outcome, which is useful in certain circumstances and may tell us something, but for me what is more important, particularly if you are someone looking for employment is just that how many people go on to get jobs as a result of the course and what sort of employment is out there for people with the qualification you are thinking of doing.  What is the point if doing a Diploma of counselling for example, if there is no job outcome at the end, or as I have argued before, if you would have been better doing a Cert III or IV and being funded to complete it.  A good provider will work with you to help you get the qualification you want not just sell you what they have on their scope.

It does also pay to look at the over all completion rates, although as those of us in the industry understand there can, given the length to complete a qualification and other time frames related to  some courses and the kind of business a provider is involved in can have an effect on the level of completions in any given year, so ask something like, what is your average completion rate over the last 5 years.  This will give you a much better picture of how many students actually finish their course than just a yearly snapshot.  But what if they haven’t been around for 5 years you might ask, well then I would want to know why they became an RTO, what bought them to the industry.  I have been amazed over the years the number of times I have asked representatives of providers, senior staff and even CEO’s that question and really not received an answer that filled my with confidence.  You are also not going to fill me with confidence if I look at your website and I see that all you are offering are VET FEE-help courses and nothing else, no certificate III, IV or lower programs, just VET-FEE Help diploma’s and above.

Ask to talk to the person who will be delivering the training if you can, or a previous student, or someone they have worked with so you can have a conversation with them about what the provider is like, and they should be willing to let you do this before you enroll in anything.  And that right there is a big one, if whoever is signing you up is not willing to let you ask questions or provide answers or if they are a broker, are not willing to tell you who the provider is and let you talk to them, until you have signed on the dotted line so to speak, run, and run away fast.

The other thing for me has always been are they trying to sell me what they have to offer or are they actually listening to what I want and trying to solve that for me.  (Quick note here as I said above, if you don’t know what you want and you are signing up because someone approached you about it and offer you an ipad, don’t sign up, go a have a little think about what you actually want first).  So many providers (both public and non-public) just try to sell you what they have and don’t ask what it is you want to do and offer you solutions built around that.

How is the training going to be delivered is also a crucial concern and what kind of support is going to be given.  Now I am a fan of online learning, but here is the thing, we are seeing across the board woeful completion rates for completely online delivered training in some cases in the single digits.  One of the reasons for this is simple, sitting alone at home, trying to do hour after hour of online training, is well boring, difficult and hard to maintain motivation for, even with all of the webinars, phone calls, emails and other kinds of supports, particularly if you know it is going to go on for the next 18 months.  Also given that there are heaps of quality providers out there who offer face to face and blended options, why unless there is a significant impediment to sometimes attending class, choose to go with a completely online solution.  This also brings me to the other thing, I want to be able to go to your office and have a chat with you, I want connection and engagement, I don’t want to be just another phone call to a call center, where they look up a file.  I want to know that the person I am talking to  knows who I am and you should too.  Why choose a provider that is based in Brisbane or Sydney or Melbourne or where ever, when there is probably one almost just around the corner, where you will get the same training and not just be another number.  This of course doesn’t apply if what you want to study is a specialist qualification, but hell if you are looking to do a business qualification there is certainly a provider pretty close to you in most cases.

So how do you choose a good training provider, use common sense, search them out in the media, see if you can talk to a previous student or the trainer.  If it is a broker and not a provider you are talking to then find out who the provider is, say thanks and go away and research both them and the broker and don’t sign up in a shopping center or over the phone, no matter how many ipads you are offered.


Anyway that’s 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.


Is a $15,000 Diploma better than a $5,000 one?


Whether a Diploma of Counselling for example costs you $5,000 (and sometimes even less) or $15,000 the qualification you get at the end is the same.  They are both assessed against the same criteria with the same evidence requirements and delivered by a providers that all operate under the same standards and the same legislation.  They are identical.

Let me tell you a little story, in 2012, when I was the Chief Learning Officer at a very large NFP which was also a RTO, who not only did internal training, but also a fairly high volume of training for external clients as well, we increased our scope to include some new Diploma and Advanced Diploma level courses at the same time as applying for funding under the then National Workforce Development fund.  There was a huge amount of discussion at the time about pricing, what was fair and reasonable, where the market was, what level of funding the government would accept and a range of other issues.  So in the long run we settled on $5,000 for our Diploma level Qualifications and between $8-10,000 for our advanced diplomas, which was pretty much the standard in the sector at the time.    That was 3 years ago.  

We have seen a 300% rise in the costs of Diploma’s in 3 years

I mean really, even house prices don’t go up that quickly in an inner Sydney suburb.  The real rub here is that nothing else apart from the cost has changed, nothing at all.

So back to my initial question.  I get really quite upset when people say that a $15,000 Diploma is better than a $5,000 one.  The Diploma’s and advanced diploma’s at the provider I now run, range from $3,500 to $9,000. We are of course part of a larger community services organisation, we own our own facilities and have quite a lean flat structure and the reason we try to keep our prices lower is because we believe in community inclusion and that everyone deserves a chance to be able to do the things in life that want and need to help them grow and prosper and that includes learning. We as a NFP make a modest surplus because after all we need to be sustainable (it’s not for profit not for a loss after all), have state of the art equipment in all of training facility, and in terms of our online services,  pay our staff well and have outstanding completion and employment outcomes for our students, both are over 90% .  The only difference between a Diploma with us and Diploma with someone else is the profit margin.

Well that is not entirely true, I would stake our training and outcomes against all comers.  Our training is done within an organisation that delivers, mental health and disability support, counselling, health and fitness and a range of other services.  Students are embedded in culture of community services from the time they walk in the door, and this is the case with almost all of the NFP providers out there.  Now I am sure that there are some shonky providers at the lower price end of the market, just as I am sure there are some high quality providers at the high profit end of the market, but judging the value and worth of a qualification in the price you paid for it (even if that price is a loan you are never likely to repay) is an exceedingly stupid way to decided on where you are going to get a quality education.

Anyway that is just my opinion.

Intersecting VET and L&D

In response to some discussions around models for the delivery of non-accredited training along side nationally accredited training and why L&D departments choose non-accredited training over accredited I thought that I might pull some of the threads of posts and bits and pieces together so that they were all in one place.

The Learning and Development and Vocational Education Disconnect

Australia has one of the best Vocational education systems in the world.  It is well generally well respected and provides both individuals and organisation with nationally accredited outcomes and qualifications, which are transportable across industry and provide a mark of competence against a defined set of criteria.

So why then do organisations make choices like these?

  1. $3000 for a Prince2 Course over $3000 for a Certificate IV in Project Management
  2. $250,000 for the C.A.R.E program as opposed to a Certificate IV in Child, Youth and Family Intervention.

This paper will look at the reasons behind the choices that are made by Learning and Development professionals working in organisation, the drivers and considerations and how that effects the usage of the Australian Vocational education system.  It will also consider the drivers from the VET sector, both at strategic and coal face levels that tend to perpetuate and reinforce the decisions made by organisations.  The disconnection between these two sides of the equation will be evaluated and model developed which can assist both organisations and training providers to be better able to communicate and meet learning needs, both at an organisational and individual level.

In order to do this it will be first necessary to look at what motivate the purchasing decisions of organisations with respect to training.  What causes an organisation to choose one learning program over another, this is of particular interest when the price points of the various learning programs in question are often very similar.  In addition to the choice of program there will also be a discussion around the choosing of providers for the delivery of learning programs and how the choice of provider can affect the purchasing decision.  The purpose of training from both the organisation and the individual will also need to be considered.

Once the organisational side of the equation has been considered we will move to the provider or VET side and consider both the strategic and coal face positioning which tend to put the VET sector at odds with the need of industry and organisations.  In order to do this there will need to be a consideration of what is the purpose of training from the point of view of the VET sector and the business and funding models which have been adopted in the sector as this it will be seen, is one of the key issues in translating VET training into organisational learning. In addition issues around the pricing of programs, delivery methods, facilitator qualifications and experience, reputation and brand will also be considered as again all of these have the effect of creating a disconnection between needs of the organisation and VET sector.

With the disconnection considered and understood and the issues which cause it out in the open, the discussion can move to looking at a range of strategies, particularly from the Training organisation side of the equation which can assist to overcome this disconnection.  There will also be a limited discussion as to what could be done on the L&D side to assist in overcoming this disconnection, but as we will see this is a problem which is best address at the VET sector side of the equation as they possess a level of flexibility (even if they don’t know it) which can easily navigate creating a better connection.

Once all of this has been discussed a model will be presented which can assist all of the stakeholders involved in the process to better understand the part they play and to provide a framework upon which to build their own unique structures.

Issues for Learning and Development Staff


Organisational learning is an unwieldy beast at the best of times and the Learning and Development professionals who attempt to herd this group of cats are always looking for ways to meet the needs of the both the organisation and its staff.

So let us go back to the initial question that I posed right at the start.  Given that Australia has a robust and well respected vocational education system, why then do organisations make choices like these?

  1. $3000 for a Prince2 Course over $3000 for a Certificate IV in Project Management
  2. $250,000 for the C.A.R.E program as opposed to a Certificate IV in Child, Youth and Family Intervention.

If we consider the first example, why would an individual or an organisation choose to spend the same amount of money on a program that in its own words, simply provides a methodology for project management over a course which would provide them with the actual skills and knowledge needed to run a project?  In example two, why would an organisation spend a large sum of money of training that has been developed in another country, does not have rigorous assessment and competency standards attached to it and while used widely, is not considered to be the industry standard, rather it is just one model amongst a number of models and offers staff little transference of skills should they move to another organisation which does not utilise that model?

There is as would be expected not a single answer or factor that is behind choices like these however there are a number of commonalities which we can consider and address in order to ensure the best possible chance of connection between the two sectors.

The first and probably the most obvious reason or factor present in decisions like these, relates to timeframes.  Most L&D departments are under pressure to deliver programs in quite short timeframes, (Can I have that as a half day?) which I have explored in other works.  There is almost always a pressure from the business to ensure that staff are not taken ‘off the job’ for more time than is actually necessary.  In this way a program that runs for five consecutive days and then is finished may be preferable to a program that runs for 6-12 months even if it only runs one day a month.  The logistics around making staff available are easier for one off programs.  In a lot of cases particularly where the person is in direct client facing roles, other staff have to be moved around or rostered in order to allow for a staff member to go on a training course.  It is also often the case with VET training that there will be work that the staff member is required after the delivery of the program itself to meet the assessment criteria of the program.  This then in a significant number of cases leads to the staff member applying to have some of their work time allocated to completing their study which in turn puts addition time and resource pressure on the business manager.

The other time related factor which often comes into play here as well is that of the time commitment necessary from any managers, supervisors or team leaders involved with the staff who are undergoing training. With most professional development programs as opposed to national accredited programs there is little or no involvement needed from the supervisory staff of those undertaking training.  However this is in most cases not the same situation when we look at VET training.  There is almost always in the case of VET training a requirement of ‘on the job’ observation or training which needs to be undertaken with the staff members in question.  This is often further exacerbated where the manager or supervisors are not in the same workplace as the staff requiring supervision and observation and by the by the fact that often these activities have to happen on more than one occasion for each participant.

There is also the issue of the time involved for the individual L&D staff members, with professional development style programs there is often not a lot of additional work which they are required to undertake.  Again this is often not the case with VET training, in particular where the training program being delivered is not simply a generic program.  There is time spent consulting with the RTO around the content of the program, looking at what needs to contextualised to the particular business unit or units who are being trained, signing off on paperwork, which it of particular relevance where VET training is being delivered through a funding or subsidy program such as an apprenticeship or traineeship scheme.

Even if we just consider the issue of time it can be seen why a lot of organisations and L&D units would opt for short course professional development style programs, where the time and resource costs are quite low over nationally accredited training.

Learning and Development staff are often asked by the business what the Return on Investment (ROI) was for training that was delivered, either in terms of particular programs or as whole.  Unfortunately one of the things that RTO’s in general do not do particularly well, and we even see this at a national level is terms of the kinds of data that is collected, is evaluate their training well.  In fact it seems that the data that is often collected is often not the data that organisations are even interested in.  We find that completion rates data is collected almost all of the time, yet only 33% of organisations view it as being valuable data.  Yet we see that data around job and business impact is rarely collected but is rated as extremely valuable by organisations.

Often training providers in the professional development market have developed systems to make it as easy as possible for them to collect the kinds of data that organisations view as valuable and have large stores of this data which they can utilise to be able to show that there are (or appear to be) very solid business reasons in terms of ROI and other measures for an organisation to invest in their training programs.  When the collected by most RTO’s or even by the government through agencies such as NCVER is put against this data it is lacking and does not offer a compelling case for and organisation to choose VET training over professional development training.

The issue of data is one that also ties into another big issue which is that of brand and reputation.  If we consider Prince2 training, why would an organisation or an individual choose to spend $3000 on a Prince2 course when they could spend the same amount and get a certificate IV or even a diploma of project management through the Australian VET system?  One of the most powerful and significant reasons behind this choice is BRAND.  Prince2 is a powerful brand, it is an internationally recognised and accepted certification of knowledge of the Prince2 project management methodology.  It is a ‘requirement’ for employment in an ever-increasing range of government and public service positions, as well as in the private sector, so strong in fact is the brand that often experienced project managers with degree level study in the field, find it difficult to obtain roles without it. When we consider the Brand strength of VET against this background again it can be seen why organisation and individuals would choose Prince2 over VET.  Now while it may be true that the brand strength of individual providers or particular programs could be quite high, when faced with an initial choice about which program to choose the overall strength of the Prince2 brand overshadows the strength of the overall VET brand.  Add to this the issue that a lot of people in organisations and even in L&D departments do not understand the VET sector and how it works and are often confused by the rules and regulation, the choice seems even easier to make.

Given that L&D departments, even very large ones, are often both resource and finance poor in relative terms, one might think that offering a government subsidised training program or a program that came with financial incentives for the organisation itself, may well swing the pendulum back to the RTO side of the equation.  Unfortunately there are a number of reasons why this is not the case.  One of these is of course perception of value.  If something if free, incentivized or subsidised then there is always the possibility of it being seen as being less valuable, though of course this is not always the case.  This however is not the main reason here, the main problem is that of business or organizational fit and need.  When I was running an L&D department responsible for the delivery of training to more than 35,000 staff, it was not uncommon for me to receive between 3 and 10 phone calls a week from training providers, both RTO’s and not.  The difference between the two groups approach was very stark, in most cases the RTO lead with words around free training, government subsidies, and incentives for the organisation, essentially they were selling the money.  They were wanting me to buy the programs that they were funded to deliver now there is nothing wrong with that at all, except I was necessarily interested in putting staff through a whole Diploma of Management when all they really needed was a course on communications skills.  Now the approach from the other training organisations was more often than not the exact opposite.  They asked me what it was that our staff needed, what was the biggest issue we had and questions like that.  Also where they couldn’t meet the need that we had, they would point us in the direction of someone else who could rather than attempting to fix us into the box that they had already drawn.  The point is that for organisations in particular and even for a significant number of individuals it is about business need, it is about the skills and knowledge they require, it is not about the qualification.  Also and this is very much and organizational mindset but it also applies to individuals as well, they would rather spend the money to get exactly what they want, rather than get something that is not  exactly what they want but is free.

When we take all of these issues, in conjunction with the perception that VET programs are difficult at access administer and manage (whether it is true or not)  it is easy to see why both organisations and individuals might choose non-accredited professional development programs.

So why choose VET

So given all of the issues above why would an organisation choose to send its staff to a nationally accredited VET programs, what would prompt someone to choose a certificate IV in project management over a Prince2 Foundation program.  The answers are as you would expect fairly straightforward.

One of the most significant reasons for organisations choosing to have their staff undertake VET programs is the robustness of the system, particularly in terms of assessment of competence.  Unlike the vast majority of professional development programs which staff attend, accredited training has actual assessment which the student is required to undertake, which are then marked against standardised criteria to determine that persons competence.  This is particularly attractive to organisations who work in areas which could be considered to be high risk or where parts of the business deal in high risk areas.  Should something tragic occur within an organisation which results in the serious injury or death and the organisation needs to testify about the competence of its staff, being able to say that staff had undertaken nationally accredited and been deemed competent, is far more potent than saying that they attended a 2 day course with no assessment of competence.

Probably the next most significant reason for choosing a VET program is reputation, not the reputation of the VET brand in general, although the stronger the general VET brand is the better, but the reputation of the individual RTO and its relationship with the organisation.  Most managers and organisations and even L&D specialists have very little idea of who provides good training by just looking at a website, talking to a sales person, looking at government statistics or reading a brochure.  It is all really the same at that level there is no difference and everyone can claim to be the best at what they do.  If I had a dollar for every time someone had sent me an email or pick up the phone and asked me “So is this training course any good?” I would be a far richer man than I am.

Now if the program costs $50-$100, it’s a half a day and only one person is going the risk is not too great.  You could even use them as a test case, to evaluate the program and report back.  However, what it the training is $3000 per person or 250 staff want to do it.  That changes the ball game very rapidly, and as the spend goes from thousands to tens of thousands and sometimes even beyond the need for there to be something, other than just a certificate (even a nationally accredited one) becomes more and more important.

This is why reputation in the marketplace, connection and networks are so vitally important.  If you are just one of five people who rang the L&D person this week offering them free management training, there has got to be something that is going to separate you from the rest.  If there isn’t you are not going to get past the first phone call.

Part of building that reputation or making yourself stand out and be different is to do the other things that L&D people, managers and organisations want you to be able to do.

  1. Customisation, and
  2. Integration

Let’s look at customisation first.  A lot of the training providers talk endlessly about their ability to customise a program to meet the needs of an organisation.  How many of them actually do, I think unfortunately, or fortunately for those who do, not many.  Often customisation means nothing more than choosing different electives, although not too different or there might not be someone able to train them. Just changing electives however is not customisation, customisation is building the training program in such a way that it achieves the goals that the organisation wants.  It is about using their documents, their policies, their procedures.  It is about building a program that produces a participant who has the skill set that the organisation requires and is able to utilise them.  The complaint about this kind of customisation is that you still have to do what the training package says, they have to be assessed on the performance criteria.  That is true, but I don’t think that anyone ever said that that was all a program had to contain.  It doesn’t say anywhere in the packages that you cannot add additional information or assessment or training.  What it say is that this set of skills and knowledge, assessed against this set of performance criteria is the evidence that is required to deem this person competent in this Unit of Competency.  The other issue that is often bought up is where there is something in the performance criteria that for whatever reason the organisation doesn’t do or do completely differently.  An example of this is a unit of competency around strength based practice in support work and counselling.  There is a process mentioned in the performance criteria which while correct and used by a lot of practitioners, is probably not used, described differently, used differently, by equally many practitioners.  So (leaving aside questions whether or not the criteria should actually even be in the unit) what does customisation look like here for an organisation that doesn’t use it as to meet the performance criteria you can’t leave it out.  You simply do both and assess both, and tell the students that one is preferred method where they work now, but there are other organisations which prefer to use the other method.  Is it a little more work?  Yes, but it will also make the organisation much happier than saying well we have to teach them this method because that is what the training package says and then let them come up with a solution around how to train their staff in their preferred method.

Customisation is actually an enormous strength within the VET system as opposed to many of the other proprietary training programs that are out there, most of which can’t be changed and customised to suit particular circumstance, because the material is copyrighted and licensed and often the people delivering the training have no say in the content because of this and in order to meet the criteria of the provider that owns the program they have to do things in a particular way, over a particular number of hours or days.  Everything is tightly controlled.  This should not be taken to mean that we can and should ignore the rules of the VET sector, things like Volume of Learning, rules relating to assessment and evidence, however the space circumscribed by those rules allows us much more latitude to be able to develop and deliver a program that meets the needs of our clients than most licensed training would ever be able to do.

The other enormous strength of the VET system in Australia is its ability to integrate with what is already being delivered and done within an organisation as well as with training which comes from other sectors of the market, outside of VET.  This is because for the most part the Australian VET system is content free, it does not worry where your knowledge comes from or how you acquire it, it is simply concerned with a student’s ability to meet the demands of the performance criteria.  This makes it extremely flexible and able to integrate into a wide variety organisational training plans and structures.

The concept of how integration works is quite simple.  It relies however on combining what I said above, that it doesn’t matter to the VET system where you learnt something, just that you can show that you’re competent and the fact that L&D departments are going to run non-VET training for their staff.  In fact in most organisations the amount of non-VET training which is run far outweighs the amount of accredited training that is delivered.

So if we look again at the example of the community services organisation which is utilising an overseas training product to ensure their staff have the skills and knowledge that they feel they need to have.  Now at a very basic level we can take the training product in question and whatever assessments form part of it (if any) and map this information across to for example a Diploma of Child, Youth and Family Intervention.  Now certainly we may need to add additional assessment pieces, including things such as workplace observations in order to ensure that we have enough evidence of competence to meet the requirements of the training package.  From there staff can go through the non-VET training just as they would have previously, undertake the additional assessment tasks which are necessary and any other work and assessment which may be necessary and then at the end of the process not only have they successfully completed the training the organisation requires, they have obtained a nationally accredited outcome from that training as well. This is of course a win from everyone who is involved in the process.  The staff get a transportable, recognisable qualification, the organisation gets it staff trained in the program that they require and the RTO gets business that it would not have otherwise got.

This concept of integration can be taken much further however.  Rather than simply looking at the outcomes of any particular course or program we can look at the overall picture of training within the organisation and create a model of delivery which further improves the outcomes of process.

So what is the model?  Below is an example of how the concept can work within a community services organisation.



So how does this all work?  All staff at all levels of the organisation go through a standard general induction, the standard who we are and what we do style program.  Once that is completed each business unit then has a separate induction program specific to their own needs and training requirements.  A small number of Units of competency can be built in at this level, the completion of which along with the rest of the induction program can be linked to the probation periods and extensions.  Once the induction training is completed there will be a set of training programs that everyone in the organisation will be expected to undertake, from generic programs  like Fire safety and Workplace health and safety to more organisationally focussed program such as in this case, mental health awareness and strength based practice. Alongside this training there will also be business unit specific training which is also required, a disability support worker for example would need behavioural awareness training, and where as a senior manager might be put through a more rigorous financial accountability program.  There will then be a range of programs delivered by and for the organisation which are available to all members of staff, these might be things like communication skills, crisis intervention skills, computer skills, and a range of other programs.  Once staff have completed all of the mandatory programs (both generic and unit specific) they can then undertake any of the training available within any policy constraints put in place by the organisation.

So all that has happened here is that the organisation and any associated training providers have simply delivered the training that they would have normally needed to deliver.  However if the RTO (be it internal or external) has mapped all of the training being delivered and looked at the assessments and what gaps are needed to be filled in order to meet the requirements of training package, what has actually happened is that the staff member has progressed quite a long way towards a qualification.  Now they may need to do some additional assessment work, on the job training or skills observations by their managers and supervisors, but they will, if they wish and this system seems to work best if it is voluntary for any extensions over what is mandatory, have accumulated a group of Units of competency.  From here the staff member can sit down with the RTO, their manager and anyone else who may have relevant input look at the range of qualifications that the units they currently have could lead them to and what they need to do to achieve them.  What this means for the staff member is that they may be able to achieve a number of qualifications, rather than just one, by doing a much smaller amount of additional work.  This also provides both the organisation and the staff member with a little bit more flexibility in terms of talent and career development options as well.  Someone who is moving towards a management track can be encouraged to take more management based units to fill out their qualification, rather than practice based units which might be more applicable for a frontline worker.

There are a number of very useful things which happen within this system (particularly when any additional assessment or learning is made voluntary)

  • organisational training can remain the same, additional assessment are simply plugged in for those staff who wish accredited outcomes
  • staff with existing qualifications do not need to do additional assessment over and above what is organisationally required
  • provides flexibility in the talent management pipeline
  • allows staff flexibility in terms of qualifications and training
  • Reduces the cost of delivery and the time off work costs associated with accredited training.

A more generic example of the model can be seen below.



Now admittedly in order to make this sort of model work effectively there needs to be very close collaboration between all of the stakeholders in the process, particularly the RTO and the L&D staff.  However, once implemented a system like this delivers a wide range of outcomes for everyone involved.  The adoption of a system such as this allows for all of the training both informal and formal that is undertaken by staff and delivered by the organisation to be utilised towards a qualification or set of units of competency.


Challenges for VET providers

There are a number of challenges which exist in trying to intersect the needs of L&D with the needs of VET providers and unfortunately a lot of these challenges relate to the mindset of the people involved on the VET side of the equation.  As I have suggested earlier one of the problems is that the VET sector often thinks in terms of Qualifications and what is funded and what is not and try and sell the qualification they think might be the best fit, or more often than not the qualification that they have on their scope rather than providing what it is that the business needs.  So the question that VET providers need to ask themselves is a simple one ‘Are you the same as the last guy?’

Ask yourself this, ‘Are you just another provider delivering Management, Community Services, Hospitality, construction or some other set of qualifications? Are you actually doing something different or are your programs, approach, materials and delivery just the same as the RTO or TAFE down the road?  If they are than you might have a problem.  If your selling point is price, or that the training is free or heavily subsidised then you might have a problem as well, simply because you are not, in most cases the only choice out there that organisations have.

  • What is it that you do that is actually different from the RTO down the road?
  • What is it that you do exceptionally well?
  • What are the Big, Brand Ready skills of your people?

Providers also need to look at what they are ‘selling’ and how it is packaged.  Are you the fifth person this week who is going to talk about the Diploma of Management, or the first person to talk about your customisable leadership and management development program?  Here is an example of what the right branding and wording can do for a program.

Boring – Community Sector team leadership skill set

  • Long winded and difficult to get buy in for because no one knows what it means
  • Low price point due the sector always claiming to have insufficient money
  • Low numbers of attendees

Rebranded – Health Leaders Program

  • Partnered with Gym (they provide the healthy)
  • Accredited outcomes are optional, participants choose to be assessed
  • Marketed the skill and knowledge outcomes not the unit outcomes
  • Strong Brand – ‘Strong – Skilled – Successful
  • Much higher price point (claims of having no money disappeared)
  • A tailored experience for all participants and organisations
  • Extension of market to outside of community services
  • Much higher attendee numbers

A few simple changes and a realignment of thinking took the program from one which had an intake of about 30 participants per year at about $695 per participant to one which enrolled 160 participants last year at an average price point of $3260 per participant.  All of this because it was targeted at a perceived need for organisations rather than as simply an accredited program.

Now I am not suggesting that rebranding and repackaging something is always going to have this effect or that this kind of process is appropriate for everything and every kind of program it does being to point out something important.  There is an old saying that comes from the world of sales which is

Sell the Sizzle not the Steak

Remember the steak is the qualification or accredited outcome, the sizzle however is why it is important to the organisation or individual.  The other point to be made here is that cost and subsidies are often less important that organisational need and fit.  So what is the sizzle and what isn’t

The Sizzle isn’t;

  • We put 20 staff through a Certificate IV in Frontline management;
  • All of our support staff have a Diploma of Counselling; or
  • 75% of our managers have completed a Certificate IV in Project Management.

Why aren’t these the sizzle?  Well because whoever has paid for this is likely to ask and expect answers to things like;

  • What is our percentage increase in sales as a result of that program;
  • Have we seen a decrease in client behavioural issues;
  • Good, so we have seen a reduction in cost overruns and are meeting project deadlines?

So don’t start by telling L&D people what qualifications you offer or what subsidies are available, ask them instead what their biggest issue is right now and show them how you can solve it.  However, there is an important addendum to this and that is if you can’t solve it and solve it well – tell them and walk away, unless you know someone else who you know can solve it.  Remember if you hand them off to someone who you know and trust to help them, they will remember you both.

Education Brokers and the Facebook scenario

Firstly this is not an attack on the Educational Brokerages in Australia, it is more of an explanation and discussion on how the system works and why.

Everyone complains about Facebook, almost all of the time.  They complain about changes to the interface, the way it deals with what turns up in the news feed, how many ads they see, what the company does with all of the data it collects and who actually owns that data (I will give you a hint it’s not you).  The problem is that all of these complaints and issues grow from a mistaken belief about the place of Facebook users in the grand scheme of things.  As a lot of people often suggest if you want to find out why things are being done in the way they are being done, follow the money.  So if we follow the money in relation to Facebook, we quickly realise that Facebook users are not in any real sense of the word Facebook clients, they are in fact simple objects within a data set and consumers to be advertised to.  Facebook’s real clients and the people who they are really trying to keep happy are their advertisers who generate all of the income for the site and their shareholders.  Now while it is true that if you have happy consumers you are probably more likely to generate better income, when you have a billion users a lot of people have to not only complain, but stop using the system before the company would take notice.

So if we apply the same logic to the Educational Brokerage sector in Australia we can quickly see what is happening.  In fact all we have to do to find out who is important to these organisations is to ask a really simple question, which is of course, who pays them?  The answer, of course, is equally simple, they are paid by training providers to provide them with students.  So the income stream for brokers is tied completely to the continuing recruitment of students for their client RTOs.  If there client RTOs are unhappy or there are not enough students, or the costs are to high, or compliance issues start to impact and they leave the relationship, then the broker either has to find other clients or increase the number of students being recruited for the clients it still has to address the income shortfall.

Make no mistake however, as is the case with Facebook users, potential students are not the clients of brokers, they are simply the consumers of the service they provide.  They are in reality very little more than a product with a certain value attached to it, which is generated when they are ‘sold’ to a provider.  The value of a can of beans to Woolworths is that someone will pay money for it.  The value of a potential student to a Broker is that someone (a training provider) will pay money for them.  The more money a provider is willing to pay for a student the more value that student has to broker.

Now to be fair this should not be taken to suggest that potential cash value is the only driving motive for brokers nor it is to suggest that potential students don’t have a cash value for RTOs who don’t use brokerage services because they certainly do.  It simply suggests that as with Facebook the person who does not pay for the ‘service’ in this case the student is always going to be a secondary concern to the needs of the person who pays the bills, in this case the training provider.  When we add to this the concepts of the Brokers themselves being independent contractors, and or working either entirely or partially for commissions, we can easily identify the pain points within the system.

Is someone working on commission going to recommend a Cert III or IV course to a student which might generate $600 worth of income or is there the temptation to recommend the diploma level course which will generate $3,000, particularly when the RTOs (who remember are the ones paying the bills) might make $15,000 from the Diploma course as opposed to $3,000 for the Certificate IV.  Again it is important to note that I am not saying that this is the driving force behind all of these operations, but when we start looking at the money we can see why people might prefer to recommend a Diploma over a Certificate IV or even utilising VET-FEE HELP over accessing direct government funding.  As someone from a brokerage said to me a while ago, ‘our business is recruiting diploma students, it is up to the individual to decide if it is the right option’.  Now while this is true, I would suggest it is also true that even for people who are deeply involved in the VET sector funding arrangements can be complicated to say the least, and for a potential student having a ‘personal learning consultant’ recommend undertaking a Dual Diploma of counselling and community services, which they don’t have to pay anything for up front, becomes an easy thing to agree to because well it sounds good and seems much easier than trying to figure out the morass of funding available.

So here is a question for everyone to ponder.  What would the role of the broker be if the person who was paying them was the student, if their income was generated by creating the right result for a potential student rather than being driven by the training provider?

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