Fostering Flexibility, Innovation and Responsiveness in VET

Fostering Flexibility, Innovation and

Responsiveness in VET:

Meeting Industry Needs for the Future

A Strategic Issues Paper

By the National Industry Skills Committee

August 2008

Disclaimer: This paper was developed by the National Industry Skills Committee (NISC) as strategic advice for the Ministerial Council for Vocational and Technical Education (MCVTE). Please note that the views expressed in this paper are those of the NISC and do not necessarily reflect the views of the MCVTE.

Fostering Flexibility, Innovation and Responsiveness in VET: Meeting Industry Needs for the Future

Contents

1 Executive summary 1

2 Fostering Flexibility, Innovation and Responsiveness in VET: Meeting Industry Needs for the Future 2

3 Future Industry Skill Needs 3

4 Definitions 4

5 Progress and Achievement 5

6 Future Strategies and Initiatives 7


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1 Executive summary

The focus of this paper is on what the National Industry Skills Committee believes can be done to continue to improve the responsiveness and flexibility of the VET sector and its capacity to provide innovative approaches in meeting industry skills needs.

Research indicates that skills development for enterprises and for existing workers is most effective when it is highly relevant to business and employee needs and is delivered in a way which reflects those needs and the circumstances of both the enterprise and its employees.

The creation of a more flexible and demand responsive VET system has been central to the development of a national VET system in Australia over the past two decades. It is clear that many providers, and the business units within them, are very flexible and innovative in terms of the ways they develop, implement and deliver training solutions for enterprises and address their business needs.

Notwithstanding these achievements, several studies and reports continue to highlight a range of shortcomings in the VET system from an industry perspective. These shortcomings relate to both (1) how enterprises access VET, and (2) when they do, the extent to which the system generally and RTOs specifically are responsive to it and are then able to meet those needs flexibly.

The NISC believes that these constraints need to be tackled through strategies and initiatives at three levels. These initiatives are set out in section 6 of this paper but in summary, the NISC recommends that MCVTE considers the following package of reforms:

At the system level

1. More flexible arrangements and packaging rules for qualifications and training packages;

2. Improve governance arrangements for TAFE to support industry responsiveness and partnerships with enterprises;

3. Facilitate RTO/enterprise co-provider models; and

4. Ensure VET regulation, accountability and performance measurement supports innovative delivery.

At the training provider level

5. Establish a national VET e-learning strategy; and

6. Improve VET workforce capability in identifying and responding to industry needs.

At the enterprise level

7. Improve capability to identify enterprise skills needs and improve information about VET products and services and provider capability; and

8. More flexible and effective use of employer incentives.


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2 Fostering Flexibility, Innovation and Responsiveness in VET: Meeting Industry Needs for the Future

Purpose

The focus of this paper is on what can be done to continue to improve the responsiveness and flexibility of the VET sector and its capacity to provide innovative approaches in meeting industry skills needs. The paper draws on the findings of a background issues paper prepared by NCVER, including an analysis of relevant research. This paper also reflects the outcomes of a workshop of NISC members, enterprises, RTO practitioners and VET researchers. However, the proposals outlined in the paper reflect detailed consideration by the NISC itself in relation to a range of strategies to foster greater flexibility innovation and responsiveness in VET to meet future industry needs.


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3 Future Industry Skill Needs

There is increasing recognition within government and industry that workforce skills are crucial to improving business growth, productivity and competitiveness as well as their capacity to reinvest for the future. There is also evidence that employee skill needs are deepening and broadening. The impact of demographic change is throwing increasing focus on the importance of reskilling the existing workforce. This recognition is reflected in the Council of Australian Governments’ human capital, skills and productivity agenda.

Employees learn in many ways, including informally on the job, through structured training provided by the company or a provider, and through formal accredited training delivered by public, private or enterprise-based vocational education and training (VET) providers.

These different forms of training are most commonly provided through traditional face-to-face delivery both on and off the job, through the integration of work and learning (experiential learning, through job rotation, mentoring, and performance feedback) and increasingly through the use of technology enabled learning.

TAFE, a wide variety of private providers and a range of other organisations are the principal providers of vocational training to industry, whether structured or formally recognised. However, there are also many other providers of vocational training including suppliers, professional and industry-based associations, group training companies, community-based providers, schools, universities, workplace trainers and consultants.

A fundamental objective of skills reform in Australia has been to ensure that industry is able to define its current and future skills needs, and to ensure that the VET system and training providers understand and are able to respond to industry needs. The NISC sees this ongoing objective as crucial to increasing innovation, flexibility and responsiveness in VET.


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4 Definitions

At the outset, it is important to clearly define what is meant by the terms responsiveness, flexibility and innovation.

For the purposes of this paper the NISC has adopted the following definitions:

Responsiveness means the capacity of an RTO to understand the core

business of an enterprise, its markets, factors influencing those markets, how these impact on skills requirements to develop and the capacity of the RTO to develop and deliver a skills development response to those requirements;

Flexibility means capacity by the RTO to adopt and deliver skills development

strategies which are most relevant to the enterprise and employee needs both in content and delivery requirements, and to adapt those strategies in response to feedback and changing circumstances; and

Innovation means the capacity of the RTO to access and develop new and

different ways of developing skills, including through the use of new technology and emerging teaching and learning strategies.

Flexible delivery is also a broad concept, covering not only teaching, but also flexibility in the operational systems that support delivery. It is also about improving training access through delivery in workplaces, by using e-learning and making training available in regional, rural and remote areas. VET providers need to be flexible in terms of the range of learning approaches they use and be willing to adapt them to suit the preferred learning styles of different learner groups.

Research indicates that skills development for enterprises and for existing workers is most effective when it is highly relevant to business and employee needs and is delivered in a way which reflects those needs and the circumstances of both the enterprise and its employees including reduced direct and indirect costs such as downtime when employees are involved in training.

This requires a strong capability by RTOs to work with firms to understand their business goals and needs and how these needs translate into employee skills requirements. Research, case studies and outcomes from the workshop for this project suggest that enterprise/RTO co-provider models are a particularly effective way of building these relationships and achieving effective outcomes.


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5 Progress and Achievement

The creation of a more flexible and demand responsive VET system has been central to the development of a national VET system in Australia over the past two decades. The NISC recognises many of the achievements to date. In summary, major reforms to achieve these objectives include the opening up of the training market through a common national regulatory framework for public and private providers, the introduction of ‘user choice’ for apprenticeship and traineeship funding and contestability for some public funding (although the level of contestability has not increased in recent years).

There has also been significant investment in the Australian Flexible Learning Framework which was established in 2000 to support the VET system ‘to meet the rapidly increasing demand for flexible learning and e-learning from industry, enterprise and clients’.

There has also been a significant increase in workplace delivery by VET providers. For example, a major multi-sector TAFE Institute in Victoria now has over 25 percent of its total delivery in workplaces.

There has also been growth in formal partnerships between firms and RTOs, including models where RTOs operate on an ongoing basis from the premises of firms and are highly integrated into the business and HR processes of the enterprise as in-house providers.

From the evidence available and good practice examples cited in the Background Paper prepared for this project, it is clear to the NISC that many providers, and the business units within them, are very flexible and innovative in terms of the ways they develop, implement and deliver training solutions for enterprises and address their business needs.

Constraints

Notwithstanding these achievements, several studies and reports continue to highlight a range of shortcomings in the VET system from an industry perspective. Too often, innovative practices are implemented with, at best, partial recognition and support through the broader VET system. In the view of the NISC, they are not sufficiently generalised across the VET system because of constraints at the system, provider and enterprise level.

These constraints affect enterprises’ capacity to access VET and the extent to which the system generally and RTOs specifically are responsive to and able to flexibly meet enterprise needs.

In summary, employers still report that:

the training system is confusing and in particular it is difficult to access information about provider quality and capability;

the process to access VET is difficult. As a result, small to medium enterprises, in particular, tend to avoid formal training – preferring structured training or learning informally on the job;

employers cannot always readily access the training they seek and in particular, formal training is not always available at the time, location and mode of delivery that suits their needs;

employers find that the training offered is not always relevant to their business needs and too often reflects what the provider wants to deliver rather than what the enterprise requires;


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VET programs need to be flexible, able to be customised readily to meet employers’ needs, and be updated regularly to meet emerging needs;

the VET system needs to be more flexible in the recognition of people’s skills. It needs to incorporate accelerated attainment of skills and qualifications with an emphasis on a simplified and less bureaucratic approach to the recognition of prior learning (RPL);

the teachers and trainers that providers have on staff are not always relevantly skilled nor aware of the latest practices in industry, and training equipment is not state-of-the-art; and

there is variation in the consistency and quality of delivery.

Employers themselves are not necessarily good at identifying and defining their skills needs, and investment levels in training vary considerably between enterprises and industry sectors.

Registered Training Organisations and VET practitioners also report a range of factors which limit their capacity to respond flexibly to industry needs and to adopt innovative skills development strategies. These factors include:

the governance of public providers which reduce the incentive to partner with industry; for example where TAFE Institutes are not able to retain earnings from commercial activities;

the extent to which a provider’s own governance and internal culture enable its individual business units to act flexibly and commercially to service particular and varying industry needs;

staffing issues including constraints in existing industrial agreements and the ageing and highly casualised workforce of the VET sector;

the regulatory system which in the past has placed too great an emphasis on compliance and applying ‘rules’ rather than supporting approaches which support innovation, responsiveness and flexibility;

accountability measures and performance measures which tend to focus on inputs, efficiency and student throughputs rather than innovation and flexibility; and

the extent to which National Training Packages meet specific enterprise needs or can be customised to meet those needs.

The nature of VET funding also has a significant influence on flexibility and responsiveness, including:

profile funding where centrally determined priorities constrain local flexibility and responsiveness;

the role of contestable funding in helping to drive innovation flexibility and responsiveness;

specific purpose funding programs where prescriptive guidelines and accountability requirements may limit flexibility and responsiveness; and

eligibility criteria for employer incentives for retraining existing workers which may result in enrolments in inappropriate qualifications and the use of specified delivery methods.


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6 Future Strategies and Initiatives

While many of the foundations for a highly responsive, innovative and flexible VET system have been laid, and considerable progress has been made, many constraints still exist. In the view of the NISC, these constraints need to be tackled at three levels:

at the system level;

at the training provider level; and

at the enterprise level.

Our objective is to translate individual cases and examples of flexible, responsive and innovative delivery into systemic practice. To achieve this objective, the NISC therefore suggests that MCVTE consider the following suite of measures.

We recognise that a range of strategies are being considered by MCVTE and through the COAG human capital and skills and productivity agenda, some in similar areas to those outlined below.

System Level Strategies

1. More flexible arrangements and packaging rules for qualifications and training packages.

National Training Packages define what RTOs can deliver in most industry areas. They need to both reflect the diverse needs of enterprises and be able to be flexibly implemented so that RTOs can flexibly respond to enterprise needs.

2. Improved governance arrangements for TAFE to support industry

responsiveness and partnerships with enterprises.

The governance structure for TAFE Institutes should support their roles as multi-million dollar enterprises, with diverse revenue streams. They must be able to respond quickly and flexibly to enterprise and industry needs, enter into formal partnerships with enterprises and be able to retain and reinvest revenue in innovative products and services.

3. Facilitate RTO/enterprise co-provider models.

At present, public VET funding is still driven by student contact hours derived from conventional face to face delivery. In this model, there is little scope for teachers and trainers to be funded to undertake an enterprise skill needs analysis, and there is often a clear separation between publicly funded and fee for service programs. However, where nationally recognised outcomes are achieved, there are both public and private benefits and the potential exists to leverage investment, engagement and expertise from enterprises with RTOs through co-provider models.

A specific program could facilitate and support RTO/enterprise co-provider delivery models.


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4. Ensure VET regulation, accountability and performance measurement supports innovative delivery.

Criteria for compliance under the AQTF, accountability for public funding and measurement of RTO and system performance should encourage and recognise, rather than constrain, responsive and innovative delivery. Specific reforms could include:

broadening measurement of teacher\trainer output to include training needs analysis, partnerships with enterprises and innovation;

focussing on outputs including completions, participation levels and skills recognition rather than student contact hours;

establishing KPIs to measure the uptake of innovative delivery (e.g. workbased, e-learning);

ensuring AQTF compliance systems audit focus on outcomes and supports innovation rather than just compliance with inputs.

Provider Level Strategies

5. Establish a national VET e-learning strategy.

This could include the development of a platform through which RTOs and enterprises can readily access a wide range of e-learning programs and resources across the VET sector.

6. Improve VET workforce capability in identifying and responding to industry needs.

The ageing of the VET workforce represents both a challenge and an opportunity to build the capability of the existing VET workforce, and those entering the VET workforce, in key areas including:

training needs analysis;

workplace delivery;

skills recognition;

building and managing co-provider models; and

identifying, creating and deploying innovative delivery models.

Remuneration levels for VET staff will also need to be considered for careers in VET to be competitive with other industries, particularly in areas of skills shortages.


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Enterprise Level Strategies

7. Improved capability to identify enterprise skills needs and improved information about VET products and services and provider capability.

VET delivery will be most effective when enterprises are able to:

create ‘informed demand’ by identifying and clearly articulating their skills needs;

understand the range of VET services and products available; and

source training providers with the quality and capability to meet their needs.

Enterprise capability could be increased through the training of staff in training needs analysis, by building a network of intermediary agencies to advise and assist enterprises and by developing systems for reporting on RTO capability and performance.

8. More flexible and effective use of employer incentives.

Current employer incentives for existing workers are targeted to traineeships which may not be appropriate for the needs of enterprises or employees and have limited eligibility criteria.

Eligibility for employer incentives could be broadened to include existing workers involved in nationally recognised training undertaken through work-based learning, including literacy and numeracy programs.