Thin Markets and RTO Delivery Challenges

 

There is no question as to the importance of training for an industry’s growth and competitiveness, or how it can support people to secure employment. The industries we work with clearly tell us where skills gaps are and where opportunities for training exist. Still, the same challenges rear their head for most industries we support. Those located in regional, rural or remote areas have limited access to training. Training for highly technical skills is also hard to come by, especially if expensive materials or machinery are required. The national training packages are updated to include the necessary qualifications and skills standards as specified by industry, but this does not drive training delivery. One key question stands out – why are registered training providers (RTOs) not delivering these qualifications and skills standards?

Skills Impact is conducting research to explore the mismatch between known skill shortages and the lack of training supplied to these industries. We believe there are solutions, but first we need to understand the nature of the barriers to delivery and what can be done to encourage more RTOs to deliver training and for enterprises to actively seek training for staff.

This work has been identified by Industry Reference Committees (IRCs) as an area requiring better understanding.

We are looking at qualifications within the horticultural, agricultural and forestry related industries to identify the barriers to enrolments and generate advice about the best means to address VET delivery, quality, relevance and access issues.

Hundreds of industry stakeholders volunteered their time and provided extensive input into the development of the qualifications and skills standards in the horticultural, agricultural and forestry related industries. So, why do some qualifications have high enrolments, while others do not? What are the challenges preventing RTOs from delivering the qualifications? One obvious trend is the difference in enrolment numbers for training aimed in high volume occupations, based in a city or main regional centre, versus enrolment numbers for occupations in sectors with their base in regional, rural and remote areas.

Thin Markets and High Costs

   $ Low ratios of student to trainer, access and safety issues
   $ Highly technical skills and or skills requiring access to expensive materials and machinery
   $ Learners spread across large geographical areas with low numbers of students in any one area

All the above factors contribute to high costs per learner, often 2 to 5 times higher than for training in situations that are not subject to the same factors.

This is an important issue as some of the skills most critical to Australia’s future are highly technical and high cost to deliver, so RTOs struggle to fund development leading to their delivery. Without delivery being offered, enterprises, over time, develop their own alternative solutions and no longer seek formal training for their staff.

There are a host of factors affecting RTOs and their decision as to whether to deliver training or not, any one of these issues by itself is enough to prevent delivery. More than one makes a compelling case for RTOs to not offer training for critical industry skills.

Factors in an RTO’s decision to add or remove a qualification or unit

Availability of skilled and qualified trainers 88%
Availability of equipment, infrastructure, or other resources 87%
Demand for the training from employer 88%
Availability of prospective students 90%
Changes in industry priorities 84%
Ability to meet ASQA compliance requirements 87%
WHS or other risks associated with delivery 82%
Access to public funding to support delivery 72%
Cost of course design and\or materials 74%
Geographical spread of students and\or workplaces 59%
The ability to deliver the desired elements in your institution or a workplace 80%

Source: Griffith University ‘Learning, Training, and Competency Survey’ Preliminary Findings, June 2020

Industries we work with

Skills Impact provides services to a portfolio of industries with a predominance of operations in regional, rural and remote locations. These areas are generally high cost training environments with student numbers spread over a broad geographic range, leading to lower potential enrolment numbers for RTOs working in any particular region.

Regulatory requirements for providers in these thin markets are the same as for those in urban areas. The viability of delivery under these conditions is challenging and often not sustainable, resulting in the failure of training solutions to regions or in specific skill areas and/or a significant compromise in quality of delivery. Many of the skills needs in these regional, rural and remote industries also require expensive materials or machinery. Some of the skills are highly technical and challenging to deliver. All of these factors have resulted in a lack of delivery options for many skills, occupations and areas in Australia.

In the pulp and paper sector, employers cannot find an RTO willing to deliver the training. The pulp and paper sector, with less than a dozen major worksite across Australia, represents a thin market for training and an expensive, high risk proposition for RTOs. So, training, by necessity occurs on-the-job, provided by in-house subject matter experts, often utilising national training package products to design and assess learning activities.

Training packages are developed as a result of industry feedback and they describe occupations and the skills and knowledge required to perform at work. The industries we work with are concerned about a bleak future if significant numbers of qualifications for critical occupations continue to lack delivery options and opportunities for new and existing employees.

RTO Delivery Challenges

Training delivery is consolidating in areas where delivery is viable and not in areas of greatest industry need

RTOs now focus on delivery in areas that they are best able to meet demand under the current regulatory and funding settings. Most training delivery is in areas that can be carried out in classrooms and simulated work environments or for areas driven by regulation guaranteeing a supply of students who need a “ticket” to perform a work function.

RTO delivery decisions appear to be driven just as much by regulatory and operational risk as they are by cost factors

RTOs are becoming more and more reluctant to take on new areas of training due to the demanding level of regulation in the sector including the cost of meeting that regulation. If a business requires training outside the existing scope of training, an RTO needs to be fully compliant in all areas of new delivery before a single student can be enrolled or before a course can even be advertised. A thriving, useful RTO business can be put at risk by attempting to meet industry needs in new or challenging skill areas.  The result is that industry misses out on much needed training and perceptions are formed that due to low or no enrolments, a qualification or unit is not needed.

Research in this area is being conducted primarily through qualitative interviews with industry personnel and training providers, supplemented by a literature review and some survey work to cross-validate the qualitative findings.

Participate in an interview

We are interviewing industry participants all throughout this year (2020) to understand why they are actively involved in the development and creation of qualifications and skills standards, but not necessarily as active in the training activities that come from these. We are also interviewing training providers to understand the role they play in deciding what training is offered, or not, and what influences these decisions.

We encourage anyone that would like to share their knowledge to get in touch. Please feel free to contact us with your own experiences and insights.

 

Subscribe to updates

Subscribe to the Skills Impact newsletter to keep informed about updates and opportunities to provide input.