About the Research

Building organisational capability the private provider way - Hugh Guthrie

This paper, presented at the 2008 annual conference of The Australian Council of Independent Vocational Colleges, summarises what we know about building capability among the VET sector's private providers.

Its insights are based on a comprehensive program of research, Supporting VET providers in building capability for the future, conducted from 2005 to the end of 2007. The research explored factors which enhance or inhibit vocational education and training (VET) provider capability.

Private providers are numerous, usually small, and diverse. Individually, they aim to create unique goods and services which provide features or benefits of superior value for their customers, especially in niche markets. They are the 'boutique stores' of the VET sector and are, collectively, significant providers of vocational education and training.

Key messages

• To remain successful, private providers need strong and effective partnerships with their clients. They also need to build partnerships with other organisations and external people who have expertise which can complement and add value to their business, and with whom they can build a sustainable and productive relationship.
• Their capability relies on developing and maintaining a stable and uniform organisational culture. This requires effective leadership, good recruitment and induction processes, and a work culture which makes use of other peoples' skills and knowledge, and provides a rewarding working experience likely to attract new employees.
• Their human resource management (HRM) practices are relatively informal and flexible. This flexibility bestows a real advantage over public providers. Nevertheless, private providers are very vulnerable when they lose key staff or make poor recruitment decisions.
• When they grow, they risk changing the culture which has made them successful. They also risk losing the flexibility their informal and flexible HRM processes have given them. Growth may require the introduction of more formalised processes, but these must retain as much flexibility as possible.

The research program on building VET provider capability contains many useful insights for private providers. However, those of particular relevance are Smith and Hawke (forthcoming) on HRM practices, Hawke (forthcoming) on workforce development, Callan et al. (2007) on leadership and Clayton et al. (forthcoming) on VET provider cultures and structures.

Tom Karmel
Managing Director, NCVER