Research

Summary page

Research

Project no: nr9003

Publication title: Factors influencing demand for vocational education and training courses: Review of research

This review of research covers Australian, and some international research relating to factors that influence demand for vocational education and training (VET) by individuals, enterprises, industries, communities and regions. It examines the scope of research and reveals the gaps which need to be addressed by future VET policy and research.

Demand for VET refers to the intended and desired participation in VET programs. Individuals, enterprises, industries, communities, regions and the nation are stakeholders in VET.

the main findings

Policy has focussed largely on VET and the world of work, neglecting notions of learning to improve quality of life and knowledge. The needs of industry receive primary consideration in national policy, although usually it is individuals or enterprises, not the industry as a whole, who ‘demand’ training. Current definitions of ‘industry’ may not be effectively identifying training needs, whereas recognising occupational groups with similar functions may show demand for VET courses more clearly.

Individuals, communities, industries and the nation have a longer-term view of their training needs, and are increasingly looking for ‘life skills’. Motivations for participating in VET can stem from the labour market, and/or from social or personal development reasons. Learning for life requires literacy, numeracy, personal skills and positive attitudes, skills which are transferable between different work situations, and which are also translatable into non-work situations.

Social rates of returns to training, or benefits from training, have been understated. Recognised social and individual benefits include: increasing social capital and social cohesion, improved sense of personal worth, lower crime rates, increased community service and improved quality of civic life, greater appreciation of diversity, and improved ability to use technology and react productively to economic shocks.

Most demand for vocational education and training continues to be met by the public system. There is evidence that the public system is better able to provide support, especially in literacy and numeracy skill development.

There are benefits to enterprises from structured training, including increased ability to adopt new practices and technologies, increased productivity and increased viability and survival rates. New firms are less likely to demand training than older firms. Larger firms participate in formal VET to a greater extent than smaller firms. Small firms tend to demand training that is directly related to production, whereas large firms can devote more resources to training in management and support functions.

Clients in rural and regional Australia have less choice of courses and providers, being limited by access to facilities and the flexibility of the services offered. This means not all demand for VET is satisfied. Local planning and provision of VET can result in more accurate identification of demand and hence more satisfying outcomes for the community and the region involved.

expected changes in demand for VET

There has been little recent quantitative work on demand for VET in Australia.

Skill areas where demand for VET is expected to increase are: skills for ‘knowledge work’ (working with ideas, design, innovation, marketing, monitoring and management); ‘soft skills’ (conflict resolution, leadership, team-building and workplace communications); and literacy and numeracy skills (especially embedded in other courses).

Demand from non-sponsored individuals will increase, as will demand for courses that can be taken in short chunks with seamless entry and exit from VET. Demand from enterprises for entry-level training is expected to fall.

Demand for VET could be increased by: a network of training brokers to analyse needs and negotiate with providers on behalf of enterprises and communities for suitable training; continuity of funding and programs; more accessible information for enterprises, especially small businesses, individuals and families; greater awareness of and easier access to recognition of current competence; and clearer, simpler VET administrative arrangements.

conclusions drawn

To achieve high levels of skills formation there must be commitment from government and a large majority of enterprises, widespread public support, accountability to ensure an adequate quantity and quality of training, opportunities for all to participate, incentives for young people and workers to train, and flexible training methods. Measures that would help meet the VET demand from the large equity sections of VET’s client base include customised courses for various groups, flexible timetabling and flexible delivery. Clients need information about entry points and pathways. Clear pathways between ACE and VET increase demand for VET. Teaching professionals need to work with industry and enterprises in order to increase demand by developing relevant training. They must understand the needs and everyday experience of small business.

The focus of the current policy on the needs of industry and enterprises should be re-evaluated in the broader context of the demands of other stakeholders who have longer-term interests.

areas for further research

Economic and social factors contribute to the demand for VET. Research has been undertaken which identifies the influence of economic factors, such as income and profit or productivity on demand and there is a small body of research noting that social factors such as personal fulfilment contribute to demand. The relative contribution of economic and social factors to the demand for VET by various stakeholder groups requires further research.

There is no systematic research into the impact of the price of VET on demand by various client groups (in particular enterprises and individuals). Such research is potentially difficult because of the large number of other factors that impact on the willingness and capacity to purchase VET. The many changes over recent years in the level and nature of government contribution to VET in terms of subsidising prices and reducing costs (by extending government benefits to those participating in education and training and introduction of a training wage which reduces enterprise costs), have contributed to the difficulty. Further research is needed into the relative cost of modes of provision, and whether the preferred unit of analysis should be cost per trainee, per module or per course completed.

Potential changes to the ways in which individuals pay a contribution to the cost of their own VET suggested, for example, by Chapman (1998) should be preceded by investigation of the extent to which upfront fees prevent or discourage individuals from participating in various levels of VET and from enrolling with particular provider types, for example, TAFE, ACE and private RTOs. Further research into the sources of financial support for the living costs of VET students should also precede such changes, especially in view of Gregory’s (1995) suggestion that demand for education and training is based more strongly on the cost of an extra year of education than on expected future earnings.

In light of the debate about the relative desirability of general education and job-specific training for senior school students not destined for university noted in the chapter ‘Demand by school students and their families’, further research is needed into the desirable balance between general and job-specific education and training. In particular, the role of context in learning generic skills and in the transfer of skills between school and work and between jobs deserves more investigation. A better understanding of how generic skills are acquired, transferred and applied in a variety of contexts will lead to more informed demand for generic and job-specific VET products, and hence better outcomes from VET. Another gap identified in the research is the nature and extent of unmet and unarticulated demand for VET by those not completing senior secondary school, and whether this should be addressed through the school system or by other means.

Demand for training in literacy and numeracy is expected to rise as jobs increasingly require higher levels of these skills. The research had identified a group whose literacy and numeracy skills prevent them from participating fully in economic and social life and are not currently accessing training. More research is needed to investigate the most effective ways of meeting the increasing demand for literacy and numeracy training for this group.

The long-term national consequences for international competitiveness and national income of investment in training that is at a low level and is enterprise-specific is an area for future consideration. There is considerable scope for further research in this broad area, which could include inter-country comparisons, large-scale longitudinal Australian studies and case studies. Further research is needed to investigate whether the overseas experience of enterprises subsidising generic skills is mirrored in Australia.

emerging issues

Individuals suffering from literacy and numeracy deficiencies are increasingly disadvantaged in the labour market. This disadvantage extends to the VET system, where there are problems in accessing and successfully completing other training. This is one area of increasing demand where VET policy-makers need to consider courses which include a component of literacy and numeracy support. Negative experiences of school, low self-esteem and models of learning that assume a high level of literacy and numeracy repress demand by a large number of potential VET clients, including many Indigenous Australians.

Current perceptions and traditional performance measures of learning are narrow. Learning which supports self-esteem, personal development and personal value in order to promote a learning society would increase demand for VET.

There is concern that the quality of education and training and assessment (VET products) is being eroded by the proliferation of registered training organisations (RTOs) and user choice, especially where training is undertaken exclusively on the job. User choice policy has focussed more on providing clients with choice, rather than much needed support in articulating demand and negotiation to meet needs.

In future there will be more demand for VET from non-enterprise-sponsored individuals who will require constant involvement in training because of the pace at which work is changing. Many non-sponsored individuals have no real choice of provider or ability to influence content or delivery because of their inability to pay. There has been a shift towards a greater concentration of young adults in small firms that tend to provide (demand) less training, and less generic, transferable training. Clients with multiple disadvantaged backgrounds are the most disadvantaged in terms of access and choice.

Lack of continuity of funding and programs is the single biggest barrier to enhancing participation in VET and to achieving beneficial social and economic outcomes. Consideration of small business, regional difference, and the balance between the short-term needs and demands of enterprises and the longer-term needs of employees and individual clients is required.

Supporting training brokers in negotiations between clients and providers will increase demand for VET. Networks and leadership that includes a brokerage function are emerging as key factors in assisting individuals, small business and communities and regions in articulating and meeting their demand for VET.