Continuity and change: employers' training practices and partnerships with training providers

Description

This study provides a comprehensive picture of the way in which employers navigate the Australian training system and establish partnerships with registered training organisations. In terms of evolution over the last 20 years three key factors emerge:

• While the take-up of nationally recognised training by employers has not increased substantially, this type of training is being used in different ways.
• The nature of the partnerships between RTOs and employers has changed, from a relationship based on fee-for-service provision to one based on long-term mutual collaboration.
• A change in the role of the training function and training staff in organisations has been observed.

Summary

About the research

A number of factors influence the motivations of employers to train their workforce and the ways in which they engage with the training system. This study combines a national survey and interviews with Australian employers and registered training organisations (RTOs) to provide a comprehensive picture of the way in which employers navigate the Australian training system and how partnerships with RTOs are established. The study also provides insight into how practices have evolved over the last 20 years.

Key messages

• Despite changes to the business and vocational training policy environments, the reasons why employers train their employees have altered only slightly over the past 20 years.
• There is an enhanced focus on quality and partnerships, with the following main changes:
  • The role of the training function and training staff in organisations seems to be more proactive than previously, with training staff now having direct relationships with external providers of training.
  • The take-up of nationally recognised training appears not to have increased substantially, but this type of training is being used in more diverse and flexible ways; for example, support for skill sets over national qualifications.
  • The nature of the partnerships between RTOs and employers has changed from a relationship based on fee-for-service provision to one based on long-term mutual collaboration.
• The main reasons why employers train their employees are: to improve the quality of goods and services because of new technology; as a business strategy; and to meet licensing and workplace health and safety requirements.
• Employers want to provide more training for their employees but are constrained by the time it takes and the financial resources required.
• Partnerships between industry and RTOs bring a range of benefits to both parties, but the financial benefits to RTOs are generally quite modest.
• Employers use both TAFE (technical and further education) and private RTOs as their main source of information about vocational education and training (VET) and increasingly use them as ‘navigators’ of the VET sector in collaborative partnerships.

The research clearly shows that nationally recognised training is valuable to employers and has many ‘spin-off’ effects. It confirmed recent directions by governments to encourage the use of such training. The redeveloped models described in this report may aid future planning and policy by governments in relation to employer training and partnerships between RTOs and industry.

Dr Craig Fowler
Managing Director, NCVER

Executive Summary

The aim of this project was to provide an up-to-date picture of the training practices of employers in Australia and their partnerships with registered training organisations (RTOs) in the provision of nationally recognised training. To assist in tracing developments over time, comparisons were made with the prior research conducted by the researchers involved in this project, which dates from between 20 and 13 years previously.

Methodology

Surveys of employers and of RTOs were undertaken. The RTO survey focused on partnerships with employers, while the employer survey investigated training practices in general, as well as partnerships with RTOs. Interviews were also undertaken with the employers and RTOs involved in partnerships to identify the features of successful partnerships. The interviews were ‘paired’, such that each partner was interviewed separately about the same partnership. The data from the surveys and interviews were analysed to provide a snapshot of current practices and then used to identify aspects of continuity and change over the past two decades.

Key findings

The reasons employers train their workforces have not changed appreciably over time, although quality is becoming increasingly important amongst the mix of major factors. The most important drivers to training for employers are the need to: constantly improve the quality of the product or service; adopt new technology; and meet the increasing regulatory requirements that impinge on their businesses. Most employers reported conducting more training compared with five years ago, with medium-sized companies most likely to report a substantial increase in training. Generally, the amount of training increases with employer size. Most employers want to provide more training for their employees, with the major barriers being the time it takes and the financial resources required.

Nearly half of the employers in this study reported providing some form of nationally recognised training to their workforces, a greater proportion than that reported in the literature. Our analysis showed that organisations using nationally recognised training tend to be more complex, to be multi-site, to experience greater advances in technology and to be expanding their operations. Nationally recognised training provides benefits in addressing these issues. The adoption of this training by employers conforms to a continuum, whereby the employer may initially engage on a small scale with a pilot adoption of training; following the success of the training, the employer may progress to extending the use of nationally recognised training to other groups of employees. At the final stage, advanced users of nationally recognised training make a commitment to the training being sustained, by building training into broader aspects of workforce development strategies.

A key element in the use of nationally recognised training by employers is the existence of a ‘navigator’, an organisation that can guide the employer through the complexities of the vocational education and training (VET) system. This navigator might well be someone external to the organisation, such as an RTO or other partner. The navigator may not receive financial benefit from all interactions.

The availability of government funding remains a key reason for employers making use of nationally recognised training, and changes in funding over recent years at both Commonwealth and state levels have complicated the picture, with employers and RTOs being more preoccupied with recent funding cuts than with the additional funding opportunities provided in the slightly more distant past. RTOs remain the most important source, by far, of information for employers on nationally recognised training.

Almost half of the employers surveyed had partnerships with RTOs. The majority of employers in partnerships were generally satisfied; any dissatisfaction was related to an RTO’s openness to experimentation and their willingness to make changes to the nature of the off-the-job training. TAFE (technical and further education) institutes had high levels of self-awareness of their own deficiencies in these areas and in the business matters associated with partnerships. Further detailed information about partnerships was gained from the in-depth interviews with the RTOs and employers who were in the partnership. Both parties reported major benefits from partnerships, with many reports of partnerships that were collaborative rather than transactional. Financial benefits were important for RTO viability but these were rarely large.

A number of ‘success factors’ characterise effective partnerships. These include the availability of government funding to underwrite the partnership; flexibility and willingness to innovate in delivery on the part of the RTO; RTO staff understanding of industry and business needs; and the establishment and maintenance of trust in the partnership between the employer and the RTO.

Based on these and other findings, the two models of employer training and one model of successful RTO—industry partnerships developed in earlier studies by the authors have been updated and reworked. A new typology of employer—RTO relationships has been developed, one that depicts a number of items in three general domains: the nature and depth of the relationship; the extent of coverage of employers’ workforces; and the extent to which employers’ premises and staff are used in training delivery.

Implications

The research shows clearly that nationally recognised training is valuable to employers and has many ‘spin-off’ effects. It confirmed recent directions by governments to encourage the use of such training. The redeveloped models may aid future planning and policy by governments in relation to employer training and to partnerships between RTOs and industry.

The research shows that employer training practices, when viewed through the lens of the last 20 years, are characterised by continuity and change. Although many aspects have remained the same over this period, employer training has undergone some degree of evolution.

Firstly, there appears to have been a change in the role of the training function and training staff in organisations. They seem to be more proactive than previously and play a direct role in relationships with external providers of training and in reacting to external change.

Secondly, while the take-up of nationally recognised training by employers has not increased substantially, this type of training is being used in different ways. Rather than organising the delivery of full qualifications to large groups of workers, employers are now using nationally recognised training in more diverse ways, such as delivering training in skill sets for many different groups of workers and being aware of what is available and how it can best be used.

Finally, the nature of the partnerships between RTOs and employers has changed from a relationship based on fee-for-service provision to one based on long-term mutual collaboration. RTOs appear to be working with employers across a range of business needs and providing expert guidance to the employer in undertaking and navigating the VET system.