Creating markets or decent jobs? Group training and the future of work

Key messages

• While the existence of group training as a phenomenon is well known in vocational education and training (VET) policy circles, it is poorly understood by most people, including those in VET policy circles.

• In the past, too much attention has focused on group training organisations as objects of government policy concern. Too little attention has been paid to the role they play in the labour market.

• Group training organisations are best understood as intermediaries that are embedded in particular labour market flows. We believe it is erroneous to treat them as if they are 'stand alone' organisations from which 'outcomes' can be 'purchased'. At their best they help promote decent, sustainable work-based learning situations by facilitating a fairer sharing of the risks associated with employment and skill formation. They are able to do this because policy from an earlier era nurtured a network of group training organisations built around a practical vocational ethic. This is an ethic that blends the best of commercial competence, a commitment to developing coherent occupational structures and an ethos of care and support at both the personal and local level.

• We argue that changes in policy since the early 1990s are likely to undermine the provision of quality group training services.

• This outcome is not inevitable. If it is to be avoided, in our view policy concerning group training will need to change direction. In particular, group training organisations should not be expected to emulate labour hire organisations or employment agencies specialising in employment-based training. Instead, the best features of the group training model, especially the minimisation of down time and operating on a not-for-profit basis, should underpin future reforms, including in relation to all organisations providing intermediary services in the labour market.

This report examines two questions:

• What do group training organisations do?

• What do their operations reveal about options for work in the future?

Group training involves situations in which apprentices or trainees are employed by one company (termed a 'group training organisation') but are continuously placed with other enterprises (termed 'host employers') for the purpose of their on-the-job training.

The literature on group training is patchy. Most of it reports on various evaluations and reviews of administrative issues, especially funding arrangements. In making sense of group training organisations, we have found four strands useful within the literature on the changing nature of work. These concern debates on:

• the changing content of work (for example, knowledge versus service work)

• changing forms of employment (for example, the rise of casual, contractor and labour firm arrangements)

• new responses to these developments (for example, so-called 'third sector' organisations brokering a fairer sharing of risks)

• the changing relations between community, work and the state (for example, controversies over declining levels of civic engagement and notions of occupation).

Conceptual leads derived from this literature informed our close analysis of four group training organisations. A research strategy based on qualitative case studies was employed to generate the data informing our analysis. This approach was adopted because the objective of the research was to better understand how group training organisations operate. To do this we explored 'dimensions of difference' within the current network of group training organisations. This involved examining four group arrangements that differed on the basis of size, occupational coverage, geographic location and organisational setting. Information was primarily gathered from face-to-face interviews with group training staff, host employers/supervisors, apprentices/trainees and training providers familiar with the group schemes studied.

Key findings arising from the fieldwork were that:

• the employment (as opposed to the training) relationship is the defining feature of group training organisations

• they are embedded in particular labour market flows-that is, it is erroneous to treat them as 'stand alone' organisations from which 'outcomes' can be 'bought'

• at their best, we believe that group training organisations help labour market arrangements work better and add new dimensions to their operation. They are especially important for:

• increasing levels of participation in employment-based training

• improving the quality of skill formation by ensuring better links between on- and off-the-job training

• improving standards concerning wages, employment conditions and occupational health and safety

• improving access to employment-based training amongst disadvantaged job seekers

• at their worst, group training organisations can undermine labour market standards by mobilising an opportunistic, rather than training, ethic amongst employers

• the best way to characterise differences between group training organisations is by reference to their dependence on different market segments-that is, upper echelons (best quality and lower risk) or lower echelons (disadvantaged job seekers)-and their ability to draw on the support of different communities (that is, occupational and locational).

Implications for analysis and policy arising from this project are:

• The changing content of work: The group training organisations examined showed how decent, sustainable forms of service work can be promoted and degraded forms of service work discouraged, especially in low-paid jobs. This was achieved, for example, by ensuring a fair sharing of the risks of employment and skill formation, enforcing publicly defined standards and providing counselling, pre-placement and support to employees.

• Changing forms of employment: Several of the group training organisations examined highlighted the limitations of assuming 'flexibility' is something to be pitted against 'standards'. Instead, they showed the viability of establishing standards for flexibility. For example:

• preserving apprenticeships in difficult circumstances by offering three-month pre-apprenticeship training to ensure productivity from the first day with the employer (an action taken by one of the organisations)

• rotating apprentices between employers to broaden their range of skills

• guaranteeing apprenticeship continuity if a placement with a host employer ends unexpectedly by the group training organisation offering off-the-job training on a competency basis in their own skills centre

• ensuring adequate learning opportunities for the apprentice are provided (monitored by regular visits from their field staff).

• The management risk: Our group training organisations showed how risk could be more fairly and effectively shared for the good of the apprentices/trainees and host employers, as well as for their localities and industries. One organisation, for example, passed on most of its training subsidies to its low-paid aged care workers to lift their earnings. Another organisation kept the subsidies to help fund its overheads, such as its intensive case management program offered in the first three months of work. A major problem amongst a group of trainees arose from poor rostering practices within a host company. A group training organisation consequently stepped in as case manager, having the status of employer, and improved the rostering practices for the whole workforce of the host company, not just the trainees.

• Marketisation: We argue that if vocational education and training (VET) policy in general (and group training policy in particular) continues on its current trajectory, the network of group training organisations, which are delivering efficiency and equity benefits of the type noted in the three previous points, will be destroyed. Some quality organisations will survive, but they will only service the upper echelons of the labour market. Important analytical and policy implications resulting from this study have been to clarify on what basis government support should be provided.

• Building new institutional capacity: State intervention is required to promote and maintain a group training organisation network built around a practical vocational ethic. This ethic blends the best of:

• commercial competence, which involves recognising the importance of commercial realities but not being motivated by market criteria of success

• a commitment to developing coherent occupational structures; for example, helping to reproduce or establish trade or quasi trade-based structures in the labour market, known as the 'occupational' principle

• an ethos of care and support at both the personal and local level, which are not strictly employment related but bear on performance at work, for example emotional problems associated with the transition from adolescence to adulthood and from education to work. This has been called the 'employment welfare' principle.

• To prevent complacency and offer workers and employers choice, some kind of competition is required; but it needs to be conducted to enhance and not undermine skill development in secure work. Group training organisations need public funds for the public good they provide because market-based arrangements will never provide effective structures of skill formation and care on a universal basis. Market-based arrangements are part of the problem, not part of the solution.

The report concludes by arguing that the experience of these organisations highlights the importance of clarifying the role of markets in policies concerning work and skill. The choice is not whether one is 'pro' or 'anti' market. Rather, the choice is whether markets are seen as an objective to be promoted or a constraint within which people, institutions and policies have to operate. If the former view is taken, group training organisations will become little more than employment agencies and labour hire firms, specialising in employment-based training. If the latter view is taken, then this analysis indicates that group training organisations provide important pointers on how more quality jobs can be created in the future.