Group Training: Government not biggest funder, the private sector is – What about TAFE?

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As recent history has shown, with examples like Vocation and ABC Learning, organisations that base their business model on consistent government funding tend to learn the hard way about survival. Group training has been going for 35 years and there are thousands more apprentices and trainees we will help into a career in the years to come.

Victorian TAFE Reform Panel recommended removal of restrictions on TAFE institutes being registered as Group Training Organisations. 2013 – http://bit.ly/1DZpe1L

Above all, governments seemed then and now unable to face up to the factors that would be necessary to make TAFE institutes ready for flat playing field competition.

In a joint statement, the CEO of Group Training Australia, Jim Barron, and the CEO of TAFE Directors Australia, Martin Riordan, pressed for the skills and training portfolio to be afforded high level ministerial representation, given its importance to national economic productivity and workforce participation. http://bit.ly/1EwTEKb

Group Training Australia is the national peak body representing the network of over 150 Group Training Organisations (GTOs) employing apprentices and trainees throughout Australia. GTA was recently awarded the Council of Small Business Organisations of Australia (COSBOA) Small Business Champion Award 2010.

TAFE Directors Australia is the peak incorporated body representing Austra|ia’s 61 TAFE Institutes, including five dual sector universities with TAFE divisions. The network is the largest and most diverse tertiary education sector in Australia with more than 1,300 campuses located across metropolitan, suburban, regional and remote locations.

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Last week’s announcements of the recipients of the federal government’s Australian Apprenticeship Support Network funding is just the most recent example of an issue that some consider to be undermining group training.

The Australian reported that without this round of government support group training’s future is in doubt. Of course, many organisations are disappointed to have missed out on funding but it is far from the death knell for the group training system.

In NSW, we have just received the results of research into the group training system and the findings are clear – government is not our biggest funder, the private sector is. The data showed that in NSW we received on average $27.4 million each year from employers investing in group training apprentices and trainees, compared with only $1.7 million from government programs.

This finding shows that far from having no funding prospects, group training is well supported in the private sector. It is important that the training sector does not lose sight of this fact. Too often we have focused on reacting to governments’ involvement in the sector. We have become preoccupied with perennial policy changes, inconsistent funding and regulatory changes, leaving many organisations at the mercy of political or departmental whims. Often governments at both state and federal levels have pulled the wrong policy levers with no plan to cope with the unintended consequences.

It is now strikingly clear that too much reliance on government funding could damage the training sector. Governments across the country are opening up training markets to provide more choice and providers must get on board with adapting to market demand and the mantra of choice.

Earlier this year we commissioned Social Ventures Australia Consulting to measure the value of group training using a social return on investment methodology. It found that by taking on an apprentice or trainee through group training, employers get a return of $1.70 for every $1 invested. This social ROI is based on the fees employers pay to have a GTO help them manage an apprentice or trainee. Many employers, particularly SMEs, would otherwise struggle with the administrative and time burden required to manage a new unskilled employee. The time and money they save by outsourcing the recruitment, induction, workplace health and safety and management of apprentices brings about this ROI.

While this equation sets out a clear business case for the group training model, one of the most interesting findings of the research is that apprentices hired through group training tend to be more productive. Group training removes the risk of taking on recruits who may have on-paper qualifications but no real work skills, making them a net liability for the business.

Productivity is at the core of the public debate about quality training. Employers want recruits who don’t just have qualifications, but who can quickly become productive contributors to the organisation. And, it is relieving to see that governments across the country may be heading in this direction which requires a shift in their focus from simply signing up young people into courses to incentivising them not just to complete their course but to use their training in a job.

Government needs to play its part and invest in social goods like promoting apprenticeships and traineeships, supporting careers pathways in schools and targeting support to disadvantaged people, but it is not the be all and end all. And it is certainly not the end of the line for group training.

As recent history has shown, with examples like Vocation and ABC Learning, organisations that base their business model on consistent government funding tend to learn the hard way about survival. Group training has been going for 35 years and there are thousands more apprentices and trainees we will help into a career in the years to come.

Naomi Dinnen is the executive officer of the Group Training Association of NSW and ACT which is hosting the 2015 Skills Conference today in Sydney.

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