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Group Training Organisations Trends and Challenges
With respect to group training organizations, the prevailing trends are that governments in the United States and the United Kingdom are pushing for more apprenticeships, group training's share of the apprentice and trainee market in Australia is decreasing, and technology disruption among the traditional trades is creating opportunities for group training organizations. Key challenges confronting group training organizations in Australia, on the other hand, are funding cuts and policy reform fatigue.
TRENDS
1. Apprenticeship pushes in the United States and the United Kingdom
While information on group training organizations in the past three years is concentrated on Australia, there is related information concerning the United States and the United Kingdom that is worth noting. According to a Bloomberg article published around a week ago, the Labor Department of the United States made public its Task Force on Apprenticeship Expansion. This task force appears to have been created in response to Trump's acceptance last March of Salesforce CEO Marc Benioff's suggestion that 5 million apprenticeships be created in the succeeding five years.
"According to the Department of Labor, there are 6.1 million jobs that employers can’t fill because they can’t find enough skilled workers. A study conducted this summer by the National Center for the Middle Market at Ohio State University found that 44 percent of mid-market companies said they had difficulty recruiting people who had the skills they needed."
It appears the United Kingdom is keen on increasing apprenticeships too as the number of apprentices in the country has grown from 75,000 in 2003 to 1 million this year. The push for apprenticeship in the country began with the Blair government.
Though apprenticeships in these countries are not necessarily done through group training organizations, the push for more apprenticeships is an opportunity that group training organizations can take advantage of. A group training organization, after all, is an organization that "employs apprentices and trainees, and then places them with a host employer who they work for whilst receiving on-the-job training for their apprenticeship or traineeship."
2. Decrease in group training's share of the apprentice and trainee market
Acil Allen Consulting was commissioned by the Commonwealth Department of Industry to prepare a report on the group training industry in Australia. Though the report is somehow dated as it was published in June 2014, it is very likely that some findings in the report are still relevant today.
According to the report, group training's share of the apprentice and trainee market in Australia had effectively dropped between 2003 and 2013. With respect to all three metrics — commencements, in-training, and completions, group training's share in 2003 was approximately between 12% and 14%. In 2013, the share had fallen to about 10%.
Meanwhile, locations in Australia where GTOs had the largest market shares in 2014 were South Australia (13.8%), Western Australia (13.7%), and Northern Territory (13.3%). And, occupation-wise, the occupation groups where GTOs had the biggest shares in 2013 were: electrotechnology and telecommunications trade workers (17.7%), automotive and engineering trade workers (16.5%), and construction trade workers (15.9%).
3. Disruption of traditional trades by technology
"The traditional trades, along with most professions and occupations, are being revolutionised by the introduction of technology. The study and mastery of STEM subjects is recognised as becoming increasingly essential to success in the labour market of modern economies."
The NAEN thinks that GTOs are in the best position to manage school-based apprenticeships because of the GTOs' "close relationships with the secondary schooling sector."
CHALLENGES
1. Funding cuts
The NAEN, formerly Group Training Australia, noted this in its budget submission "Skilling for jobs — skilling and jobs through group training." According to the report, which was published in January 2017, the vocational education and training (VET) system of Australia has seen several reductions in funding in the past few years. The most crucial of the funding cuts led to the abolition of the Joint Group Training Programme (JGTP), which was then replaced by the Australian Apprenticeship Support Network (AASN). Although some group training organizations (GTOs) are included as providers in the new framework created by the AASN, the NAEN, the organization that represents GTOs in Australia, thinks GTOs have more to offer in helping the government attain its training-related goals and that GTOs' expertise can be better utilized.
With the funding cuts, GTOs, especially those located in rural and regional areas, are finding it increasingly hard to be responsive to opportunities and to carry the risks associated with the business. The NAEN proposes that some aspects of the group training model should be retained and funded as they are not addressed in AASN's new framework.
At the time the NAEN wrote the budget submission, it mentioned also the possible loss of funding under the National Partnership Agreement on Skills Reform. This possible funding cut, as the NAEN explained, is a cause for concern for GTOs.
As can be seen in the GTO Policy and Procedures published by the Victorian Registration & Qualifications Authority in October 2016, Commonwealth funding to the JGTP was discontinued on July 1, 2015. Before that, New South Wales and Tasmania had also pulled out from the program. Based on this, it appears GTOs previously received funding from both the Commonwealth and the state. There is no current indication online of whether GTOs are competing on price, but, in 2010, it was reported that employers accounted for 95% of revenue of majority of GTOs.
2. Policy reform fatigue
This was mentioned by the NAEN in its 2016 budget submission "Backing what works — skills and jobs through group training." The NAEN wrote:
"There is a growing sense of reform fatigue, heightened by the policy experimentation that has led to a position where the practical outcomes seem to have fallen well below expectations."
The NAEN explained that many professionals think the VET sector has become something akin to a laboratory, where new policies are tested at the expense of established players. One questionable experiment cited in the report is the VET FEE-HELP program, which has allegedly resulted in taxpayer money getting wasted on sub par training.
"The level of experimentation and tinkering has gone too far. Policy reform has become policy upheaval, nowhere more so than in the VET FEE-HELP disaster that has swallowed billions of taxpayer dollars and mountains of resource time."
OTHER STAKEHOLDER PERSPECTIVES
Recent reports on the group training industry are from the perspective of the peak body representing these GTOs. There is a report containing the assessment of other stakeholders (e.g. customers — government and employers), but the report is very dated. According to Part B — Industry Analysis of this 2010 report, only 20% of employers "said that group training had increased their propensity to employ an apprentice or trainee." Employers identified the following as the top three benefits of group training: simplicity of employing an apprentice or trainee, flexibility, and positive customer relationships. Also, cost was seen as the key barrier to usage of GTO services.
The government, on the other hand, saw the following items as the most critical issues with respect to GTOs: performance, social equity programs, and market share.
CONCLUSION
To summarize, trends affecting group training organizations include the following: the push for more apprenticeships in the United States and the United Kingdom, the decrease in group training's share of the apprentice and trainee market in Australia, and the disruption of the traditional trades by technology. The main problems besetting group training organizations in Australia are funding cuts and policy reform fatigue.