The Race to the Bottom

By Marie Vassallo

No matter where you look in the Australian mainstream media today, the news about vocational education is all doom and gloom. Headlines about ‘dodgy providers’ abound, with rehashed stories printed on a weekly, if not on a daily basis. These stories often confuse investigations underway by a variety of regulators including the Australian Skills Quality Authority (ASQA) and the Australian Competition and Consumer Commission (ACCC) into Vet-Fee Help providers, with those who have lost state government funding contracts. The stories often include a single mother wanting her certificate, or an unemployed person with a new laptop and thousands of dollars of debt for a course they never started or realistically, would never have been able to complete. The image they portray of our industry is of ‘fly-by-nighters’ making quick profits leaving the battlers in their wake. Not a very flattering picture.

It’s little wonder that across the board training numbers are down. The latest National Centre for Vocational Education (NCVER) figures show an increasing decline in apprentices and trainees across all industries, and this trend has continued across funded and fee-for-service students as well. When competition was high for the student numbers, many RTOs decided to compete on price. This meant extremely low student enrolment fees in a ‘race to the bottom’. The only way to sustain low fees is to cut corners in other ways—reduce the quality of learning materials, employ less-experienced trainers, cut administration staff etc.

There are those who argue for zero enrolment fees when state government funding is available. This too is unsustainable, as funding changes occur quickly. The head of Victoria’s Higher Education and Skills Group (HESG) has often said in public forums that, “we don’t pay enough for you to deliver quality training” implying that the Department expects providers to levy a fee to students. Business development staff will tell you that students “won’t pay fees”. But is this true?

In 2016, I’ve seen a growing number of RTOs in Victoria deliberately not taking up state-funded contracts. They cite the ever-increasing burden of compliance to a contract that restricts their ability to enrol quality students and restricts their flexibility in changing what they deliver throughout the year. These organisations have undertaken a review of their student cohort over the past few years and found some surprising statistics. Full fee paying students are more likely to complete a course, require less administration time in chasing up assessments and extending end dates, and have a stronger ‘word-of-mouth’ success rate in recommending the course to others in their circle of acquaintances. There is no doubt that transitioning away from funded students has changed their businesses, particularly in the early stages, as student numbers could initially drop (but as I’ve said they are dropping across the board anyway). Business development staff also had to change their approach, marketing material and scripts, and trainers were required to be more adaptable to e-learning and other modes of delivery.

What causes this change in student attitudes? Is it that you value something more if you have paid for it? Or is it that the attitude of the staff within the RTO has altered? Trainers have increased enthusiasm levels when engaged learners attend classes, enrolment staff have students who are keen and don’t need chasing up for their ID and USI, and administration staff are able to get on with their job and undertake file audits etc., rather than chasing up students.

Isn’t it time we all changed the direction of this race?

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Marie Vassallo

Marie Vassallo has more than 15 years of experience in vocational education. She has worked at all levels within a Registered Training Organisation (RTO), including as CEO for a large national RTO. Marie has also worked as a Skills Victoria Auditor. Since 2008 she has managed her own company, Marie Vassallo Consulting, and brings her business and compliance skills to the table, delivering real world solutions for RTOs. Her consulting business provides assistance with regulatory and funding authority audits, contract applications, validation and moderation workshops and professional development workshops for all levels of staff. In 2014 Marie became an Accredited VETtrak Consultant, providing training to administration staff and management in how to gain the most from this student management system.