Transcript of The role of micro-credentials in VET

1 June 2021

Vocational Voices: Season 6, Episode 3

The role of micro-credentials in VET

Bryan Palmer (00:04)
And I'm very conscious that governments think about what they fund, and don't often think about the rest of the system that's operating. And I suspect that we do need to make sure that we are thinking about all aspects of the vocational education and training system, including the bits of the system that aren't funded by governments.

Steve Davis (00:25)
Hello, and welcome to Vocational Voices. The official podcast of the National Centre for Vocational Education Research or NCVER for short. I'm Steve Davis, and today's topic is the role of micro-credentials in VET. Our Vocational Voices today are Simon Walker, Managing Director NCVER, and Brian Palmer, Private Consultant and author of An analysis of micro-credentials in VET, which at the time of recording, is just a few days away from being released on the 3rd of June, 2021. Simon and Bryan, welcome to the podcast.

Steve Davis (01:02)
Hello, Steve.

Bryan Palmer (01:03)
Good day.

Steve Davis (01:04)
Simon, I'd like to start with you because we've spoken about micro-credentials a few times on this podcast, and I'd like to assume that all our listeners know exactly what micro-credentials are, but do you actually think there's a case, or do you feel there are some grey areas that might lead to different interpretations and definitions of micro-credentials?

Simon Walker (01:28)
Yeah, it's a very good question, Steve. And I think, yes, there are some areas of different interpretations, but at one level, a micro-credential is really just a contemporary name for something that's always been around. So other names include skill sets, short courses, nanodegrees, micro certifications, digital badges, etcetera. And perhaps to note that there is one new form of micro-credential that came into existence, if you like, last year, which was the introduction of micro-credentials at undergraduate level, and they're referred to as undergraduate certificates. Otherwise, shorter forms of training have been around for a long time.

Simon Walker (02:09)
That said, it is worth in the context of the research just clarifying some of those definitional issues. And so firstly, I'm going to pass the expression, starting with the term micro. That is widely accepted as meaning a shorter form of training or education that is less than a full qualification. And it's typically focused on a discreet skill or a set of skills and knowledge as opposed to a broad-based educational program.

Simon Walker (02:38)
And then if it took a look at the term credential, in its broader sense it's proof of someone's abilities and experience. And of course that can be a qualification or it could be a CV outlining someone's work experience. If we take a view from an education and training perspective, micro-credentials can take a number of forms, including both accredited, which in the VET sector we refer to as nationally recognised, or unaccredited micro-credentials. There are plenty of valued unaccredited micro-credentials in the market. For example, Microsoft certifications.

Simon Walker (03:14)
In terms of the discussion and this research, we're focused on the formal VET system, and that recognises two forms of micro-credentials. Training package skill sets and accredited short courses. And in these instances, particular subjects or combinations of subjects are specifically defined and formally identified on the national register of VET.

Simon Walker (03:36)
What this research shows, however, is that there are also many other combinations of subjects that are effectively acting as credentials in the marketplace, and which in this report we refer to as subject bundles.

Steve Davis (03:48)
And I want to pick up on the subject bundles thing, and this is where I'll turn to Bryan, because in your report, An analysis of micro-credentials in VET, you use the term subject bundles to describe enrolments in subjects not part of a nationally recognised program or course. And I wonder, can you paint more of a picture for us, Bryan, especially the reason people do these bundles instead of micro-credentials.

Bryan Palmer (04:16)
What I looked at was students who are doing one or more subjects, and that's what became the bundle, at a single registered training organisation where every subject in that bundle was not taken as part of a nationally recognised program of study, or an accredited course. And in 2019, there were some 2.6 million VET students enrolled in these subject bundles. This was the largest cohort of students. 62.7% of the RTO student pairs that I looked at were undertaking a subject bundle. The most common bundle, or the most commonly studied subject was providing CPR. Cardiopulmonary resuscitation.

Steve Davis (05:06)

Bryan Palmer (05:06)
The second most common one was a first aid certificate, and the third most common one was preparing to work safely in the construction industry. They give you an example of what some of the bundles were.

Steve Davis (05:20)
With that though, with those examples you just mentioned, can we go a bit deeper? Can you help us understand why there are so many of these students pursuing these subject bundles when we actually have training package skillsets and we've got accredited courses already?

Bryan Palmer (05:38)
So in the analysis I looked at, there was about 50,000 different subject bundles that I looked at. But just 600 of them accounted for 90% of the students. Just 100 of them accounted for 80% of the students. And a very large proportion of these were driven by regulatory requirements. Requirements to ensure that people, for example, were safe in the workplace, or for example, that they're able to respond to an emergency should it occur, or that they were able to operate a dangerous piece of equipment or work in a dangerous location. And so workplace safety, emergency preparedness, an authority to operate a piece of equipment were large. And the regulatory requirements that sit behind that were a large driver for these subjects.

Steve Davis (06:33)
Does that suggest there's actually a gap in what we're offering in these training package skillsets or accredited courses. Why do we feel there's a need to go outside of those to get this micro-credential, if you'd like, to tick a box and get a ticket as far as a certain skill of operation might be the case. Are we identifying a shortcoming by this large tranche of people?

Simon Walker (07:07)
I might just start before Bryan chimes again to say that up until 2015, we didn't have any line of sight of this particular activity because it is primarily privately financed, and we're only collecting data on government-funded activity. So when total VET activity came in, this stuff started to emerge. And even then it was a couple of years before we were able to present the data in a way that highlighted just how much of this stuff was existing.

Simon Walker (07:35)
And the reason for me mentioning that is there's nothing to suggest this wasn't always the case. In other words, before training package skillsets were introduced, this activity was almost certainly going on. Particularly in the regulated space. And probably the other aspect of the regulated space is that over the last let's say 10 to 20 years, a lot of licensing activity used to be separately examined or assessed by another body. And there has been a trend over time to use what's on the shelf. Subjects that are nationally recognised for the purposes of licensing. And that has then, if you like, raised the profile certainly in the data that we collect.

Steve Davis (08:16)
Bryan, have you got some thoughts on that?

Bryan Palmer (08:19)
I agree entirely with what Simon just said. That I think this has been going on for some time, and I agree that the VET system in some way has been co-opted to provide a national system of occupational health and safety and other allied safety and allied authorities to do particular tasks and jobs. I also think that governments have tended to focus their attention where they're funded, not where it's privately funded. And that's why there hasn't been an enormous amount of awareness of this activity for a long time as well.

Steve Davis (09:05)
I would like to suggest that what we're seeing here perhaps is what town planners and architects might refer to as desire lines. We've all seen a beautiful new park where there's a lovely perpendicular intersection where the path goes to point A and then turns around to point B, but through the grass in between the beginning and the end of that, people just cut across and go on the path of least resistance for an efficient arrival to an outcome. Is this the market giving us desire lines and telling us, "Yep, we've got all those bigger packages. We just need this pinch hit now."

Simon Walker (09:46)
Well, I think that's absolutely true. What I think you'll find in Bryan's study is because some of these combinations are not specified as skillsets, they are bespoke or tailored to particularly enterprises. So an enterprise just wants a particular set of skills. The private market, arguably is a bit more nimble and agile at being able to provide those two workplaces. And I think those two things combined have just, as Bryan has pointed out, has sort of created a market which is self-serving and working beautifully. And in many respects, particularly in this regulatory space, government doesn't need to intervene.

Steve Davis (10:29)
Interestingly, I was actually on YouTube on the weekend and there was a pre-roll ad before the video I was going to watch. And low and behold, it was sponsored by the South Australian government, and it was inviting me and anyone who watched it to go to their skills workshop web page, so that I could be directed to where I might be able to do some courses to gain some skills obviously to improve where I am in the job market or enter the job market. Which if I were to pick up on that point you raised earlier Simon, where a lot of this is privately funded, it's not government-funded, a question to you and Bryan and I'll start with Bryan is given that government involvement can actually help stimulate demand for courses. Do you think it'd be helpful for the government to intervene in this sector of the training system to help boost engagement levels even further?

Bryan Palmer (11:21)
I'd like to draw a distinction and suggest that there may be a number of markets operating here and rather than a single market. I think there's a market that's operating around qualifications. Sorry, not qualifications. Around this regulatory requirement that you'd either need a ticket to enter a workplace, or some safety training before you're allowed in a workplace. And then I think there is a range of jobs in the labour market that only require one or two VET competency programs before you can do that job in the labour market. And I think there's less of a role for government in what industry is currently privately providing, but there's a range of people who have a marginal connection to the labour market, where these one or two competencies, much less than a qualification, would make a tremendous difference in the employment outcomes for a range of individuals who otherwise would have marginal connection to the labour market. And so I think there is an opportunity for governments to fund programs or fund small subject bundles that can just be the tipping point for an individual to get a job and to get lifelong employment.

Simon Walker (12:45)
Yeah. And I just add to that what happened last year through the disruption due to COVID. There was an enormous amount of effort and policy and funding going towards micro-credentials. And this is probably the first time there's ever been a concerted national effort for some of the reasons that Bryan's just outlined and because of the disruption in the labour market and the changing skills needs, being able to quickly adapt future workers with the skills they need for jobs as they have changed as a result of the pandemic. And I'm just going to quote you a couple of statistics from our government-funded September collection. So that's the nine months last year from January to September.

Steve Davis (13:31)
I'm glad you're doing this, because we have you here for your statistics, Simon.

Simon Walker (13:35)
And I are going to compare that to the previous nine months in December '19. Sorry, to September 19. And if we talk first of all, about training package skillsets. So these are not the bundles that Bryan's talking about, they increased by 128% compared to these nine months in 2019. Still relatively small, so only about 22,000 students. But governments also developed their own skillsets or programs, which were often in relation to infection control and those sorts of things. But there were quite a long range of other types of skillsets that they developed that were not formal training package skillsets, and they jumped by 171% in that nine month period, partly stimulated by the job trainer initiative, which was about a billion dollars collectively between all governments that started coming. Although noting that this is a September figure, so that probably didn't have a huge effect at that stage. And that was almost triple the amount of locally developed skillsets, or the numbers of students undertaking skillsets from the previous nine months.

Simon Walker (14:46)
So we have seen in this last year, due to this extraordinary in history, an enormous jump in government support, funding and participation in short course training.

Steve Davis (15:00)
I want to pick up on that because there's always been that work for the dole. What if it was subject bundle for the dole? Just to get some of those mandatory things that would help job entrance gain access to certain workplaces. Could that be how the government could provide that stimulus?

Simon Walker (15:20)
Well, I'm going to get Bryan to respond to a bit of that, because his analysis did go to some of that stuff through the third party arrangements. But to some degree that has already occurred, but I think it did increase in the last year. Bryan, you got any comments there?

Bryan Palmer (15:34)
I think governments can do that, but I think there's also a risk of, at the moment, 93% of the subject bundles I looked at were privately funded. I think that's the number. There's a risk that if government becomes increasingly involved, it ends up having a cost shift to government. And so I think if it does something, it needs to think about targeted intervention, particularly where it would have the most impact. And that's why I think people with marginal connections to labour market might be the place. Or in the context that Simon was just talking about, the very unusual, when very unusual circumstances such as the pandemic occur, there may be points in time when very different interventions are needed because things are so different to the usual.

Simon Walker (16:24)
We had last year, a lot of low cost or fee free training offered by governments, and they are targeting exactly the cohorts Bryan's talking about. So people that became unemployed or have under-employment in the labour market, that was where a lot of that stuff was targeted. And a lot of that was short courses.

Steve Davis (16:46)
I have been casting our eye nationally. I'm curious to know if there are differences in participation rates and in subject choices in this subject bundling, when we look around Australia. And I asked this, Bryan, because as we know there are variations between the states and territories across a range of factors, from regulations and funding arrangements to different states of the economy and different labour markets. Could you talk to that and add some extra detail to this picture.

Bryan Palmer (17:18)
Yeah, sure. You're absolutely right. There is enormous difference between the states in terms of the subject bundles that were studied. And I think there were about four drivers of that difference. The first one is pretty obvious, that the structures of the economy and the labour market in each state is different. And for example, in the resource states of Queensland and Western Australia, there is an enormous amount of mining subjects. Whereas in ACT, which doesn't have a mining sector, there was no mining subjects. So not surprising, but an important difference nonetheless.

Bryan Palmer (17:57)
There are also a range of differences that came about by unique state government regulation. For example, in the real estate market, I looked at Queensland, New South Wales, and Victoria. They all had different requirements for what an assistant real estate agent needed to be an assistant real estate agent. And so you had different bundles of real estate subjects in those three states showing up because of different regulatory requirements in those three states. Another one that's an example was all of the states required people to have responsible gaming services training, but South Australia also had an additional subject. And so in South Australia, because of regulatory difference, you had a different subject bundle to the other states for people working in gaming venues.

Bryan Palmer (18:50)
I talked about earlier state ... I think I talked about state government funding for subject bundles. New South Wales has quite a large program of funding for state, for bundles compared to the other states. And so there were many more bundles in New South Wales compared with the other states simply because state government funded a large number of different subject bundles, whereas a number of the other states may just fund qualifications. And then there can become differences where states fund a qualification or not fund a qualification for how students engage the system. If there's qualification funding, but students may only want to do one or two subjects, they may enrol in a qualification, but then drop out when they complete the subjects they want to do. Whereas if there's no state funding, they will just enrol in the subjects they want to do and enrol as subject bundles rather than as a qualification.

Bryan Palmer (19:46)
So there's a range of different things that was driving differences we saw between the states and territories.

Simon Walker (19:52)
Yes, and I probably was a bit errant in not clarifying that those statistics that I quoted earlier, predominantly New South Wales drove those in increases. So Bryan's quite right. They were a big player in government-funded skillsets and short courses.

Steve Davis (20:08)
Bryan, I want to push the boat out a little bit further from the shore.

Bryan Palmer (20:11)
Yeah, sure.

Steve Davis (20:11)
You've noted those differences. Do you have a sense of whether that is an inefficiency in the marketplace, or whether it is a bit like a stump jump plough in which bit by bit, state by state, we adapt to the needs of the market, and as a whole, we're getting the job done.

Bryan Palmer (20:34)
That's a good question because I didn't really analyse that question in my research. And my observation was that the differences were driven by what states did both in terms of what they funded for qualifications and what they funded for bundles. But I was left wondering what was efficient and what was the right thing to do. And I didn't have an answer for that.

Steve Davis (21:05)
There could be some more scope for research in the future.

Simon Walker (21:09)

Steve Davis (21:10)
I just want to ... We hinted at this before. I want to just look back again in this topic of micro-credentials. It seems, as we've noted, a lot of the activity and even with the subject bundling it in response to regulatory activities and needs. Do you think there's appetite and opportunity for expanding this type of training to emerging persistent skills, if you like, and those needs to increase workforce participation overall? Bryan?

Bryan Palmer (21:41)
It was the one thing that intrigued me was, as I was saying before, those people who have marginal connection to the labour market, possibly a qualification might be beyond them at this point in their life. But there are job opportunities where just one skill or one subject from vocational education and training would make the world of difference in their capacity to engage with the labour market, and I think there's a real opportunity there to increase labour market participation through targeted interventions.

Simon Walker (22:17)
Yeah. And I got to just add to that another cohort, which are people who are already in the workforce. And look, I'll take a fairly crude illustration, but if you have people who are already in the IT industry in particular, which is fast moving, and maybe they're currently a network administrator, and we have this emerging issue, which everyone's aware of around cybersecurity, for example, they may already be qualified and they've had however many years of work experience, but because of the fast moving nature and the disruption that can be caused through new technologies and the like, getting trained sharp quick form of training around cybersecurity in this instance is also another area that I think governments could pump prime through funding arrangements.

Bryan Palmer (23:05)
I wondered more generally along the lines that Simon just discussed of mid career upskilling. 20 years past your qualification, we all know that in the current fast rate of technological change, is there a place for mid-career upskilling?

Simon Walker (23:24)
And of course, some of the reasons behind moving into micro-credentials in the higher ed sector were just that. So that they're able to add additional contemporary skills to people that may already have been qualified.

Steve Davis (23:39)
I note you're both looking at me as you're doing that particular aspect of the discussion. In relation COVID-19, which is on everyone's lips these days, we've already talked on this podcast about micro-credentials filling the gaps between certificate courses and current job skills as we need an increased cohort of people to respond to this. But do you think these types of skills, or this micro-credential realm is going to have a bigger role to play in our economy's recovery from the pandemic and all the disruptions that are still playing themselves out in all sectors of the economy, Simon?

Simon Walker (24:23)
Yeah, I think there's a lot of discussion and research going into the way the labour market may have changed as a result of the pandemic, and being able to move people with the existing skills into new jobs, rather than formally requalifying them. Maybe you add a couple of competencies to what they already have, and then you can actually give them the skills they need to move from a job that is becoming potentially redundant into one that is in demand. And that's an ongoing piece of work that is being advanced by the National Skills Commission as part of their brief, and I think that is definitely an area that is being looked at by governments.

Bryan Palmer (25:06)
I think governments are looking at this question of the skill differences between where people might be at the moment, and jobs in demand, and how to top up someone's skill with much less than a full qualification to make them, again, competitive in the labour market.

Simon Walker (25:24)
Another aspect of this is the broader futuristic notion of lifelong learning. And there's been a lot of discourse over the last 10 years and never really keep going around the need for people in a fast changing technological environment in particular to continually up-skill. Now, I don't think anybody is going to sit there and do a full qualification every five years to service that need, but the idea of taking bite-size chunks of training and doing that ongoing throughout their working life is probably more likely than perhaps it has been in the past.

Steve Davis (26:02)
From your wise head that's aged many years, Simon, have you got a thought though for young people? Is there any evidence yet to help us work out whether micro-credentials might be good for them? Because we're talking about people mid and late career. What about at the beginning of the career? How might that be a useful building block or part of the tapestry for their careers?

Simon Walker (26:25)
I'm going to give you two answers. One is to build upon what Bryan said about people who are seriously disconnected to the labour force, and may be disadvantaged in other ways, and in which case a short piece of training just to get that foothold into the labour market might be the most appropriate. So that's certainly one. I still believe though that a foundational program, a certificate, diploma, or degree, is still fundamental to someone's lifelong working experience. And I think they are not substitutable, in my view, they are complimentary. And I think we would not want to risk displacing full qualifications with skillsets on a large scale for young people.

Steve Davis (27:10)
I want to give the last word to Bryan because with your report An analysis of micro-credentials in VET, who should read it? And if you had power to compel people, what sort of things would you like people who have got the hands on the controls of influence in our society, what would you love to see them do with it?

Bryan Palmer (27:33)
Your first question, who should read it? I think policymakers should certainly be in the marketplace for reading this. I think government agencies who work with VET policy should be in the marketplace for this. I also think that there's a regulatory thing here that probably hasn't been surfaced. There's a regulatory burden. Have we got that burden right vis-a-vis the benefits of the regulatory system? And I think that's a good question for economists and a good question for industry to think about. What would I like to think that people do with this? I think it needs to be a platform for thinking more about this sector, and I'm very conscious that governments think about what they fund and don't often think about the rest of the system that's operating. And I suspect that we do need to make sure that we are thinking about all aspects of the vocational education and training system, including the bits of the system that aren't funded by governments.

Simon Walker (28:42)
Look, I'd like to build on that, because another piece of work that I'm keen to engage Bryan on is actually the broader understanding of, well, what is the commercial market? So we've had a look at this particular piece around subject bundles, but there is also a very healthy market in qualifications that are privately financed as well. So what is it about what government's role is versus the privately financed role, and how do you get the most optimum mix of government and private investment in vocational education?

Steve Davis (29:10)
I love this. This is the first time we've finished a Vocational Voices episode with a cliff hanger. I'd like to say Bryan Palmer and Simon Walker, thanks again for being part of this podcast.

Simon Walker (29:21)
Thanks Steve.

Bryan Palmer (29:21)
Thank you.

Steve Davis (29:24)
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