Using training indicators to improve planning for vocational education and training

In response to the need for information about labour market changes, skill shortages, and social and economic indicators, this report has attempted to develop training indicators for vocational education and training (VET) policy and providers. It follows from a critique, published by the National Centre for Vocational Education Research (NCVER), of various approaches to measuring the adequacy of the stock of VET skills, a key performance measure for the VET system as a whole.

Training indicators are taken to mean functional suites of quantitative and qualitative indicators of current or future VET supply and demand, potentially including economic, social, labour market, training, and other indicators, which governments, enterprises, training providers or individuals may bring together to guide decisions about investments for skill training, especially at the industry, occupational, regional and course levels.

In that sense, training indicators are crucial to the VET planning cycle. To implement the National Strategy for VET and give best effect to the pool of VET funds, the Australian National Training Authority (ANTA) and State and Territory Governments use a wide range of training indicators in developing and reviewing their VET plans. Training indicators are an important NCVER area of interest, particularly in terms of key publications on enrolments, apprenticeships and traineeships, and student outcomes.

The report begins with recent developments in the training system and the training market. Information relating to the national strategy and key performance measures (KPMs) for VET follows. The current strategy's market emphases, and the new diversity of training providers and pathways to skills, are taken to imply increasing needs for diversified training information to improve the operation of the market.

The report describes and classifies major Commonwealth, State and other uses of training indicators since the 1970s - for youth education and training, training policy, skilled migration, job placement needs and vocational guidance. The overall assessment is that this work has proved its worth for policy and program purposes, especially when it successfully synthesises major demand-side and supply-side training indicators, or derives actual measures that compare training demand to training supply.

Various 1990s initiatives in the VET sector (new employer and student surveys) and in employment and education (new job outlook and student information programs) are seen to create fresh possibilities for the use of training indicators in VET planning and vocational guidance. State and regional VET planning occupy an important place in the report, as this is increasingly where important VET plans and decisions are made and where training indicators can have a major impact. Whereas State and regional VET plans appear to be organised primarily along industry lines, institute-level plans appear to be expressed more in terms of the (adjustments to) provision of educational courses that will give effect to industry and regional planning priorities.

The issues and directions for training indicators are discussed in terms of the national planning background; the place of indicators in VET planning; the market for training indicators; needs and gaps; classification, forecasting and resourcing issues; and the aptness of indicators for the VET climate.

Training indicators help in meeting the needs of the national strategy and the measurement framework for the VET system. In recent years, they have often been developed to assess stocks of skills and client outcomes, now KPM 2 and KPM 4.

A range of supply and demand training indicators are used in national and State VET planning and region - industry planning. There appears to be limited formal assessment of the usefulness and accuracy of the indicators used in developing successive plans. The processes and indicators used for VET performance measurement and evaluation tend to follow somewhat different tracks from those used for VET forward planning.

There is evidence of persistent demand for training indicators, which in this report are regarded as a 'public good'.

NCVER responds to demands for training indicators with a range of national and State analyses of VET enrolment, training and student outcomes. For State VET planning purposes, States and Territories may supplement these analyses with their own systems data on VET students, other statistical analyses and industry survey sources.

With increasing diversification and deregulation of the training market, there are important needs and gaps for training indicators directed to regional and technical and further education (TAFE) institute planning processes and decisions. The tools and indicators available at these levels can be improved.

Institute planning and the use of indicators for institute comparisons are issues of some sensitivity. Also discussed in this report are the most useful frameworks (industry, discipline, field of study or unit of competency) for VET planning and indicators, and the extent to which the training indicators do or should use (industry) forecasts.

The preference among State VET planners is to use industry and occupational forecasts as one, if not necessarily the predominant, set of training indicators which contribute to VET plans and planning decisions. This seems reasonable if, as argued here, VET systems have both leading and following roles in developing skill solutions for industry and individuals.

The debate tends to focus on the best techniques and training indicators for VET planning, but continuity in VET organisational resources and expertise is just as important as technique in improving judgments and inferences. Resources and expertise, in NCVER and State VET agencies, matter greatly if training indicators are to make their best contribution to sustainable improvements in VET planning.

To emphasise this point, the report notes that available and current training indicators have been used successfully to make judgments about some of the critical VET policy questions (for example, the quantity and quality of traineeships). Over the period 2000-05, these indicators offer suitable measures to assess prospects and performance in a VET system under policy and resource stresses, and flexible measures to examine VET responses to changing industry, skill and demographic trends. In particular, training indicators can be used to analyse important lines of inquiry (including youth transition issues) that follow from the basic concept of KPM 2: stocks of VET skills against desired levels.

The report develops summary propositions for good practice in the use of training indicators, for increasing the range of training indicators, for improving the implementation of KPM 2, and for improving the dissemination of training indicators for VET planning.

Consistent with the project aim, and to distil its results, table 1 (below) proposes a selection of training indicators - on the demand side, on the supply side, and comparing demand to supply - which may be used for improving assessments of changing VET demand at national, State and regional levels. The table presumes that indicators would usually need to be applied to particular industries, disciplines and fields of study.

Table 1: Selected training indicators for assessments of changing VET demand, at national, State and regional levels

Training demand indicators (for a nominal industry):

• Output and productivity, and growth forecasts
• Employment, recent employment change, growth forecast
• Assessment of strategic importance (of an industry to the economy)
• Industry characteristics (size and distribution of firms)
• Industry training needs (emerging or contracting skills demands)
• Replacement demand levels
• VET graduate employment and salaries, and trends
• Employer and student satisfaction, and trends
• Job market trends (wages and conditions)
• (Regional) demographics

Training supply indicators (nominal industry, discipline or field of study):

• VET funding, and trends
• Training providers (numbers, types, locations and trends)
• Training activity and trends
  - students, enrolments, hours and trends
• Training trends in detail
  - course enrolments, levels, completions and trends
  - enrolments by package (competencies), and trends
  - contracts of training, completions, and trends
  - module enrolments, completions and trends
• Shares of training market (by provider, by pathway, by level)
• Other supply sources (existing workers, retraining, migration)
• (Regional) enrolment demographics

Derived measures (comparing demand to supply):

• Output or strategic importance (of an industry in the economy) versus VET funding level
• Employment levels versus VET funding levels
• Employment levels versus levels of training hours
• Employment levels and trends versus enrolments, contracts of training, completions
• Growth and replacement needs versus training completions
• Regional demographics versus regional enrolment demographics
• Industry market needs versus training trends and training market shares
• Suggested direction of training effort (+, 0, -)
• Suggested training gaps and (purchasing) opportunities

Note: Indicators and comparisons may be quantitative or qualitative. The fourth chapter in this report provides further explanations.