Why the new TAE must cost more


Fair Value Line

I believe the asking price for the new Cert IV TAE and Dip VET will go up. Why?

The TAE has become a commodity. The number of RTOs advertising the qualification has, in recent years, exploded. The number of people demanding the qualification has also increased, with many of these people not really needing all that the Cert IV TAE involves.

The commodification has created a downward pressure on prices, which has squeezed the margins of RTOs offering the program. Combined with resistance among a growing number of students to doing the work needed to complete the qualification with integrity, we have had a move toward shorter programs as RTOs try to maintain some market share and meet the (immediate) needs of their cohorts. A nasty spiral has formed, pushing fees, time and quality down.

But this has come with a cost. To everyone.

The value of the qualification has also plummetted.

While the VET sector is generally seeing a disconnect between price and quality across many qualifications, with VET Fee Help being largely responsible for this, the Cert IV TAE has become a necessary yet none too trusted piece of paper. (The big brother, TAE50111 Dip VET, has not entirely experienced the same fate, although it was certainly heading down the same path until being arrested by the arrival of the TAE.)

After all, while many people have felt the need to have the Cert IV TAE, many have also understood that the way in which they attained it was not quite right. While they may have appreciated that it took a mere 3 or 5 days with perhaps “a little homework”, any thinking person would realise that this was quick, too quick. And so, they don’t actually trust in their own competence.

Instead, they feel cheated, and not just by themselves.

Enter the new TAE.

Without commenting on the application process (you can read about the requirements HERE), it is fair to say that ASQA is going to greatly reduce the number of organisations offering the new TAE qualifications. For many RTOs, the process to apply is just too burdensome and, let’s face it, too costly. For smaller enterprises who are already struggling with squeezed margins (see above), it is ludicrous to suggest that they allocate the resources to create the application with no guarantee of success.  At the time of writing, there were over 650 who could deliver the TAE40110, and 144 who have the TAE50111 Dip VET on scope; it will be interesting to check the number who have the new Cert IV TAE and new Dip VET on scope in a couple of years).

RTOs with TAE40110 on Scope

Many RTOs who offer the TAE40110 will look at the new requirements and judge themselves as not likely to succeed. (An example here is that the application include, for the 6 months prior, the dates on which all students enrolled and completed their programs, and the date on which their certificates were issued. Any RTO who had certificates ready to issue students on the last day of a 3 or 5 day program will understand that this will attract some attention from the regulator…and possibly trigger some further investigation that they may wish to avoid.)

For Fortress Learning, it took about 3 months to put together our TAE40116 Cert IV TAE and TAE50116 Dip VET applications (you can read about that process HERE). It involved the equivalent of about one full-time senior staff member, as well as consultation with about 45 other people, 8 independent validators, and a whole heap of administrative support. It was not a cheap exercise, nor was it a quick one. To top it off, the application fee was about another thousand bucks and approval – should it ever come – simply means permission to then spend more on developing the rest of the program and associated administrative systems.

And there are no guarantees.

What’s this got to do with fees for the new Cert IV TAE and Dip VET/TDD?

At the time of writing, we have no idea about the status of our application. Over the years, we have been through numerous changes to Scope and never have we experienced the uncertainty that is surrounding this process.

But we are sure of one thing.

The combination of the application process and the nature of the new TAE40116 Cert IV and TAE50116 Dip VET will unite to arrest the downward spiral that plagues our industry.

As people start to value confidence in their competence, they will start to seek out the new TAE qualifications if for no other reason than they will themselves trust it. As the holders of the new TAE qualifications start to develop this confidence, they will also start to influence the decisions made by others, and this will lead to a growth in the general acceptance of the new TAE Cert IV and Dip VET as being a more genuine reflection of competence than were their predecessors.

As this confidence develops, we will likely see further erosion in the legitimacy of the previous TAE Cert IV and Dip VET. Even if ASQA does not require people to upgrade their TAE10 qualifications, the need for qualifications that meet a broader standard of acceptability will still motivate people to do so.

And, while this pool of people will never be as large as the number of people who pursued the TAE10 qualifications, it will steadily grow in line with the Adoption Curve and I expect that the people pursuing it will expect quality and they will eschew short cuts.  Similarly, the TAE10 will likely decline further in quality as many RTOs who have no intention of applying for the new Cert IV TAE or Diplomas try to bank as much cash as possible to aid them to change their business model and course offerings, combined with the expectation among prospective students that it will be easier to get the TAE40110 than the TAE40116.

TAE Upgrade Adoption Curve

A New Demand

In simple terms, the demand will not be for short cuts, but for integrity. And people will be prepared to pay for it because they want their qualifications to reflect their own integrity, for both their own personal satisfaction and for their professional differentiation.

For those RTOs who are successful with their applications, they have an investment to recoup. For even the most socially-minded RTO Manager, there is a very real imperative to claw back some of the losses associated with the recent commodification within the market.  This isn’t greed, it is logic.

The cost of delivering and assessing the new TAE qualifications will rise, and so fee rises will follow. In the absence of the fierce competition that is exerting downward pressure on both standards and prices, fees will be able to rise and ultimately level out. We expect that many people will call this profiteering, but they will be wrong. Listen closely to any Manager of an RTO trying to do the right thing, and you will hear them say, “we made another loss this month”.

If our industry is to not just survive but thrive, then it requires a broader commitment of both providers and consumers to quality.  This will require fees to be set at a level that does not just enable ethically-minded providers to sustainably deliver the quality of service that they believe is right, but it will enable all providers to be ethically-minded.  It is only then that we have delivered the quality of service that they are registered to provide.

Initially, there will be some market resistance.  We can expect the higher prices of the early offerings of the new TAE to be judged in comparison to the deeply discounted offerings of the old. But, against this is the reality that these are fees for two different markets.  The late majority, and soon to be laggards, of the now superseded TAE40110 and related Diplomas are not the same as the innovators and early adopters of the new Cert IV TAE and its Diploma cousins.

These early adopters will see the value of the new qualifications and judge their value against a higher standard than will the late adopters to whom the old TAEs are still being marketed. And, by the time the late adopters come into the market, the unsustainable pricing of the TAE10 offerings will be a distant memory.

Perhaps at that time we will have some dignity returned to our industry.

 


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