Enhancing enterprise expenditure on VET: Policy goals and mechanisms

Increasing enterprises’ expenditure on their employees’ vocational education and training (VET) remains an important policy goal for governments in many countries. Policy mechanisms implemented to secure this goal include the legislated and mandated approaches adopted in Germany, France and Australia, and measures designed to encourage voluntarism and exhort enterprises to increase their expenditure such as in the United Kingdom and the USA. These policy mechanisms represent quite different approaches to and context for policy implementation. Their goals can be equally diverse, including subsidising government expenditure on VET, securing a more equitable distribution of training opportunities across and within workplaces, improving the quality of skill development, and responding to strategic or particular localised skill development needs. Each of these kinds of goals likely requires distinct kinds of policy measures. The primary concern of this paper is to identify goals for increased enterprise expenditure on VET and align and elaborate policy options for achieving these goals. Throughout, the balance between efforts to mandate and regulate are contrasted with those attempting to change enterprise sentiments more persuasively, and for the longer term. However, given that decisions about expenditure will largely be made within enterprises, ultimately most of these policy goals will only be met through the development and sustaining of a sentiment within enterprises that is favourable towards expenditure on training. Policy purposes for encouraging enterprise expenditure on training Governments in many countries have attempted to find ways of increasing enterprise expenditure on the development of their employees’ skills. The policy mechanisms implemented for this purpose are diverse. They range from the legislated and mandated approaches adopted in Germany, France and Australia, through to measures designed to encourage and exhort voluntary commitment by enterprises, as in the United Kingdom and the USA. Yet it seems that none of the measures to regulate or implore enterprises to increase expenditure has been particularly successful in changing enterprise sentiments about the worth of this expenditure (Keating et al 2002). Indeed, in Australia, efforts to mandate training expenditure arguably resulted in the commodification of and focus upon training expenditure within enterprises (Teicher, 1995). In the main, employers and their spokespersons viewed this Labor government policy as merely a means to generate income and as an impost on business activity. Yet, there are other purposes for encouraging enterprise expenditure on training. These include: (i) securing a more equitable distribution of training opportunities within enterprises; (ii) fairer distribution of public funds supporting VET; (iii), improving the quality of skill development; and (iv) responding to strategic or particular localised VET needs. These different kinds of purposes likely require quite distinct policy measures to achieve their goals. Yet, governments have sometimes been unclear in distinguishing their policy goals for encouraging enterprise expenditure and have also adopted models from elsewhere with little critical consideration of the social, cultural or economic compatibility with conditions in the host country (Schmidt, 2002). These criticisms could be advanced of Australia. However, in some countries there are clearly articulated and understood links between specific policies on the employer sponsorship of VET and broader social obligations. In