Smaller universities and private Vocational Education and Training (VET) providers expect to be hardest hit because of their greater reliance on students from India and Nepal. Applications from Nepal dropped 61 per cent and those from India by 47 per cent last financial year, putting further pressure on Australia’s $40 billion a year international student sector amid COVID-19 restrictions.
The Morrison Government is making a number of changes to student visa arrangements to ensure Australia remains a priority destination for international students as we emerge from the COVID-19 pandemic. The Government will recommence granting student visas in all locations lodged outside Australia. This means when borders re-open, students will already have visas and be able to make arrangements to travel.
The NSW government has temporarily paused the review of its TAFE during the pandemic and it is anticipated that the review will recommence in late 2020.
Use some of the following strategies to manage the economic impact of the COVID-19 pandemic on your RTOs cashflow:
- Be laser focused on your RTO’s statement of cash flow and income statement so you can keep an eye on how money is moving through your organisation. Review it more frequently than usual e.g. daily or weekly.
- Access government financial assistance available such as the Cashflow Boost, Payroll Tax Relief and JobKeeper Payment to supplement income.
- Focus on retaining existing students by implementing adjustments to training and assessment strategies that keeps them in enrolled and prevents attrition within your current courses. This will ensure you continue to receive fees and funding as forecasted. Some ways to do this include:
- Bringing forward your theory classes and commencing units of competency sooner by resequencing your order of delivery in courses
- Identifying units of competency that you can continue to deliver practical training for either in a simulated environment or in the workplace by adhering to physical distancing principles.
- Identifying units of competency that you can continue to conduct assessment for by alternative methods like videoconferencing or by having students submit video evidence that either your assessor can observe directly or a third party can verify.
- Identify revenue sources such as government funded programs that you can continue to deliver without disruption as most funding bodies have increased the frequency of payments to RTO’s or assured prompt payment to claimants.
- Consider alternative revenue streams. For example, if one of your primary markets was international students you may now want to consider focusing on reaching them with online courses or you may consider turning your attention to the domestic student market with government funded subsidised courses.
- Don’t stop marketing for new enrolments or business, you need to ensure your sales pipeline continues whilst taking care of your existing students. Your sales strategy should be focused on where you have pivoted your RTO’s business. Many industries will be focused on upskilling or retraining workers moving into the recovery phase of the crisis therefore, your RTO should be planning now for these future opportunities.
- Look at your RTO’s insurance policies to see if they cover a significant business disruption such as COVID-19. You may be able to claim for losses arising from an event such as the coronavirus pandemic.
- Convert fixed to variable costs by selling the RTO’s assets to raise emergency cash and leasing them back.
- Sell your RTO’s non critical assets that get little or no use. Particularly if they are duplicate assets or surplus to requirements.
- Top up working capital by utilising available cash or a redraw facility
While businesses are focusing on protecting their staff and trying to save jobs during the COVID-19 pandemic the reality is a significant cost for RTO’s are wages as they are a large expense directly attributed to your course offerings. Some difficult decisions are being made or currently being considered by RTO managers relating to cut backs. Consider the following cost saving measures to gain efficiencies in your programs:
- Increase online F2F class sizes and reduce the number of classes offered to save on labour costs but be careful not to overload your trainers with unrealistic caseloads of students.
- Consider adjusting your practical classes if it meets performance evidence and assessment conditions to collect video evidence of skills demonstrations or third party reports from workplace supervisors to save cost and time of assessors.
- Look at reassigning classes to permanent trainers in place of casuals or contractors.
- Examine your payroll. Consider implementing a hiring freeze. Layoffs are the last thing you want to have to do in this crisis as your RTO’s workforce is critical once you move into the recovery stage. However, in some instances you may need to terminate temporary and casual staff. Be cautious not to damage the confidence and commitment of your remaining workforce in taking these actions.
- Consider payroll reduction alternatives by reducing staff hours across the board. This will keep staff employed and make pay cuts more manageable for all concerned. Restrict overtime.
- Can you place staff on leave without pay until the situation improves?
- Have you made the best use of available government support to support wages e.g. Job Keeper
- Identify any non-performing staff on commission e.g. sales staff that may need to be stood down
Other cost saving measures
- Reduce variable costs such as travel expenses and non-essential items such as entertainment.
- Look at your printing costs – can moving to online or remote delivery methods make significant savings in this area?
- Look at your accounts payable and receivable as a priority. Talk to your suppliers and ask if you can negotiate time to pay what you owe them? Review outstanding invoices from your debtors. Contact them to see if you can arrange payment of what is due.
- Consider limiting payment methods to credit cards or cash in advance for your RTO products and services. You may need to cease providing credit to customers e.g. payment plans due to the risk of delayed or non-payment.
- The payment terms you give your customers should match the ones you accept from your suppliers so you have balance between cash coming in and cash going out.
- Look at your energy consumption e.g. heat, air conditioning, computers and printers etc. although this may have happened organically if you have moved your workforce to working from home arrangements
- Consider new suppliers to reduce fixed and variable costs. Many businesses in the RTO supply chain are selling goods and services at a discounted rate currently and in some instances offering free products.
- Use technology to gain efficiencies (automation) or review technology not being used
Our recommendations should not replace advice from the professionals such as your accountant, your bookkeeper or both on how to manage your business out of the crisis and then take proactive steps to prevent a recurrence. There are some free webinars currently available to RTOs such as COVID-19 Economic Support for Businesses by vetr that you may find informative.
Many RTOs have cancelled face-to-face classes, including practical and work-based training, to comply with social distancing requirements to help prevent the spread of coronavirus (COVID-19).
Emergency remote training:
To ensure continuity of services RTOs have the option of using remote teaching solutions to deliver classes that would otherwise be provided face-to-face or adjusting their delivery models to blended or mixed mode in the interim with the intent of returning to the usual format once the COVID-19 crisis is over. The purpose of emergency remote training is not to reinvent your training and assessment strategies and practices but to rapidly deploy access for your students to training and support reliably during the coronavirus pandemic.
In deciding whether to live stream your classes or pre-record them and make them accessible for your students online you should consider the following:
- Do your students have access to the right IT infrastructure? Not everyone has the right hardware or sufficient bandwidth. Those that do might struggle with limitations of data caps.
- Are all your student cohorts computer literate?
- Does your RTO have suitable resources to deliver training in this way? You may need to convert supplementary resources e.g. class handouts to digital formats.
- Set clear expectations for trainers and assessors in preparing for and conducting livestreaming classes and encourage them to do the same with their students to ensure a quality learning experience. Consider implementing a web conferencing policy for your RTO.
- Ensure you have provided targeted professional development for you trainers and assessors in using your RTO’s selected web conferencing tools for their remote classes. As with any other technology, your staff and students have to learn how to use it competently. Your RTO needs to ensure you have the right support mechanisms in place to ensure technical issues are addressed promptly and professionally as they arise.
Adjustments to training and assessment strategies:
It is important for RTOs to document all adjustments made to the courses you offer during the pandemic. ASQA have advised that RTOs must maintain records for individual students regarding why they may have not attended scheduled classes. This is particularly important if you have international students. This will ensure you can justify decisions and actions taken during your response to the coronavirus pandemic should a regulator or licensing authority require this information in the future. While it may not be feasible to amend all your RTOs training and assessment strategies while you are dealing with the crisis, you should at a minimum keep a register of adjustments made to courses such as:
- Change of delivery modes e.g. classroom based to mixed mode
- Re-sequencing delivery of units or components of units e.g. bringing theory classes forward
- Delaying practical assessment and work placement
- Delaying delivery of courses where adjustments to delivery are not possible
EDministrate has a free template here that RTOs can use to record adjustments make to training and assessment strategies during the pandemic. Where assessment cannot be undertaken due to the delaying of certain components of delivery your RTO should have mechanisms in place to track and monitor your students partial completion of the training and assessment. This could include the assigning of “interim” results that indicate they are yet to complete assessment. This will ensure you can report accurately on your training activity during this crisis and plan to finalise outstanding training and assessment in the near future.
AQSA have advised that any changes RTOs make during this period to training and assessment must maintain the integrity of the specific training package requirements. Therefore, you must continue to ensure you comply with all the requirements including assessment conditions for each unit of competency delivered prior to issuing the final result. Some SSO’s and accreditation bodies have provided guidance for permissible adjustments for specific training products such as:
RTOs who continue to deliver critical courses during the pandemic should reinforce to students and employers the additional hygiene measures you have implemented to minimise the risk of infection.
The COAG Skills Council in its meeting on 3 April also agreed to meet regularly to enable short-term and urgent adjustments to be rapidly made to the qualifications and training package requirements to support critical training delivery. RTOs should monitor any announcements made regarding these adjustments.
ASQA has released a temporary changes notification form that your RTO is required to submit to notify of temporary changes to locations of your delivery, temporary cessation of all or part of your operations, or adjustments to delivery modes or methods. This requirement also applies to any delivery you have off-shore or conducted by third parties. A guide for CRICOS registered RTOs to assist with understanding provider default obligations under the ESOS act has been developed by the National Regulator.