Many countries have implemented versions of competency-based training in which competency standards or statements serve to provide standardized learning and skill development outcomes for vocational education and training. It seems that a main attraction that motivated the introduction of such competency-based systems was the assumption by some that they would be 'failsafe', in that achievement of the learning and skill development outcomes would guarantee that the learner was workplace competent. However there were always convincing conceptual reasons for denying that the achievement of standards-based learning and skill development outcomes would be equivalent to being workplace competent. This paper aims to explain these reasons, to provide empirical evidence of the scope of the gap between formal standardized training and workplace competence, and to address the implications of this gap for the improvement of vocational education and training. The assumption that the gap could be avoided overlooks the crucial importance of context and culture in workplace performance. It is argued that sound vocational education and training needs to take account of these features.