Developing Skills for a Productive Workforce

Issues and Potential Solutions

The World Bank, East Asia and Pacific Region

Human Development Department

Social Protection & Labor Unit

November 7, 2013

Ximena Del Carpio Senior Economist

Workforce skills is only one of various dimensions needed to

improve Cambodia’s productivity and economic growth trajectory. But the government recognizes that without a well

equipped workforce it cannot meet its ambitious goals.

• Fact: Impressive growth, per capita GDP grew 55 percent from 2004 to 2011, resulting in a p/c income of US$823.

• Goals: Continue growing rapidly at 7% p/y, graduate from LDC status, and diversify and modernize the economy.

• Reality: Quality of the current (and future) stock of workers is too low to diversify away from an economy dependent on low skill labor intensive growth.

Workforce skills as part of the productivity and growth strategy

What are the main market and institutional failures hindering the country from meeting its goals?

1. Leaky pipeline of students going through to upper levels of education.

2. Weak coordination in the workforce development (WfD) system.

3. Lack of performance incentives for WfD institutions to improve and clarity on the rewards of vocational training in the labor force.

4. Inadequate quality and relevance of the WfD system.

5. Shortage of qualified teaching staff, partly due to low compensation.

6. No channels for employers to influence the WfD system (e.g. curricula, quality) and delivery of services.

7. Broken pathways in the WfD system, and insufficient attention to skills development needs in the informal sector.

8. Low access to training programs, especially for rural populations.

9. Low social demand for TVET (vis-à-vis universities).

10. Limited reliable information of labor market needs to guide skills development policy and evaluate the effectiveness of programs.

*WfD system in this context refers to all formal education and training done by TVET, Polytechnics, Universities. Private and public.

Who are the stakeholders and what do they want?

4

Private sector firms

Improve labor productivity

Attract foreign direct investment

Support industrialization

Individuals

Increase individuals’ earning potential

Improve ability to make better life choices (from a

bigger set of choices)

Enable individuals to respond to ever-faster

changing world

Enable individuals to remain productive for

more years

Public sector

Create a cadre of public employees capable of

supporting an ever more complicated society

Apart from the government….

What are the skills that matter?

Cognitive

Involving the use of logical, intuitive and

creative thinking

Raw problem solving ability vs. knowledge to

solve problems

Verbal ability, numeracy, problem solving,

memory (working and long-term) and mental

speed

Non-cognitive

Soft skills, social skills, life-skills, personality

traits

Openness to experience,

conscientiousness, extraversion,

agreeability, emotional stability

Self-regulation, perseverance, decision making, interpersonal

skills

Technical skills

Involving manual dexterity and the use of

methods, materials, tools and instruments

Technical skills developed through

vocational schooling or acquired on the job

Skills related to a specific occupation (e.g. engineer, economist, IT

specialist, etc)

5

CURRENT CONTEXT

Progress and challenges

Education spending is half that of lower middle income countries

(Percent of GDP)

Note: Lower-middle income (GNI hovering US$ 2,600 per annum) includes: Armenia, Sri Lanka, Mongolia, Philippines and Georgia. East Asia (upper middle and high income) includes Malaysia, South Korea, Hong Kong, Singapore, and Brunei Darussalam. Sources: World Development Indicators (World Bank) and Key Indicators for Asia and the Pacific (ADB).

Despite progress in educational attainment, average years of schooling remains low…

8

Good news, there has been an expansion in enrollment rates in higher education in Cambodia

9

1

15

43

21 22

7

18

8

29

58

41

31

15

29

0

10

20

30

40

50

60

70

Cambodia East Asia &Pacific

Europe &Central Asia

LatinAmerica &Caribbean

Middle East& North

Africa

South Asia World

(gro

ss e

nro

llme

nt

rate

, %)

Gross enrollment rate in tertiary education (%)

1999

2005

2010 (*)

Source: Edstat. Note: For Cambodia, the figure shows 2008 enrollments

And the new generation of workers has more education than the previous generation

10

74.3

40.95

22.9

45.7

1.8

5.3

0.9 8.1

0

10

20

30

40

50

60

70

80

90

100

Female, 40-44 age year olds Female, 20-24 age year olds

More than secondary

Completed secondary

Completed primary andsome secondary

No schooling and someprimary

Source: Cambodia Demographic and Health Survey 2010

At the higher education level, the number of higher learning institutions continues to increase rapidly

11

13 15 15 17 20 22

26 26

2

10

23 28

33 38 40

46

0

10

20

30

40

50

60

70

80

2001 2002 2003 2004 2005 2006 2007 2008

Number of higher education institutions

Public Private Total

Note: This figure does not include Branches that exist in the provinces

Source: Department of Higher Education, 2008

Most students enter the “usual” fields of study, and few graduate with degrees in areas of critical need

Source: EdStats

What information do they use to make their choices?

Students/workers make education and career decisions largely through informal channels

(Survey of youth, HRINC 2011)

0 10 20 30 40 50 60 70

Advice from friends and parents

Websites

Articles in newspapers and magazines

vocational training centers

Recruitment agent

Universities

High school teachers

NGOs

Career days

Government departments

Employer associations

Others

Employers are increasingly concerned about the skills of the workforce

1. Not enough people with job-specific “vocational” skills, and a seemingly oversupply of university graduates in the wrong fields.

2. Graduates lack the right mix of all three “complementary” skills

• Work attitudes in unskilled workers (52% employers); decision-making skills in semi-skilled workers (45%); and analytical skills in skilled workers (64%)

• Leadership, problem-solving and communication among semi-skilled workers

• Behavioral problems among out-of-school youth (89% employers)

3. Sharpest shortages are in the senior management level, having to fill with foreign talent

• Big shortages in management skills (70% employers) , middle management and supervisor skills (36%), and professional staff skills (34%)

4. Low skilled workers lack basic skills such as literacy and numeracy, making it hard to train them.

Employers face shortages of educated and skilled workers in the managerial and professional category

15

3%

34%

36%

71%

15%

57%

56%

28%

81%

9%

8%

2%

0% 20% 40% 60% 80% 100%

Entry level staff

Professional staff

Middle management and supervisor

Management

Does your firm face skills shortages?

Big shortage Shortage No shortage

Source: Survey by HRINC Cambodia, March 2011

Most

existing

workers

are in

these

groups

Shortages are mostly related to the content imparted in the education and training system

16 73%

62%

38%

31%

23%

16%

12%

5%

0% 20% 40% 60% 80%

University graduates do not have the right skills

Vocational training graduates do not have the rightskills

Not enough vocational training graduates

Difficult to train or up-skill existing staff

Firms cannot afford to pay salaries that the marketdemands

Others

Not enough university graduates

Difficult to attract people to this industry

What are the underlying causes of your firm’s skills shortages?

Source: Survey by HRINC Cambodia, March 2011

Current TVET system largely delivers non-formal short training courses

1.6%

2.8%

0.6%

95.0%

0.8%

1.4%

0.6%

97.2%

0% 20% 40% 60% 80% 100%

Bachelor + Upper

Diploma Level

Certificate I, II, III

Short-courses Training

Female Total

Examples of non-formal courses • Samdech Technology Special

Fund • Voucher Skill Training Program • Skills Bridging Program • Special Training Needs • Post-harvest technology • Others

Source: Ministry of Labor and Vocational Training PPT, 2011

• Economic incentives to train are constrained by fluidity of workers.

• Limited pool of quality and effective training providers, with limited

standards imposed.

• TVET system is NOT an option they consider for their training needs.

• Weak oversight of the quality of providers and no formal accountability

(they lose business but waste resources).

• Employers face many information limitation; ex. they do not know the

• availability and quality of existing providers

• availability of particular skills, and quality of TVET and universities

• They do not seek to establish links with WfD institutions to influence curricula

• Others issues?

Employers try to remedy skill deficits by training workers but they face various constraints

Complex system: MOE, MOLVT, Private Providers, and no Qualifications Standards to guide them

LEGEND

Entrance Examination/ Screening

BRIDGING

Mobility Direction

Optional

W

O

R

L

D

O

F

W

O

R

K

BRIDGING

BRIDGING

BRIDGING

15

16

17

18

DO

CT

OR

AL

19

20

21

TRADE I

TRADE III

TRADE II

TRADE IV

CERTIFICATE II

CERTIFICATE III

CERTIFICATE I CE

RT

IFIC

AT

E

TECHNICAL & VOCATIONAL STREAM

13

14

DIP

LO

MA

BA

CH

EL

OR

13

15

14

16

DE

GR

EE

17

18

19

20

21

YEAR OF

SCHOOLING

7

8

9

11

10

12

5

6

1

3

2

4

BA

CH

EL

OR

13

14

16

15

17

17

18 18

19

20

21

22

13

15

14

16

19

20

21

UN

IVE

RS

ITY

GENERAL STREAM TECHNOLOGICAL

STREAM G

EN

ER

AL

SC

HO

OL

S

7

8

9

11

10

12

6

3

5

4

1

2

Source: MOLVT PPT, 2011

OPTIONS FOR MEANINGFUL IMPROVEMENT IN TVET+

Political will to reform and affect change?

At the national level… Design an integrated education and training system through a National Qualifications Framework that enables portability of

skills and qualifications across different pathways, informed by an outcomes and competency-based system of education and

training.

At the TVET level… Design a TVET system that provides economic value for

students and employers and incentivizes lifelong learning .

Learn from international experience… Developing countries: South Africa, Chongqing-China, Penang, Malaysia; OECD: Korea, Australia, Canada, Chicago-US, Europe

Objective of reform

Consider a major reform to the TVET system

3. Re-design the system with stakeholders support: Change from the traditional TVET system by adopting a modular, portable

and stackable system that embeds employers into the design and incentivizes students to seek training.

4. Invest in key inputs upfront: Make investments in people (trained instructors and administrators),

physical assets (equipment and revamped training centers), inputs (data) to measure effectiveness and success, and Standards to regulate quality..

1. Assign a Leader and formulate a vision: Restructure the system and intensify the role of the leader. The National Training Board (TVET) is a natural leader to lead the reform process and

establish a clear vision/mission.

5. Test and measure

2. Identify priority “cluster” sectors and align TVET with them: Institutionalize the role of the private sector in the reform by identifying priority sectors that have large employment potential. Cluster them in a

logical manner and engage them by offering them clear roles in the process.

1. Leadership and Vision

Action 1: Establish the leadership of the TVET reform

Objective: Unified national leadership of a discrete TVET sector.

Perhaps a strengthened National Training Boards (NTB) could lead

Role of the leadership:

• Set vision for the system which is aligned with the country’s goals.

• Establish clear (and measurable) goals.

• Coordinate and establish clear roles for stakeholders.

• Facilitate creation of Skills Standards and ensure compliance in all Technical Centers (TC).

• Increase access to the system.

• Manage funds efficiently and relationships strategically.

• Establish Task Forces to focus on distinct groups and implementation issues.

• Create and promote data/evidence based decision making.

1. Leadership and Vision (cont.)

Action 2: Formulate a clear vision and measurable goals

• Vision: Strive to have student succeed in the classroom and the workplace, and to narrow skills gaps by providing a productive workforce that contributes to Cambodia’s growth

• Goals:

• Increase the number of students with job-specific credentials that have a clear economic value in the labor market.

• Make measurable improvements in the outcomes of students needing remediation in foundational and technical skills.

• Attract school drop out students and adult learner to be formally trained in a vocation, and increasing their ability to enter the labor market.

• Increase the number of students who transition from TCs to University.

• Increase the information base that stakeholders can use to make decisions.

Action 1: Establish Industry Coordination Committees (ICC) Objective: Embed private sector into the system by establishing clear specific roles of industry in setting standards and outcomes.

NTB leads the process of identification of priority industry clusters Create ICCs Select pilot TCs Embark in teacher training reform Begin Piloting with 3 clusters Evaluate, reform and expand to all Clusters.

Criteria for Identifying Priority Industries: 1. Employment is large and growing (for the next 10 years) 2. Deficit of job-specific skills which limits industry growth. 3. Government prioritizes the industry in its growth strategy. 4. The sector is willing and able to contribute resources, in-kind or otherwise.

2. Identify priority “clusters” and align TCs

Logistics : Transport & Storage

Electrical & Electronics Automotive

Agriculture & Agro-industry

Wholesale Retail Trade

Manufacturing: Garment & Assembly

Tourism: Hospitality & Food

Construction

Role of ICCs should be very well defined • Catalyst to encourage target industries to make significant input into

training standards, curriculum, and delivery.

• ICC project advisers develop technical skills of trainers and train the trainer in their respective industrial cluster.

• ICCs work with NTB, teacher-trainers, MOE (Higher Ed), and center administrator to develop Competency-based modules that are stackable, range from entry level certificate to diploma programs, and articulate well with university entry requirements.

• ICCs establishes a self-financed and managed fund to contribute

equipment, trainers, time, and other resources. Increasing their role over time, as the value of the system becomes clear.

2. Identify priority “clusters” and align TCs (Cont.)

.

3. Re-design the system

Action 1: Re-design institutional features along reform objectives

1. Institutions selected must be converted in to Technical Centers of Excellence in a specific Cluster, while offering programs in “other” fields. They liaise directly with ICC for their sector.

2. Instructors are competent industry practitioners in a specific cluster, endorsed by the ICC, and they are subsequently trained in pedagogy. They are mostly University trained and have strong ties to their profession.

3. Pathways between post-secondary systems are critical to attract all types of students, including those that are academically inclined and may train to be instructors. Therefore standards must align with university requirements and articulation agreements with MOE should be negotiated ex-ante.

3. Re-design the system

Action 2: Re-design programs to align with reform objectives

1. Modular system breaks down whole educational qualification into sub-units that carry a clear economic value. Each module has a measurable outcome assessed and certified, and they accumulate to larger overall educational outcomes, and across levels.

Why modular? Simplifies the system, eases access (costs and short time commitment), eases progression as it recognizes prior learning and pre-vocational education, and completion has a clear economic value.

2. Stackable set up is critical to motivate lifelong learning; there is no time and resources wasted by students. This allows students to stack modules in a manner that enables them to know what the educational path is and what is means to the labor market.

3. Re-design the system (Cont.)

A sample modular map (for the Mfg. sector) gives a program overview, potential job placement, and provides incentives for students to move swiftly through the system.

3. Re-design the system (Cont.)

Action 2: Re-design programs to align with reform objectives

3. Portable credentials are critical. Each module is verified and accredited under a unified qualification standard, and they have clear learning outcomes that are pre-established and assessed which makes them recognized by industry and education system.

4. International linkages are critical to engage international technical experts in each cluster to maintain the curricula current and to ensure sustainable growth toward meeting international standards of the credentials.

4. Invest upfront in standards, people, assets and data

Action 1: Design framework and standards

• Integrated (Simple) National Regulatory Framework for Higher Education. Plus National Skills Standards for Universities (and separately but aligned) Skills Standards for TVET , with sectoral approaches for specific industries.

• Modular curricula design adopting National Skills Standards for each sector.

Action 2: Train instructors and administrators

• Technical expert instructor training, with support from ICCs and universities, to impart modular system.

• Administrators to be trained by universities and ICC to administer the modular system.

Action 3: Invest in facilities, equipment, and data collection

• Facilities and equipment updates, co-financed with ICCs.

• Monitor the labor market with regular surveys (e.g Labor Force Surveys)

• Establish mandatory automatic tracer data collected upon completion of module to measure success/failure and adjust.

Roles and responsibilities Stakeholders Role and importance

MEF Responsible for the preparation and implementation of budgetary framework, in

line with national priorities, and to facilitate coordination between MOLVT and

MOE.

MOLVT Responsible for the design and implementation of the proposed TVET reform (and

potential project), working closely with key stakeholders involved in skills training

provision.

NTB The Apex Body for TVET, leader of the Reinvention, responsible for Skills standards

for TVET, regulation, and monitoring and evaluation

MOE Responsible for Qualification Standards for Universities. Key partner to the MOLVT

by maintaining a high quality university system, establishing articulation and degree

recognition agreements with TVET, training and and supporting the re-training of

instructors.

Public (and private)

education and training

providers

Direct conduits of the reform, champions of training in their economic sector,

beneficiaries of the change. Private sector providers will benefit from clear

standards, will face increased competition, and may find opportunities for growth.

Employers (and private

sector in general)

Direct and indirect beneficiaries. Will play an increasingly important role in the

design and implementation of new system. Will need to organize itself to mobilize

their inputs to their respective Champion institution(s) and remain actively

engaged.

Workforce and students Direct and indirect beneficiaries.

Teaching/instruction/admi

nistration staff

Direct beneficiaries (re-trained, compensation), will be required a higher level of

mastery and involvement in the re-design and sustainability of the system.

How will the government know if the investment is yielding positive results?

Employers • Increased participation in the curricula design and re-design

• Increased investment in the training institutions

• Improvements in a newly created “Employer satisfaction index”

• Increased demand for Technical education

• Increased investment in priority sectors

Workers and students • Increased demand for spots in the new training institutions

• Increased percentage of trainees employed or training in priority sectors

• Increased # trainees in market-driven training courses established in the new system, and demand for re-training by current workers

• Earnings gains of Technical graduates

• Increased transfers from Technical centers to university

Invest in Workforce skills and see Cambodia transform

Cambodia’s future growth relies on the skills, competitiveness, innovation and productivity of its people, and these rely heavily on the quality of education and training that people have access to…

LDC MIC+

The World Bank Team

For questions please contact: Ximena Del Carpio Senior Economist

Contact: xdelcarpio@worldbank.org

Washington DC +(202) 458-1004