Vocational education and training and employer engagement: an industry-led sectoral system in the Netherlands

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Vocational education and training andemployer engagement: an industry-led

sectoral system in the Netherlands

Johnny Sung

The overall objective of this paper is to determine, through aqualitative case study of the Dutch sectoral training system,factors associated with successful employer engagement. Aswell as examining the key features of the Dutch approach tovocational education and training (VET), the article makes anumber of specific arguments: (1) employer ‘buy-in’ is crucialto the success of the sectoral approach to VET; (2) simplyestablishing a system of sector-based training bodies (e.g. skillscouncils) does not guarantee effective employer engagement;and (3) to make sectoral training work, especially in countrieswhere a ‘supply-led’ system dominates, a fundamental reformis required in areas such as funding, qualification structure,leadership and system support.

IntroductionThe current case study examines the role of employers in determining vocationaleducation and training (VET) content and the national vocational qualification systemvia the sectoral bodies in the Netherlands.1 It is argued that the Dutch sectoral systemis highly employer driven because of its effective use of a system of sectoral bodiesknown as ‘Knowledge Centres’ and the particular funding mechanism that focuses onraising the level of employer engagement in the national VET system.

While observing the increasing emphasis on employer-led skill policy in manycountries, this paper does not intend to argue for any intrinsic advantages of employer-led policy over the previously popular supply-led approaches. Instead, the paper tries

❒ Johnny Sung, Senior Research Fellow, The Centre for Labour Market Studies, University of Leices-ter, Leicester LE1 7QR, UK. Email: [email protected] basic data for this paper come from a project in which both Dr. Arwen Raddon and Prof. DavidAshton were members of the research team. It is important to acknowledge their contribution.However, the author takes full responsibility for the content of this paper.1 This paper uses the term ‘sectoral bodies’ as a general term to refer to all the sector-based skills bodiesin different countries, e.g. ‘Sector Skills Councils’ in the UK, the Industry Training Organisations inNew Zealand, the Industry Skills Councils in Australia and so on.

International Journal of Training and Development 14:1ISSN 1360-3736

© 2010 Blackwell Publishing Ltd.

16 International Journal of Training and Development

to address what policy and system design considerations may be needed if a VETsystem is intended to be highly employer driven via a system of sectoral bodies.

It is argued that having the ambition to become ‘employer led’ is one thing, butwhether or not this is supported by the necessary funding and institutional arrange-ment to achieve a high level of employer-led VET system is another. Thus, this paperwill use the Dutch experience to show that in addition to a system of sectoral bodies,there are a number of important issues to be addressed in order to arrive at anemployer-led VET system. The paper will use these issues to identify what lessons canbe learned from the case study. These lessons are particularly relevant to the currentreform in the UK, but they are also applicable to other VET systems where the empha-sis of being employer led is increasingly driving VET reforms.

This paper starts with a short discussion on the issue of employer engagement withinthe UK Sector Skills Councils (SSCs) system. This is not meant be an evaluation of theUK system. Rather, the short discussion should be used as a contrast tool for identi-fying a range of relevant issues before we examine the Dutch sectoral system.

Employer engagement in the UKThe recent Leitch Review of Skills proposes that in order to take on the challenge ofbecoming a knowledge economy, the UK needs to set ambitious skills targets for 2020.In vocational education and training, the means to achieving these ambitious targets, asviewed by the UK government, is to strengthen the employer-led sectoral trainingsystem while consolidating the competence-based qualification system which was firstintroduced in the mid-1980s (HM Treasury, 2006). Given the employer-led emphasis ofthe Review, one of the key questions concerns the extent to which the UK sectoralsystem is sufficiently employer led so that the competence-based qualifications aredynamic enough to enable the changes in skills and knowledge that it needs (Raddon& Sung, 2006). If not, what reforms are needed?

Indeed, the concept of ‘employer engagement’ is problematic. Payne (2008) arguesthat the concept of employer engagement is both under-researched and politicallysensitive. As a result, there is very little formal analysis identifying activities that mayconstitute employer engagement. In the UK context, Payne’s (2008) research also showsthat whatever activities we may observe as employer engagement, many researcherswould argue that we are actually looking at activities that are the result of a‘government-/target-led system’. Furthermore, Payne’s interviews with seven UKSSCs show that there is no clear agreement on the definition of employer engagementamong SSC practitioners.

The Sector Skills Development Agency (SSDA) did identify five levels of engagementactivities (Payne, 2008; SSDA, 2007):

• engaging employers in SSC strategy and development;• engaging employers in designing skills and qualifications provision;• engaging employers in utilizing skills and qualifications provision;• engaging employers in research and labour market intelligence; and• engaging employers through communication.

Other than the excellent and insightful interviews conducted by Payne (2008), therehas been little research that evaluates the five activities of SSCs listed above. The generalimpression is that employer engagement varies hugely across SSCs and engagementcan be patchy in some activities. In the 2005 Employers’ Survey commissioned by theSSDA (now part of the Commission for Employment and Skills), it was found that onlya small proportion of employers were aware of their respective SSCs (SSDA, 2006). Onaverage, only 27 per cent of the establishments surveyed were aware of their SSCsunder their new names. This figure improved to 35 per cent when awareness wasextended to include SSCs’ ‘legacy names’ (e.g. as under national training organizations,industrial training organizations and training boards). On the question of ‘having anydealings with own SSC’, the percentage answering ‘yes’ was just 14 per cent (rangingfrom less than 1 per cent to 27 per cent). Although all of these figures have huge

Vocational education and training and employer engagement 17© 2010 Blackwell Publishing Ltd.

variations between sectors and sizes of establishments, they are, in general, not easyreading for those who want to push for greater employer engagement within the UKsectoral system.

The problems of low employer engagement for the Leitch ambition are obvious.First, if we are to achieve further consolidation of the national vocational qualificationssystem in the UK, greater ‘buy-in’ on the part of employers is crucial. Second, if theskills content of the qualifications is to support changes in industry, more employersought to be involved, especially in emerging sectors of the economy. Lastly, employers’support is crucial in enhancing the position of VET qualifications. Much of the problemof VET qualifications concerns its currency and the real value of skills and knowledgefor industry, as well as the confidence of the students who are investing in thesequalifications.

As part of the feedback to the Leitch Review, the current author has argued that if theSSCs are to achieve greater effectiveness, there is a need to strengthen their positionwithin the VET system as well as their ability to engage employers. In addition, thereis a further need to rethink the institutional relationships among the major playerswithin the system and the route through which public funding can create a greatersynergy and incentives among sectoral bodies, employers, qualifications, and the train-ees within the system (Ashton, 2006).

As a first step, the Leitch review seems to have made changes in the right direction.For example, some of the recommendations include ‘strengthening employer voice’and ‘delivering more economically valuable skills by only allowing public funding forvocational qualifications where the content has been approved by SSCs’ (HM Treasury,2006, p. 4). However, to make fundamental changes, two important issues have to betackled: (1) How can we significantly increase the level of employer support for SSCs?(2) How can we make funding more appropriate to incentivizing a system that isspearheaded by SSCs, assuming that SSCs continue to operate?

In the section after next, this paper uses the sectoral system in the Netherlands as anexample to illustrate what might have to be done if the above Leitch recommendationsare to be realized. I intend to use the case study to demonstrate that if we want toincrease the effectiveness of the SSC system, there is still scope for more innovative andeffective system changes.

Data and methodologyThe data in this paper are derived from a previous international comparative study onnine VET systems – Canada, the Netherlands, South Africa, Australia, New Zealand,France, Germany, Singapore and the USA (Sung et al., 2006). The study was funded bythe SSDA in 2004–2006 with a view to informing policy makers on recommendationsthat could be made to strengthen the UK sectoral system. The first five countries on thelist have features of a ‘sectoral system’, namely involving a comprehensive system ofnational industry-/employer-led sectoral bodies (e.g. SSCs) as well as sector-basedvocational qualifications to spearhead national workforce skills development effort. Ofthese five sectoral systems, Canada is the only system that has not developed a com-prehensive national competence-based qualification framework linking employers’demand for skills to training and the work of the sectoral bodies.

The above study relied on desk research of official documents, research papers andin-depth interviews with key stakeholders in those systems. Key stakeholders includepractitioners running sectoral bodies, government officials who were involved in thedesign or maintenance of sectoral policy, key government departments that interactwith sectoral bodies, employer organizations and ‘umbrella bodies’ for sector bodies.In addition, the views of supranational bodies such as the Organization for EconomicCo-operation and Development and the International Labour Organization wereincluded in the study, plus discussions with academics and researchers who hadcarried out analyses in their own countries. In total, over 190 interviews were carriedout in the UK and overseas.

18 International Journal of Training and Development© 2010 Blackwell Publishing Ltd.

In the case of the Netherlands, there are three sources of information for this paper.First, 20 interviews were carried out under the SSDA project involving six sectoralbodies, the Ministry of Education, Culture and Science, the Netherlands Association ofVET Colleges (MBO Raad), the Association of Sectoral Bodies (Colo) and academics.Second, these interviews were supplemented by a second set of interviews to the sameorganizations in October of 2007 comprising seven interviews on specific topics – e.g.employers’ role in the creation of competence-based qualifications and the role of the‘umbrella bodies’ such as Colo and MBO Raad (see later sections) among others. Thethird source of data was telephone discussions with various stakeholders betweenthe two visits in 2005 and 2007. Many of these discussions were to confirm ourunderstanding of the issues involved.

In terms of methodology, the analysis employs interview data to demonstrate theimportance of using funding and institutional design to incentivize employers takingthe lead within the Dutch sectoral system as well as utilizing it. The discussion will alsoshow that the Dutch system, which gives sectoral bodies (i.e. the Knowledge Centres)the lead body status, is designed to achieve the first four of the five employer engage-ment activities identified by the SSDA (2007). The discussion is not meant to makedirect comparisons with the UK or other sectoral VET systems. However, the Dutchexperience will provide useful lessons for improving employer engagement in thesectoral approach to VET training.

The Dutch VET system reform in 1996Before we examine the reasons why employer engagement is more effective in theNetherlands, especially in the areas of establishing the qualification structure anddriving the sectoral system forward, we need to understand the policy context withinwhich the sectoral system in the Netherlands was set up. In this section, we willexamine the motivation behind the recent VET reform, the resulting VET structure andits key components. One of the major lessons here is that if we want a new VET systemthat works and is underpinned by a particular policy philosophy, we should use areform as an opportunity to examine whether or not there is a need to create a newstructure. It is unrealistic to expect marginal tinkering with previous policy and struc-ture to work (Jephcote & Abbott, 2005). Effective reform may require substantial reori-entation of major elements within the system. The lack of fundamental restructuring, asargued in this paper, forms one of the biggest obstacles to achieving employer engage-ment, especially in VET systems where the infrastructure is essentially supply driven.In the case of the UK, this is clearly a very important hurdle to overcome in the reformafter Leitch.

The contextual factors underpinning the Dutch VET reform

The enactment of the Adult and Vocational Education Act (abbreviated as WEB – WetEducatie Beroepsonderwijs) in 1996 was pivotal to the development of the sectoral train-ing system in the Netherlands and with it the establishment of the various institutionalarrangements of the different components within the system. The WEB Act was a directresponse to the increasing dissatisfaction about the mismatch between educationoutput and the demand for skills from industry, although this problem appeared tohave been shared in a number of industrialized countries since the 1980s (Berryman &Bailey, 1992). In the Netherlands, questions were asked as to whether or not VET wasadequately preparing trainees for the world of work and, if so, whether or not theDutch VET system was sufficiently geared up for the fast-changing skills content of theworld of work, with the increasing emphasis on emerging skills, adaptability, andproblem solving (Lazonder & de Jong, 1999).

Prior to the WEB Act, two commissions set the direction and emphasis of the Dutchsectoral system in its current form. The first – the Wagner Commission – laid thefoundation of the future VET system that should be ‘inclusive’ in nature. In a reportentitled ‘On the Way to Share Responsibility’ in 1984, one of its recommendations led


to the establishment of sector-specific national bodies for vocational education whichformed the negotiating forum between education, workers, employers and relevantindustry bodies. These bodies – the predecessors of the current sectoral bodies – wenton to develop job profiles and education and training profiles in a variety of ways,although attempts were made to follow a standard methodology such as that inEngland and Scotland without much success (Nieuwenhuis, 1993).

Although the ‘varied’ ways of developing job profiles and qualifications weredeemed unsatisfactory and soon abandoned, it sowed the seed for an improved struc-ture to come. However, on ‘social partnership’ and skills development, the ‘sharedresponsibility’ theme of the Wagner Commission continues to influence subsequentstages of the sectoral development in which each stakeholder has a collaborative andspecific role, reflecting the well-known ‘Polder Model’ of the Dutch approach to societalsystems.2 It is important to bear the ‘Polder Model’ in mind in reading our discussionsin other sections of this paper: it suggests that the eventual sectoral bodies can be seenas part of the wider social partnership within which the key players see their role astheir ‘responsibility’. However, the key to nurturing the continuation of a successfulpartnership is the incentive system – i.e. funding arrangements – for those who areinvolved. We will return to this later.

The Wagner Commission was followed by the Rauwenhoff Commission in 1989,which affirmed the ‘cooperative’ principle among the stakeholders – i.e. education,employers, workers – through the sectoral system. In addition, the commission addedthe emphasis of lifelong learning and employability as additional objectives for theVET system (Mulder and Tjepkema, 1999). So for the first time, the VET reform agendawas extended to incorporate other socio-economic objectives explicitly. However, themost important contribution of the Rauwenhoff Commission was the formalization of‘dualism’ at all levels of VET training. This meant that there was a need to designlearning that was flexible, and it should include both theoretical knowledge and prac-tical (competence-related) skills. The commission regarded dualization as the mostimportant vehicle for bridging the mismatch between VET and the skills demand fromindustry (Nijhof, 2004). As it turned out, the impact of dualization exceeded its originalexpectation. As will be discussed later, the Dutch VET qualifications are mandated tocontain both work and theoretical contents, and employers are keen to influence whatemployable (and workplace) skills a qualification contains. Thus, it is argued thatdualization has turned out to be an important tool for raising the level of employers’involvement and interest in VET qualifications.

The WEB Act

Building on the foundation created by the two commissions, the WEB Act formed thebasis of a major VET reform in 1996. The Act specifies the roles and statutory respon-sibilities for the various stakeholders. In particular, the WEB Act set out to achieve thefollowing objectives (Nijhof, 2004, p. 23):

• a new VET system with various learning pathways that is coherent, flexible andrelevant to the world of work;

• the minimization of waste (dropout or outdated skills), and that means that theresulting qualifications should be portable, broad, and flexible to cope with changeand employability;

• business and industry must have significant influence on the skills and trainingcontents at all levels of the VET system; and

• a new institutional regime to deliver the WEB Act.

2 The origin of the term ‘Polder Model’ is not known. However, the term commonly refers to theacclaimed Dutch version of consensus decision-making processes involving tripartite stakeholders. Theword polder refers to the way in which the Dutch people build dikes – each family builds a small sectionand together they have a large barrier keeping sea water out.


The latter two objectives were extremely significant in bringing about a major shift inthe Dutch VET system. In effect, the WEB Act established an entirely new institutionalregime that was driven by employers via a system of sectoral bodies. To support thisnew regime, there was the formal acceptance of a tight integration between the school-and work-based elements of the VET system through the competence-based qualifica-tion structure, with four levels of learning – namely Level 1 (assistant training), Level2 (basic vocational training), Level 3 (vocational training) and Level 4 (middle man-agement training).

In addition, the WEB Act gives vocational education equal standing and recogni-tion as a learning pathway when compared with general/academic education. Thischange is intended to create the possibility of ‘transfer’ between VET and general/higher education. However, this latter aim remains as one of the biggest challenges,as the reform focused mainly on the employer-led structure and did little to buildbridges between VET and general education. Therefore, the Act provided the legalframework for change – a change that led to employers taking on a leading role indetermining training and VET qualifications via the sectoral bodies (i.e. the Knowl-edge Centres).

The key stakeholders in the sectoral system under the reform

As argued previously, to have an effective sectoral system, one needs more than just asystem of sectoral bodies. Stakeholders need to be organized in such a way that theemployer-led formation would be supported. So who are the key stakeholders after thereform? What is the mechanism for creating an employer-led training system withqualifications that the employers feel that they can influence?

The WEB Act specifies important roles for the key stakeholders in the new systemwhich include the following.

• A system of sectoral bodies called the ‘Knowledge Centres’ (or Kenniscentra)3 is tobe created. The Knowledge Centres are mandated to create job profiles (the basisfor the competence-based standard), quality assured workplaces for work-basedtraining and facilitating trainee placements. The qualification structure is the mostimportant starting point among the different roles of the Knowledge Centres, as itforms the linchpin linking all the VET components together – from the skills needsof employers to what colleges would teach, matching the needs between industryneeds and public VET provision.

• Within the formation of a ‘social partnership’ (workers and employers), employersoccupy a pivotal position to ‘lead’ sectoral skills development in terms of thetraining content and qualifications through the Knowledge Centres. As such,Knowledge Centres become the driving component within the VET system thatdefines the learning and skills content of VET. As will be argued later, this is oneof the key features of an effective sectoral system – sectoral bodies should be thelead bodies with a very high level of employer commitment and involvement.Otherwise, these bodies will be just an ‘add-on’ to the past system, with thesectoral bodies constantly fighting for a meaningful role to play.

• The new system is to be supported by various agencies and a reformed system ofVET colleges. For example, the Advisory Body for Education and Labour Market(ACOA) ensures that training and qualifications proposed by the KnowledgeCentres will meet the industry and social goals (known as the ‘macro-efficiency’criteria) and that qualifications are not overlapping and are created following acommon set of criteria. In addition, hundreds of local training colleges merge intojust 43 Regional Training Colleges (ROCs) to provide more focused and efficientsupport for sectoral training. These colleges manage the ‘school-based’ trainees.

3 The translation from Dutch into English means that these are sometimes referred as ‘expertise centres’or the ‘expertise centres for vocational education, education and labour market’. See http://www.Colo.nl/


However, they also support the work-based apprentices with their theoreticallearning. All students (work or school based) follow the same qualifications thatare designed by the Knowledge Centres. As commented by MBO Raad (theumbrella body for all the colleges), ‘The Knowledge Centres do the “what” and we[the colleges] do the “how” ’. This has turned out to be another key feature of aneffective sectoral design that the colleges are organized solely for the support ofwhat the Knowledge Centres want them to deliver, and little else. This is in strongcontrast with other countries (e.g. in the UK) where the colleges may be funded toachieve the government’s ‘educational targets’. It is therefore not a coincidencethat MBO Raad organizes itself into 17 curriculum teams that in effect ‘mirror’ theformation and training focus of the 17 Knowledge Centres.

Figure 1 depicts the institutional relationship among the stakeholders within the DutchVET system under the 1996 WEB Act.

Some of the constituent elements in Figure 1 will be explained in the later sections.For now, broadly speaking, the left-hand side of Figure 1 describes the ‘demand’ forskills and the right-hand side is the ‘supply’ of skills. Borghans and Heijke (2004) callthis the ‘control model’ because the system has been designed to ensure that industryneeds are closely matched by the qualification structure and VET provision and thatindustry and employers have to ‘lead’ the qualification structure. So the control andinfluence flow from the left to the right of the diagram. Crucially, all our interviewsconfirm that the Knowledge Centres are the most important starting point of the ‘flow’.In the majority of the Knowledge Centres, they act as the ‘training departments’ of theindustry.

However, the design of the system, as well as the embedded relationships among thedifferent constituent elements in the WEB Act, concern matters beyond issues of‘control’. An important quality of the new system is hidden behind the diagram and

Qualification

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Figure 1: The ‘control model’ of the Dutch VET system.Source: Adapted from Borghans and Heijke (2004).


that concerns the creation of an ‘incentive’ system. An effective incentive system has atleast two very important effects. First, if public funding is to overcome ‘market failure’,it ought to alter the cost–benefit balance such that most of the employers would wantto be ‘part of the system’ (also see the ‘funding’ discussion later). Second, the incentivesystem should support the role of the leading agency within the system. In this case,industry training funding ‘flows’ through the Knowledge Centres (e.g. also see theincome streams of the Knowledge Centres later). This avoids a situation where sectoralbodies become ‘ineffective’ because employers see little point in being part of thesebodies. A practitioner from one of the Knowledge Centres commented: ‘Having a‘Polder Model’ mentality is useful. But that does not guarantee employer participation.What brings employers into the Knowledge Centre system is the fact that much of thepublic fund for adult training is channelled through us. We have the resources andmandate to deliver what employers want . . . there are no reasons why employers wantto be outside the system’.

As will be seen in later discussions about the roles of the various components in thesystem, it is very important to get the balance of the incentives right, such that theemployers are keen to take part in ascertaining the job and training profiles that lead toqualifications and providing training places at their workplace. Likewise, the Knowl-edge Centres are encouraged to raise training activities and to keep the qualificationsup to date. In the next sections, we will look at how these crucial elements worktogether. In essence, we argue that although the Dutch ‘Polder Model’ culture plays animportant part in forming a social partnership, it is the design of the system thatprovides the incentives for a sustained and highly effective employer-led sectoralsystem.

The qualification structureIn the preceding section, Figure 1 shows that the Knowledge Centre (with its socialpartners such as employers and unions) drives the activities of the rest of the sectoralsystem. However, it is the qualifications that provide the linchpin among the variousstakeholders. After all, why should employers bother if the qualifications are not whatthey want or if the training content is not required at work? In this section, we will lookat how the qualification structure works and, in particular, how the structure maycreate a greater incentive for employers to be ‘in’ the system rather than staying‘outside’.

The new structure

When it comes to recognition, two features are associated with the new qualificationstructure. First, it has been designed to support the requirements of prior learningrecognition, with the aim of enhancing workers’ employability through qualificationsand recognized skills. Second, the new qualification structure is the tool for ‘standard-izing’ all sectoral training – both public and private training providers use the samequalification framework in order to structure their training programmes. The immedi-ate benefit of this practice is applicability irrespective of how and where training takesplace. Although this is not a feature that is unique to the Dutch sectoral system, it isimportant to support the aims of the WEB Act, namely flexibility and inclusiveness.

Dutch VET qualifications are divided into four levels. To achieve these qualifications,VET trainees have two potential pathways to follow. These are primarily youngerpeople, although the average age has been rising in recent years and there are no legalage limits on these two pathways. The first pathway is work based (BeroepsbegeleidendeLeerweg – BBL). A key feature of the work-based route is that the work-based trainees(apprentices) have an employment contract with an accredited employer, and they arepaid the minimum wage. They typically spend 80 per cent of their time as trainees inthe workplace and 20 per cent, usually amounting to 1 day a week, in school-basedtraining. The Act further stipulates that a minimum of 60 per cent of their time must bespent at the workplace.


The school-based students (Beroepsopleidende Leerweg – BOL) do not have an employ-ment contract. They have a studentship at one of the ROCs. Their training may consistof 1 day a week at a workplace. Only accredited employers (who also train the appren-tices) can provide training places to these students. So school-based students typicallyinvolve a minimum of 20 per cent and a maximum of 60 per cent spent in the work-place, during which time the trainee receives on-the-job training and a small trainingallowance (but not a wage). Irrespective of the route taken, the WEB Act sees these twopathways as having equal status.

Flexibility and meeting needs

The work- and school-based approaches have the initial advantages of providing train-ing according to the individual trainee’s preferences and needs and the availability oftraining. However, this approach has a number of additional benefits when comparedwith the pre-1996 system. The capacity of the work-/school-based system enables theDutch sectoral training system to respond to economic change. Thus, in times ofeconomic downturn, when fewer employers are able to offer traineeships, the work-/school-based system allows for young people to continue to receive training by shiftingthe emphasis towards school-based training. So at times of economic downturn andhigher unemployment, the school-based system increases its capacity for trainees andvice versa. This means that the sectoral approach can function effectively regardless ofthe economic situation. There is, nevertheless, some debate about the relative worth ofwork- and school-based training. However, it is generally recognized that both routesoffer different advantages and provide scope to engage different learners/trainees withdifferent needs.

With an increasing emphasis in recent times on flexible provision in sectoral trainingand meeting regional needs, the Dutch sectoral system is also capable of meeting newdemands. For example, in order to be responsive to employers’ local and sectoralneeds, the ROCs are allowed to adapt up to 20 per cent of the national curriculum tomeet the needs of the local or regional employers. In the Netherlands, it is well knownthat the local labour markets in the North and the South of the country are verydifferent. As a result, employers may have different training needs for their workforces.For example, in regions where light manufacturing dominates, employers’ trainingneeds are very different from regions where traditional industries still operate.

The ROCs also provide post-experience and continuing VET. For example, in orderto gain specific training, employers can approach the Knowledge Centre concerned,which will consider training needs alongside the sector standards. The KnowledgeCentre will discuss the needs of the company and employees, approaching one of thecolleges to create a specific programme, which is funded entirely by employers.

The Dutch experience actually reflects two opposing developments. On the onehand, there has been a massive effort in standardizing the way qualifications aredesigned (e.g. using the same ‘competency model’ for curriculum design) in order tocreate greater portability of qualifications. And on the other hand, the different learningroutes and flexibility in delivery mean that the qualification structure can support awider range of employers’ as well as learners’ needs. Interviews with the KnowledgeCentres suggest that these qualities are thought to be conducive to a higher level ofemployer buy-in.

Linking different stakeholders through qualifications

Legally, the WEB Act requires the qualification structure to fulfil three importantfunctions: (1) linking industry to VET provision; (2) steering VET output (both quantityand quality); and (3) embedding ‘ownership’ among those who use it – employers,trainees and VET institutions (ACOA, 1997). Figure 2 shows how the different stake-holders in the qualification structure work with each other in order to deliver the threefunctions.


Figure 2 shows that the social partnership within a Knowledge Centre is the startingpoint of job/occupational profiles. These are then translated into qualifications by MBORaad (not shown in diagram) which form the basis on which colleges design theirtraining programmes. CREBO is the qualifications authority that monitors all the quali-fications. Thus, Figure 2 shows the different statutory functions of stakeholders underthe WEB Act.

However, we can also use this to identify three sub-structures that are less obviousin the diagram but are very important in determining the degree of employer engage-ment. These are (1) the skill content structure; (2) the leadership structure; and (3) theincentive/ownership structure.

The leadership and skill content structuresThe social partnership arrangement involving both workers and employers is a keyfeature of the boards of the Knowledge Centres. This arrangement means that togetherwith employers and trade unions (or worker representatives), the Knowledge Centresidentify appropriate competencies for sectoral training (as well as the levels andnumbers). The skill content has the support of a broad spectrum of stakeholders. Inparticular, interviews with the Knowledge Centres and employer bodies suggest thatemployers take their leadership role very seriously as they know their input deter-mines how VET provision is funded in terms of training places for young apprenticesand studentships at ROCs. This is a crucial point for high levels of employer engage-ment. It has been observed that other sectoral systems also have employers steering theboards of sectoral bodies. However, if the sectoral body does not effectively influence(or determine) VET outcomes in terms of qualifications and funding outcomes,employers are unlikely to be interested to be ‘engaged’ either at the board level or asusers taking advantage of the training on offer. The Dutch sectoral approach is toensure that the Knowledge Centres are ‘attractive’ for employers to be a part of at thedifferent levels – i.e. steering the board, determining the job profiles and using thequalification system.

In contrast in most other VET systems, public funding for skills as well as collegeVET provision are often determined by a combination of political decisions as well asemployers’ ‘feedback’. Some VET systems are driven by broad targets, e.g. levels ofqualifications to be achieved. In the Dutch system, in comparison, employers have fargreater say and influence over public spending on the type of skills, the level of skills,

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Figure 2: The qualification structure of the Dutch VET system.Source: Adapted from Brandsma (2004).


and the quantity of trainees through the Knowledge Centre’s ‘target attainment pro-posals’ (also see later discussion on the role of the Knowledge Centre). ‘Target attain-ment proposals’ for the different sectors are mandatory documents that affect the typeof skills and the quantity of trainees.

The above discussion suggests that in the Dutch system, ‘leadership’ is a statutorydevice to ensure that the Knowledge Centres and their activities are strategic to thesectors’ skills base. It is also a starting point that cascades to the activities of other partsof the VET system, e.g. the ROCs. Outside the Netherlands, New Zealand is the onlyother sectoral system that mandates a ‘leadership’ role in a similar fashion.

The incentive/ownership structureThe Knowledge Centres develop the standards and qualifications, and they arepaid to maintain them. This creates an ownership and an incentive for the Knowl-edge Centres to keep the qualifications effective, valued (by employers and learners),and up to date. But this is just one example of how incentives can create greaterownership and ‘stake’. In fact, the Knowledge Centres are very well incentivizedthrough funding to ensure that the sector they look after will succeed in producingskills that are needed by industry through a number of means (also see discussionunder ‘Funding’). Essentially, there are three routes through which VET funding canbe distributed, each with a very different implication for sectoral bodies: (1) throughthe sectoral bodies (as in the Netherlands and New Zealand); (2) through the learn-ers (e.g. Australia); and (3) through the colleges or public training schemes (mostother countries). Needless to say, the first route is the one that is likely to confer astrong leading position for sectoral bodies, and as such, employers are more likely totake a strong steer in sectoral bodies and a higher level of employer engagement asa result.

Employers are also incentivized to take their training role seriously, counteractingthe downside effect of market failure. For example, as an incentive to provide trainingcontracts for new and existing employees, an employer whose workplace is accredited(by the Knowledge Centre) for sectoral training can claim approximately 15 per cent ofthe trainee’s wages back as a tax refund. This tax refund is often seen as a significantincentive for employers to ensure their training provision is ‘up to scratch’ and toengage in training. Here we can see a positive and reinforcing circle being created. Theemployers create the job/training profiles in the first place, which reflect the skillsneeds at work. These are then translated into qualifications, which are then funded bythe state. When the employers are accredited (by the Knowledge Centres) as approvedapprenticeship providers, employers carry out the training (that they would havedone) with a subsidy. In effect, the subsidy is to counter-balance the fear of poachingand to incentivize employers’ sense of ‘responsibility’ under the ‘Polder Model’. Inter-views with the Knowledge Centres and other stakeholders suggest that when mostemployers are taking part in the system, there is a level-playing field effect minimizingmarket failure.

For the colleges, they are keen to obtain good and consistent workplace experiencefor their students. This is the ethos of the WEB Act – making VET education relevant tothe world of work. Colleges’ outputs are assessed in terms of the employment out-comes of the students. This makes it important that the ROCs are providing studycontent that has currency and is valued by employers. It also encourages colleges towork closely with the Knowledge Centres to find better placements with employers inorder to obtain the best on-the-job training experience for their students. In a ‘non-financial’ way, colleges are therefore also ‘incentivized’ to take up ownership within thesystem through employment outcomes. The Dutch design means that colleges have tobuild a close working relationship with the Knowledge Centres in order to deliver theirresponsibilities. They cannot do that on their own, especially if the work experiencedoes not add value to the students’ classroom training. In contrast, most other sectoralsystems do not have this system feature to encourage this kind of partnership betweenthe colleges and the sectoral bodies.


The role of the knowledge centresHaving looked at the leading position of the Knowledge Centres at the system level, wealso need to examine what exactly the Knowledge Centres do in order to appreciatehow they engage employers. In 2009, there are 17 Knowledge Centres in the Nether-lands that have been established along the line of broad economic sectors. Since 1996,there has been a tendency to reduce the number of Knowledge Centres. It is under-stood that to make the qualifications structure sufficiently flexible and portable, the‘footprints’ of the Knowledge Centres need to become bigger, and therefore in thelonger term there will be fewer of them.

As indicated in Figure 1, one of the most important tasks for the Knowledge Centresis producing job profiles for the competence-based qualification structure. The secondlegal role of the Knowledge Centres concerns the output of these qualifications –namely the ‘attainment targets’. With their own research units and sometimes withadditional help from the umbrella body, Colo, the Knowledge Centres are mandated toanalyse the implications of job profiles and summative assessments that are describedby the social partners. The analysis of this information is an overview of qualificationsand targets for every qualification. This is the leadership role that was discussedpreviously. The outcome of this analysis affects the patterns of the VET funding.

Other than the qualifications, the Knowledge Centres have other tasks. Indeed,compared with the other sectoral systems outside the Netherlands, the Dutch Knowl-edge Centres probably have one of the most extensive ranges of responsibilities. Thefollowing tasks are the legal responsibilities of the Knowledge Centres (Sung et al.,2006):

1. coordinate and promote sectoral training;2. attract new entrants to the industry through promoting career opportunities;3. accredit appropriate workplaces for sectoral work-based training;4. provide training materials and training courses for workplace supervisors; and5. act as quality control body to oversee the quality of workplace training as well as

providing an input into examinations conducted by ROCs (in some sectors).

The Knowledge Centres are funded to carry out the above tasks. As indicated, amongthe different roles, qualifications development is the most important starting point forall other responsibilities of the Knowledge Centres. Each year, all Knowledge Centreshave to submit their proposals to the Ministry of Education, Culture and Science(MinOCW) detailing the various attainment targets (i.e. numbers of trainees) for thequalifications that they coordinate. These proposals have to be verified by an ACOA(see Figures 1 and 2). ACOA takes a broad view of the efficacy of the proposals,ensuring that sectoral proposals are not in conflict with each other – the so-called‘macro-efficiency’ (Borghans & Heijke, 2004) – i.e. matching the qualification structurewith the needs of society (industry and learners).

Once these proposals are ‘approved’, the qualifications and attainment targets will befunded by the ministry. The qualifications are entered into the Central Register ofVocational Qualifications (CREBO; see Figures 1 and 2). However, approval is only thebeginning that leads to all other responsibilities that the Knowledge Centres have tofulfil. For example, for work-based training, Knowledge Centres have to ensure thatthere are sufficient accredited workplaces that can carry out training to the expectedstandard and can offer apprenticeships. If required, the Knowledge Centres may haveto identify new training places and ensure that the employers have the appropriatestandards of supervision and training. Likewise, for school-based training, KnowledgeCentres need to liaise with various regional colleges via their umbrella organizations –Colo for the Knowledge Centres and BMO Raad for the regional colleges.

The umbrella body makes representation to the Ministry of Education, Culture andScience on behalf of all the Knowledge Centres. It coordinates qualifications andproposals across sectors. This ‘umbrella’ role of Colo makes Colo central in initiatingcross-sector development plans in order to achieve cross-sector ‘core competencies’. Inaddition, Colo collates cross-sector labour market information from the Knowledge


Centres regarding job profiles, vacancies, occupational trends and skills requirements,making this information available online. This is a very useful feature of the Dutchsystem. Most sectoral systems are very ‘silo-focused’, which makes them less able todeal with cross-sector issues and labour market adjustments. One of the biggest prob-lems is that some sectors actually draw on the same pools of workers (e.g. techniciansand junior engineers).

Thus, other than training, the Knowledge Centres, together with Colo, also try tomaximize skills impact through portability and flexibility. In one interview with Colo,it was suggested that ‘it is all about matching – matching learners with placements,matching learners with qualifications, matching job seekers to vacancies and matchingjob seekers with new skills’. It would appear that Colo’s role in collating extensivecross-sector labour market information and forecasting adds value to the effectivenessof the Knowledge Centres and to the system as a whole. Thus, this will increase theusefulness of the sectoral system for employers.

The role of the Regional Training CollegesWe specifically highlighted the spearheading role of the Knowledge Centre in relationto the support role of the colleges. The following section examines what this means forthe colleges. The argument here is that if the system can ensure that the sectoral bodiesare properly supported by the education sector, employers are more likely to buy inand support the work of the sectoral bodies.

In order to bring greater focus to sectoral support under the WEB Act, as well astackle the different regional skills needs, over 400 vocational training colleges aroundthe country were merged to form 43 large ROCs and 13 additional specialized traininginstitutions (e.g. in agriculture) as a result of the implementation of the 1996 WEB Act.4

Under the WEB Act, the Regional Training Colleges have two very important tasks.The first is the career counselling role with the ‘school-based’ students (with employerscarrying out a similar role for the work-based apprentices). The second task is todeliver study programmes to support both school- and work-based students. To dothis, like the Knowledge Centres, colleges also have to make proposals to the Ministryof Education about the study programmes that they would like to offer (see Figures 1and 2). Although the qualifications initiated by the Knowledge Centres and approvedby the Ministry of Education, Culture and Science form the framework within whichthe ROCs have to make their proposals, they are not obliged to offer all of them. Indeed,on making their proposals, the colleges have to weigh up the competing needs betweenthe target attainment plans of the Knowledge Centres and the local demand for quali-fications arising from the regional economy, as well as the needs of learners. However,in general, the ROCs are expected to provide focused support to the 17 KnowledgeCentres regardless of whether this takes the form of the school- or work-based routes.The target attainment proposals are the general basis for the ROCs’ action.

Compared with VET colleges in other sectoral systems, the ROCs are probably lessautonomous, and they are in general guided by the work of the Knowledge Centresand industry demand. Thus, on evaluating the ‘macro-efficiency’ of the sectoral system,Borghans and Heijke (2004, p. 94) comment that the Regional Training Colleges

are strictly bound by the decisions taken by the lead bodies [the Knowledge Centres] and very muchoriented towards the wishes of business and industry’.

The funding arrangementsIn this section, we will highlight the various sources of income of the KnowledgeCentres. The argument here is that unless a sectoral body is sufficiently resourced, its

4 In some Dutch literature, these regional training colleges are also known as ‘community colleges’.


effectiveness will be severely affected. It also follows that if sectoral bodies are under-resourced and ineffective, employers are unlikely to be interested in working withthem.

The Knowledge Centres are comparatively well funded when compared with sec-toral bodies elsewhere. There are four main sources of funding, as follows.

1. The Knowledge Centres are paid according to the number of competency stan-dards or qualifications that they develop and maintain. However, since the intro-duction of the competence-based system, qualifications have grown from 200 to700. With the recent flexibility agenda, the 700+ qualifications are expected toreduce to just over 300–400 (van Esch, 2004; Sung et al., 2006). So there may befinancial implications for the Knowledge Centres.

2. Knowledge Centres have a responsibility to accredit employers who are able tooffer work-based training (apprenticeships) and are qualified for the task. If theyare not qualified, Knowledge Centres can organize training to create supervisorsand trainers at the workplace. For this, Knowledge Centres are paid for the numberof companies that are accredited. Some Knowledge Centres also accredit a smallnumber of companies outside the Netherlands to carry out part of the work-basedtraining, e.g. tourism, hotel and retail. However, these overseas accreditations donot get funding, although it can enhance the attractiveness of the apprenticeshipplacements that the Knowledge Centres can offer. In the last few years, around167,000 companies were accredited for training purposes (MinOCW, 2003, 2008).

3. Knowledge Centres are mandated to recruit apprentices for their industry. They aretherefore paid for the number of apprentices that they recruit and place. Coregovernment funding for all sectoral training activities in 2007 was around €2.87billion with an average expenditure of €6600 per VET student and the KnowledgeCentres received €98 million (MinOCW, 2008). Because funding is tied to the volumeof training activities, individual Knowledge Centres may have incomes many timesthat of their counterparts in others sectors. For example, KC Handel (KnowledgeCentre for retail and wholesale) received €17 million funding in 2007, which wasmany times more than that of SVO (Knowledge Centre for meat processing). Thelatter had 2000 students compared with 44,000 at KC Handel (MinOCW, 2008).

4. There are also additional incomes from projects and research. An example of thesemight include ‘services’ to other stakeholders in the system. For example, a Knowl-edge Centre may collate various data about their sector and labour market. Theinformation then forms guidance to the ROCs about the kinds of training pro-grammes that are most likely to lead to employment and the regions in whichcertain skills are in short supply. Some Knowledge Centres produce employersurveys periodically on the growth, decline and new developments in the sectors.

Within the limits of their statutory responsibilities, the Knowledge Centres are rela-tively autonomous and can use their funds in any way they see fit. The KnowledgeCentres are subject to financial audit and are required to show that they met their aims(Sung et al., 2006).

In some sectors, as part of the national bargaining, the social contracts also include anagreement on the percentage of wage bill (ranging from 0.2 to 0.5 per cent) to be paidby employers into a sectoral training fund, and this fund is administered by theKnowledge Centre. This is, in effect, a training levy that is over and above governmentfunding for the regular sectoral training activities. For example, when there was ashortage of metal workers, the sectoral training fund would be used to put on a shortand intensive training programme, provided by one of the ROCs, in order to trainunemployed people to work in the metalworking industry.

We discussed the importance of incentives for employers in the previous section.Here, we can see that many of the sources of funding can be influenced by the level andquality of work of the Knowledge Centres. In other words, Knowledge Centres caninfluence their own level of activities and grow their business by doing a good job inareas such as qualifications, apprenticeship numbers, workplace accreditations and soon. The most effective Knowledge Centres are the ones that can synergize all these


functions together well. In this respect, the Dutch funding mechanism is designed toenable Knowledge Centres to achieve just that. This, of course, makes a strong contrastwith other systems where, for example, funding is targeted on some very narrowobjectives, e.g. qualification targets. In addition, the Dutch case seems to suggest that ifthese roles are integrated well, the sectoral bodies are of more value to the users, andthese include employers and learners.

ConclusionOn studying the six sectoral systems, one of the most interesting observations is thateach country could quickly identify what they meant by ‘employer-led’ sectoral train-ing. The most common denominator of this perception is the implementation of asystem of sectoral bodies covering most parts of the economy, and these bodies are‘employer owned’ (because employers are appointed to the board). This paper arguesthat this is a very simplistic understanding of what a sectoral system is. There is a hugeamount of assumptions made about the working of a sectoral VET system.

The Dutch system of Knowledge Centres shows that there is much more to be doneother than the establishment of a system of sectoral bodies – e.g. qualifications,funding, support structure, leadership issues and so on. The impact of a sectoral system– such as the extent of employer engagement – will depend on how well each of theabove elements is integrated with others.

In addition to system issues, there are also wider lessons to be learned from theDutch case. All too often in the past, VET reforms in most countries meant adding newelements to old. So, take for example, when the UK wanted to pursue an ‘employer-led’VET system, it did so by adding a system of SSCs somewhere in a ‘supply-led’structure that is dominated by the Learning and Skills Council (LSC).5 As the philoso-phies of the two concepts are fundamentally opposed to each other, the idea simplywould not work. The Dutch experience therefore reminds us how important it is to usea reform to radically rethink the working of the different components within the VETsystem. Reforms need radical thinking. Likewise, to move from a ‘supply-led’ to an‘employer-led’ system requires a root-and-branch restructuring of the whole system,covering institutions, funding, and leadership issues no less.

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Documents

Vocational education and training and employer engagement: an industry-led sectoral system in the Netherlands