Leveraging 'People' Power of Sustainability
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Professor Alan R Nankervis
Alan is a Professor of Human Resource Management in the School of Management, Curtin Business School, Curtin University. He has more than thirty years’ academic experience at three universities in Australia, and in the UK, Canada, Malaysia, Indonesia, Singapore and Thailand, together with consultancies in Indonesia, China and Thailand. He was the Director of the Sydney Graduate School of Management, Research Director and Head of HRM at Curtin University. He is currently the Chair of the Australian Human Resources Institute’s (AHRI) National Program Accreditation Committee.
Alan has published more than 150 books, book chapters, international journal articles and conference papers for publishers such as Routledge, Palgrave Macmillan, Cambridge University Press, Pearson Education and Cengage Learning; and journals including Personnel Review, Thunderbird International Business Review, Asia Pacific Business Review and Asia Pacific Journal of Human Resources. His research interests include the links between performance review and firm performance, comparative Asian HRM/Management, services management, and skills development in the Asia Pacific.
Alan’s most recent book is New Models of HRM in the Asia Pacific (Routledge), co-authored with Professors Malcolm Warner (Cambridge University), Fang Lee Cooke (Monash University) and Samir Chattejee (Curtin University).
The extent of the challenge
There’s a major labour market problem coming to all Asia Pacific countries, including Australia, and it’s likely to be aggravated as the impact of the new ASEAN Economic Community (AEC) is experienced across the region. It’s the result of the shortcomings of governments, many industry sectors, and educational institutions, and it needs to be addressed as a matter of urgency by all of these stakeholders.
The growing skills mismatch between industry demands and graduates’ capabilities has become one of the key challenges in the region. Most, if not all, countries in the region are experiencing difficulties in attracting and retaining employees with the required portfolio of qualifications, vocational skills and personal capabilities. These labour market deficiencies are primarily due to shortcomings in the relationships between governments, industry and educational systems. Their effects include constraints on national economic growth and future production structures, and long-term socio-economic development.
As examples of the depth of this challenge, in Malaysia a quarter of university graduates remained unemployed six months after they graduated; in Indonesia youth unemployment is reaching almost 25 percent; in Vietnam, graduates outnumber industry requirements but many end up unemployed or underemployed, and employers complain about the lack of graduates with appropriate knowledge and skills. It is projected that by 2020, Indonesia will only have 56 per cent of the middle managers that companies need to run their businesses, together with reports that 84 per cent of employers in manufacturing report difficulties in filling management positions, and 69 per cent report problems in sourcing other skilled workers.
The Indian economy is witnessing a divergent trend within which both critical levels of graduates' unemployment and serious skill shortages coexist; and in Taiwan, the dramatic expansion of the number of higher educational institutions has ironically contributed significantly to the growing unemployment rate of university graduates. According to many recent studies, a lack of appropriately talented candidates is most likely to be a concern in Singapore, as the number of employers reporting talent shortages has risen sharply (to 40%). Australia is also going through a difficult phase, as job prospects for new graduates are the worst they have been since the 1980s, with only 68 per cent of new bachelor graduates in full-time work within four months of finishing their course, down from more than 80 per cent before the 2008 global financial crisis.
Figure 1 below distills the findings on graduate ‘work-readiness’ criteria over the last decade or so.
Graduate Work-Readiness Challenges
A Curtin University research team has undertaken a region-wide study of the work-readiness challenges facing governments, industry and education systems. Countries included in the study are Australia, Singapore, Malaysia, Indonesia, Taiwan, Vietnam and India. All participant countries reported both broad (and more specific) concerns with the ‘soft’ skills of many graduates. With respect to the former, many participants reported difficulties with new graduates in the areas of communication, problem-solving, initiative, attitude, work ethic, critical thinking, resilience, adaptability, innovation and creativity.
More specific concerns were voiced about the following workplace competencies:
* Writing skills – both low and higher level
*Inability or unwillingness to make decisions
* Leadership competencies, critical analysis skills and practical workplace experience
* Creativity, discipline and work ethic
Causes and consequences of these challenges
In almost all countries, the reported causes include inadequate government education and training policies and strategies, and short-term labour market planning. Training in vocational colleges and universities is of variable quality, with an imbalance between theory and its business applications, non-existent partnerships between industry and education systems, and an absence of instructors with relevant work experience. Employers seldom attempt to develop close collaborations with training institutions. These factors have led to a waste of human resources and a consequent reduction in productivity; increases in unemployment and under-employment which can lead to other social consequences such as poverty, inequality, crime and social evils (notably in Vietnam, Malaysia, Indonesia and Taiwan). Graduates find it difficult to obtain employment whilst enterprises are short of appropriately qualified, skilled employees. These consequences are likely to be further exacerbated as the impacts of the AEC are felt across the region, with discernible ‘winners’ and ‘losers’ based at least partly on their graduates’ work-readiness capabilities.
Some positive strategies and practices
A broad range of actual and potential remedial strategies was suggested by the study participants. For governments, they include the Australian government’s National Work-Integrated Learning Strategy; further financial and taxation incentives for industry training programs; the facilitation of industry-education partnerships; the revision of education funding and curricula; and, importantly, the extension of professional and trade training systems and models. In Vietnam, the Ministry of Labour, Invalids and Social Affairs (MOLISA) has developed policies to support job creation, and a national fund for employment which supports graduates’ careers’, together with initiatives to improve labour market forecasting. The Malaysian government has developed several new initiatives, including a national talent enhancement program (NTEP) which funds twelve month traineeships; and Talentcorp, an agency which is designed to enhance graduate employability.
Employers also need to provide supportive cultures, focused graduate recruitment processes; ongoing training and support; targeted mentoring systems; and, most importantly, strong partnerships between industry and educational institutions. Education institutions also need to review and revise their programs and approaches in closer partnerships with associated industry sectors and professional bodies to address the challenges. These partnerships can range from relatively simple program inclusions such as industry guest speakers, more focused practical components, integrative and multi-disciplinary capstone units in all programs, and adding work experience criteria for all new lecturers; to broader imperatives such as rethinking their graduate outcomes, revising WIL and internship components, and designing ‘incubators for graduate mentoring’, combining education institutions, employers and professional associations. As examples, many Australian universities have developed professional degrees based on industry requirements. Others have programs to facilitate entrepreneurial start-ups, ‘professional’ degrees which incorporate considerable direct work experience; or new positions as ‘professors of practice’ whose key roles include developing partnerships with industry. In India there are a number of ‘best practice’ universities which focus on the global perspectives of business (for example, Symbiosis International University, BITS Pilani, NMIMS Global Access for Continuing Education).
However, all of these approaches need to be co-determinant, as only integrated national strategies comprised of supportive government policies, graduate-friendly industry programs, and the review of education approaches to graduate work-readiness is likely to be effective in the long-term.
* Research Team – Kerry Brown, Julia Connell, John Burgess, Alan Nankervis, Ros Cameron and, Subas Dhakal (Curtin); Prikshat Verma (Australian Institute of Business); Alan Montague (RMIT).
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