Controversial issues in industrial society HR Management

  • Training for an advanced industrial society: are skills enough?

We have been subjected to a barrage of comments by experts in the world of vocational and educational training that advanced economies need to expand the number of people with the requisite skills if they are to compete in the twenty-first century. The extract below gives a flavour of these warnings. It is obvious that Britain and other advanced industrial economies can never compete with Third World countries in terms of cheapening the labour supply.

If economies are to remain relatively prosperous, one of the policy imperatives for the future must be a considerable investment in education and training by both organisations (public and private sector) and governments, to increase skill levels for potential and actual employees. Industry is no longer drawn to the comparative advantage of abundant natural resources, but instead to pools of human skills.

American – and British – governments neither provide the education nor the training in depth, nor the infrastructural foundations necessary for the post-electro-mechanical society. (Ford, 1993; in Thurow, 1992) In the past, governments in the UK have created an ‘alphabet soup’ of VET initiatives to engender a workforce with the right skills and knowledge for future economic and labour market requirements.

But is this enough? By all accounts, past experience has shown that it is not! The continual chopping and changing of policies by various governments have not provided a training environment of continuity compared with Japan, Germany and France. This has had the effect of creating confusion and there has been a tendency to fill in tick-box report forms in order to please those in authority higher up the training and education ladder, rather than attend to the spirit of an HRD strategy in a national context.

  • Compulsory or voluntary VET?

One major concern to the fore in debates concerning the need for greater skills has been whether training should be voluntary or compulsory. If organisations and companies will not train their staff adequately, even with certain inducements, then should the state step in and force them by means of legal regulation? Observers and interested bodies are divided on the issue. The Liberal Democrats, the TUC, the Commission for Social Justice and, previously, the Labour Party have argued ‘that the problem must be tackled with legislation.

Employers should be compelled to provide training’ (Harrison, 1995: 38). On the other hand, a strong case can be made for ‘voluntarism’ (Harrison, 1995). The Labour Party has now moved its position from one where organisations should be compelled to provide training (the levy system) to the most recent proposal of coordination of initiatives through the Learning and Skills Council, which backs away from elements of compulsion and retains the elements of persuasion.

While welcoming the partnership approach, John Monks of the TUC expressed concerns about the emphasis on voluntarism (Rana, 2000:13). The CBI, the Institute of Directors and the CIPD have argued for ‘carrot’ rather than ‘stick’ measures, as levies or compulsory learning accounts could act as a tax on jobs. In the face of the failure of the Australian levy system and the fact that proposals for levy systems in New Zealand, Ireland and Sweden have not been taken up, it would appear that the Labour Party has seen these as precautionary tales (Beresford and Gaite, 1994; Harrison, 1995).

A number of observers have welcomed the fact that British governments are coming to the realisation that The Learning and Skills Council will become a major hub in helping coordinate this activity where coordination and cooperation is the key to aiding effective skill provision. Thinking now believes that a series of disparate agencies acting on their own initiatives can no longer produce the requisite skills required by the economy; nor could a monolithic government training programme, forcing companies to follow the same blueprint regardless of sectoral requirements and individual company and organisational needs.

Nevertheless, elements of control and strategic direction are elemental to success and the LSC already ‘encourages sectors to adopt a “licence to practice” qualification requirements, which at one time would have been politically unacceptable’ (Keep, 2002: 53). more skills supply initiatives on their own, would not be enough to solve our long standing skills ‘problem.’The Cabinet Office Performance and Innovation Unit also signalled a recognition that organisations’ needs for skills are a derived demand – ie, driven by business requirements, not government schemes.

This means workforce development needs to be addressed in the wider context of government and business strategies on products, innovation, market positioning, IT, HR and so on. Tackling low levels of employer demand for skill and ensuring that skills are deployed to maximum effect are key issues in solving the problem. (Keep, 2002: 53) There will have to be greater accessibility to universities for more of the population, a coherent system of VET in which harmonised qualifications are accredited and appreciated by all employees, and a commitment to lifelong learning. This implies an increase in funding for education.

As noted in Chapter , the future organisation is a learning organisation, and future employees are those who are continually seeking to develop themselves. Further developments in VET are therefore inevitable in the UK. The Labour governments elected in 1997 and 2001 have strongly recognised this in the flurry of VET initiatives put into practice. It is clear that further attention will be paid to education and VET in the UK for some time to come, although critics within the system at school, college and university levels claim that there is insufficient funding to meet all their needs.

■ The contribution of training to national competitiveness

It has also been recognised that in a comparative context skill generation needs to meet national labour market requirements. Crouch et al. (2001) propose that coordination of private and government agencies in some neo-corporatist structure is the way forward. Alternative proposals do not work by themselves.

For example, many private companies will engage in large amounts of training under their own volition They also argue that improved skill levels do not necessarily solve unemployment, and higher levels of education may produce more highly educated unemployed people or over qualified employees, such as graduates, filling McJobs. If skill generation is left mainly to companies, this inevitably means that government agencies are left with the residual role of taking care of the unemployed, and training policy in this area cannot solve unemployment by itself nor stimulate economic growth.

Alternatively, all-pervading government control of VET is not likely to be able to provide the skills and knowledge that companies need. In the past, economic growth has been seen to have been bound up as much with the wealth of a nation’s ‘human capital’ as with its material resources. Japan and Germany are two oft-cited cases. Both countries have relatively few natural resources, and have relied heavily on the development of the skills, aptitudes and efforts of their people.

Both had suffered considerable wartime destruction by 1945, but had largely rebuilt their economies by the 1960s as a launch pad from which to challenge world markets. The problem with training and education is that, although most observers acknowledge their importance, it is very difficult, if not impossible, to correlate directly their contribution to economic growth. Attempts have been made by some researchers to do this, albeit with questionable results (Prais and Steedman, 1986; Steedman, 1988; Prais and Wagner, 1988; Prais et al., 1989).

Comparative economic research by Freeman (BBC, 1996) finds that although the Philippines has increased and improved education, it is not doing as well economically as China, which has not significantly increased its education and training but is experiencing high economic growth. He warns that education and training alone are not a prescription for pulling a country out of low economic growth, and other writers from developing nations have also attested that the hopes invested in education in the 1960s and 1970s have not been realised in economic terms for many Asian and African countries (Halls, 1990).

However, Ashton and Sung (1994) cite the impressive economic growth of the Singaporean economy in the 1990s, and claim that much of this can be related to a comprehensive state-directed VET programme integrated into the Singaporean government’s long-term economic aims. They claim that ‘the relative autonomy of the state apparatus is the ability of the political elite to define long-term goals for political and economic action’.

From these examples we can at best conclude that the experience of developing economies is varied, and that the way VET policy is conceived and implemented is of utmost importance: this is an area of research that is receiving increasing attention. In recent years the much-vaunted German VET system has come under criticism, in that training for the unemployed is not affecting the labour market in the way it had done previously, and levels of unemployment are now equivalent to, if not greater than, those in Britain.

It would seem that in certain areas of the economy training and retraining in practical skills are proving less effective, largely because of the changing nature of the economy, which is requiring fewer and fewer engineering, construction and other manual skills. As world competition increases, and new technology replaces many occupations that would once have absorbed the unemployed, retraining schemes appear increasingly out of date and ill equipped to help the ‘new’ unemployed (BBC, 1996).

Unification has also had a negative economic impact on the new German state. The changing labour requirements of the economy, in terms of numbers of employees and skills needed, will be an increasingly pressing problem for the major economies, with ramifications for social as well as economic policy-making. Similarly, while in-firm training has increased considerably in France, there remains the problem of what to do with the unemployed, particularly youth and ethnic minorities – groups of unemployed that are disproportionately large.

Long-term unemployment in France has also risen over the past decade, and labour-market policies have not been particularly effective in providing the skills-based training needed to help these people find jobs. France, like Britain, has not succeeded in bridging the skills gap, and this may be partly due to the low esteem in which vocational training initiatives are held (Bournois, 1992).

Training is also regarded as an instrument for solving specific economic problems such as unemployment, and for bridging the skills gap. Many advanced economies have pursued such training policies with, at best, mixed results and usually little long-term effect on the unemployment register. Social arguments seem to fare better, and according to Lord Young it is preferable to have unemployed youngsters on training schemes than out ‘ram-raiding’ (BBC, 1996).

In addition, as we shall see in Chapter on international HRM, factors such as the influence of national institutions, social attitudes and culture are also bound up with explanations of the economic success of these nations and their education and training systems. Nevertheless, comparative study can highlight weaknesses and strengths in national systems of training and education, from which we may learn some vital lessons.


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