VET in the leading industrialised nations HR Management

Comparisons have been made between leading industrial nations in an attempt to discover elements of education and training that create successful economies. Much attention has been focused on the German VET system, training in large Japanese corporations and human resource development in HRM-style US companies. Latterly, comparative studies have questioned how much of these nationally embedded training systems can be transposed to other institutional and cultural settings.

The dual system of training in Germany, for example, has a uniqueness forged out of the historical development of its institutions at a national and local level and these cannot be replicated in, for example, the UK, as these pre-conditions do not exist in the same way. Another issue is how much can government policy consciously enhance training and education through public policy initiatives? Crouch et al. (2001) strongly doubt that government policy alone can achieve these ends and that a more realistic approach is to form strong partnerships between the state, employers and employee organisations such as trade unions.

Their recommendations for the future of VET would lie in a form of neo-corporatism, whereby the state acts as a catalyst but in response to demands from companies for skills and knowledge. In other words, the state has to be responsive to changes in skill and knowledge demands in a rapidly changing world. The old model of monolithic state institutions laying down directives encasing training in specific and inflexible structures would be inappropriate in the rapidly changing world of work in the twenty-first century.

Neither can companies by themselves enhance national economic performance through their own initiatives. A good example is the USA, where excellent training is carried out in many companies yet there is still a skills shortage in the economy as a whole, combined with a widening gap between the highest- and lowest-paid workers. There are no easy solutions and the catalogue of failed VET initiatives in the UK is testament to this.

This section attempts to compare and contrast VET in six leading industrialized nations: Britain and five competitor countries. There are a number of similarities. All six countries have compulsory education of similar ages and therefore recognize the importance of at least a basic education in a modern industrialised society. All six countries experienced decline in the number of children of school-leaving age in the 1990s ; Germany experienced the most severe decline.

An examination of the statistics for 16- to 18-year-olds shows that the majority continue with some form of education or training, either full- or part-time. Britain, however, has the fewest involved, being 10 per cent below the comparable French figure, for example. Germany has a thoroughgoing VET infrastructure, and Sweden has a well-established vocational system, which begins when children are 14 years old.

  • VET policies and practices

An examination of the VET systems beyond compulsory school age for the same six countries reveals a varying, and sometimes widely varying, set of practices (see Table 9.4). They can be roughly divided into voluntarist and directed. By voluntarist is meant a system that has little or no government interference, and effectively leaves training to the choice of the individual or the organisation.

By directed is meant the existence of state legislation or regulation that has an element of compulsion for employers to train their staff. Britain and the United States clearly have voluntarist systems and Germany, France and Sweden have directed systems, whereas Japan, while not having legislation that makes VET compulsory, has strong directives set by local and central government that enforce high-quality training standards (Dore and Sako, 1989).

The Japanese also have a culture that values training and education highly, and such policies have a collectivist rather than an individualist imperative (Hofstede, 1984).What can also be discerned is that in each country there are a considerable number of routes through vocational education and training, which vary from relatively low-grade schemes such as Training for Work in Britain to university graduate and postgraduate degrees.

However, it is apparent that the British system lacks homogeneity and consistency in courses and standards of occupational qualifications compared with those of Japan, Sweden and Germany.

Compulsory school education ages a Varies from state to state

Compulsory school education ages a Varies from state to state

Indices of the 16- to 18-year-old population and participation

Indices of the 16- to 18-year-old population and participation

VET policies and practices

VET policies and practicesVET policies and practices

In Europe there are two main types of vocational training: the sequential and the dual systems. The sequential system is practised in France, Italy, Belgium, the Netherlands and Sweden, and is conducted in specialist vocational training colleges, which school leavers attend full time. The German Berufsbildungssystem is the main exemplar of the dual system, and is described below.

  • The German system of VET

The German ‘directed’ and dual system of vocational training has frequently been referred to as an example of excellent practice. A common misunderstanding is that the VET is funded and run by the state. In reality, employers fund two-thirds of VET, and employers and trade unions have a considerable influence on the control of the system, together with central and local government.

Laws and guidelines of VET regulate the system so that employers are duty bound to provide funding and resources for training. The institutions and procedures that operate the system are, however, administered jointly by employers, unions and the state. There are three stages in the dual system. The first begins in the latter years of school, where emphasis is placed on a high level of education for all.

A good general education, it is recognised, provides the solid basis for later learning. Nearly all young school leavers enter apprenticeships, as do a quarter of youths with qualifications similar to A levels; the rest enter the college and university system (Rose and Wignanek, 1990). The dual system stresses the strong relationship between theoretical and practical training; part of the apprentice’s time is taken up in attending vocational college, and part in receiving structured training from a meisterwerker (skilled craftsman) in the workplace.


The meisterwerker, it must be stressed, is also trained in instruction techniques (Thorn, 1988). On- and off-the-job instruction is carefully coordinated to produce a vocational course that gives a thorough grounding in the skills of the apprentice’s trade, and this, once acquired, is acceptable in all parts of the German labour market. The costs of the dual system are shared by firms, government and youths. Firms pay for on-the-job training, youths accept relatively low wages, and the vocational colleges are paid for by public funds (Rose and Wignanek, 1990).

There are approximately 319 000 apprenticeship places available in Germany compared with approximately 13 000 in Britain. However, since 1986 young people in Germany have taken up only about 172000 apprentice places, but that number may have declined with the advent of more difficult times in the 1990s (Gaugler and Wiltz, 1992).

Germany has three times more skilled workers than Britain, even though the labour force of each country is of similar size (Rose and Wignanek, 1990). Nevertheless, as will be noted in the section on controversial issues, Germany’s much admired VET policies and practices are apparently no longer effective in reducing the number of the unemployed.

  • The Japanese system of VET

While the German system illustrates the comparative efficiency of its youth training programmes, an examination of the Japanese system of VET reveals the advantages of continuous development of employees throughout their careers. ‘Lifetime employment’ is a much-referred-to Japanese employment practice, although in reality ‘40% of new recruits leave within three years of entering their first job’ (Dore and Sako, 1989).

However, there is still a considerable proportion of lifetime employment in large-scale companies among the managerial and professional workforce in particular, who tend to form the core (those with relatively permanent positions and career structures) of company employees.

Lifetime employment allows for the long-term development of employees, and enables the creation of a structured succession programme that is mutually beneficial to the organisation and the individual employee. Decision-making is shared at all levels, there is a strong sense of collective responsibility for the success of the organisation, and cooperative rather than individual effort is emphasised, although achievement is encouraged.

Training and development are an integral part of company policy in helping to reinforce these working practices, and in improving skills in technology and other related working practices. Training and development are thus ‘embedded’ in Japanese companies, rather than extraneous as in British organisations. A study of eight comparable British and Japanese companies revealed the inherent weaknesses of the British system (Storey, 1991).

While the study concentrated on management development, the fact that the Japanese have no term for this was significant. They believe all workers should be developed, and this should be an ongoing part of systematic employee development. Line managers in Japanese organisations are expected to spend time developing their subordinates, and this is deeply imbued in their expectations:

  • The French system of VET

In the 1970s training initiatives and expenditure were similar in Britain and France. In the 1970s and 1980s, however, successive French governments initiated a number of training laws that compelled organisations to train, making this a ‘directed’ system. The taxe d’apprentissage (apprenticeship tax) required employers engaged in commercial, industrial and handicraft activities to be subject to a tax of 0.6 per cent, which was to be used to finance technical and apprenticeship training.

An employee training tax was also introduced, which compelled employers of nine people or more to allocate a minimum amount equal to 1.2 per cent of total annual wages and salaries to staff training (Price Waterhouse, 1989). The effects on training were dramatic. At first, a considerable number of training consultancies came into existence to cater for the expected demand In the main, the Japanese treated training and development more seriously.

In Britain, despite many good intentions and recent advances, there was a level of ambiguity about the real value of training and development that was not found in Japan. (Storey, 1991) (Barsoux and Lawrence, 1990). Another longer-term factor was that, as companies were forced to train, many found that it brought benefits, and they began to spend above the1.2 per cent requirement, as Table indicates.


French organisations, in conforming to French law, have a much greater knowledge of their training expenditure compared with other European countries, as the Price Waterhouse data consistently show in both years of the survey, even when extended from five to ten countries . Only 2 per cent of French organisations did not know how much they spent on training, but well over 40 per cent did not know this in the UK, Sweden and Germany. Similar figures can be found in the 1991–92 survey.

Overall, French organisations

  • The implications of these international comparisons for Britain

Statistics reveal that Britain has one of the lowest percentages of young people between the ages of 16 and 18 years of age staying on at school or undertaking vocational education schemes, compared with other industrialised countries of the European Union and the world (DES, 1990). A more recent report published by the OECD stated that of 14 countries studied in depth only Hungary and Portugal had a record as poor as the UK for smoothing the transition from school to work.

Of those students staying on in full-time education, 20 per cent dropped out within one year, and an astonishing 10 per cent could not be traced as in work or in education. It also stated that 40 per cent of British young people aged 19–24 had not reached what the OECD considered to be a minimum-level qualification (Atkinson and Elliott, 2000: 6). Concerns have also been raised regarding the relative decline of literacy and numeracy among school leavers and the relevance of the school curriculum to the world of work, for example the narrow and restrictive role of A levels.

Moreover, there is also considerable concern about long-term unemployed people condemned to a life of inactivity because they have not been able to receive adequate training to create a suitable career. There has been disquiet regarding the role of training and education policy in helping to halt or reverse that trend. Yet despite high unemployment in some areas, there are organisations experiencing difficulties in recruiting certain highly skilled positions. The comparisons made above between the British system of VET and those of some of its major competitors do little to allay such concerns.

Recent nationwide skills audit reports show that Britain’s workforce has slipped further behind its main economic rivals in training and education. In comparing Britain with France, Germany, Singapore and the United States, the report indicated that, while the number of young people staying on in full-time education in Britain had improved, it was still behind the other four nations.

It was in VET, particularly in craft and technical skills, that the report stated that Britain still had much to do to equal its rivals (Targett, 1996: 3; Macleod and Beavis, 1996: 6). Some critics claim that Britain is becoming a ‘low-tech’ (untrained and unskilled), cheap-labour economy, with an increasing proportion of the potential labour force condemned to a lifetime of economic inactivity. In the early 1990s Layard stated that ‘two-thirds of British workers had no vocational or professional qualification, compared with only a quarter in Germany’ (Anon, 1992). Table Proportion of salaries and wages spent on training 1991–92

These issues raise many questions as to the scope and type of training that is needed. The following subsections outline some of the recent VET initiatives designed to improve Britain’s competitiveness. It is too soon to judge their effects, but the conclusion that Britain lags behind its competitors is now being questioned: ‘the UK system may eventually be seen as an example of how to create a more flexible workforce’ (Merrick, 1995: 8).

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