1. SKILLS CERTIFICATION, A KEY DRIVER TO IMPROVE TRAININGQUALITY AND RELEVANCE (AND WORKERS EMPLOYABILITY)Hernán AranedaHead, Centre for the Innovation in Human Capital, Fundación ChileThe World Bank Labor Market Policy Core Course:“Improving Jobs Opportunities and Worker Protection: the Role of Labor Policies”Washington DC, 8 May 2013
2. CONTENTS1. Skills certification: why, what, how2. The chilean policy context3. Skills certification pilot project 1999-20084. Scaling-up and the unfinished agenda5. New developments: workforce planning anddevelopment in the mining industry
3. 1. SKILLS CERTIFICATION SYSTEMSWhy, what, how
4. SKILLS ON DEMANDMeantaskinputaspercentilesofthe1960taskdistributionLevy & Murnane, 2006
5. LOW SKILLS / LOW WAGES TRAJECTORIESSOURCE: As quoted in Tether, B. (2008) How does succesful innovation impact on the demand forskills and how do skills drive innovation.SKILLS SHORTAGEIMBALANCE -mismatch caused bycompanies demanding higherqualifications than areavailable in the localworkforceHIGH SKILL EQUILIBRIUM –economy with a strongdemand for high level skills,which has a positive effectthroughout the supply chainon enhancing the aspirationsand actions of individualswith respect to participationin education and trainingHIGHEMPLOYER DEMAND FORHIGHER LEVEL SKILLSLOWLOW SKILL EQUILIBRIUM –employers face few skillshortages in a predominantlylow skilled workforce, wherethere is little incentive toparticipate in education andtraining and raisequalification levels andaspirationsSKILLS SURPLUS IMBALANCEmismatch caused by aworkforce which cannot findlocal employment to matchtheir skills and aspirationsLOW SKILL SURPLUS HIGH
6. WHY DEVELOPING SKILLS CERTIFICATION SYSTEMS?• To improve the signaling of workers’ occupational skills toemployers.• To improve the signaling of employers’ skill requirements toteachers, trainers and trainees.• Better signaling of employers requirements results in bettertraining programs and a more motivated set of trainees.• Better signaling of worker skills increases the proportion oftrainees who find jobs in their field.• This increases the payoff to training and this in turn attractsadditional people into training.• The SCS should therefore focus on certifying skills andknowledge that are taught in training programmes orlearned at work, not traits of character that are hard toteach and impossible to measure reliably.
7. To improve thesignaling of workers’occupational skillsto employers.To improve thesignaling ofemployers’ skillrequirements toteachers, trainersand trainees.Better trainingprograms and amore motivated setof trainees.Better employmentprospects oftrainees in theirfield.Increasing payoff totrainingAdditional peopleattracted intotraining (moreinvestment)Whycertificateskills?
8. • increases the proportion oftrainees who find jobs in theirfield• increasing payoff to training• additional people attractedinto training (more investment)Workers’occupational skills toemployers• better training programs(content, structure, pedagogy)• more motivated set oftraineesEmployers’ skillrequirements toteachers, trainersand traineesSIGNALING
9. PURPOSE1. To induce youth and adults who wouldotherwise be unskilled to get training necessaryto become better skilled.2. To improve the quality of training.3. To improve the utilization of the skills that aredeveloped.
10. Certification1. To improve signaling of the occupational andother work related skills that individuals developin schools or on the job.2. This increases the likelihood that workers areassigned to jobs that use their skills.3. This increases the demand for training, which inturn, induces more investment
11. 1. Describing the skills that employers in particularoccupations desire and developing performanceassessments for these skills should induceTechnical-Vocational Education and Training(TVET) providers to do a better job and helpworkers select training programmes moreeffectively.Skill Standards Development
12. 1. Not in raising the barriers for current low paidjobs2. Success in increasing the supply of well trainedworkers expands the size of the pie andimproves its distribution (the relative wage rateshow high skill occupations fall)3. Removing people from the unskilled groupreduces the supply of workers to low wageindustries (and wage are forced up)A SCS SHOULD BE FOCUSED ONTRAINING THE UNSKILLED PEOPLE
13. 1. Certification should be voluntary;2. Industry / Employer led;3. Voluntary partnerships involving employers, unions,training organisations, local communities, etc.4. Public financial support for training should be subjected toprogrammes aligned to Skills Standards and Certification.5. Certificates should be become part of NationalQualification Frameworks to promote flexible learningpathways across the life span; otherwise occupationalcertificates risk becoming dead ends.INSTITUTIONAL ARRANGEMENTS NOT TRIVIAL
14. 2. THE CHILEAN POLICYCONTEXT
15. Long narrow country (4.300 kms)17.1 million populationGDP growth 5.4% (2010)Per capita GDP US$ 15.107Life expectancy at birth 78.6 yearsTotal employment 7.1 millionUnemployment rate 6.5 - 7.0%Poverty 18% (extreme poverty 3%)OECD member since 2010CHILE
16. DECREASING POVERTY
17. RELATIVELY LOW POVERTY + POOR INCOME DISTRIBUPOVERTY AND INEQUALITYIN LATIN AMERICA COMPARISONINEQUALITYOECD COMPARISON
18. INACTIVE AND UNEMPLOYED PEOPLE ACROSS INCOME QUINTILESAs per cent of total (Household Survey 2009)
19. INFORMALITY AND JOB QUALITY ACROSS INCOME QUINTILESAs per cent of total in the quintile
20. 010203040506070KoreaCanadaJapanRussianFederation1IrelandNorwayNewZealandLuxembourgUnitedKingdomAustraliaDenmarkFranceIsraelBelgiumSwedenUnitedStatesNetherlandsSwitzerlandFinlandSpainOECDaverageEstoniaG20averageIcelandPolandChileSloveniaGreeceGermanyHungaryPortugalAustriaSlovakRepublicCzechRepublicMexicoItalyTurkeyBrazil55-64 year-olds 25-34 year-oldsPERCENTAGE OF POPULATION THAT HAS ATTAINED TERTIARYEDUCATION , BY AGE GROUP (2009)Source: www.oecd.org/edu/eag2011).%
21. LABOUR-FORCE PARTICIPATIONPercentage of 25-64-year-olds active in the labour market.Source: OECD Labour Force Statistics Databa
22. YOUNG PEOPLE AND WOMEN IN THE LABOURMARKET: PARTICIPATION RATE WELL BELOWOECD STANDARDS
23. INCREASING DEMAND FOR TERTIARY EDUCATIONEvolution of total enrolment(1990-2011)In Chile, between 1990-2011 the net coverage in tertiary educationincreased from 11.9% to 36.3% (Mineduc, 2011). Gross coverage 50%.Lowest income decile increased its participation from 3.8% to 16.4% (netcoverage).400,000615,000-100,000200,000300,000400,000500,000600,000700,00019901992199419961998200020022004200620082010CFT and IP UniversitiesTVETInstitutionsKick-offSkills CertificationProject
25. MAIN DRIVERS1. A significant amount of experienced workers lacking formalqualifications “trapped” in low productivity jobs2. An even more relevant number of low skilled young people and adultswithout the motivation to participate in training: unemployed, inactive.3. Relatively low participation on workforce training (on-the-job / off-the-job)4. “Disjointed” systems offering lifelong learning opportunities5. Poor quality and relevance of the subsidised training for the labourforce (tax incentive for companies; training for groups at risk of socialexclusion). Mostly supply driven. No Quality Training Framework.6. Increasing concern about low labour productivity at the company andaggregate level (discouraging outcomes from the first InternationalAdult Literacy Survey)7. More dynamic and competitive industries facing skills gaps andshortages.
26. NATIONAL SKILL CERTIFICATION SYSTEMIndustryEndorsedSkills / CompetencyStandardsSkillsAssessment &CertificationSystemLabour MarketIntermediation /InformationServicesHR Management(recruitment, selection,performance appraisal,training, sucession plans,rewards, etc.)TVET PROVIDERS(SECONDARY, TERTIARY,INFORMAL TRAINING PROVIDERS)NationalTraining SystemNSCS, A CRUCIAL ROLE TO DEVELOP ADEMAND DRIVEN TRAINING SYSTEM
27. THE PROJECT (1999-2007)(i) Develop an institutional framework that articulated actorsinvolved(ii) Industry specific occupational and labour market studiesreport: main challenges, priorities for skill certification(iii) Skills standards development and sectorial validation(iv) Assessment methodologies and tools development,including criteria procedures and instruments(v) Criteria to assess the quality of training programs in theoccupational areas included in the project(vi) Pilot of the defined assessment & certification mechanismswith a actual workers from the participating industries(vii) Positioning and disseminate the products / services of thesystem at national and international levels (viii)(viii) Design and propose an institutional and financial platformfor the system.
28. 1.Seleccionar eIdentificar SectorProductivo2.Movilizar ActoresClaves3.Definir Estándares4.ValidarEstándarescon ActoresClaves5.Adaptar Currículum yFormación segúnEstándares6.Evaluar y CertificarTrabajadores7.Promover yDifundir8.Actualizar Estándaressegún NecesidadesMANTENIENDO LAVENTAJACOMPETITIVA1.Seleccionar eIdentificar SectorProductivo2.Movilizar ActoresClaves3.Definir Estándares4.ValidarEstándarescon ActoresClaves5.Adaptar Currículum yFormación segúnEstándares6.Evaluar y CertificarTrabajadores7.Promover yDifundir8.Actualizar Estándaressegún NecesidadesMANTENIENDO LAVENTAJACOMPETITIVASELECT ANDIDENTIFYINDUSTRYKEEPINGTHECOMPETITIVEEDGEDEFINEOCCUPATIONALAND EMPLOYABILITYSKILLSSTANDARDSVALIDATESTANDARDSWITHSTAKEHOLDERSADAPT CURRICULAAND TRAINING TOSTANDARDSEVALUATE ANDCERTIFY WORKERS /STUDENTSPROMOTEANDDISSEMINATEUPDATESTANDARDSAS NEEDEDMOBILIZESTAKEHOLDERS15 INDUSTRYVOLUNTARYPARTNERSHIPS250 COMPANIES500 OCCUPATIONALSTANDARDS, +EMPLOYABILITYSKILLS MODELS (8COMPETENCIES)METHODOLOGYTRANSFER TO 300TVET PROVIDERS30.000 WORKERS CERTIFIEDEMPLOYABILITY SKILLS FOR 7.000STUDENTSWEB SITE (SKILLSSTANDARDS)NEW REGULATIONMEDIA COVERAGEDEVELOPING A NSCS: ROADM
29. Pilot ProjectStage 11999-2003Pilot ProjectStage 22003-2009CHILE VALORA(legislation)2009 -FUNDACION CHILE3 ECONOMIC SECTORSMin LabourMin EducationMin Ec DevelopmentMIF/IDB MMUS$ 1.9CORFO MMUS$ 1FUNDACIONCHILE15 ECONOMICSECTORSWB LifelongLearning Project(MMUS$ 5)Tripartite Governance34 Industry Voluntary partnerships70 labour unions66 industry associations(MMUS$ 5)1999-2013: FROM PILOT TO SCALING-UP
30. What’sdone?How isdone?Underpinningknowledge?Where doesthe joboccurs?What arethe job’soutcomes?Basic SkillsGenericEmployabilitySkillsFunctional /TechnicalSkillsSKILLS / COMPETENCY STANDARDSSkills Standardsreflect how the jobhas to be done,according theindustry’sperfomance criteria.
31. 1. TOURISM (hospitality, gastronomy, eco-tourism)2. ENERGY (gas / electricity value chain)3. MINING (metals)4. RETAIL5. TELECOMMUNICATIONS6. FRESH FRUIT (exports)7. WINE (value chain)8. FOOD PROCESSED (4 subsectors)9. AGROPECUARY10. METALMECHANICS11. LOGISTICS AND TRANSPORT12. AQUACULTURE13. CONSTRUCTION14. SMALL AND MEDIUM SIZE COMPANIES (business management)INDUSTRIES
33. “Somos competentes en nuestro trabajoy nuestro sector empleador nos ha certificado”
34. MAIN ACHIEVEMENTS1. National coverage of the evaluation experience / certification with30,000 workers.2. Sectors of the project correspond to clusters selected by theNational Council of Innovation for Competitiveness to design theNational Strategy for Competitiveness.3. Interaction with companies facilitates the adoption ofcompetencies model in the selection, performance evaluation andpurchase of training.4. Main services sectors have validated standards: tourism, logisticsand transportation, training, trade.5. Installation of a common methodology for identifying and raisingstandards of competencies.6. Accessibility standards for small and medium enterprises.
35. 7. Certification with the development of transversal occupationalprofiles which cut across various sectors: health and safety, energyefficiency, SME.8. Competency profiles for the system’s operation: Evaluation ofcompetencies, processes audit to the processes of competenciesassessment.9. Construction of Occupational Profiles and labor competenciesstandards catalog.10. Construction of certification, standards, evaluators and certifiersrecords.11. Educational material and training plan for competency-basedtraining.MAIN ACHIEVEMENTS
36. MOTIVATIONSManagers:- Articulation of production processes and HR management- Improvement of training provision- Company’s reputation and imageWorkers:- Value to the curriculum- Professionalization of work- Self- rewardAPPREHENSIONSManagers:- Workers’ expectations of salaries’ increase- Resistance to share information with competitors- Demanding complementary actions required to exploit thepotential of certificationWorkers:- Fear to negative evaluationTHE USERS PERSPECTIVE:MOTIVATIONS AND APPREHENSIONS FROM MANAGERS ANDWORKERS TO PARTICIPATE IN SKILLS CERTIFICATIONPROCESSES
37. THE USERS PERSPECTIVE:BENEFITS OF CERTIFICATIONCHANGESINPRODUCTIVITYMOTIVATIONANDRECOGNITION OFWORKERSHUMANRESOURCESMANAGEMENTCORPORATEIMAGE-i --Incrementalchanges inproductivityMotivationandrecognitionof workersHumanresourcesmanagementCorporateimage• Better matchingbetween jobs andskills• Tool for performancemanagement: basedon feedback; workerreflects on his/herperformance,mending errors anddeviations, gainingbetter understandingof performanceindicators and theiron productivity.• Feelings of accomplishment andself-realization (self-esteem)• Greater motivation to carry outimproved productivity• Symbolic relevance of theawarding ceremony, particularlyfor the low skilled workers• Decreasing turnover rates• Credentionals for futureemployability.• Identification of skills gaps /training needs• Decreasing recruitment andselection costs• Input for job design improvement• Better focused investment intraining• Skills certification an enabler forcorporate quality systems• Shared ground ti supportenployer-union relationships• Greater willingness of short termworkers to being re-employed.
38. Industry leadership of the initiative (demand driven) Private-public partnership Funding from private sources in the initial stage (grant MIF/IDB +WB Lifelong Learning project (Chile Califica + companies) Increasing participation of more sectors of the economy Bottom-up approach, no legislation needed during the pilot Do not reinventing the wheel: methodological transfer fromAustralia and other countries with more developed SCS Impact evaluation at the sectorial level Fundación Chile, a non-for-profit technology transfer andinnovation institution playing the role of the “honest broker”relying on its neutrality and public-private governance stakeholdermanagement (transaction and coordination costs).CRITICAL SUCCESS FACTORS
39. 4. SCALING-UP AND THEUNFINISHED AGENDA
40. National Skills Certification System created bylegisltation in 2008, after a long discussion in theNational Congress. CHILE VALORA is an autonomous public institution,linked to the Minister of Labour and Social Affairs. Board comprising Public Sector (Labour, Education,Economic Development), Labour Unions, IndustryAssociations. Financing: public budget to support CHILE VALORA;subsidies to certification demand coupled to subsidiesfor training.EPILOGUE:SCALING-UP THE PROJECT THROUGHLEGISLATION
41. Building a lifelong learning system with a clearer linkbetween the NSCS and the TVET System.Qualification Framework (at least level 1-5)Quality Framework (accreditation)Financing (incentives, etc.) NSCS as the basis for a new generation training reform. Robust impact evaluation (emplyment, wages, labourmobility to higher productivity jobs, productivity at thecompany level).THE UNFINISHED AGENDA
42. Mining: an opportunity to develop a worldclass education and training system in Chile.
43. COMPANIES PARTICIPATING IN THE STUDYAND MINE SITESFive of Chile’s largest copper mining companies took part in the study.Together these 5 companies account for 83% of Chile’s copper productionwhile operating 18 different mine sites.
44. DEMAND FORECAST (2012 – 2020)COMPANIES AND CONTRACTORS• The estimation assumes current productivity figures of the industry.• A 1.75 rate between contractors and company employees is assumed.• Demand considering projects at the feasibility stage only: 44,256 workers.• Current workforce not considered.1064 2075 3561957511238 11238 1123813100 131006061182202954576404 6404 64047465 7465587772657896 8984 943915091 150913349414045005119 53798600 86002012 2013 2014 2015 2016 2017 2018 2019 2020Total demand ContractorEmployees (Sector)Total demand companyEmployees (sector)Demand studyContractor EmployeesDemand study CompanyEmployees
45. ENGINEERING CONTRACTORS DEMAND(Mining + Energy & Infrastructure Projects)5,9182,958 3,3131,8841,325 1,018470 2266,3655,1393,4412,3541,9541,5348012012 2013 2014 2015 2016 2017 2018 2019 2020Public Infrastructure and Energy ProyectsMining Sector Proyects
46. MINE CONSTRUCTION CONTRACTORS STAFFPARTICIPANT COMPANIES AND OTHER COMPANIESWith respect to the construction workforce required for the projects, participantcompanies will need to have a total staff of 56,228 workers by 2012, and 69,934workers by 2013.In total, 192,893 construction workers will be needed by 2013. This is by far thebiggest challenge regarding the human resources needed to materialize theinvestment required by the mining industry.134,016122,95999,88868,90847,048 47,04821,83756,22869,93462,90459,86059,86036,85224,7622012 2013 2014 2015 2016 2017 2018 2019 2020Participant CompaniesOther sector Companies
48. Skills gaps and shortages are one of the most importantchallenges for the development of large-scale mining in Chilefor the period 2012 – 2020.
49. WHAT TO DO?
50. A sectorial strategy(mining companies,contractors, trainingproviders, government)with a short-termcomponent in order tobridge 2012-2015 gapsand a long-termcomponent to installcapacities to ensure thequantity and quality ofhuman resourcesrequired.A. SECTORIALMANAGEMENT,STANDARDS ANDATTRACTION.• Workforce Attraction• Occupation Framework• Certification Capacity Assurance• Consolidation of a Large-Scale Mining IndustryInformation SystemB. TRAIN 28,000OPERATORS ANDMAINTENANCEWORKERS• Execution of trade programs for operators andmaintenance personnel, as well as laborintermediation for companies.C. ENSUREEDUCATION ANDTRAININGCAPACITIES•Ensure the availability of Mining TrainingHubs with learning technologies to optimizeresults.
51. THE 2012 – 2015 SKILLS SHORTAGE2011 SKILLS SHORTAGE GOALSStock 2012 2013 2014 2015 Cumulative 2012 -2015Operators 34,945 1,214 723 5,854 4,782 12,573150% OFESTIMATEDSKILLSHORTAGEMaintenance T. 18,992 703 444 3,260 2,649 7,056Supervisors 6,636 67 0 774 437 1,278Professionals 5,279 0 0 419 140 559ProfessionalsSupervisors (*)11,915 178 34 1,606 1,140 2,932In the period from 2012 to 2015, large-scale mining will need to fill thehuman capital shortage as detailed below.(*) Considering only top 10 UniversitiesSlide 57Alex Jaques, VP Human Resources, Base Metals, November 10, 2011
52. 1. STAKEHOLDERS MANAGEMENT,STANDARDS FOR TRAINING AND ATTRACTIONPLAN• Sectorial articulation and management• Design and implementation of an Attraction Strategy(2,690 maintenance workers, 2,000 supervisors and 850professionals)• Update gap study / information system• Technical/professional qualification framework for themining industry• Program accreditation standards and job competencycertification• Qualified instructors and other learning professionals.
53. 2. FAST TRACK TRAINING PROGRAMMESFOR ENTRY LEVEL WORKERS• 18,900 operators (400-hour courses)• 8,708 trained maintenance workers (courses lasting 400and 800 hours depending on profile) Improving Installed Capacity for Technical VocationalEducation and Training• Investment projects for the establishment of traininghubs with state-of-the-art learning technologies. Updating current trade, technician and professional trainingsupply Creation of training hubs in regions lacking enough supply3. STRENGHTHENINGVOCATIONAL EDUCATION AND TRAINING PROVISION
54. GOVERNANCE:MINING INDUSTRYSKILLS COUNCIL(COMPANIES,PROVIDERS,GOVERNMENT)QUALITYASSURANCE ANDACCREDITATIONFRAMEWORK FOREDUCATION &TRAININGPROVIDERSQUALIFICATIONSFRAMEWORK FORMINING ANDRELATEDOCCUPATIONALFIELDSTHREE PILLARS OF THE EDUCATION & TRAINING SYSTEM FORMINING