Get India World Ready_2012

8/13/2019 Get India World Ready_2012

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FINAL REPORT:RESEARCH & RECOMMENDATIONS

A GLOBAL STUDY TO GET INDIAWORLD-READY Building sector skills bodies for India


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About Manipal City & Guilds This report was commissioned and published by theJoint Policy Advisory Group of Manipal City & Guilds.

Manipal City & Guilds is a UK-India joint venture bringingtogether one of Indias leading players in the education sectorand the UKs largest and oldest vocational awarding body.

In 2009, the joint venture launched IndiaSkills to offerworld class solutions that meet the speci c needs of skillsdevelopment in India. IndiaSkills has since developedcapability in occupational role analysis, structured curriculum,content and assessment development in a range ofsectors by absorbing processes and prior knowledge fromCity & Guilds and recreating these for India, and also deliverstraining through its own centres and in-house to corporate andgovernment clients.

Following close contacts with policy makers, Manipal City & Guildsdecided to invest in a new strategic initiative to become a moreeffective knowledge partner as well as a delivery agent forIndia. As a result, the Delhi-based Joint Policy Advisory Group(JPAG) was established in 2011, bringing together expertisefrom Manipal and from City & Guilds to provide an objective,evidence-based voice on policy issues in the skills space inIndia. This report is JPAGs inaugural publication.

For more information: www.manipalcityandguilds.com

The Research Base is a research consultancy which helpsorganisations to become more sustainable by delivering a strongevidence base for decisions, policies and strategies. We deliverresearch that is clear, accurate and insightful. Our specialismsinclude skills and education research, economic and socialresearch, and environmental and CSR research. We believe

in producing work that has the capacity to make a difference;using evidence and research to nd solutions that work. Thisreport was researched and compiled by The Research Base forManipal City & Guilds.

For more information: www.theresearchbase.com


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India today stands at a decisivemoment in her history. Poised tobecome an economic superpower,enjoying a spectacular rate ofgrowth and blessed with a huge,young and dynamic population,the future has never been morepromising for the country, nor thepresent so exciting.

But the challenges facing India remain formidable. Much has

been made of the countrys demographic dividend: herburgeoning working-age population at a time when mostadvanced economies - and several emerging ones - arefacing just the opposite. While this is indeed a tremendousadvantage, it is not a window that will remain open forever.

If India is to take advantage of this immense opportunity,there are two vital goals she must achieve. She mustensure that the Indian workforce of tomorrow can not onlyparticipate in the economy, but that they do so in ways thatdrive higher growth, productivity and innovation - in otherwords, in ways that support Indias ongoing transition to a

modern advanced economy. At the same time, the peopleof India deserve to have every opportunity to achieve theirdreams: not just to be able to work, but to be able to forgesatisfying and rewarding careers. If such opportunities areopen to everyone, then India will truly have reaped therewards of the demographic dividend.

Skills are the key factor in ensuring that this happens.Skills training empowers individuals by enabling them toful l their ambitions, and has the potential to lift millionsout of poverty through access to better-paid employment.

And as Indian employers compete internationally, they

need a skilled workforce at every level. Not just the toptechnology graduates India has already shown herselfadept at producing, but throughout the economy: fromalready huge sectors like IT and auto to rapidly emergingones like hospitality, healthcare and beauty. Already,throughout the country, employers in these and othersectors are crying out for skilled labour: the challenge forthe country is to respond.

As this report makes clear, responding to this call meanslistening to employers and getting a clear picture of whatthey need in each and every sector. Listening to employers,ensuring that training re ects their requirements, andmaintaining the highest quality is a challenging set oftasks even for small countries. For a nation of Indiassize and complexity, the task may seem overwhelming.But the imperative is clear: a system of sectoral bodiesto understand skills needs and drive skills developmentcan, if designed well, be a key foundation of Indias future

economic and social prosperity. At Manipal City & Guilds, we dont believe that borrowingpolicies wholesale from overseas can be effective in Indiascase. India needs to nd her own solutions to the skillschallenge and her own form of institutional mechanismto drive sectoral skills development. But since manycountries have introduced such mechanisms, and sinceevidence exists as to their successes, failures, strengthsand weaknesses, we believe that India can usefullyexamine these experiences in order to apply them to herown situation. The issues - and the scale - are different,

but the principles behind sectoral bodies: the employervoice, quality provision, matching supply and demand- are the same. But to properly understand the issues,its necessary to look further than just one countrysexperience and take a truly evidence-based approach.

This report draws on the experiences of six countries,examining their sectoral skills system in detail beforeapplying the lessons drawn to the very speci c challengesfacing India. By making speci c, evidence-basedrecommendations, it aims to be a useful tool to Indianpolicy makers as they tackle the crucial questions that

will shape the country in the 21st century. Many of theserecommendations are re ected in the approach alreadybeing pursued in India, while others offer alternativepoints for consideration. Manipal City & Guilds is proudto be an active contributor to developing Indias futureskilled workforce, and I hope this report will makea real contribution towards shaping that future andbringing about the prosperous, highly skilled countryIndia can be.

Chris Sims

Director IndiaCity & Guilds

Foreword


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Contents

Executive Summary ____________________________________________________ 10International Literature Review ___________________________________________

Introduction ....................................................................................................... 13Role ................................................................................................................... 13Models .............................................................................................................. 15Structure and Governance ................................................................................ 16 Approaches

Macro Structure

Federal SystemsGovernanceFunding .......................................................................................................... 19 Operational Funding for Sector Bodies

Financial Incentives, Funding for Training and the Role of Sector BodiesEmployers ...................................................................................................... 22 Industry Sectors

Employer EngagementHard-to-Reach Groups

Quality Assurance .......................................................................................... 26 The Role of Sector Bodies in External Quality Assurance Quality Assurance of Sector BodiesEffectiveness ................................................................................................. 28 General Effectiveness

Quali cation Frameworks and Cross-Sector IssuesFunding and StructureStakeholder Engagement

Approaches to LearningImplementation .............................................................................................. 29Good Practice Indicators .............................................................................. 30

Country Reports _____________________________________________________ 35 Sector Bodies in Australia ________________________________________ 37 Introduction ..................................................................................... 37 System Map ..................................................................................... 37 Sector Bodies: Background .............................................................. 38 History

Structure and Funding Footprint Operational Role Quality AssuranceSector Bodies: Performance and Issues ....................................................... 40Lessons for India ........................................................................................... 42 Structure Operations Funding Quality Assurance Sector Bodies in Canada ________________________________________ 45 Introduction ....................................................................................... 45 System Map ..................................................................................... 46

Sector Bodies: Background .............................................................. 46

History Structure and Funding Footprint Operational Role Quality Assurance Sector Bodies: Performance and Issues .......................................... 51


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Contents

Lessons for India .............................................................................. 52 Structure Operations Funding Quality Assurance Sector Bodies in England ________________________________________ 55 Introduction ..................................................................................... 55 System Map .................................................................................... 55

Sector Bodies: Background ............................................................. 56 History Structure and Funding Footprint Operational Role Quality Assurance Sector Bodies: Performance and Issues .......................................... 58 Lessons for India .............................................................................. 60 Structure Operations Funding Quality Assurance Sector Bodies in the Netherlands __________________________________ 63 Introduction ...................................................................................... 63

System Map ..................................................................................... 63 Sector Bodies: Background .............................................................. 64 History Structure and Funding Footprint Operational Role Quality Assurance Sector Bodies: Performance and Issues ........................................... 66 Lessons for India ............................................................................. 67 Structure Operations Funding Quality Assurance Sector Bodies in New Zealand ____________________________________ 69 Introduction ..................................................................................... 69 System Map .................................................................................... 69 Sector Bodies: Background ........................................................... 70 History Structure and Funding Footprint Operational Role Quality Assurance Sector Bodies: Performance and Issues ........................................ 74 Lessons for India ............................................................................ 75 Structure Operations Funding Quality Assurance Sector Bodies in South Africa __________________________________ 77 Introduction ..................................................................................... 77 System Map .................................................................................... 77 Sector Bodies: Background ........................................................... 78 History


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Contents

Structure and Funding Footprint Operational Role Quality Assurance Sector Bodies: Performance and Issues .......................................... 80 Lessons for India .............................................................................. 81 Structure Operations

Funding Quality Assurance

The Indian Context ____________________________________________ 8Introduction ................................................................................................... 85Overview ....................................................................................................... 85Economic and Social Factors ........................................................................ 86 Demographic Trends

EconomyGDP Growth

Sectors and Growth Industries Labour Force

Size and Forecasts Skills Capacity Skills RequirementsPolicy Landscape .......................................................................................... 90

Governance Federal State Skills Reforms and Initiatives

World Bank Recommendations (2006) National Skills Development Policy The National Skills Development Corporation Quali cations Framework Development Modular Employable Schemes Institution Creation and Upgradation Unorganised Sector Initiatives Confederation of Indian Industry Federal and State Ministries The 12th Five Year PlanFunding for Vocational Education and Training ............................................... 99 World Bank Proposals

National Skills Development CorporationMinistry of Labour and Employment FundingDirectorate General of Employment and Training Funding

Employer and Industry Participation ............................................................... 100Learners and Quali cations ........................................................................... 101 Quali cations and Progression Routes

The National Vocational Quali cations Framework Modular Employability Skills Providers and Capacity

Learner NumbersLearning and Assessment OutcomesQuality Assurance

AccreditationRecommendations ........................................................................................ 108


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Contents

System and Delivery RecommendationsSector Body Development in India ______________________________________ 111

Introduction ................................................................................................... 111History .......................................................................................................... 111Current Status ................................................................................................ 115Opportunities and Strengths .......................................................................... 118Risks and Barriers ......................................................................................... 119

Recommendations ____________________________________________________ 121Introduction ................................................................................................... 121Key Issues ..................................................................................................... 121Recommendations Concerning Sector Bodies in India ................................ 121 Establishment

StructureOperationFundingQuality Assurance

Bibliography __________________________________________________ 125

Appendices ___________________________________________________ 130 Appendix 1. The Australian Vocational Education and Training System ......... 130 System Structure

Training ProvisionFundingQuali cations and Certi cationQuality Assurance

Quality Assurance of Quali cations Quality Assurance of Education and Training Provision Other Forms of Quality Assurance Key Stakeholders

Appendix 2. The Canadian Vocational Education and Training System ........ 137 System Structure



Appendix 3. The English Vocational Education and Training System ............ 143 System Structure




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Appendix 4. The Dutch Vocational Education and Training System ............. 151 System Structure Training Provision Funding Quali cations and Certi cation Quality Assurance

Quality Assurance of Quali cations Quality Assurance of Education and Training Provision

Key Stakeholders Appendix 5.The New Zealand Vocational Education and Training System ... 156 System Structure

Training ProvisionFunding

Quali cations and Certi cationQuality Assurance


Appendix 6. The South African Vocational Education and Training System ... 160

System Structure Training ProvisionFundingQuali cations and Certi cationQuality Assurance

Quality Assurance of Quali cations Quality Assurance of Education and Training Provision Key Stakeholders

Appendix 7. Stakeholder Involvement in Indian Sector Bodies ..................... 164

Appendix 8. Proposed Sector Details, India (2009) ...................................... 167


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1. Executive Summary

With its unique demography and its desire for positive growthand change, India is experiencing an unparalleled need forskills development. The establishment of its ambitious targetof skilling 500 million people by 2022 also affords uniquechallenges in terms of not only improving its current trainingcapacity, but also increasing it signi cantly. India also has thechallenge of a largely informal workforce: just 8% of its labouris in the formal sector.

The opportunities inherent in Indias development have beenapparent for some time; international aid agencies, NGOs andtraining providers have long sought to lend their assistanceand, in some cases, their own systems of vocationaleducation. While there is much to learn from internationalexperience, however, it cannot provide a solution due to thesimple fact that India is singular in terms of structure, culture,ways of working and, most importantly, scale.

The rise of Indian initiatives and plans for growth indicates thatIndia is increasingly creating solutions for itself; among theseinitiatives are the formation of the National Skill DevelopmentCorporation, the development of the National VocationalQuali cations Framework, and the implementation of SectorSkills Councils. Each of these important developments arebeing led by Indians, for India.

This report has taken the current state of play in Indianvocational education and training in all areas policy, funding,quali cations, quality assessment, sector and industryinvolvement as a baseline. Due to the rapid growth of theIndian skills landscape and the number of agencies involved,gaining a clear and coherent picture is challenging. One of themajor recommendations of this report is the development ofa single portal containing information on all relevant initiatives,updates and changes in the skills landscape.

The focus of this report, however, is on the developmentof sector bodies (Sector Skills Councils) in India. Theirdevelopment is underway; indeed, at least one has alreadybeen established. The gap in analysis, however, is not whether

sector bodies are needed in India and which model shouldbe adopted. Rather, it is the lessons that can be learned frominternational experience and the ways in which they relatespeci cally to the Indian market.

This report contains an international literature review, whichexamines the establishment of Sector Bodies internationally;the ndings from this are presented as a set of KeyPerformance Indicators. It also contains an Indian literaturereview, examining the research to date on the establishment ofSector Bodies in India; the ndings from this are presented as alist of opportunities and risks.

Finally, a series of reports has been incorporated on countrieswith sector body systems in various stages of development,and with varying degrees of success. The countries analysedare Australia, Canada, England, New Zealand, South Africa andthe Netherlands. Each country has had its sector body systemanalysed in terms of structure, organisation, funding and qualityassurance; as an appendix, each vocational education systemis explained. The ndings of each country report culminate in alist of recommendations for India on what can be learned fromeach system: the challenges and the opportunities.


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1. Executive Summary

India is in a unique position to learn lessons from internationalexperience and avoid some of the challenges inherent inestablishing a national sector body system. By building asector body system from the ground up, Indian industryand policy makers can ensure that their system is

comprehensive, well planned, and responsive to the needsof all stakeholders concerned.

The scale of India is beyond any country included in thisreport; indeed, only China provides a comparison in termsof size and population. Bureaucracy has proven to be asigni cant issue in many national vocational systems; it isno different in India with its necessary multitude of actors.Indian of cials need to strike a careful balance between thenecessary consultation of all relevant stakeholders and theneed for swift response and decisive action.

The establishment of key elements of a vocational framework quality assurance and quali cations frameworks inparticular is often challenging in terms of establishing

ownership and effective governance. The scale of the Indiansystem, and the sheer volume of government departmentsinvolved, means that this is a signi cant issue that warrantsespecial attention.

The number of initiatives and projects surrounding skillsdevelopment in India is beyond that in any other country;the number of reporting lines for each agency and actoris equally high. An element of the Indian system thatmay require some attention is cohesive reporting andorganisational transparency. The ability to access keyinformation on skills initiatives, and the availability of reliableinformation on vocational education and training in India, willenable agencies and stakeholders to make more informeddecisions.

In terms of recommendations relating to the establishment of sector bodies in India, the ndings include:

The creation of a deep, vertical structure of sector bodiesto enable the consistent, quality-controlled transmissionof information and funds at federal, state and local levels.Horizontal cross-sector lines of communication will ensuregood practice and clarity between sectors.

Shared governance between government, industry andpractitioners; this tripartite model works very well in the NewZealand system and allows for industry needs to be directlyaccommodated by training providers; federal priorities canalso be immediately effected in the system.

Responsibility for producing regular Industry SkillsReports which indicate the current skills requirementand recommendations for industry, policymakers andpractitioners.

Responsibility for producing National Occupational Standardsin conjunction with industry; also assisting industry andpractitioners to develop quali cations for submission forquality assurance and registration on the National VocationalQuali cations Framework by the relevant national agency.

Recruiting employers for work placements and workplacetraining; providing quality assurance and auditing for thoseemployers.

Collecting and distributing an employer training charge, whichis levied on a sectoral needs-only basis.

Channelling federal and state training funds for workplacements and workplace training.

These recommendations may serve to highlight key issuesand opportunities in the Indian vocational landscape; theycannot be comprehensive, however, given the complexities ofthe system. Some further issues for consideration have beenidenti ed for policy makers and industry, including the issue ofachieving the necessary scale for maximum impact, skilling theunorganised sector and ensuring suf cient teaching resources.

The ndings highlight the following key themes interms of challenges and opportunities for India:


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InternationalLiterature Review


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2. International Literature Review

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and education stakeholders in economic sectors, that identify and address human resource and skills issues in acollective, collaborative and sustained manner 2 (Canada); haveresponsibility for setting national skills standards, providinginformation and advice, arranging for the delivery of trainingand the assessment of trainees and quality assurance 3 (NewZealand); can develop and implement sector skills plans,register and promote learnerships (a form of apprenticeship),and oversee the development of relevant quali cations 4 (South

Africa); and create the conditions for increased employer investment in skills which will drive enterprise and create jobs and sustained economic growth 5 (United Kingdom).

The exact role of sector bodies varies by country, and in manycases by the individual body. The table below outlines some ofthe main activities of different countries sector bodies 6 . Wherethe sector bodies themselves do not perform a particular role,they are often supported by other agencies; in the Netherlands,for example, the Advisory Body for Education and the LabourMarket works with the Knowledge Centres to ensure that thetraining and quali cations they propose meets labour marketneeds and policy goals (Sung, 2010).

2.1 Introduction The role of sector bodies is to foster skills development andworkforce development within different industry sectors; amore recent concern in some sectoral systems has beeneconomic development (Sung, Raddon and Ashton, 2006).

They are known as Sector Skills Councils in the UnitedKingdom, Knowledge Centres 1 in the Netherlands, IndustrySkills Councils in Australia, Sector Education and Training

Authorities in South Africa, Industry Training Organisations inNew Zealand and Sector Councils in Canada.

Raddon and Sung (2006) identify three main reasons for theestablishment of sector bodies. The rst is a policy landscapein which government, employers and individuals shareresponsibility for investment in training, and sector bodiesare established to articulate the needs of employers and,to a lesser extent, the needs of workers and the state. Thesecond impetus lies in the failure of vocational education andtraining to meet the needs of employers in the face of shrinkinglabour markets and growing international competition. Finally,industrialised economies may introduce sector bodies to helpdrive growth through general skills development, a move

towards higher level skills and the performance of higher value-added activities; this is in response to increasing competitionfrom developing countries in the delivery of low cost, low skilledproducts and services.

2.2 RoleSector bodies work to modernise vocational education andtraining systems by bringing together industry representativeswith other stakeholders, formally bridging the gap betweeneducation provision, vocational training and the labour

market (International Network of Sector Skills Organisations/ Bewick and Abbott, 2010:4). Sector bodies can be nationalconsensus-based partnerships between business, labour

1 Also known as Kenniscentra or Centres of Expertise.

2 http://www.hrsdc.gc.ca/eng/workplaceskills/sector_councils/faq.shtml3 http://www.nzqa.govt.nz/for-business/ito.do4 http://www.saqa.org.za/docs/brochures/nqf_setas.pdf5 http://www.ukces.org.uk/ourwork/sector-skills-councils6 While some bodies may undertake certain activities which are not highlighted in the table, the table articulates the main activities and remit according to the sector

bodies themselves, or their oversight body, in each country; it does not cover every activity of every sector body (for example, most sector bodies have some level ofstrategic input into policy dialogues, but this is only an explicit role in certain countries).


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Cultural and historical factors affect international perceptions ofthe role of sector bodies. In Australia and China, for example,sector bodies are concerned with protecting the rights of theirmembers, but this role in China is in uenced by their remit ofundertaking Government-prescribed activities (Misko, Yufeng,Dayuan, Quanquaan and Zerong, 2005). In Canada, skills policywithin Sector Councils is viewed within the broad context of workand community (Watt and Gagnon, 2005), which means that theirremit may be less narrowly de ned than elsewhere.

Sector bodies role in collating and disseminating labourmarket information may be an area which sees less activity infuture years; technology is changing the way in which data iscollected and manipulated, and allows in some countries for central management of the system. In the United States,for example, the successful Occupational Information Networkor O*NET uses live databases of vacancies and jobseekers,together with their skills pro le, to develop labour marketinformation which can be analysed nationally, regionally,locally or sectorally (Sung et al, op cit ). Sector bodies canthen tailor this national information and re ne it according totheir own sectors, which avoids duplication and wastage, andencourages comparability (ibid).

In certain areas, the activities of sector bodies can cross over into theareas of other organisations, leaving them open to criticism.In Australia, for example, interested parties have argued that IndustrySkills Councils production of training and assessment materialscompetes directly with the materials of publishers and trainingproviders, which they have argued is inappropriate for publiclyfunded organisations. This has led the Education, Employment andWorkplace Relations References Committee to recommend that theIndustry Skills Councils work in quali cations oversight and strategyreceives primary focus, and that this work remain separated from thework of [Registered Training Organisations] in product development

and training strategy (Education, Employment and WorkplaceRelations References Committee, 2011:23).

Of the varied roles and remits of sector bodies, Canada standsout as one of the few to highlight the function of acting as abridge between companies in the same sector to help co-ordinate a collaborative and collective skills strategy (Watt andGagnon, 2005:21). Given the wealth of literature suggesting thatcollaborative sectoral working linked to employer networks isan important driver behind both innovation and the incidence of

employee training (see, for example, Erickson and Jacoby, 2003),perhaps this is an ambition to which more countries with sectoralapproaches should ascribe.

7 These countries have been selected for the table to correspond to the country reports which accompany this literature review; the literature review does, however,encompass reports and publications from a wider range of countries.

8 Sector Skills Councils work across all nations in the UK, including England.

Table 2.2 Principal Sector Body Activities by Country 7

Activity AU CA NL NZ SA UKResearchGathering labour market information (LMI)Identi cation of skills gapsSkills forecastingSurveysGuidance

Development of occupational/competency standardsDevelopment of quali cationsCurriculum developmentCommunication of careers and training advice to learners

Training advice to employersStrategic advice to GovernmentStrategic advice to industry

Accreditation, Certi cation and Administration Accreditation of quali cations and competency standards Award of quali cations and competency standards Accreditation of training providers/employers offering trainingDesignation of training places (numbers; area)

Arranging training for employersFundingDirect funding of training

AU: Australia; CA: Canada; NL: The Netherlands; NZ: New Zealand; SA: South Africa; UK: United Kingdom 8.


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2.3 ModelsRaddon and Sung (op cit) identi ed four sectoral models ofemployer engagement:

1. The employer-involved model, which has two versions.In the rst, policy makers engage employers voluntarily insectoral skills debates. This occurs mainly via consultation.In the second, legislation places a statutory demand

on employers to help nance training in their sectors,supplemented by voluntary consultation.

2. The employer-owned model, in which employersidentify skills needs through employer associations andrepresentative groups, and fund relevant training.

3. The employer-modelled model, which involves best practice models of skills development used to shape trainingwithin the sector ; in other words, employers learn from theirpeers.

4. The employer-driven model, which has two versions. Inthe rst, the public vocational education and training systemis run according to articulated employer demand. In thesecond, employers participate in private partnerships toidentify skills needs and to fund training.

Appropriate models for different countries depend verymuch on national policy aims. Where the focus is solely ondeveloping the skills needed by different sectors, for example,an employer-owned approach may be the most appropriateoption. Hong Kongs Industry Training Associations, which areemployer-owned and funded by a statutory levy, have provedsuccessful in meeting sectoral demands, but less so in meetingnational policy aims. As Raddon and Sung (2006:16) pointout, there is little government intervention in the work of the

[Industry Training Associations], and since they are employer-owned and nanced, little incentive to focus on delivering

national skills policies . Such policies might include basic skillstraining or training under-represented groups.

The balance between the levels of involvement of differentstakeholders also plays a fundamental role in determiningthe operating models, activities and outcomes of sectorbodies. These stakeholders can include policy makers,worker representatives in the form of unions and communitygroups, businesses and enterprises of varying sizes, industryassociations and training providers. Cultural beliefs ascribedto skills development can have a signi cant impact on theselected model; in France, for example, policy aims to

encourage employers to train more (resulting in a levy system),and in Australia the supply of skills is seen as the main policy

Employer-Involved Model Employer-Modelled Model Voluntary

Australia

Canada

New Zealand United Kingdom

Singapore

Statutory

France

Quebec, Canada

South Africa

Employer-Owned Model Employer-Driven Model No nationwide examples.

Hong Kongs Industry Training Associationsrepresent a sector-based example.

Employer-Driven Public VET

The Netherlands

Employer-Driven Partnership VET

The USA

Table 3.1 Countries According to Models of Employer Engagement (adapted from Raddon and Sung, ibid)


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Watt and Gagnon (op cit) identify three other types of sector-based skills development strategies:

Consortium-based strategies. The ICT Skills Consortium, forexample, was an EU-wide initiative led by seven major ICT

rms. It aimed to identify relevant skills and competenciesand communicate them to learners, training providers andpolicy makers; build these into generic job pro les; anduse a website to match skills supply with the demand fromemployers.

SME-based strategies. In Spain, an association of 150

small companies in mould and dye-making formed a Technology Centre which provides a range of trainingcourses, in addition to other services, to improve memberscompetitiveness.

International Highlights Although Canadas Sector Councils are

notionally national, their actions are, inpractice, implemented at a state level (Cully,Knight, Loveder, Mazzachi, Priest andHalliday-Wynes, 2009).

Curricula are set at a national level in theNetherlands according to national sectoralneeds, but regional vocational colleges areable to adapt up to 20% of an individualcurriculum according to local or regionalemployer needs; despite the small sizeof the country, local labour markets varydramatically (Sung, op cit ).

Germany does not have a system of sectorbodies as they are understood in this paper,but competent bodies which includecrafts chambers and professional boards are charged with monitoring trainingcontent and delivery at a regional level.

Their role includes registering trainees,certifying trainers and holding examinations.Each body has a vocational committeewith employer, trade union and teacherrepresentatives. The remit and strength ofthese bodies means that employers have asigni cant in uence on the skills developmentsystem (Cully et al, op cit ).

South African SETAs are unique in cateringto all employees within a single company,from support services to production staff tomanagement. SETAs therefore have a cross-sectoral element and often have to engage inpartnership working with other SETAs (Sunget al, op cit ).

challenge and so employers are consulted in order to improvesupply (OLeary and Oakley, 2008).

Ashton (2006) used international comparisons to identify sixelements which he believes constitute an effective sector skillsapproach:

1. Employers identify skills needs and design relevantcompetencies.

2. Employees are engaged in the system and in identifyingskills needs, which secures legitimacy among workers.

3. Financial incentives are widely used.

4. Public funding is used as a lever to ensure that long-termpolicy objectives are considered by sector bodies.

5. (A portion of) public training funds are channelled throughsector bodies.

6. Differences in approach, systems and priorities betweenlocal/state and national/federal government are recognised,and steps are taken to manage these differences.

Ashton adds a number of recommended government actions

to ensure that sectoral skills systems respond to employerneeds and contribute to effective skills development.Firstly, different parts of the system such as quali cationsframeworks or quality assurance mechanisms should bealigned to the same objectives. Secondly, it should be drivenby employers and have the support of employees (Section2.6 below on Employer Engagement demonstrates thechallenges innate in this recommendation). Ashton suggeststhat selectiveness can be applied to sector bodies; theyare not necessarily required in all sectors, and some suchas sectors in which high levels of growth are forecast should receive higher priority. Clarity of function is a furtherrecommendation: should sector bodies steer employers orfocus on meeting training needs? Labour market information

and research needs to be shared and co-ordinated betweenthe different sectors to ensure consistency and effective policyalignment. Finally, the performance of sector bodies must bemonitored effectively, both in terms of clear measurement andminimising the burden of bureaucracy: an overly bureaucratic

and complex system that attempts to monitor both activities and outcomes, as in Canada, can lead to a diversion of staff activities and be counterproductive (Ashton, 2006:12).

2.4 Structure and Governance 2.4.1 Approaches

The structure of sector bodies depends, to a certain extent,

on the reasons behind their inception and the parties who aredriving them. The most popular strategy, ironically, tends to beled by governments who want to introduce a demand-led oremployer-driven focus into the education and training system.


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Cluster-based strategies. Ireland promotes and co-fundsSME networks, usually operating in clusters, which designand implement their own training (Stone and Braidford, 2008).

2.4.2 Macro Structure

National sector bodies are the principal focus of this paper. Assuggested in Section 2.3, the structure of sector bodies needsto align with other elements of the vocational education and

training system in order to work effectively. These elementsinclude funding and who distributes it (employers are morelikely to engage if sector bodies distribute it themselves),

nancial incentives for employers and learners, skills delivery,union and/or employee support for sector bodies and otherpolicy objectives (Ashton, op cit ).

One of the key challenges facing the macro structure of sectorbodies is the extent to which cross-over between sectorsoccurs, and resulting issues with potential duplication or powerstruggles over which body owns certain industry standards(Sung et al, op cit ). Leadership and management, for example,are cross-sectoral. This has led Sung et al (ibid) to suggestthat there may be more horizontal sector bodies (e.g. forprofessionals who use software as part of their sector-speci c

jobs) in the future, and an accompanying decline in the numberof vertical sector bodies. Their analysis does not say how thiswould affect employers who might need to work with multiplesector bodies, nor the possible impact on the sector bodiesthemselves who if their area of focus were particularly generic might need to align themselves with most employers inthe country.

2.4.3 Federal SystemsStructural challenges are inherent in systems in whichnational sector bodies operate within a federal system.

These challenges can relate to con icting priorities andlack of effective communication between state and federalgovernments, and the limited in uence of national sectoral

bodies within such systems caused by limited funding anda lack of control at state level (Ashton, op cit ). The voice ofemployers tends to be weaker in federal systems than inmore centralised political structures (UKCES, 2010c). Sectorbodies operating in countries with two tier structures such asthese tend to have an information role sharing good practiceand identifying trends at the national level, with programmedelivery taking place at a state or regional level (Sung et al, op cit ).

A federal structure of sector bodies needs to ensure reachacross localities. In Australia, for example, only two out of 11Industry Skills Councils are active in Tasmania; national labourmarket information and quali cations therefore fail to take

Tasmanian needs into account (Education, Employment andWorkplace Relations References Committee, op cit ).

Sector bodies in Australia operate nationally. At the statelevel, industry involvement is delivered in the form of statetraining boards, which advise policy makers on trainingneeds; licensing authorities for occupations in which there arestatutory skill or quali cation requirements; state economicdevelopment boards; and upper secondary curriculum boards(Cullyet al, op cit ). Local industry involvement in terms ofrepresentation on training providers boards is also common (ibid).

2.4.4 Governance

It is vital that employees are represented in sector bodies. This can be achieved through the engagement of unions. Teachers and trainers should also be engaged; national sectorbodies cannot understand the diversity of local employersneeds but local training providers can (Shoesmith, 2009).In terms of the role of sector bodies boards, there needsto be clear separation between strategic and operationalissues; where board members have become unduly involvedin operations, the promotion of their personal interests hasrestricted effectiveness, as has happened with certain SETAsin South Africa (Grawitzky, 2007). It is equally important thatthe stakeholder participation in setting the strategic direction ofsector bodies is not forgotten in favour of a focus on board-level duciary responsibilities; in South Africa, this has resulted

in the worst of both worlds poor corporate governance ofSETAs and inadequate strategic focus on demand-led skillsdevelopment (Marock, 2010:30).

Figures 2.4.4.1 and 2.4.4.2 below show two slightly differentgovernance structures from Australia and the United Kingdom.Board committees are similar, covering nance and audit,nominations and executive functions/remunerations. In bothorganisations, sub-sector-speci c groups advise the Board,and in the case of Australia, the management/staff too. TheUK sector body varies in its use of country-speci c advisorygroups, and also in its recent adoption of a Council ofMembers to incorporate a wider range of stakeholder views.


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Board ofDirectors(industryexperts)

Board Committees

Executive

Finance, Audit & RiskManagement

Governance &Nominations

National ProjectReference Groups

Source: Innovation and business Industry Skills Council website

Sector AdvisoryCommittees

Business Services

Cultural & Creative Industries

Education & Training

Financial Services

ICT & Telecommunications

Printing & Graphic Arts

Chief Executive Officer

Management & Staff

England Cross-Sector Forum

Community Justice

Courts, Tribunals & Prosecutions

Custodial Care

Forensic Science Policing & Law Enforcement

Fire & Rescue Services

Northern Ireland

Scotland

Wales

Finance & AuditCommittee

Committee &Steering Groups

Occupational Groups Country Groups

UKBoard

NominationsCommittee

RemunerationCommittee

The Council of Members represents a strengthening of our governance arrangements to draw in a wider

range of employers and other stakeholders to work with us in developing policy.

Source: Skills for Justice website

Figure 2.4.4.1 Example Corporate Structure: Innovation and Business Industry Skills Council, Australia

Figure 2.4.4.2 Example Governance Structure: Skills for Justice (UK)


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9 Although the implementation of skills development plans at a local level may involve funding arrangements between the Sector Council, employers and training providers.

International Highlights New Zealands Industry Training

Organisations have a direct role in thedistribution of funding: they broker up to 10%of the tertiary education budget to 35,000employers (Bewick and Abbott, op cit ).

Dutch Knowledge Centres receive funding forfour main activities (Sung, op cit ):o The development and maintenance of

competency standards and quali cations,receiving a set amount of funding for eachindividual quali cation/standard.

o Accreditation of employers who offer work-based training.

o The recruitment and placing of apprentices.o Projects and research, e.g. employer

surveys. The payment for standards and quali cationsencourages Knowledge Centres to maintaintheir effectiveness and relevance, and toensure that they are valued by both employersand learners (ibid). Australias Industry Skills Councils are not-for-

pro t. They receive core Government funding, andalso bid for Government contracts and privatetenders (Education, Employment & WorkplaceRelations References Committee, op cit ).

The UK intends to move away fromits current model of equal shares corefunding for Sector Skills Councils towardsan investment-based, contestable anddifferentiated approach by April 2012.It has recently launched the EmployerInvestment Fund, which will allow sectorbodies to run and pilot small scale innovativesolutions to raise skills levels and businessperformance. Such projects might includeearly development of a licence to practiseor the development of pre-employmentprogrammes, and grants are expected to

range in size between 500,000 and1 million (UKCES website; UKCES, 2011).

2.5 Funding 2.5.1 Operational Funding for Sector Bodies

Sector bodies tend to receive the majority of their operationalfunding from the state (e.g. Bewick and Abbott, 2010). This publicfunding can take various guises (see box, right) in the form of corefunding support, payment by results or competitive tendering.

Sector bodies have often managed to leverage private sectorfunding to support their operational activities. New ZealandsIndustry Training Organisations, for example, perform a varietyof roles outside their statutory responsibilities, some of whichare chargeable for example, commercial training and servicesin areas in which public funding is not available (Baker, inBewick and Abbott, ibid). Pakistans Industry Advisory Groupsare encouraged to supplement their public funding throughindependent donations and the delivery of consultancy services(Riaz, in Bewick and Abbott, ibid).

Little research has been done on employer motivations forfunding sector body operations, but research into employerinvestment in publicly funded training from the UK (Parsons,Barry, Thomas, Rowe and Walsh, 2005) suggests that

recognition of quality or capability gaps is a more importantdriver than corporate or social responsibility objectives. Thesame study found that expected gains from funded projects including ongoing partnership investment align closely tobusiness needs. This suggests that articulating the ability ofsector bodies to respond to individual business requirementsmay help to leverage greater levels of investment.

Despite private sector funding involvement, the public goodnature of sector bodies means that long-term independencefrom state funding is unlikely to be achieved. A continuedreliance on public funding is also in uenced by policy makersthemselves, who begin to see that withdrawing public fundsentails a loss of leverage and in uence over skills development (Raddon and Sung, 2006:16).

In 2001, Canadas Human Resource Development Councilstated that initial funding for Sector Councils was provided bythe Federal Government and would be phased out after threeyears (HRDC, 2001). In 2005, Sector Councils received securityof funding for a further three years; the Councils contended atthe time that the pressures associated with achieving self-suf ciency can distract a edgling councils focus from theiroriginal mandate, and even inhibit successful councils fromsharing information and best-practices with other councils asthey try to maintain a competitive edge for limited resources (Watt and Gagnon, 2005:24). The Councils also argued,together with employers and training providers, that the self-suf ciency drive and a lack of committed infrastructure support

in the longer term made it hard to plan or build partnerships(ibid). Sector Councils at the national level today remain fundedby Government 9 (Cullyet al, op cit ).


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Other arguments exist for sustained public funding for sectorbodies. In addition to supporting their effective operation,public funding can help to ensure broad employer participation(DFID, 2011). It also enables governments to support broaderpolicy objectives which might not otherwise be driven byemployers, such as the development of basic skills or a focuson excluded groups (Raddon and Sung, op cit ).

Public funding, while varying signi cantly by country (see Table 2.5.1 below), needs to be of a suf cient level toensure that sector bodies are able to ful l their remit. Inthe United Kingdom, for example, meagre funding levels

inevitably stunted the initial development of the [Sector SkillsCouncils] (Hartley and Richmond, 2009:36). Funding levelsremain relatively low compared to the activities required ofSector Skills Councils; their eternally expanding remit andsupposedly pivotal role in quali cation reform, sector-wideskills development, national employer engagement, monitoringtraining providers, supporting the economic recovery and

raising productivity simply does not correlate with the amountof funding they are each given (ibid: 37) . Insuf cient levels ofpublic funding risk consigning sector bodies to being ineffectualand irrelevant.

One contested route to supporting the nancing of sectorbodies, and related training for employers, is through alevy system. This can be voluntary (certain sectors in theNetherlands, for example, have chosen to have a traininglevy) or compulsory, as in the cases of France and South

Africa. Compulsory levies, aside from ideological or politicalconsiderations about whether an interventionist strategy isappropriate, can have their problems Australias failed levy

system, for example, was thought to have highlighted the costof training to employers, rather than demonstrating its value(Brisbois, Pollack and Saunders, 2009).

Compulsory levies, however, probably contribute to higherlevels of training, and the process of drawing up a trainingplan which forms part of employers demonstrating their useof training funds raised through the levy helps to create aculture of training in the rm (Stone and Braidford, 2008:17).Levies also help smaller companies to deliver training (ibid).Evaluations of French training levies suggest that employerstend to be more accepting of sectoral or regional levies thanthey are of national ones, especially when represented inorganisations that are charged with fund disbursement (Billettand Smith 13, cited in Brisbois et al, op cit ).

Table 2.5.1 Core State Funding for Sector Bodies 10

Australia Canada New Zealand South Africa 11 UK

Funding (national currency) $45,596,797 $27,380,000 $1,000,000 12 R0 47,647,000

Funding (INR) 2,191,798,128 1,274,591,101 39,905,200 0 3,416,647,793

Population 21,874,900 33,739,900 4,315,800 49,320,150 61,838,154

Equivalent funding per capita Rs.100 Rs.38 Rs.9 Rs.0 Rs.55

10 State funding data come from the following sources: Australia: Education, Employment and Workplace Relations References Committee, 2011; Canada: HRSDC,2011 ( gures are from 2007/08; more recent gures are pending); UK: UKCES, 2010a. Population gures come from the World Bank. Other gures have beencalculated. Core state funding gures for the Netherlands were not available. Currency conversions were correct in June 2011.

11 Core funding is taken from SETAs 1% levy on employers payrolls, hence the lack of public funding.12 Core funding was cut in 2010 to 1 million; this compares to an increase of 3 million to over 220 million targeted at funding industry training and modern

apprenticeship places through Industry Training Organisations (TEC, 2010a).13 Billett, S. & A. Smith (2005). Myth and Reality: Employer Sponsored Training in Australia. International Journal of Training Research 3(2):16-29.


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2.5.2 Financial Incentives, Funding for Training and the Role ofSector Bodies

Financial incentives for employers to participate in sector skillsapproaches can take three main forms (Ashton, op cit ):

Statutory regulation, such as employer levies (e.g. France,South Africa and some sectors in the Netherlands seeSection 2.5.1).

Direct subsidies from government (e.g. the former Train toGain system in the United Kingdom).

Indirect nancial support, such as tax refunds for sectorbody-accredited workplaces (e.g. the Netherlands).

Financial incentives should have the outcomes of (a)addressing market failure by changing the balance of costsand bene ts so that employers want to participate, and (b)supporting the role of sector bodies (Sung, op cit ). Effectiveincentive systems depend very much on the institutional andpolitical context in which they operate (Ashton, op cit ). Inthe Netherlands, for example, the historical support of thesocial contract system plays a key role in determining whichincentives are appropriate for the Dutch context. Certainsectors pay between 0.2% and 0.5% of their wage bill into asectoral training fund; the agreement on contribution and levelconstitutes part of national bargaining between employers,workers and the state (Sung, op cit ).

Sung (ibid) identi es three routes through which funding fortraining can be distributed:

Through sector bodies (e.g. the Netherlands and NewZealand).

Through learners (e.g. Australia).

Through colleges or public training systems (most otherplaces).

Steering funding through sector bodies has the effect of givingthem a leading position in the skills development systemand garners higher levels of employer engagement (ibid.).

Ashton (op cit) critiqued the UK system in which the agenciescontrolling the use of training funds also have to follow theGovernments policy agenda. The UK wanted to develop anemployer-led system, but failed in its attempt by adding SectorSkills Councils to what was, in effect, still a supply-led systemwhich was dominated by the Learning and Skills Council , nowthe Skills Funding Agency and the Young Peoples Learning

Agency (Sung, 2010:30). Despite recent changes to thefunding agencies themselves, the situation has not changed:public policy is, through the nature of the funding structure,

prioritised over employer needs. This results in training placesand programmes having to be sold to employers (Ashton,2006:7).

Funding for training within sectoral skills development canbe further complicated by a federal system. In Australia, forexample, Industry Skills Councils compile national competencystandards, but funding is delivered through state governments,many of which fund different numbers of hours of training perlearner. This may have the consequence of training in somestates not covering all of the required standards (Sung et al, op cit ).

In New Zealand, the sector body system has been sosuccessful in encouraging training uptake that some Industry

Training Organisations do not have suf cient places to meetdemand: success in developing a culture of training often

brings higher numbers of learners and the potential need for additional public funding (Sung et al, 2006:32). A challenge forlong-term planning is therefore, for some countries, to identifyhow funding should work in the event that demand exceedssupply.

International Highlights In Singapore, employers are provided with

an incentive to move into higher value-addedactivities through a tax on low paid labour.

The proceeds of the tax are used to trainolder workers in a variety of sectors (Ashton,op cit ). Financial incentives and training arethereby tied into Singapores industrial policy,which is aimed at developing a competitiveadvantage in high-end activities.

In Australia, funding for training is oftenchannelled directly to technical and further

education colleges; employers thereforeoften engage directly with colleges and avoidthe Industry Skills Councils, whose role issometimes reduced to the creation andmaintenance of competency standards (Sunget al, op cit ).

Allocation of training funds to Industry Training Organisations in New Zealand iscontingent upon receiving a 30% cashcontribution from employers (TEC, 2010b).


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2.6 Employers 2.6.1 Industry Sectors

Table 2.6.1 below shows industry sectors as represented bysector bodies in six selected countries 14. Sectors have beengrouped into broad industry areas; Australia has been usedas the baseline because it has the fewest sector bodies of thecountries under consideration. Similar sector categories across

countries are represented by the same shade of colour.

Table 2.6.1 Bodies by Sector and Country 15

Australia Canada Netherlands New Zealand South Africa UK Agriculture & Food Agriculture Agriculture Agriculture Agriculture

Fish Equine IndustryForest Industries Forest Products Forestry Forest Industries

Environment Environment & LandConstruction &

PropertyConstruction Construction &

InfrastructureBuilding &

ConstructionConstruction Construction

Building ServiceContractors

Building Services

CranesReal Estate Property,

Housing, Cleaning& Facilities

Painting &Maintenance,Plastering &

Finishing

Plumbing, GasFitting & Drain

Laying

Wood Joinery & Wood JoineryFlooring

Community Services& Health Health Care, SocialCare & Sport Pharmacies Health & Welfare Health

Apprenticeships Education, Training& Development

(Lifelong Learning)16

Child Care Social Services Social Care &Development

Community SupportServices

Police Fire & RescueServices

AborginalNonpro t

Sport & Recreation Sport & LeisureSports Turf

14 Sector Skills Councils work across all nations in the UK, including England.15 Some of the sectors do not represent the sector bodies actual names, but are, we believe, a fair representation of the industries they cover.16 Lifelong Learning UK, the Sector Skills Council for Lifelong Learning, lost its licence to operate on 31 March 2011 and its responsibilities have been subsumed within

the Learning & Skills Improvement Service.


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Australia Canada Netherlands New Zealand South Africa UKEnergy & Utilities Electricity Electricity Supply Energy Energy & Utilities

Petroleum Chemicals,Pharma, Oil, Gas,

Nuclear, Petroleum,Bioscience

Government Public Sector Public ServicesLocal Government

Law & Justice

Innovation &Business

Bio-Economy Technology Chemical IndustriesICT Electrotechnology Information

Systems,Electronics & Telecomm-unications

IT & Telecoms

Health, Technology& Creative

Craftsmanship

Science,Engineering &Manufacturing Technologies

Process/Environmental/

Laboratory Technologies &

PhotonicsCulture Graphics & Media Media, Advertising,

Publishing, Printing& Packaging

Creative & Cultural

Printing Apparel Apparel & Textiles Clothing, Textiles,

Footwear & LeatherMedia & Fashion

TextilesEconomic/Admin,

ICT & SecurityFinancial Services Financial Services

BankingInsurance

Manufacturing Engineering,Manufacturing &

Baking

Manufacturing &Engineering

Process &Manufacturing

Food Processing Food & BeverageManufacturing

Food & DrinksManufacturing

AutomotiveManufacturing

Vehicle Buiding &Body Repair

PlasticsResources &Infrastructure

Infrastructure

Mining Extractive IndustriesSteel


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There are various challenges inherent in an employer-centricapproach to skills development which need to be recognisedand, where possible, mitigated. These include the likelihoodthat strategies will be led by the most vocal employers; differingorganisational perspectives depending on job role and level;the multiple views represented by employers, including theirown, those of the business and those of their customers;and the risk that those who could make the most valuablecontributions also have the least time, and are therefore lesslikely to participate in sector bodies (UKCES, 2010c).

Five levels of employer engagement exist in the UK (Payne, 2007):

Sector Skills Council strategy and development.

Designing skills and quali cations provision.

Utilising skills and quali cations provision.

Research and labour market intelligence.

Mass communications.

An evaluation of this engagement found that levels of employerengagement differ signi cantly across Sector Skills Council(ibid). Levels of employer awareness of Sector Skills Councilsare low (Sung, 2010), and the UK has historically struggled withemployer engagement. For many organisations, skills are often

a third or fourth order issue dependent upon rst and secondorder decisions around product market positioning, workorganisation and job design ( ibid, 2007:35).

Dualism, which involves the incorporation of both theoreticalknowledge and competence-related skills in vocationaleducation and training, has been key to developing the highlevels of employer engagement seen in the Netherlands; thepotential to in uence employability and workplace skills withinindividual quali cations has raised their levels of interest (Sung,op cit ). It should be noted that the Dutch system is unlikelyto be directly transferable to other contexts; its social modelof tripartite responsibility (state, employers and workers) hasa long history and encourages greater involvement fromstakeholders than might be found elsewhere.

Another way of improving levels of employer engagementis to stream funding for training through sector bodies (seeabove under Funding), which has the effect of encouragingemployers to engage in the sector bodies, and thereby makestraining more relevant to their needs. The key to nurturing thecontinuation of a successful partnership is the incentive system

i.e. funding arrangements for those who are involved (Sung, 2010:20). In addition to appropriate nancial incentives,the extent to which policy makers are prepared to take ahands-off approach to sector bodies can have a signi canteffect on employer engagement levels (Raddon and Sung, op cit ).

Statutory regulation can work under certain political andcultural conditions. Before 1996 in China, for example, stateorganisations enforced industry involvement with vocationaleducation and training; 1996 reforms reduced their power todo this, and combined with structural changes such as a laboursurplus to reduce industry-training links (Misko et al, op cit ).

Practical means of sector bodies engaging employers are oftensti ed in debates around the importance of doing so. StateSector Strategies, an American multi-state project which aimsto exchange knowledge between states using sector strategiesto help support skills development, is an exception to this.It outlines a number of ways in which states have effectivelyengaged employers within their jurisdiction (State Sector

Strategies website17

): Using sector experts to advise on appropriate means of

industry engagement.

Offering services that employers believe they need (somemight not see the value of training prior to engagement, but allwill see the value of good recruitment). This might consist ofbundling packages of services to support employers, with theirinvolvement in the design and delivery, such as recruitment ofappropriately skilled members of staff, training and staff retention.

Encouraging state level industry associations to engage theirmembers.

Recruiting industry leaders to act as champions for their

sectors. This could take the form of speaking at meetingsand conferences, writing articles for newsletters andengaging in web-based communications.

International Highlights The preferred employer engagement

mechanism in Australia, New Zealand andCanada is personal contact through sitevisits (Stone and Braidford, op cit ), whichhas helped to engage small employersbut is unlikely to be replicable in countrieswith larger populations without massiveinvestment of resources.

The initial incarnation of New ZealandsRetail Industry Training Council attemptedto engage employers through attempts toincrease and improve in-house training.

This attempt failed many felt they werealready providing good quality training. Thesecond incarnation of the Retail ITO insteadoffered accreditation of workplace training andrecognition of prior learning, which led to moresuccessful engagement (Sung et al, op cit ).

17 http://www.sectorstrategies.org/


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Taking a policy in uencing role; demonstrating to businessesthat sector bodies can in uence policy makers at a regionallevel to effect change on their behalf.

Demonstrating value to businesses by providing earlybaseline labour market data and analysis, which can act asa foundation for early discussions and the setting of goals.Businesses could be invited to a forum in which they areinvited to provide on-the-ground feedback.

The organisation adds that employers time constraints mustbe respected; lack of available time is a key barrier to employerengagement, particularly in small organisations. Time inputshould be required at only key stages, and attendance atongoing process meetings should be avoided where possible.

While industry engagement and the development of the employervoice have been at the heart of many attempts to developsector bodies internationally, the role of sector bodies must notbecome confused with that of industry associations. Sectorbodies, in an ideal model, incorporate the views of a broad rangeof stakeholders, and also pay heed to national policy objectivessuch as the development of basic skills (see Section 2.3). Asthe Australian Automotive Industry Association has pointed

out, Industry Skills Councils do not represent industry; SkillsCouncils are a mechanism to co-ordinate consultation to draw in the views and need of industry, to provide Government withcritical information, so the funding and policy can be determined

according to industry need (Education, Employment andWorkplace Relations References Committee, 2011:8). Employersare not always able to articulate their skills needs and can be

reluctant to give time towards development of quali cations andstrengthening of a skills development system (DFID, 2011:7).

Evidence from the Netherlands suggests that the keypoint at which to engage employers is in the development

and maintenance of competency standards that drive the [vocational education and training] system. Once that isthe case, the subsidies and the training act as reinforcingcomplements to each other within the normal conditions ofemployment (Sung et al, 2006:20).

2.6.3 Hard-to-Reach Groups

Employer engagement often needs to be tailored according tosector and occupation, some of which are harder to engage and require different approaches than others. Five years agoin the UK, for example, the number of small and medium sizedenterprises in the construction industry was growing rapidly(Hughes and Smeaton, 2006), suggesting that the sector bodycharged with the construction industry had to nd better ways ofengaging small and medium sized enterprises. Case studies ofemployers in different sectors suggested that sector bodies notonly have to tailor their approach according to sector, but also bythe varying nature and priorities of different employers within thatsector (ibid); taking a uniform approach to employer engagementeven within a single sector is unlikely to be successful.

A major challenge facing all countries is the engagement ofsmall and medium sized organisations. South Africa hasattempted to address this through the concept of the leademployer (Grawitzky, op cit ) through which several employers,including small businesses, can participate in training a singlelearner (Department of Labour website). Australia and NewZealand have embraced the engagement of small businessesin their sectoral systems due to a lack of large employers inmany sectors and regions (Stone and Braidford, op cit ).

South Africa has had to contend with the further challenge of asigni cant informal sector; informal sector workers have tendedto fall into a gap between provisions made for small andmedium sized enterprises, and those made for the unemployed(Devey, Lebani, Skiller and Valodia, 2008). Devey et al (ibid) have recommended encouraging SETAs to have separatestrategies aimed at training informal economy workers togetherwith dedicated nancial resources, as the supply of training to

informal economy workers is not a pro table venture for privatesuppliers (Devey et al, 2008:130).

2.7 Quality AssuranceCountries quality control mechanisms can include (Cully et al,op cit ):

Input-focused approaches, such as curriculum content,training delivery and administrative arrangements. Countrieswith a focus on inputs include France and India.

Output-focused approaches, such as competencyassessments.

Self-regulatory or market forces approaches, for examplesome areas of the United States.

External agency approaches, for example independentawarding bodies.

Combined approaches incorporating two or more of thoseoutlined above, which can be determined by funding sourcesor the groups accessing training. This is the most commonapproach.

Extensive quality assurance mechanisms are more commonin countries which have a national quali cations framework,due to a perceived need to protect the inherent integrity ofthe framework, the individual quali cations, and the awardingof the quali cation by [vocational education and training]

providers (Cullyet al, 2009:41). Countries without suchframeworks have less complex regulatory arrangements, whichCully et al (ibid.) suggest is due to higher levels of employerengagement; quality control occurs at the level of individualoccupations rather than groups of quali cations.

A review of international quality assurance systems invocational education and training by Australias Departmentof Education, Employment and Workplace Relations identi ed


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International Highlights In Australia, the National Quality Council

(shortly to become the National StandardsCouncil) oversees quality assuranceand consistency in standards. IndustrySkills Councils must provide a case forendorsement when presenting new oramended quali cations and competencystandards to the National Quality Council.

This must demonstrate widespread industrysupport; that it meets policy requirementsand quality principles set by the NationalQuality Council; a rigorous and transparentconsultation and validation process; anda consideration of impact (Education,Employment and Workplace RelationsReferences Committee, op cit ).

In the Netherlands, the Advisory Body forEducation and Labour Market checks andadapts the quali cations and training proposedby the sector bodies to ensure that (a) policygoals are met, (b) quali cations do not overlapand (c) quali cations adhere to a common setof criteria (Sung, op cit ).

The Tertiary Education Commission in NewZealand is in the process of introducing in-depth audits and is revising funding rules forIndustry Training Organisations after a reviewfound monitoring and reporting processes tobe unsatisfactory, and that some ITOs hadclaimed funds for which they were not eligible(TVNZ News, 2011).

South Africas second National SkillsDevelopment Strategy (2005-2010) attemptedto move from setting SETAs input-focusedtargets, which had led to attempts to increaselearner numbers without measuring impact,towards outputs-focused targets, such asquality and impact (Grawitzky, op cit ).

the following as good practice in quality assurance, with theimportant caveat that they need to be considered within localcontexts (DEEWR, op cit ):

A movement towards continuous improvement and reviewrather than auditing.

Exchange of information and interaction between theorganisation conducting the quality assurance and theorganisation being quality assured.

Public availability of ndings.

Complete independence of the quality assuring organisationfrom the organisation being reviewed.

2.7.1 The Role of Sector Bodies in External Quality Assurance

The role of sector bodies needs to be clearly de ned withinthe broader skills development policy landscape and thequality assurance roles of the various agencies in order tofocus activities and avoid duplication. In South Africa, mixedmessages and a lack of clear, agreed criteria have had theunintended consequence of SETAs and even different sections

within the same government department providing different interpretations and administrative/legal requirements toemployers and providers (Marock, 2010:32).

Quality assurance mechanisms must aim to balance thefundamental objective of quality with the minimal use ofbureaucracy. In Australia, for example, bureaucracy combinedwith onerous national quality requirements have led someindustries to believe that certain quali cations are no longereffectively meeting employer needs, nor that sector bodies areable to respond quickly enough to urgent skills requirements(Education, Employment and Workplace Relations ReferencesCommittee, op cit ). In South Africa, the quality assurance ofproviders has become a tedious and bureaucratic process (Grawitzky, 2007:40).

2.7.2 Quality Assurance of Sector Bodies

There is a balance to be struck between allowing sector bodiestheir independence, and ensuring that they use their fundseffectively to meet the objectives which they have been set. InCanada, for example, complex performance monitoring hasled to the diversion of staff from activities that would otherwisehave led to better performance (Sung et al, op cit ). Conversely,South Australia requires nothing of Industry Skills Councilsbeyond business plans and nancial audits (ibid).

The appropriateness and dif culty of performance measuresvaries substantially by country. In South Africa, SETAs havemet their of cial performance targets while being publicly

criticised for their failure to perform; their very achievement ofthese targets may feed negative public perceptions (Grawitzky,op cit ). Quality assurance processes were revised in 2005


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progress, offer career pathways and deliver portability; andthe value they add to learning (and the resulting additionalfuture demand) (Sung et al, op cit ). Alternatives to nationalquali cations frameworks have also been successful, such asemployer-designed skill sets in the United States which offerprogression within 12 sectors (ibid).

One of the challenges facing many sectoral systems is theability to deal with cross-sector issues. This issue can beaddressed by the existence of a sectoral body such as Colo,the umbrella organisation for Knowledge Centres in theNetherlands, dealing with labour market information. Colosrole in collating and publicising labour market information andforecasts, which it publishes online, improves the effectivenessof Dutch sector bodies (Sung, op cit ).

2.8.3 Funding and Structure

Where funding is linked to narrow targets, such as quali cationnumbers, sector bodies tend to be less effective. Financialincentives have been highlighted earlier in this report as beingan important aspect of a sectoral skills system (see Sung,2010), but an effective skills system incorporates appropriate

nancial incentives within a broader, integrated approach tosectoral skills development which takes account of broaderemployer and worker motivations. If employers in-housetraining activities, for example, are recognised within thequali cations system, nancial incentives are more likelyto engage employers than if their in-house training wentunrecognised (Sung et al, op cit ).

Where South Africas SETAs have failed to be effective(some, such as Fasset, perform very well), it is due to poormanagement and leadership, inadequate systems or staff,fragmented boards and most importantly the imposition ofa diverse and unachievable range of stakeholder expectations.SETAs have become all things to all people (Grawitzky,2007:36). South Africa also faces two important challenges: thelarge area of the country and therefore the dispersed natureof its stakeholders, and the extent of the informal economy(Sung et al, op cit ).

2.8.4 Stakeholder Engagement

As highlighted in Section 2.6.2 above on EmployerEngagement, the most effective sectoral systems tendto incorporate a wide range of views not just those ofemployers, but also those of policy makers and employees(usually via government representatives, union representativesand professional bodies). The involvement of employeeshelps sector bodies to succeed through helping to identifyemployers workforce development needs and employeestraining needs (Sung et al, 2006). The nature of unioninvolvement, however, in sectoral bodies tends to be in uencedby unions historical and social role. In the United Kingdom,for example, unions tend to hold an advisory rather than a

following reports of misuse of funds, together with a failure tospend the money raised from employer levies (ibid). Lessonsfrom South Africa also demonstrate the importance of havinga de ned process to follow when a structure is not performing.

This process should involve relevant statutory bodies andshould operate within a clear timeframe (Marock, op cit ). In theUK, Sector Skills Councils have lost their licences to operatewhen they have failed to function effectively, with their roles andresponsibilities subsumed by other agencies 18.

In addition to external targets and audits, sector bodies needto develop systems which ensure effective monitoring andevaluation of their own projects, and this monitoring andevaluation should be supported by research (Grawitzky, op cit ).

2.8 Effectiveness 2.8.1 General Effectiveness

According to Sung (op cit), greater effectiveness can beachieved through strengthening sector bodies role, increasinglevels of employer engagement, rethinking (and aligning)institutional relationships with other relevant organisations

within the system, and rerouting funding through sectorbodies. In terms of the power of sector bodies, if the sectoral body does not effectively in uence (or determine) [vocationaleducation and training] outcomes in terms of quali cations

and funding outcomes, employers are unlikely to be interestedto be engaged either at the board level or as users taking

advantage of the training on offer (Sung, 2010:25).

Gunderson and Sharpe (cited in Watt and Gagnon, op cit )identi ed eight principles for building effective Sector Councilsin Canada. These principles consisted of an equal balancebetween employers and employees; business and labour todrive sector bodies, not government; ensuring that sectorbodies complemented the existing collective bargainingframework; collaborative decision-making; maintenance ofstrong links between sector bodies and workplaces; adequateresourcing (including long-term public funding); strongleadership; and realistic expectations of results.

In the Netherlands, the most effective Knowledge Centreswork coherently and well across areas such as quali cations,number of apprentices and the accreditation of workplaces,and use their success to draw down more funding andtherefore grow (Sung, op cit ).

2.8.2 Quali cation Frameworks and Cross-Sector Issues

National quali cations frameworks can also support theeffectiveness of sectoral systems. This is through their provisionof a framework through which industry skills needs can beassessed; their de nition of competency, standards andlearning outcomes; their support for curricula design and thedesign of learning activities; the ability they confer to measure

18 See, for example, http://www.ukces.org.uk/assets/bispartners/ukces/docs/ssc/lluk-transfer-announcement-310311.pdf


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decision-making role in national institutions, which is linkedto the tradition of free collective bargaining or voluntarism;in France, on the other hand, unions are strongly involved incollective bargaining in a wide range of areas (Moncel, 2007).

2.8.5 Approaches to Learning

Creation of a culture of learning, both within individualorganisations and within a broader sector, is central to many

effective sectoral approaches, as it can raise performance inthe longer term. A single training programme or accreditationat a basic level can raise levels of interest, making it morelikely that employers and employees will continue to engagewith training in the longer term. Australia, New Zealand andSouth Africa have built a learning culture through employer-ledcompetency frameworks which allows pathway certi cation(Sung et al, op cit ).

Separate evidence suggests, however, that this approach mayhave had unintended consequences in South Africa. One ofthe main weaknesses to be highlighted in evaluations of South

African SETAs has been too much focus on the developmentof basic skills (the level at which Sung et al suggest learner andemployer interest is piqued), at the expense of intermediate

and higher level skills. Grawitzky (op cit) suggests that reasonsfor this may include a failure of SETAs to respond to theirsectors needs; SETA boards failing to agree on priority areasand to share responsibility for delivery; the resource intensivenature of the introduction of learnerships; and the focus ofSETAs on company needs, with the questionable involvement of organised labour. It appears that the focus on basic skillshas not, as yet, been translated into employer demand forintermediate and higher level skills.

2.9 Implementation The use of baseline studies elsewhere (e.g. baseline indicatorsused by Johnson, Walton, Filder, Devins, Hillage and Tamkin,2006, as part of their phase 3 evaluations of the Sector SkillsCouncil network in the United Kingdom) demonstrates theimportance of early assessments from which the impact andeffectiveness of sector bodies can later be evaluated. Suchbaseline indicators might include (adapted from Johnson et al, ibid ):

Sakamoto (2009) has identi ed a number of emerginglessons for the implementation of a sectoral skills system.

A new system takes time to embed and to start producingresults; overly complex and bureaucratic structures canimpede progress; urgent quantitative targets should not takeprecedence over the time needed to ensure quality; andeffective monitoring and evaluation is essential, and helps toensure the effective use of public funds.

Ensuring appropriate funding and institutional arrangementsis key to the early success of sector bodies. According toSung (2010:2), ... having the ambition to become employer

led is one thing, but whether or not this is supported by the necessary funding and institutional arrangement to achieve a high level of employer-led VET system is another . A further keylesson for implementation is the importance of

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