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Education and Employment: Bridging the Divide (Part 2/2)

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East and North Africa, rates of unemployed young women are eight times that of men. This is the last of a two part series. Read part one here.

As Jamie McAuliffe, president and CEO of Education for Employment (EfE), remarked at the WEF conference in Jordan: “We are trying to get governments and businesses to identify job-creating sectors and encourage investors to engage in them.” He also spoke of the need to encourage entrepreneurship and facilitate ways for young people to start small businesses through micro-financing programs. He went on to emphasize with regards to women that: “The rates of unemployment are as high as eight times that among young men,” and that “getting young women into the work force and supporting opportunities for them to become entrepreneurs is one of the critical challenges and opportunities.”

Entrepreneurship, however, due to the hesitation of financial institutions and inadequate legal structures, is more attractive than attainable at this time in the Middle East and North Africa (MENA). Even in the Gulf Cooperation Council (GCC) countries, enabling business start-ups largely remains tied to one’s status and social connections rather than the business prospects of the product or service.

So in addition to the four factors listed above, one could add a fifth: the role of the informal economy, which for many is the only accessible outlet for entrepreneurship since official channels are full of obstacles for those with little experience or education to manage the multiple steps for launching a business.

Another concern expressed in The WEF program was engaging youth to perceive employment as more than work and more as a career, that is, acquiring skills that over time enable one to reach higher levels of achievement and compensation – critical in societies that place such a high premium on marrying well and being able to provide for a family. With the concern that public payrolls can no longer support inefficient labor practices, and the lack of diversity in most MENA economies, the IMF has issued a report on the need for greater private sector absorption of new job entrants. This will require a long-term, multifaceted program working with governments in hands-on technical and vocational training projects, as well as higher quality and better targeted secondary and tertiary education.

A sotto voce topic that relates to youth attitudes towards work is their perspectives on the kind of work and on-the-job behaviors that they value. Dealing with the expectations of job applicants is a nagging complaint across the MENA, especially about those with university educations and few practical skills. With few role models to emulate that are not tied to “the old ways,” young people range from those who are poorly or partly educated and unskilled and semi-skilled through experience, to those who are educated and unskilled with expectations that are not aligned with prospects in their economy.

It is no wonder that when youth across the region are polled about their job choices, more than 30 percent believe emigration is their best alternative. Joe Saadi, chairman of Booz and Company and managing director of its Middle East practice, painted the stark consequences of lagging youth recruitment: “Every year you don’t have the capacity to absorb newcomers into the labour force, you’re compounding the unemployment issue and, given the social and economic pressure in the region, there is this sense of urgency setting in.”

An interesting and in some ways compelling recommendation from someone whose company recruits young people, is to institute a form of compulsory service for six months in order to change the mindset of young people unwilling to consider certain jobs. This would instill values consistent with the workplace, according to Mohammed Al Mady, CEO of Saudi Basic Industries Corporation (SABIC), which has more than 20,000 employees. He believes that this approach will: “Teach them resilience, teach them modesty, teach them how to work and take the ladder step by step until they reach what they want.” Al Mady pointed out that even the recent Saudi labor policy to force the private sector to employ more nationals – nitaqat – did not necessarily address the problem of improving the quality of youth for employment purposes.

Case: Youth Employment Challenges in Morocco

Morocco has yet to experience significant economic dislocations as a result of the Arab Uprisings, and its subsequent actions may serve as a potential case study of a North African country that has undergone the least amount of turmoil while advancing economic reforms that in no small part are focused on the labor force.

The Arab World Competitiveness Report 2013 identifies education and the inefficiency of the labor market as the most obvious drags on the kingdom’s competitiveness and social cohesion. Not only is the public education system not aligned sufficiently with the needs of business, “the labour market structure needs to allow for an efficient use of talent and sufficient flexibility.”

As in other Arab countries, youth between the ages of 15 and 29 account for about 30 percent of the population and 44 percent of those of working age. “Official statistics indicate that about 90 percent of young women and about 40 percent of young men, who were not studying in the past couple of years, are either unemployed or part of the economically inactive groups.”

In a thoughtful analysis, Lahcen Achy, an economist specializing in the MENA, adds a less visible, yet critical piece of analysis: “Young people spend on average 80 percent of their time hanging out or doing personal and recreational activities that are highly unproductive.”

He challenges the stereotype that the situation is most critical for unemployed university graduates. “Most of the unemployed youth in Morocco have either low education levels or haven’t studied at all… those who are least educated are left without any help… and only 8 percent of unemployed youth have benefited from [the National Agency for the Promotion of Employment and Skills] services.”

His argument is that the marginalized youth, whose numbers far exceed university graduates, must be targeted for both employment and social integration. Involving the private sector has had some success, but the pace of generating jobs with wages that meet living needs (including prospects for marriage and family) is woefully short. Morocco is aiming at a more systematic and integrated employment strategy in partnership with a number of international agencies. For example, the European Training Foundation (ETF) has brought together business and civil society groups to exchange views on options “to improve human capital in the country’s small business sector.”

Across the board, recommendations include a more integrated framework for promoting entrepreneurship from primary through university education; women’s entrepreneurship as a national priority; and better access to finance, training, and coaching services as well as data collection on the impact of these programs that would allow for policy formulation – a necessary component if the informal sector is to evolve into a dynamic part of the nation’s economy.

Recent programs in the US and a joint certification program developed with French technical assistance provide opportunities for workers who have gained skills outside the formal system to receive certification of their accomplishments, which will enable them to move up the value chain, perhaps even become an entrepreneurial offshoot from existing industries.

It is in this environment of accelerating demands for youth employment and bringing greater efficiencies to workforce development that underlines the importance of coming to grips with the challenges before they become widespread regime liabilities. The government’s inability to date to move its agenda of economic reforms through parliament has resulted in a stalemate that threatens progress in facilitating economic growth.

King Mohammed VI’s insistence that the educational sector be insulated from political volleyball may help renew a national debate and progress on strategies to move forward more aggressively on measures to improve Morocco’s competitiveness — a key factor in attracting the domestic and foreign investment critical to generating the jobs so badly needed in the country.

Global business in emerging markets: Transformational partnerships

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At a recent corporate presentation in the Maghreb on the potential transformational effect of foreign direct investment (FDI), I focused on two points: the notion of impact investing and the corollary dynamic of how FDI impacts human development beyond the benefits of economic growth.

The discussants were company leaders and employees discussing how to build a globally competitive company culture integrating local sensibilities and priorities with technologies and industrial know-how developed abroad.  The initial discussions, following the usual pattern of strategic planning sessions, concentrated on building a common vision and purpose among the participants. The vision that coalesced was then defined in a series of core values and principles that would become the “brand” of the emerging company culture.

As I listened to insightful and well-presented points of view, it became apparent that as the new company drills down from values and principles to behaviors, it is critical that both sides examine the scope of their assumptions and expectations. While there was a strong consensus around the vision and principles, agreement was not so clear on the behaviors that would then follow. It reminded me of the iceberg metaphor in cross-cultural communications, where the core values, principles, attitudes, and beliefs are unseen below the waterline, while the behaviors, which are visible above the surface, are subject to interpretation by the other party who cannot see below the waterline. The lesson: we make judgments about others based on what we see, rather than what we know lies beneath the surface.

Given this observation, I asked the group to consider a broader perspective, moving above their particular iceberg to consider the implications of the new partnership beyond the terms of the company’s goals and objectives. I began with what I know best—defining the mission of the new company and how training impacts its brand.

The Arab uprisings pointed out the need for rapid economic growth to stimulate broad and meaningful employment and drive education relevant to the marketplace. This is not a simple task; it is not merely about providing skills training to enhance work opportunities; it is about the core aspirations of people and what this means to their country. Employees and employers are not the only beneficiaries of FDI; all of the country benefits from a more capable and effective workforce.  The workforce that is emerging will have better technical capabilities, operational sensibilities, and soft skills that enable them to define options and make choices about their futures.

In the MENA countries that I have surveyed in terms of technical and vocational training needs, soft skills are defined as more than communications and teamwork; they include the capabilities to pursue a career and anticipate and grasp needed learning opportunities. This involves creativity, innovation, and judgment. Thus, these enhanced soft skills are more complex and encourage what is called “global dexterity,” blending awareness and knowledge that lead to effective behaviors in the workplace while securing one’s core values.

The Arab uprisings remind us that there is a related issue that needs attention: that what we are dealing with is more than better training, education, and employment; Arabs are redefining the social contract that existed between regimes and their people. At the heart of it all are the issues of identity and the basis of legitimacy of the governments: political, religious, ethnic, cultural, etc.

Historically, the social contract was an exchange between a government that provided order, stability, and a bit of prosperity to citizens who felt protected and secure enough to have sustainable livelihoods.  That balance has, in many countries, been shaken to a large degree by demographics, the global economy, technology, more gender equality, a reduction in social distance, and education, which are providing the ingredients and tools for reshaping and recalibrating social contracts. So it is this redefining of the social contract that is at the heart of the struggle for political legitimacy and national identity.

In this context, skills training and professional development enable employees to access careers and benefits that equip them to be part of a generational and transformational shift. These empowered employees become capable participants with tools to achieve aspirations for themselves, their families, and their children. This confluence of skills and knowledge has the capacity to impact the debate on the social contract, which has implications for the MENA region. This may sound a bit grandiose, but it is a historical lesson that economic development and human development go hand in hand. What was once considered a business relationship has the potential, in today’s highly connected and able public space, to be a link between global markets and local human development.

By raising the performance of employees to better engage the global economy, we build a platform for moving beyond issues of economic growth as both employees and employers seek growth opportunities that require more effective governance and use of human capital. People become internal change agents that provide the role models, mentors, and early adaptors missing from the broad business landscape in the MENA countries. These local transformation agents link with others throughout the region and larger markets to promote global dexterity – adaptive behaviors built around core values.

And what is the external partner’s role in this? The concept is “impact investing,” which focuses on projects that have social and environmental benefits and generate profits. At its core, impact investing reflects business models that are sustainable, advance human capital, provide opportunities for community development, and have results that are attractive to long term relationships with the private sector. The key consideration is to move beyond social and community outreach that is beneficial in the short-term but does not significantly alter the future prospects of the communities touched. By promoting an investment perspective that recognizes that broader and deeper FDI requires long-term returns, countries and companies make mutual cause for mutual benefit. Governments have their role to play but no more than is usually needed to attract serious FDI, ranging from needed infrastructure to incentives for training, use of local materials, and similar inputs.

There are several revolutions going on in the MENA and elsewhere, some messy and unwieldy while others are barely perceptible. The role of workforce development in crafting solutions should not be overlooked or minimized as simply giving people jobs. Companies exist for a purpose, to be profitable and grow. Employees share these goals, to profit from their employment by acquiring skills that free them to know and exploit opportunities for themselves and their families. Partnerships between local and international private sectors that are emerging will, in many respects, help governments in their mission to build a new social contract with their citizens by greatly reducing demands for counterproductive government intervention in the economy. Good business making better jobs and great citizens and governments is a goal worth pursuing.

Worker incentives: Are MENA employee stereotypes shifting?

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 In reviewing comprehensive strategies for closing the gap between education and employment—an unresolved agenda of the Arab uprisings—one area where there is no ready agreement is non-monetary compensation. Everyone acknowledges that money is the chief incentive for attracting employees, but there is a dilemma when taking a longer view of the “employee value chain,” that is, from graduation to employment to career, what matters for recruiting and retaining good workers? In looking for possible answers, there are clear differences between countries that have plenty of people and plenty of funding, such as Saudi Arabia, and countries that have plenty of people and limited funding, such as Morocco. In both countries, young people assert that they want to and are ready to work. Yet in both countries there are wide gaps in expectations between those with secondary and university educations, which preclude a “one size fits all” approach.

The case of Saudi Arabia

In Saudi Arabia, where hundreds of thousands of new jobs are needed annually over the next 5-10 years to fill employment needs of locals under 25, the clear preference is for white collar jobs, even though industrial workers are in high demand throughout the country. While there has been extensive research on the categories of jobs available to Saudis, the most difficult step—motivating young people to fill the potentially available slots, has yet to be taken.

The kingdom has a three-pronged approach: 1) pushing the private sector to hire more Saudis and provide incentives for companies to have in-house training programs; 2) upgrade government coordinated training programs to enable young Saudi men and women to acquire skills linked to the rising demand centers for employment; and 3) educate and motivate Saudis to take seriously employment as a career.

The majority of the general population as well as university graduates are female, who, while seeing a gradually growing number of workplace opportunities, are also facing a dwindling pool of eligible husbands. This fact impacts the career aspirations of both men and women and cannot be overlooked as a normative peg is promoting employment.  

 

The case of Morocco

Morocco has different challenges since its young people are attracted by both blue and white collar jobs but the labor supply exceeds demand, especially if potential employees are reluctant to relocate. University graduates who prefer government-related jobs are disappointed in that few are being chosen under the accelerated hiring program of the current government. Since it has limited funding, the government is incentivizing the private sector through subsidies and grants to train in specific sectors. This is especially important since government training facilities are limited in number and unable to carry the full burden of training across a range of jobs. While there is an increasing emphasis on entrepreneurship and start-ups, the overall environment for promoting new businesses is still difficult to navigate. There is a large pool of entrants into blue collar work if they can access effective training programs.

Non-monetary incentives

Given the challenges in both countries, another motivational tool is identifying non-monetary incentives that could be part of an effective recruit and retain policy. Offering some ideas are two articles. McKinsey & Company just republished a seminal article on the topic “Motivating people: Getting beyond money.” And IESE Insight published “Remuneration Tips for a More Motivated Workforce,” which covers a study conducted by this Spanish economic institute. Both are based on surveys done with a variety of companies, ranging from mid-size to large corporations.

The McKinsey article found that:

“…praise from immediate managers, leadership attention…, and a chance to lead projects or task forces—[are] no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options. The survey’s top three nonfinancial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously, and strive to create opportunities for career growth.” 

The IESE Insight article found that:

“variable remuneration schemes, although increasingly widespread, do not always achieve their main objective: to motivate people.” In these schemes linking benefits to company profits (however measured), the author found that the relationship between variable remuneration and motivation is too complex as “numerous factors that cannot always be controlled influence the equation.”

In the MENA countries, using Saudi Arabia and Morocco as examples, both the financial and non-financial motivators cited in the two articles are not common practice. Yet the McKinsey article noted that “…in developing markets…[respondents] cited employee motivation as a key reason for modifying incentives.”

The Way Forward

So where to begin? Promoting one’s initial job as an entry into a career will be a major culture change in how Moroccans and Saudis perceive employment. Too often, either the job in industrial settings has defined limitations, or traditional job security has meant that there was little turnover to allow movement upwards for young, talented employees. Senior management must become committed to integrating their traditional role as benefactor/bureaucrat with a balanced style that demonstrates appreciation for talent, initiative, and loyalty.

Both articles warn that nonfinancial compensation schemes must be fair, objective, and realistic to discourage employees from “gaming” the system by working for the reward and not the overall benefit of the company. Discussions about how to motivate through nonmonetary rewards are a very useful device for engaging employees, if the option for these benefits is available. In addition, until middle management and supervisors also adapt their behaviors to support a corporate culture that recognizes and rewards teamwork and respect for diverse skills, talents, and personalities, any incentive-based motivational program will be eroded by a “do as I say, not as I do” credibility gap.

Consensus and capacity-building: Tipping the scales in favor of reform

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After a year away, I returned to Morocco for 10 days. I am sure that I will find the visit both challenging and satisfying. My central interest is to better understand the tangible governance issues facing the PJD-led government. It continues to struggle with advancing its agenda through parliament and achieving a consensus among its coalition partners on policies that effectively attack unemployment, the budget deficit, corruption, and social reforms. Most organic laws required to enable reforms promised in the 2011 constitution are still either being drafted or pushed off to a later agenda. And, as Morocco moves towards implementing its regionalization strategy, there is still a long way to go to enable officials and civil society to acquire the skills associated with effective local government.

While the policy debates on issues ranging from the latest version of the media law to subsidy and judicial reforms and strengthening protection for whistleblowers are well reported in the press, many critics are claiming that there are few results after 16 months in office. My assumption is that this is politics as usual in any democracy, especially a hybrid like Morocco. But there is more going on here that I want to explore.

In a country where labor issues can bring thousands of people into the streets, it is remarkable, but not surprising, that a common platform addressing labor mobility, training for work, and an open regulatory environment has not been vetted and moved through parliament yet. As in the US, political leaders seem to have a block against cooperating on issues despite the reality that their constituencies voted for change, not for stalemate.

Morocco badly needs to restructure the labor environment to enable workers to acquire skills and access to jobs while employers will benefit from more flexibility in responding to variable market conditions and a reduction in restraints on employee hiring and firing. This is not to say that important steps have not already been taken. As I’ve written previously, the government is moving incrementally to improve the labor force by broadening and upgrading technical and vocational training and by setting up a system to certify on-the-job skills acquisition. These steps however have not made a significant dent in the unemployment and underemployment rates.

An equally daunting task is focused on reducing and realigning the government’s subsidies to better serve the less well off in a country where a significant portion of the population is in the informal economy. Today, rich and poor equally benefit from fuel and food subsidies and the government is exploring options that not only relieve human needs but also encourage small business expansion. One proposal that I heard last night is to subsidize small farmers rather than the price of imports to the wholesalers. Of course, I asked if this was just another form of welfare that could grow into corporate subsidies, which like in the US distort market prices. But that is not the approach that Morocco is considering. Greater support to local growers would include training and equipment for better crop practices ranging from higher quality seed and watering to the use of fertilizer and more efficient cultivation, storage, and distribution. This would expand their capacity for more production, new employees, and fresh local supplies to market.

Whether it’s better labor practices or rationalizing subsidies, at the heart of the movement to reform is human development. Last week, I met with Mariam, a very capable, multilingual woman IT graduate from the top school in Morocco. She graduated months ago and still doesn’t have a job. Less than 30 percent of her classmates have found employment. One woman friend found an unpaid internship in Turkey through an organization that places capable graduates, for a fee, in positions scattered around the world. Now, Mariam is seriously looking at a position in India…ironic, isn’t it that Morocco is sending its talented young people, at their own expense, to fuel the IT capabilities of other countries.

I can’t help but put these concerns into a larger context – the daunting challenge of building consensus around reform policies that will benefit Moroccans and the simultaneous need to greatly enlarge capacity building training for the grassroots as well as the managers of Morocco. The promised policy of regionalization – devolving power to local governments – requires local communities and their leaders to have skills for administration and governance. The demand for more and better jobs requires policies that enable the transformation of a rigid economic regime into a market-friendly, results-driven, equal-opportunity economy that prioritizes achievement over status. Hopefully, in next week’s posting, there will be some success stories that I can share about where Morocco is heading.

Repairing the neglect of workforce development in the MENA

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The World Bank has issued its fourth volume in the series Jobs for Shared Prosperity – Time for Action in the Middle East and North Africa. Well over 300 pages, the study provides its five main messages separately for those who need a super condensed summary. Reading through the messages, I noticed how clear it is that very few results can be achieved without strategies that integrate the resources and talents of the public and private sectors. Drawing on my experiences across the MENA region, there is much to be gained from cross-border sharing of best practices regardless of the differences in the economic profiles of the countries. Let’s look at the region in terms of the key messages of the study.

Message #1: Labor markets in the MENA make poor use of the available human talent and resources, thus inhibiting the economic potential of countries and people in the region. Current political dislocations aside, Arab countries, like much of the developing world, made post-independence choices that centralized economic growth around government institutions. Despite dramatic changes in society since then in population, education, middle class composition, ethnic/minority/gender issues, global market standards, etc., governments were slow to accommodate to the realities of today’s economies. Concurrently, vested interests working with their government counterparts too often dominated the private sector. This cronyism added to the obstacles inhibiting progressive economic policies. Human capital was collateral damage in this scenario since labor had little impact on employment standards in a system of regulated government-social services and little flexibility in labor markets.

Message #2: Change the rules to create a dynamic private sector that capitalizes on the full range of the region’s human capital. Government business regulations have been slow to shed their opacity; end interference in the business of business, and equitably protect the rights of owners and employees. A major incentive towards transparency is that all MENA countries require FDI, which requires attention to rule of law, accountability by government officials, and awareness of environmental impact. The WTO, bilateral trade agreements, and a host of multilateral treaties have helped shine a light on changes that must be made for an economy to be competitive.

Message #3: Let skills flow into productive private sector jobs by realigning employment conditions in both the private and the public sector and rethinking labor regulation. Lower the barriers holding back women who want to work. MENA governments can no longer be the employers of first or last resort. Coddling public sector employees in non-productive jobs limits economic efficiencies and distorts opportunities. Efforts to enhance the employment of youth and women will be advanced through adopting unemployment policies that enable transitions to the labor force and access to services that respect the needs of working families.

Message #4: Make young people employable by closing information gaps, improving quality and relevance of skills, and partnering with the private sector in training. These steps have become the mantra of US, international and local government programs to advance employment among young people. An interesting corollary to this focus on training programs is providing recognition to those who have acquired skills informally, through on-the-job experience. Morocco is piloting a program called Validation des Acquis de l’Experience Professionelle (VAEP) to provide accreditation to workers who can demonstrate proficiencies that qualify them for advanced positions. Piloted through a cooperative agreement with the French government, VAEP originally started with the building trades in 2008, was expanded to textiles and clothing in 2011, and is poised to move into hospitality and meat processing. The bottom line is that professional skills validation through transparent proficiency examinations will “make it possible for employees to obtain diplomas or certificates outside of their initial schooling,” according to the article in Le Soir.

Message #5: Use short-term interventions to respond to immediate needs while building credibility and consensus for medium-term, game changing reforms. Demands for jobs, training, market-focused education, and transparency will not be satiated by government promises. Public-private partnerships can be a critical vehicle for identifying quick start-up projects and programs that support jobs for those marginalized and underutilized in current labor markets. Government subsidies for employment can be used more efficiently when tied to needs identified by current and future employers. The success of longer-term reforms of labor regulations, jobs training and education, gender-related policies, and workplace health and safety rules can be facilitated by piloting initial efforts at these reforms in short-term programs that deliver jobs and generate data that supports new policies.

The World Bank’s Jobs for Shared Prosperity, like the Arab Human Development Reports of a decade ago, offers a serious and methodical critique of how to take an under-performing region and enhance its prospects by freeing its most abundant resource – its people – from antiquated and ineffective labor constraints. Empowering employees is at the heart of building local stability and prosperity in the MENA, and it is an agenda that can no longer be postponed.

Indicators Up Yet Gaps Remain in Morocco’s Economic Growth

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Over the past two weeks, several stories seem to indicate that Morocco is on the right track for economic growth in 2013. As with the other Maghreb countries, Morocco faces many challenges ranging from quality of labor to a somewhat confusing regulatory environment in attracting foreign investment. Yet, tourism is up over last year, the EU has launched talks for a free trade agreement, a major Moroccan bank has signed a trade finance credit line with the Europeans, and, at least on the economic side, most analysts believe that GDP growth will exceed 3 percent.

Reuters carried the story on the EU’s intention to negotiate a free trade agreement with Morocco as part of the EU’s response to the Arab uprisings. It is significant in that the first treaty will be negotiated with Morocco, another indicator of its perceived stability and commitment to opening its markets further. Trade between Morocco and the EU topped 24 billion euros in 2011, and the EU is hoping to further expand its activities in the services sector as well. The EU’s goal was well stated by Marielle De Sarnez, a French member of the European Parliament, “Smooth negotiations of the free trade agreement are crucial because they serve as an example for other countries in the southern Mediterranean…this agreement will also allow in the long term greater regional integration for the Maghreb countries.”

Her sentiments were echoed by Vice-President of the European Investment Bank (EIB), Philippe de Fontaine Vive, on the sidelines of the EIB’s annual review. He noted that Morocco is the first recipient under a new program of the FEMIP (Facility for Euro-Mediterranean Investment and Partnership) that commits nearly one billion euros of financing “to support the transition to a new form of innovative and more inclusive growth in Morocco.”   More than a dozen major projects were funded in 2012, in areas as diverse as transportation infrastructure (including the extension of rural roads), agriculture, technological innovation, solar energy, education and health sectors, in addition to the medina renovation programs in Fez and Meknes, and coming to Casablanca. He went on to say that “This shows both that the EIB is there to support the process of democratic transition and that Morocco has the capacity in diverse sectors to be able to mount innovative projects, the most emblematic in the year 2012 has been the solar project at Ouarzazate, for which we coordinated the European funding.”

It is the capacity of local agencies and institutions that is the focus of a $75 million trade finance facility between the European Bank for Reconstruction and Development (EBRD) and Banque Marocaine du Commerce Exterieur (BMCE Bank). The financing line is to support international and intraregional trade transactions with both guarantee and cash advance facilities. It will support trade activities by “facilitating the distribution of imported goods and contribute to the overall growth of small and medium-sized enterprises (SMEs).” How this growth is perceived in-country was the focus of an article in the Financial Times by Chris Wright that highlighted the perceptions of fellow travelers on the train from Casablanca to Rabat. Comparing the views of a Brit, a Saudi, and a Moroccan leaves one with the impression that while Morocco is doing better than others affected by the Arab uprisings, it still has many challenges ahead before its recovery and growth are assured.

A key insight into what needs to be done came from Oussama Romdhani, former Tunisian minister of communication. In an article in the World Affairs Journal, he proposed that “A durable recovery will require far-reaching policy reforms addressing the chronic mismatch between educational training and the job market. In this particular concern, US advice and assistance could help North African countries modernize their inefficient higher education and vocational training systems.” The gap between jobs and skills in Morocco continues to draw the attention and resources of both the government and the private sector. It is difficult to attract foreign direct investment without an available qualified workforce that operates within a relatively open and free labor market. The government has initiated a series of programs that address the skills side but still lags behind in freeing up its regulatory environment to facilitate a more dynamic labor sector. Hopefully, as the growth prospects continue to improve, there will be time to address the structural reforms needed in the labor market that will accelerate the trend towards greater prosperity.

Breaking the cycle of “educating for unemployment” in MENA

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The Audit Court (Cours des Comptes) in Morocco recently issued a critical report on the country’s vocational training system. At the same time, the World Economic Forum was focusing on youth under/unemployment at its annual conference in Davos. This is no coincidence, as the demographic realities in emerging markets create a demand for very high levels of job growth in the next decade to absorb high school and university graduates.

In fact, key demands emanating from the Arab uprisings are for jobs, greater transparency in employment practices, and sufficient resources for market-oriented training and education.

Jamie McAuliffe, president of Education for Employment summarized the challenge quite accurately: “But it is much easier to describe the problem than to advance concrete solutions. Both within the Middle East and North Africa (MENA) and beyond, there are still few examples of large companies and national governments putting the necessary muscle and resources behind solving the problem.”

Effective program management, qualified human resources, and sufficient budgets will provide a baseline for developing and delivering solutions to reverse the complacency and ineffectiveness that characterize training programs in the region. Looking at the Audit Court’s report helps provides a starting point to discuss the challenges to technical/vocational training in the MENA region.

The Moroccan Office of Vocational Training and Employment Promotion (OFPPT) is charged with orientation, education, and placement of students, as well as providing opportunities for continuing education for adults who wish to change career paths. Ideally, OFPPT maintains relationships with potential employers since it has the critical responsibility to be familiar with the needs of the workforce and adapt curricula and training to meet those needs.

OFPPT has its equivalents throughout the MENA region, some of which focus specifically on vocational and technical skills training for recent middle school and high school graduates, while others are similar to community colleges that provide “white-collar” education and training programs for the services industries. Whatever the agency’s mission, the goal is the same—to graduate employable young people for the workforce.

After decades of acquiring academic degrees that held out little prospect of jobs and careers, young people recognized that their educational systems did not make them employable, and governments are scrambling to respond.

It is too soon to tell how the new programs will turn out, but observations of actions over the past two years raise several critical issues. Let me say, from the outset, that this is a lifelong issue for me. I have been working on training programs in the Middle East since the late 70s, starting in Iran, moving then to the Arab Gulf countries, and continue today providing services to both US employees assigned to the MENA as well as to Arab trainees at all skills levels across a broad range of sectors. So while youth employment has become a regional priority due to the Arab uprisings, there are experienced professionals and best practices available that can help guide the determination of flexible yet accountable solution options.

One of the key concerns that I have is the quick fix notion of turning Arabs into entrepreneurs. Yes, Western mercantilism and international trade definitely had its roots in the Mediterranean, as Phoenicians (from Lebanon, of course) were the pioneers in sea-borne trade throughout the region. But that does not mean that one’s DNA equates with modern day commercial success; in fact there are many obstacles to ensuring an enabling environment for entrepreneurs.

A country’s legal, financial, regulatory, and cultural norms, among others, must be coordinated in order for enterprises to succeed. As this “eco-system” advances, concurrent efforts are needed to enable companies at all levels to expand their capacities to compete in the contemporary marketplace. And of course, the point of this enterprise is to develop the human resources to lead, manage, and staff the companies of today and tomorrow.

In my assessment, there are six “demand” factors that should shape the “supply” of labor generated by vocational/technical training programs.

  1. The skill/labor needs of the market today and projected for a decade.
  2. The interests/aspirations of youth and how this matches #1, and how to close the gaps that exist.
  3. Flexible and targeted curricula that provide core technical, language, and soft skills, as well as specific skill sets linked to jobs, with a strong emphasis on practical training based on partnerships with potential employers. Courses should reflect local demand and opportunities.
  4. The careful allocation of funding so that training programs are sustainable rather than becoming unsustainable subsidies.
  5. Government policies that take a holistic approach to job growth, involving a broad range of stakeholders and supporting outcomes based on results.
  6. Ensuring that entrepreneurship programs are balanced with efforts to enlarge the competitive capabilities of medium and large-sized firms.

With these “demands” in mind, a concerted, coordinated, strategic campaign involving various groups of stakeholders will go a long way in meeting the challenges not met by previous vocational/technical training regimes.

D-PAD: A checklist for framing training content and delivering sustainable results

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The Arab uprisings are the clearest indicator to date of the region’s need for more and better jobs, better matches between what goes into education and comes out to the workforce, and restoring a sense of value to skilled and semi-skilled jobs critical to maintaining a well-functioning social and physical infrastructure.

While there is much emphasis on the integrating digital technology into training methodologies, a more effective approach focuses not only on the tools, but on the solutions. In the US alone, there are three million jobs waiting to be filled by people with the rights skills and the motivation to work and to work in new locations. Just as there must be an eco-system for entrepreneurship to thrive, a similar eco-system must be constructed for workers so that they add value to the process as products and services are brought to market.

So, not being fluent in I-PAD, I thought it might be useful to derive a framework, which I call D-PAD, to focus attention on the key content and context (environmental) issues in any skills-centric/jobs program. It is a checklist that will guide various stakeholders (potential employers, decision-makers, regulators, reformers, trainers, students, management, consumers, etc.) to smart decisions for defining content and context for recruiting and motivating the current and next generation of skilled workers.

First caveat: this thinking is not ground-breaking. I’m taking the charts, models, and paradigms of some top companies and translating them into something that hopefully is easy to digest without a consultant’s playbook. Second caveat: although this posting reflects the work of companies in Middle East and North Africa, the concern for more effective and durable training solutions is global and touches all levels and sectors of public policy and economic development.

 D-PAD is actually 5D-PAD.

In my experience, to begin the process of corralling market needs into a sustainable training regime, there are five steps:

  1. Define the goals as precisely as possible and include as many stakeholders as possible from the private and public sectors, and the institutions
  2. Discover the factors that promote and inhibit the goals (SWOT works) and discuss timeframes and constituencies that are relevant to the process
  3. Determine priorities, resources, and various cost-benefit parameters including gender, urban/rural, minorities, accessibility, and other relevant issues that influence decision choices; get sign-off from funders/regulators
  4. Design the learning objectives for both hard and soft skills and the work environment that is both the goal (where to work) and the process (how to work, ethics, career orientation, retention, performance, etc.)
  5. Develop the specific training materials, train the trainers, agree on the metrics, and move to the PAD

Of course these five action categories have multiple subsets and much fuller descriptions but that is for another article or two.

 The PAD – Acquiring skills for a lifetime

We now know that there are very few lifetime positions, although vocational self-employment still has great potential in that regard. Every job, from maintenance to programming, requires periodic if not continuous updating to be relevant to the marketplace. So the PAD has two functions: outline a learning/training regime that is both skills and career focused (hard and soft skills), and build in an emphasis on sustainability, that is, a flexible format that enables graduates to develop over time their own learning goals to have staying power in the economy.

  •  Preparation takes the results of the 5D process and defines what intellectual and physical capabilities the students and trainers need to make the program regime worth the effort. The most interesting challenge is working with prospective employers to define today’s job requirements without losing sight of how jobs in some sectors are evolving continually.
  •  Acquisition focuses on the learning/training materials and methodologies. Is there one-size that fits all? Considerations include quality of trainers, gender issues, embracing both soft and hard skills in a limited period of time, availability of mentoring/apprentice/OJT programs, counseling (why do so many want to own their own business; few succeed), and dozens of other concerns such as amount and accessibility of equipment, status/cultural factors, etc., etc. A critical key is developing cost effective solutions that are scalable and efficient, relying in large part on private-public sector partnerships; but it’s only one key.
  •  Demonstration deals with trainee and trainer performance. Societies in the Middle East and elsewhere still have a heavy cultural emphasis on avoiding shame so performance issues, in classes/labs, at the prospective employer, and elsewhere have to consider both the metrics and the process of achievement.

Okay, that’s the snapshot of D-PAD and a summary of what to consider in defining priorities and resource requirements to develop market-ready job seekers.