‘Pakistan needs efficient, not cheap labour for competitiveness’

An interview with Aman Foundation’s CEOs:

Aman Foundation is a non-for-profit trust founded in Pakistan in 2009, starting operations with their ambulance services and expanding into education and skills development. Along with Aman Health, the foundation’s Aman Tech programme is a fast growing segment which provides vocational and skills development training to the youth. BR Research sat down with Ahmad Jalal, the outgoing CEO and the new incumbent of the title Mujahid Khan about the direction Aman is headed in with the new leadership, particularly focusing the discussion on Aman’s skills development program, the current state of Technical and Vocational Education and Training (TVET) sector in Pakistan, the challenges it faces from the policy side and any actionable interventions that can be made across the industry. Following are edited transcripts.

BR Research: What legacy are you leaving with Mujahid, and how has Aman grown over the past few years?

Ahmad Jalal: We started in 2009 in Karachi with an ambulance service of only 10 lifesaving ambulances; we have grown that to 60 lifesaving ambulances today. We also expanded into Thatta and Sajawal under a public-private partnership mechanism through which we operate 25 ambulances which have done over 30,000 interventions. Across the region, we have done over 1 million healthcare interventions including more than 215 babies that were born in the ambulances. We have doubled our graduates of vocational training (13,904 to date), our placement rate is 65 percent which is the highest rate across any vocational training institute—the industry average is around 50 percent or less.

Moreover, we have focused on quality assurance. For the last five years, we have been able to get the ISO-9001 certification done by SGS. Our ambulance fleets go through a proper quality check by our internal audit and quality assurance department that ensure cleanliness, training of the staff, calibration of our equipment etc.

In terms of evolution, I would split it in different stages. The first stage lasted five years where we were involved in seeding new social ventures. We set the foundation for our different social programs such as vocational training. We started a program for mother and child care called “sukh” during that time as well. The second stage is an area which I call optimization and scaling the program where we shifted the focus on a few programs and made them more efficient.

BRR: What do you mean when you say you made the programs more efficient?

AJ: By efficiency, I mean, we were willing to close programs that did not create the right outcome i.e. if they were not creating jobs or if they were not attracting the youth, we closed those programs and opened new trades in the spirit of industry alignment. The trades we pursued were those which would get the jobs because vocational training is not only about education, it is about jobs as well. Secondly, we went into the market hiring people from the industry (like floor supervisors) to come and review our curriculum and bring it up to the needs of the market.

Normally, this is done on the industry level or at the government level to conduct skills assessment but we did this exercise ourselves. Thirdly, in an effort to align our trainings with the requirements of the jobs, we modified the timing of the vocational training. Usually, vocational trainings last 3-4 hours in a day across six months. We increased the timings of the trainings which are now conducted from 8:00 AM to 4:00 PM where students are given the opportunity to take a break, play sports etc. The idea was to change the mindset of the student in those six months and make sure he is well prepared for the job. We had observed that after training for 3-4 hours and then getting jobs that lasted an 8-9 hour shift, they were unable to cope with those jobs.

BRR: Geographically, where do your students come from and what are your plans to move this program beyond the city?

MK: We have done partnerships outside of Karachi—such as with Coca Cola Lahore we worked on developing a training facility for their workers or with IBA Sukkur where we developed vocational training simulators for them. Our value addition to the rest of the country is that we can do partnerships with other players in the field. But you have to understand, placement drives everything. Even if students come in from the rural areas, how do you guarantee their placement? We cannot have these training programs in urban centers only. The training as well as the jobs has to spread across the country. We need to create job opportunities beyond major urban centers.

BRR: How do you determine the demand of skills in the market?

AJ: At the time when we started, somewhere between 2008 and 2010, there were very few TVET programs in the country. The segment now is entering the donor landscape. Vocational training is a critical element of industrialization of the society but we are used to seeing it as charity. Around the world, the industry or the government do skills demand analysis and assessment to determine the number of skilled labor and the kind of skills and trades required.

Initially, we brought in Mckinsey to determine the skills demand in the market. They used interviews and research based on the demand and growth of industries. On that basis, they gave us a selection of trades we could go into. Since then, we determine the trades based on own engagement with industrial associations. For instance, we worked with the paper association recently—they gave us some of their machinery as well as helped co-develop the curriculum with us. The problem is industries are still not HR driven, at the worker level which is a source of huge uncompetitiveness of Pakistan. At the industry level, the vision to harness, develop and nurture the abilities of our human resources is completely missing in Pakistan.

Mujahid Khan: I would echo what Ahmad has said. At the institution level, we are trying to align our programs as close to the industry needs as possible. We have an industry advisory board as well which we have engaged who keep us in touch with the changing demand, and skills gap. In an ideal world, the industry should be coming to us and seeking our expertise in creating programs that fit their specific needs.

Now there are certain players who are evolved and are thinking along creating a skills labour force for themselves—for instance, we worked with Younis Textile Mills recently. They required a certain number of workers trained based on their position on the assembly lines. Each worker was required to learn a different set of skills to become part of that chain. Similarly, we set up a mechatronic lab with Siemens and the German government which is a 2-year program under which our trainees have also gone to Germany for apprenticeship. We have worked with Panasonic who installed robotics building arms used at our facility here and our students were trained to operate and maintain them.

If we are talking about competitive advantage, in Pakistan we consider creating cheap labour a competitive advantage. But cheap labour is not a competitive advantage. If you look at China, they are not producing cheap labour, but efficient labour. Even though their per-hour labour cost is much higher than the rest of the world, their high efficiency levels make them more desirable. This is what we need in Pakistan. Major industry players are realizing this and coming on board but we need a wider industrial involvement together with SMEs.

BRR: Which level of skill has the highest demand in the market? And which industries are absorbing the most skilled workers in Pakistan?

AJ: The demand is highest for skilled workers that are one level below engineers. These workers usually get the Diploma of Associate Engineer (DAE) which is a three year vocational training qualification. These work as basic entry level mechanical and electrical technicians and then evolve to becoming floor supervisors at factories. These workers are needed in large numbers. For every engineer, you need five DAE mechanics under him. Unfortunately, we have observed that some of the engineers in our market are competing for these jobs because there are fewer jobs for engineering students overall and they are not getting the salaries commensurate for their qualifications. This displaces the people who have these diplomas.

As for industries, market demand has changed over the time. At the moment, the demand is in electrical, mechanical, automobiles, refrigeration, mechatronics and robotics, IT for office assistance etc.

BRR: Walk us through the process at Aman Tech by which you connect the trainees to the industries and jobs, and how do you design your trade courses?

AJ: The focus of our programs is recruitment as well as placement. Usually in such programs, recruitment is done through advertisements and 90 percent of the applications get enrolled. In the case of Aman Tech, we take about 50 percent that apply. We focus on attracting the right students as well. Then there is placement. Our placement team goes out in the market to align with the industry and provides us input all the time as to the needs of the market. It is similar to the career services of a university but far more aggressive and active. Through this department, we also get feedback as to how our trainees are doing at work which helps us evaluate the performance of our programs.

Secondly, we have an academics department with the head of academics on top and then heads for each programme that are being run. Normally, these are floor supervisors coming directly from the industry and have been teaching for the past 4-5 years. They design the curriculum across some broad parameters. The theory section, for instance, cannot be more than 20 percent of the total course. In terms of practical, we design the course based on the feedback we get from the placements which tell us the specific skills set needed for a certain trade in a dynamic environment. There is a big collaboration between the placements and the academic departments. Once the program is designed, we have a session with existing HR managers who help us fine tune the program design.

BRR: Do we have standard classifications for skills in Pakistan and globally do such standards exist that we can adopt?

MK: At the national level, in collaboration with the German government, the NAVTCC is working on a National Vocational Qualification Framework (NVQF). All of our programs are NVQF compliant. NAVTCC is working on defining the levels of skills which will help address the specific layers of skills demand. The advantage here is that each student can move from level to level so he will have the chance to learn a higher level of skill for jobs growth.

I believe the concept of DAE is outdated. It is prohibitively long and students end up getting minimum wage jobs. The NVQF is a much better alternative which will help students to incrementally increase their skills set and earn money along the way.

BRR: How does the market differentiate between students with DAEs and those with other vocational training certificates?

AJ: It is difficult because there are no rankings in the market. Currently, skilled labour enters the workforce at low pay scales or at the minimum wage. Employers cannot differentiate one skilled worker from another based on the diploma alone, or determine the level of their skills and qualification. The NAVTTC is now introducing a national vocational training ranking system which will allow institutes to be ranked on the basis of important differentiating factors like curriculum strength and alignment with NVQF, quality of instructors and teaching, industry alignment, teaching aids, simulators, soft skills, practical vs. theoretical coursework, attendance, and most importantly placement.

This ranking will help students graduating from TVET institutes to be valued according to their qualification and it will both raise the national quality of the institutes and will make the skills based workforce more competitive. It will also result in better pay scales that fit their qualification and skills set.

BRR: Will CPEC be an employment generator for Pakistan. Do you see the government and the private sector doubling their efforts in creating the skilled labour force required to take on the industries that will be set up. The general perception in the market is that Chinese will bring their own skilled human resource.

AJ: There is no integrated thinking in terms of how CPEC can transform the economy to make it more competitive. Human capital is ultimately the source of all competitiveness and I don’t see a strategy for human capital development or skills assessment of the projects under CPEC and what the 10-15 years will look like. Are we in a position to serve the new industries? I see some interest from the Chinese side, but very limited concerted effort from our government’s end.

BRR: Quickly, what is your agenda over the next decade?

MK: In the beginning, Ahmad mentioned the two stages of our evolution here at Aman Foundation. We are now entering the third phase. With the intellectual property and expertise we have built over the years, we will take our model, or what I call, the blueprints and scale them through strategic partnerships whether it is public or private sector across cities, provinces and the country. We are actively seeking partnerships to help spread this work, and ensure that the investment being put into skills development is being done the right way.