'National vocational training capacity at 400,000 against demand of 2.5 million' an interview with Syed Javed Hassan, Chairman NAVTTC

Syed Javed Hassan has over thirty years of experience in leadership roles both internationally and in Pakistan. Prior to becoming chairman of National Vocational & Technical Training Commission or NAVTTC, he was the convener for the education ministry's task force on vocational training that was responsible for the policy document "Skills for All Strategy".

Before joining the public sector, he served as CEO of Hunar Foundation, where he significantly expanded the operation and diversified the funding base to make it self-sustaining. Before that, he headed the Institute of Capital Markets (ICM), a regulatory/certification body where he successfully developed international standard certifications courses that are now mandatory for professionals working in capital markets of the country.

In his past life prior to joining the non-profit sector, Javed Hassan worked extensively in investment banking and insurance. In Hong-Kong, he was head of insurance research with SwissRe-FPK and was lead analyst on international IPOs of several Chinese insurance firms. He also has over ten years' experience working as an investment banker and management consultant in London.

He trained as a civil engineer at Imperial College, London where he also completed his Masters in Transportation. He also has an MBA from London Business School.

BR Research: Education policy, planning and standard setting became a provincial subject as a result of 18th amendment. Given the context of devolution, what role can a federal body such as NAVTTC play in vocational and technical training?

Syed Javed Hassan (SJH): We do not want to be embroiled in that debate. But it is sufficient to mention here that 18th amendment has brought no change in the domains of work of federal and provincial governments as far as technical and vocational training is concerned. Given resource constraint, and as a federal body, our role is not to directly train youth. Instead, I believe as the apex national body, National Vocational & Technical Training Commission (NAVTTC)'s role is to set standards, design policy, and accredit institutions such that a broad framework for technical qualifications may be developed and adopted across the country. However, I feel that NAVTTC should also intervene to fill the gaps wherever there is lack of capacity in provinces to deliver training according to the requirements of youth and industry.

BRR: Does that mean federal government through NAVTTC will perform a guidance role, or will it be mandatory for provinces to adopt federal standards?

SJH: Without commenting on the legal niceties, recent developments show that the framework has in effect become a mandatory one. The newly legislated Punjab Skills Development Authority (PSDA) law provides that national standards will be followed in designing and delivering trainings. There is also consensus among the provincial authorities on adopting National Vocational Qualification Framework (NVQF) and Technical Education & Vocational Training Authority (TEVTAs) are adopting competency-based training (CBT) methodology in line with national reform policy framework.

Thus far, we have not seen the need to impose any national policy and expect that most reform initiatives be adopted by all provinces through consensus. Provinces have also shown willingness to be in sync with the national policy framework.

BRR: But that's only because the same political party is in power in Punjab and the capital. What about other provinces?

SJH: KP has already adopted it, and we expect Balochistan shall too. Sindh government has also expressed interest and has been very forthcoming.

The federal government's role is of coordination and providing a strategic direction. An inter-provincial Technical and Vocational Training Ministerial Conference has also been established, which is expected to meet every quarter, and we hope that policy decisions made through consensus be accepted by all provinces.

BRR: Federating units come together based on the principle of residuary powers, ie, that which is not explicitly listed in the constitution as a federal subject is assumed to be in provincial domain. Should same interpretation not apply to vocational training?

SJH: We believe there is no need to test the limits of federal power. By our very presence as a national apex body, we influence policymaking and agenda-setting in provinces by persuasion rather than making compliance with federal standards mandatory.

What we require is the ability to have clear defining roles, so that provinces may follow suit. NAVTTC sets the policy formulation under NVQF, which creates national competency standards. The provincial bodies are expected to take this forward by way of implementation of these standards in training and testing. For example, whether provinces decide to set up their own institutes in the public sector or allow private sector to jump-in is entirely up to them.

BRR: Does Ministry of Industries & Production (MoI&P) have any role in providing feedback or guidance, considering it has direct access to the pulse of industrial demand for skilled resource?

SJH: Provincial vocational training centers function under TEVTAs. Quarterly committee meetings include representation from federal education ministry, provincial ministry of industries, NAVTTC, and provincial TEVTA heads. Joint decisions taken periodically in these meetings then permeate across the system.

BRR: What is the current landscape of vocational training in the country? Is it government-led?

SJH: It is very important to appreciate the lay of the land. About five million youth turn 16 each year, of which eight hundred thousand go into the academic/FA-FSc. stream. Another million and a half drop out of the system, such as those who go into the agriculture sector, or girls who get married and drop out of the formal job market.

That leaves about 2.5-3 million kids that could potentially benefit from technical/vocational training, against training capacity for just four hundred thousand at 3850 training institutes across the country.

We need to increase our capacity by five times at a bare minimum. Relying on traditional methods of training would require additional two hundred thousand teachers, with annual budget of at least half a million dollars per institute, and additional ten thousand institutes.

We do not have the resources to scale things using the traditional training model. Well-equipped workshops are expensive. The need of the hour is to innovate. For example, to double or triple the utilization of existing training facilities. Similarly, distance learning and e-learning are only one of several ways which can improve utilization of available resources dramatically.

One solution is to encourage trainees who spend two days a week on average in an institute, to be placed with firms as apprentices for the remainder three days of the week. An apprenticeship program to this effect has already been introduced in the federal capital territory.

There is no mandatory requirement, but we expect the apprenticeship law to be adopted in Punjab and Khyber Pakhtunkhwa. We hope Sindh will also follow suite.

I would like to add that most successful countries have thrived on the back of vocational training programs driven by private sector. Government's role is to act as a facilitator and incentivize the private sector, but it is not the primary trainer. Unfortunately, the footprint of private sector industry in formal vocational training in the country is very limited.

Now let's go back to our annual requirement of training 2 to 2.5 million fresh inductees every year. Total budget for government-led programs over the last decade has averaged at less than Rs 30 billion annually. This includes allocations by federal and provincial governments, as well as funding from donor. My understanding is that total spending on higher education in the country is close to Rs 100 billion, even though the sector services a smaller share of the population., Although even in higher education there is a significant shortage of resources with the spend per university student being one of the lowest globally, but that's a separate subject.

The lack of investment in training our youth might partly explain why Pakistan's productivity per capita has only increased minimally from $10,000 in 2000 to approximately $11,000 in 2018, even as China's productivity per capita increased from $5,000 to over $30,000, and India's from $5,000 to over $14,000 per capita during the same period.

Several other factors may have played a part in relatively slower productivity growth in Pakistan, for example higher birth rate, however, the primary cause in my view is that vocational training capacity and quality has come to a standstill over last two decades.

BRR: What is the business case for private sector to invest in training personnel or invest in TAVTA? Is the market ready to pay a higher price for skilled labour?

SJH: You are right. It all comes down to whether the market will place a premium on skilled trained/certified labor versus untrained/uncertified labour. NAVTTC conducts national skills survey annually, results of which indicate that applicants lack requisite skills leading to unfilled jobs. The survey is conducted at a very micro, district-level, and is very comprehensive. It indicates that skill gap in the market is causing local businesses to suffer in terms of productivity and restricts capacity enhancement.

Let me answer the question of whether local market places a premium on skilled labour with an example. Certified plumbers and electricians are offered salaries of AED eight to ten thousand in Dubai, yet they often choose to stay back. So, there must be a premium locally.

The problem is that training and vocational institutes are out of sync with evolving demand of the industry. For example, industry may not want a mechanic with a 2-3 years long diploma in DEA; instead it may prefer to hire a 17-18 years old with six months training as an apprentice, who can be pulled later to fill the permanent vacancy.

This is what we are seeking to change with our competency-based training program, which is driven by the industry demand. Even the standards are as per the industry requirement.

The industry does not want to wait three years for a person to arrive. Instead, we have modular courses, so those who have completed NVQF level-2, for example, can find work immediately, and then return after few years to complete level-3. Theoretically, students can go up to PhD level within this framework.

BRR: If that were the case the private sector would have propped up even without an official policy. Informal sector in the country has always thrived wherever there has been a gap in the market.

SJH: It is already happening. For example, Depilex, the beauty-care salon, is already in the business of what TEVTAs are doing. It charges a fee to train personnel, and issues certificates that are accepted in the market, enabling their trainees to secure better paying jobs than the competition.

On large scale manufacturing side, one must analyze the political economy in which the sector has evolved over past decade. There has generally been, very little focus on value creating production that would have placed a premium on skilled labour.

BRR: The NAVTTC or TEVTA, which body will regulate the private sector?

SJH: Application licensing will be done by TEVTA, whereas NAVTTC shall set the policies, framework and accreditation of the institutes. NAVTTC, as regulator, will also oversee whether national standards are met or not.

BRR: Private sector often complains that the licensing and regulatory regime in various industries is so stringent that only a handful of players can benefit. Is that an impediment in attracting private sector investment in vocational training?

SJH: I believe they are not stringent in vocational training at all. In fact, there is no regulatory mechanism to stop unauthorized training and certification which is one of the primary reasons for low quality training in the country. Even so, if certain institute falls through the sieve and fails to perform up to the mark, NAVTTC's accreditation process will play its role. The accreditation system is grade based, with institutes ranked from A to D.

BRR: Have chambers or industry associations been involved in developing a coordination framework for feedback and input?

SJH: Chambers and associations offered their recommendation on sectoral experts, such as textile and dairy. We spoke the recommended experts to understand the requirements of industry before developing our framework. In addition, an institutional arrangement called the Sector Skill Councils has been developed for important sectors such as construction, hospitality, textile and renewable energy. Similarly, a National Skills Council has been established which is chaired by FPCCI.

BRR: Those who enter the vocational training stream usually come from low income segments. In order to introduce certification that meets international standards, cost of training may increase dramatically, even if it is for a six-month course, which few from low income segment can ill-afford. Does the government plan to offer initial modules to trainees from these income groups at subsidized rates?

SJH: Globally, vocational training survives either on industry or government intervention. Even in places where private sector plays a substantive role, there is almost inevitably some government intervention as well.

Consider that very few people will take a loan to enroll in undergo a plumbing course in USA or UK, whereas it is a standard practice for those who pursue an MBA degree. So, it does require state intervention. Having said that, we hope going forward private sector companies will participate towards funding, as they are the direct and intended beneficiaries of skilled labour supply.

BRR: Is there a ballpark estimate of funding required from public and private sector considering the cohort of two million entering vocational stream every year?

SJH: Let's size the market. Given minimum training period of six months at per head cost of fifty thousand rupees, you are looking at Rs 100 billion for training alone.

This excludes cost of infrastructure, consumables, and over heads. Even if we start off with initial target of training one million, we need fifty billion rupees, but we are currently nowhere close to that in terms of outlay.

BRR: In that case, have you considered the payback model, where instead of subsidizing cost of training, vocational training institutes are repaid in full through on-source deduction out of first few salaries paid by the private sector employer once training is completed? This, of course, will require that the training institute is made part of the employment contract.

SJH: We don't want NAVTTC to be in the business of lending, as we believe TEVTAs lack the capacity and it will open a whole new pandora's box. Banks should be engaged for lending, and if they can develop an appreciation for the model, we would very much encourage them to partner.

The alternate route which we have already undertaken in the federal capital is the apprenticeship program. It started three months back and already has close to two thousand students.

It inducts trainees of average sixteen years of age, pays them half the minimum wage, and NAVTTC takes the responsibility of training, course work, and placing them in apprenticeship for three and a half days with a firm. Of course, the cost of wage as well as training has so far been borne by us.

Our plan is to involve employers from day one and let them chalk out areas of training which they would like the funds to go to, instead of handing it out to training institutes by giving them meaningless targets of training x number of people in a set time period.

Moreover, since the trainees will be directly working with the industry, it will create familiarity with future employers and place of work.

BRR: Do you agree that there is a need to remove duplication and fragmentation of roles between federal and provincial governments in your sector? Secondly, has your organization identified the capacity gaps in provinces, and the steps you have taken to fill those gaps?

SJH: As the recognition of our framework increases, we hope that all provincial TTBs, DEAs and systems will gradually merge into the national vocational qualification framework (NVQF).

Our goal is for capacity to increase from four hundred thousand to one million over the next 18 months, which is why the latest PC1 has earmarked funds for hundred thousand youth to be trained over the next 18 months. Ideally, the federal government should not make that kind of intervention in the market; however, the ground reality demands that we to play a role.

We have no desire for power, but if it is done through consultation, we will know exactly the amount of funding disbursed to each department/body, and its utilization. Our youth training schemes has one of the lowest costs per trainee whereas employment ratio has compared favourably to other training programs, because we were able to extract much greater value out of training institutes that we manage directly.

BRR: Do you have enough trainers in this segment?

SJH: No, the greatest constraint is of trainers/teachers, which is why we need to be innovative and introduce e-learning, and blended learning. A lot of what is done in terms of coursework can be taken offline, which also takes in account the fact that not all trainees may be at same level of proficiency, whereas teachers can take the role of facilitators in classroom.

BRR: Is this necessarily something that provinces cannot initiate on their own?

SJH: That is exactly why NAVTTC is needed. We plan to begin 200 hundred smart classes and ensure that they are distributed evenly across the provinces. Over time, we would want to have about two or three thousand smart classes which will dramatically increase the capacity.

BRR: Your plan seems to rest on the premise that people want to pursue a virtual training path. Virtual University and Allama Iqbal Open University have been around for a long time, but both have failed to take off in a meaningful manner.

SJH: It is true that the success ratio of MOOCs (Massive Open Online Courses) is estimated to be only three percent. This is why we are not relying on MOOCs alone. If we spend a billion rupees and only 3 percent pass that will be an immediate failure. Instead, for those pursuing distant learning alone, we could incentivize interest by reimbursing those who pass.

The idea of a smart class is that the trainee spends enough time learning the trade virtually, and when he visits the classroom/workshop, he uses one-fifth amount of time and resources to perfect it in practice. Think of pilot simulators, for example.

BRR: But we just established that most who pursue the vocational stream usually lack resources to fund themselves in the first place?

SJH: This is why we should have a need-based assessment as well. Moreover, our view is not to fully rely on MOOCs but instead have a blended system, which involves classroom exposure. The distant learning bit is only to ensure that existing capacity is capitalized to the fullest, whereas cost of MOOC could be restricted to $50. But in that amount, we can offer them certification that has international credibility.

BRR: Given that 40 percent of labour force is associated with the rural sector, have any training programs been developed with explicit focus on agriculture?

SJH: I believe that if Pakistan's future is linked with import substitution, we will have to make our agriculture a lot more efficient. Our aim is to have a significant portion of all training programs to take place in rural areas, focusing on agriculture sector related training modules. We have already introduced agri-related courses such as in animal husbandry, and farm management.

Having said that, we need to do much more; part of our failure in this respect is simply because we do not receive enough funding to innovate and diversify our programs out of traditional vocations such as that of electricians or plumbers.

BRR: Will these priority areas be defined by NAVTCC or be left to TEVTA?

SJH: It will be up to TEVTA. We presume the market knows its needs in terms of training courses better than we do. We will not try to second guess the market.

BRR: Labour export is also purported to have a lot of potential, as its contribution has exceeded that of all of textile exports. Has there been any needs-assessment done in that area?

SJH: Ministry of Overseas Pakistani is responsible for that area. And I believe Pakistan has recently signed an agreement with Japan to supply them apprentices, as there is a major gap in Japan's service segments such as healthcare and retail.

But the important factor is that we must have exportable surplus of skilled workforce. It is critical to first meet the requirements of our domestic industry to enhance its productivity, and then focus on exporting skilled resource.

BRR: Is there a mechanism in place for coordination with overseas Pakistanis or their associations?

SJH: We would ideally want overseas Pakistanis to work much more on that. So far, Pakistan has been sending people on need-blind basis, and often they go through fake agents who send them off with fake degrees. Such people have no choice but to go and perform menial labour because they lack the right certification. As a result, our certifications have become maligned.

NAVTTC remains in close contact with Pakistani missions abroad to assess skilled workforce demand in the international market. Some of the courses are specifically designed keeping in view demand of international market. We are also establishing facilitation centers for ten destination-specific countries where youth will be given skill training in accordance with international market requirements.

Even though there is a global deficit in terms of manpower specially in vocational streams, we are unable to fill in the need. Which is why we have decided the next stage of PM Youth Program will only continue if can achieve 80 percent employability. Globally, this number is close to 95 percent.

BRR: NAVTTC's policy document describes industry 4.0 as one of the key areas of focus. Given the resource constraint in traditional vocational training areas, plans for industry 4.0 appear to be disconnected from ground realities. Do you feel there is a risk of spreading yourself too thin?

SJH: Within the NVQF framework, we have coursework on artificial intelligence, another on robotics. Similarly, we plan to introduce 3D printing training, once import of 3D printers become permissible.

We need to stay abreast with a changing world. This need not come at the cost of traditional vocational skills, such as carpentry, masonry or plumbing which shall remain very relevant. Except the nature of those jobs may change in future and involve artificial intelligence and robotics.

And this is very specific. We believe not everyone needs to do a three-year degree in computer science. Lots of jobs in modern firms do not even require a graduate. What they may need instead are bright young people with quantitative and verbal abilities, and in some cases, ability to interact with clients. And these young people can very quickly start earning ten to twenty thousand rupees per month once they go through a short course in vocational training.

Copyright Business Recorder, 2019