Training the labor force of a growing economy

Daily News Egypt
9 Min Read

CAIRO: In his jeans and modest T-shirt, Ayman, 23, is listening attentively together with his colleagues to their instructor. Around 25 men in their 20s are seated in the neat, white-painted room, getting ready for the practical part of the session.

The young men are attending a training session on cooling and air-conditioning systems as part of a training program that will qualify them to become staff members of one of the leading manufacturers of air-conditioning technology in Egypt.

A graduate of a vocational school, Ayman says that his education was purely theoretical, with insufficient practical training. Ayman, who will be a worker on the production line after his three-month training program, believes that he has benefited a lot from the program.

The company, which has 5,000 employees, is applying extensive human resource programs in coordination with the recently established Industrial Training Council (ITC).

The ITC is an affiliate of the Ministry of Trade and Industry that was established with the aim of coordinating and supervising all vocational and technical training activities aimed at meeting the needs of the Egyptian market.

During the past few decades, the discrepancy between the number of young Egyptians entering the labor force and the number of jobs created has led to an imbalance in the market. However, with Egypt becoming the second largest market for foreign direct investment (FDI) in Africa, the skills rather than the numbers of the workforce have become Egypt’s real challenge.

In 2007, Magdy Tolba, head of the Egyptian Ready-made Garments Exports Council, announced that factories of ready-made garments and furniture need more than 300,000 workers, citing the difficulty of finding skilled workers.

“Graduates complain about unemployment while employers complain about the shortage of labor force, said Mohamed El-Sewedy, head of ITC.

Statistics show that the Egyptian economy s positive performance in the past two and a half years created around 1.2 million jobs. However, the supposed trickle-down effect of the ongoing economic growth is yet to be felt by all sectors of Egyptian society, particularly the youth, who find themselves unqualified for seizing these opportunities.

“One of our objectives is upgrading the level of trained human resources in the labor market, which in turn will increase our productivity and competitiveness, El-Sewedy continued, adding that Egyptian labor should be attractive to investors.

According to statistics released by ITC, the council retrained more than 157,000 workers from 3,146 companies in 2007.

The council, which adopts a demand driven approach, offers vocational training programs that attempt to fill the gap between the growing need for skilled labor and the big numbers of improperly trained workers.

“We offer training programs that are closely tied to the needs of the market. We try to meet the different industrial sectors’ demands, even geographically by sponsoring training centers in certain areas, El-Sewedy told Daily News Egypt.

Though established in 2006, ITC has already garnered a good reputation among Egyptian and multinational companies.

“All types of training programs, whether on the technical or managerial level, that we cannot offer are provided by ITC, said Hamdy Abdel-Salam, head of the training unit at a leading Egyptian company. He attended a training program sponsored by ITC on specifying the company’s training needs.

The ITC’s training programs are heavily subsidized, with the council covering 80 percent of the costs via governmental and international funds.

“It is a brilliant idea, said Abdel-Salam, commenting on how the council sponsors the training programs. “This has encouraged many employers to train their workers, he added.

Besides its role in training workers, ITC is attempting to help university graduates benefit from the rising industrial production by linking unemployed youth with suitable employers.

Many experts argue that university graduates suffer the most from high unemployment rates.

The second half of the 20th century witnessed a significant population growth coupled with an unprecedented expansion in higher education in most Arab countries. At the same time, not enough employment opportunities were created, which resulted in an imbalance between the supply and demand of university graduates.

The “impressive acceleration of growth in the Egyptian economy, as it was hailed by the IMF, was expected to solve the unemployment problem among university graduates. However, the rapid economic growth created less white-collar jobs than anticipated.

“Do not let the train pass you by was the slogan under which the ITC launched a campaign a few months ago, urging unemployed university graduates to apply for blue-collar jobs. One of the aims of the campaign was overcoming the stigmas associated with manual labor.

According to El-Sewedy, the media and movies have played a big role in attaching negative preconceptions with manual labor by casting laborers in an inferior light.

“As a result of our campaign, however, around 11,000 university graduates work now as laborers, he continued, describing them as the heroes that can shift society’s attitude towards this type of work.

El-Sewedy pointed out how the inadequate skills of graduates of vocational education have compounded the problem by entrenching the idea that “vocational education is only for losers.

In coordination with the Ministry of Education, ITC is implementing a long-term plan for improving vocational education by developing vocational schools and updating their curricula.

“We are focusing now on 25 schools as part of a bigger plan for developing 100 vocational schools, El-Sewedy told Daily News Egypt.

Despite all the logistical and financial support it provides, the ITC still needs to face the challenge of developing a training culture within companies by spreading awareness about the importance of training, given that some business owners have no faith in it.

“If I trained 20 laborers, for instance, the next day 10 of them will resign, said Riham, the owner of a medium-size ready-made garments factory, explaining how training encourages laborers to ask for higher salaries.

Abdel-Salam, however, has a different opinion. “By offering workers training programs, we send them the message that the company cares for them, which in turn enhances their loyalty to the company, he told Daily News Egypt.

Amid calls for permitting businessmen to import foreign laborers, El-Sewedy exclaims disapprovingly: “If we are going to import foreign workers, what is the point of manufacturing the product at home in the first place? It would be less costly to import the product itself then!

Riham supports the idea of employing foreign workers because “they show more commitment and are more productive.

El-Sewedy argues, however, that the whole society needs to show more commitment. “Why do we blame workers only? he continued.

According to a report by Goldman Sachs, a leading investment bank, Egypt is on its way of becoming one of the future “tigers. Yet, despite the efforts of the ITC, some Egyptian and foreign investors still complain about the lack of skilled labor, which means there’s a lot to be done to help Egypt’s labor force be on par with international standards. The ITC has its work cut out to ensure that Egyptian laborers can meet the demands of the rapidly growing economy.

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