MONGOLIA S DEMAND FOR EMPLOYABLE SKILLS

Transcription

1 MONGOLIA S DEMAND FOR EMPLOYABLE SKILLS Ina Pietschmann International Labour Market Information and Analysis Expert A BRIEF ANALYSIS OF QUANTITATIVE AND QUALITATIVE LABOUR MARKET INFORMATION TO INFORM VET POLICY November 2015

2 Contents List of abbreviations Introduction Quantitative information about Mongolia s labour market General labour market trends Labour/skills supply Educational attainment of the labour force Status of Employment in VET prioritized sectors labour/skills demand Wage employment trends by major ocupational group within prioritized VET sectors Skills mismatch Qualitative information on labour demand based on sector council (SC) discussions Agriculture Participants Summary of findings List of proposed occupations for VET Construction Participants Summary of findings List of proposed Occupations for VET Road transportation Participants Summary of findings List of proposed Occupations for VET Conclusions and recommendations References Annex Questionnaire/guideline for Sector Skill Councils

3 LIST OF TABLES Table 1 Summary of general labour market trends... 5 Table 2 Example indicators for measuring labour skills supply and labour demand based on labour force surveys... 9 Table 3 Percentage point changes in wage employment by major occupational group within prioritized VET sectors LIST OF FIGURES Figure 1 Employment in prioritized broad VET sectors... 6 Figure 2 Educational attainment of the labour force... 7 Figure 3 Employment statuses of workers in prioritized VET sectors, Figure 4 Wage employment trends by major occupational group within prioritized VET sectors Figure 5 Unemployment rates by level of educational attainment levels LIST OF ABBREVIATIONS ADB LFS LMI LMIA MONEF NSO VET VET PCD Asian development Bank Labour Force Survey Labour Market Information Labour Market Information Analysis Mongolian National Employers federation National Statistics Office Vocational Education and Training Vocational Education and Training Policy Coordination Department 2

4 1 INTRODUCTION Determining the skill needs in Mongolia s labour market is one of the central tasks that manpower planners and labour market analysts face. The development of skills policies that meet labour market skills needs are a key instrument in the promotion of quality employment and private sector growth. In methodological terms, one of the major criticisms of traditional manpower planning approaches is the assumption that there is a static relationship between labour and the quantity of goods and services produced, as well as between labour productivity and education or skills. 1 However, after decades of experience it is recognized that labour markets are far more complex and labour market actors are more unpredictable. In reality the relationship between economic output, in terms of GDP, and employment levels is more dynamic, affected by new forms of work organization, technological advancement, migration to just high light some key factors. It is well known among experts in the area that the timely identification of skill needs becomes more multifaceted as economies develop and will increasingly rely on various analytical methods, based on both, quantitative and qualitative labour market information as well as on institutional and or organizational structures. Many countries, industrialized as well as developing countries, have adopted a framework of lifelong learning to shape education and training strategies. Such strategies require skills development policies that allow people to take charge of their own knowledge and skills development in a complex and rapidly changing economic and social environment. This fact does have implications for the type of data and analysis that is required. Skills policies are significant drivers of development, and it is therefore important that information is produced on current and future skill requirements. Labour market information and analysis (LMIA) is increasingly becoming important in identifying and quantifying current and future skills issues and to provide the information needed by employers, workers, providers of education and training and governments to make choices in education and training investment. Reliable, representative, timely and assessable labour statistics on supply and demand are essential for sound analysis that can inform and monitor VET policies. Also, VET relevant labour statistics need to be understood as an integrated part of the national labour statistics framework and cannot be reduced to selected indicators only. 1 See, for example, M. Blaug, Approaches to educational planning, Economic Journal, 1967, pp ; C. Colclough, How can the manpower debate be resolved, in R. Amjad, et al. Quantitative techniques in employment planning (Geneva, ILO, 1990), and G. Psacharopoulos, Linking vocational education and training research, policy and practice: a personal view, European Journal: Vocational Training, No. 36, 2005, pp

5 Good TVET plans and policies have to rely on a very good understanding of the broader labour market situation. Especially in newly emerging economies labour markets are in a constant state of flux and change rapidly, due to external influences, such as demographic changes, labour market seasonality, migration, environmental changes, policy measures such as investment programmes, etc. Thus timely and continuous monitoring of both labour and skills supply and demand is vital to inform meaningful employment as well as TVET polices at the same time. This is very important since skills training can only lead to higher levels of productivity if there are sufficient employment opportunities available. This paper provides a first step in this direction. It examines skills supply and demand based information on available quantitative labour statistics and employment trends in Mongolia s labour market and on qualitative skills demand from information gathered during Sector Council discussion in the prioritized Vocational Education and Training (VET sectors): agriculture, construction and road transportation. The information provided will play a vital role in supporting the selection of core professions in in sectors that will be prioritized for VET interventions in the years to come. Besides it is hoped that the information provided in this report will inform the design of VET policies, in terms of skills demand, labour market information needs and institutional arrangements that will be necessary to translate labour market information into policy action. 2 QUANTITATIVE INFORMATION ABOUT MONGOLIA S LABOUR MARKET 2.1 GENERAL LABOUR MARKET TRENDS A good knowledge about current and future labour market trends based on supply side data is fundamental for understanding and informing the matching of skills supply and labour demand that is interlinked with the broader macro-economic and labour market developments. Analyses of labour market trends in this section reflect a notable recovery in almost all indicators after 2013, revealing a number of opportunities as well as remaining challenges that need to be tackled while working towards decent and productive employment. The examination of labour force survey data for the years , reflects that Mongolia s working age population (15+) was estimated to comprise 1.9 million people in 2014 an increase of 143,000 people since Disconnected from the steady expansion of the working population, labour force participation and employment-to-population ratios were declining between , mainly as a result of young people participating longer in education and training. 4

6 The unemployment rate, measured according to the national definition 2, stood at 7.9 per cent in The rate is more or less unchanged since However the unemployment rate for young people between years of age was with 17.4 per cent more than twice as high as the general unemployment rate. Table 1 Summary of general labour market trends Change Working-age population ('000s) 1,798 1,812 1,937 1, Labour force ('000s) 1,125 1,151 1,198 1, Labour force participation rate (%) Employment ('000s) 1,038 1,056 1,104 1, Employment-to-population ratio (%) Unemployment ('000s) Unemployment rate (%) Youth unemployment ('000s) Youth unemployment rate (%) Youth NEET share of youth population (%) Broad sectoral aggregation of employment according to ISIC REV4 Agriculture (%) Construction (%) Road transportation (%) Other (%) Share of vulnerable employment in total employment (%) Share of vulnerable employment in total employment (%) Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys At the same time an increasing share of young women and men between the ages of 15 and 24 youth choose to be NEET (neither in employment education or training.) Although, the share is 0.9 percentage points less than in 2013 were it stood at 18.4 per cent. Young people who are not engaged in one of these activities are seen to be the most vulnerable since they are facing a difficult process of integration or reintegration into the labour force. Also NEET youth are at high risk of remaining idle and excluded from society. For Mongolia, the incidence of NEET workers represents a waste of human resources and underutilization of the productive potential young people bear to foster economic advancement in the years to come. 2 The NSO defines unemployed workers as those who are currently not working but are available for work. When compared to international standards, this definition removes the criteria of actively seeking work. Internationally unemployment relates to all persons not in employment who would have accepted a suitable job or started an enterprise during the reference period if the opportunity arose, and who had actively looked for ways to obtain a job or start an enterprise in the near past. 5

7 Percentage share in total employment (%) Figure 1 Employment in prioritized broad VET sectors Agriculture, forestry and fishing Construction Road transport Other Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys Mongolia s labour market was increasingly dominated by employment opportunities in the service sectors while on the other hand the share of agricultural employment in total employment declined from 32.6 per cent in 2011 to 28.0 per cent in Employment in the construction sector expanded significantly from 17.3 to 20.7 per cent between 2011 and Employment in the road transportation sector accounted for not more than 1.5 per cent in 2014 according to labour force survey estimates. The share was on a declining trend between 2011 and 2014 which could be partially related to measurement issues of the LFS and thus should be treated with care. Nonetheless shifts away from less productive agricultural employment towards more productive employment in services and industry sectors reflect the heavy structural transition Mongolia s labour market currently undergoes und highlights the urgent need for investments in education and training of the workforce to meet future labour market demands. 2.2 LABOUR/SKILLS SUPPLY EDUCATIONAL ATTAINMENT OF THE LABOUR FORCE A look at the educational attainment of Mongolia s labour force reveals major improvements. The share of economically active population of working age that attained technical vocational diploma/certificate doubled from 3.9 per cent in 2011 to 8.1 per cent in 2014 and the share of university graduates increased from 26.0 to 28.9 per cent between 2011 and 2014 while at the same time the shares of people in the labour force with less than secondary education declined sharply, from 44.3 per cent to 21.5 per cent. This trend towards higher education of both the 6

8 LFS 2011 LFS 2014 employed and unemployed mirrors the perceived need for new and higher skills of young people in the country. (Figure 2) Figure 2 Educational attainment of the labour force Master and above University graduate Technical/vocational diploma/certificate Initial technical/vocational diploma/certificate Secondary Basic Primary None Master and above University graduate Technical/vocational diploma/certificate Initial technical/vocational diploma/certificate Secondary Basic Primary None Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys STATUS OF EMPLOYMENT IN VET PRIORITIZED SECTORS Opportunities and limitations in wage and salaried employment in VET sectors can be shown when cross-tabulating employment by status and sector data as presented in Figure 3. Analysis of employment by status and VET sectors can also support the determination of labour demand if looked at over time. An examination of Labour Force Survey data for Mongolia reveals that among all workers in the country only an estimated 368,000 thousand were wage and salaried workers, corresponding to 49.6 per cent of all employed people in Wage and salaried jobs (in total employment) increased by 7.1 percentage points since The majority of wage and salaried jobs could be found in the construction sector (74.4 per cent of all wage employment in 2014), up from 66.7 per cent of all wage employment in

9 Agriculture, forestry and fishing Construction Road transport Other Agriculture, forestry and fishing Construction Road transport Other Agriculture, forestry and fishing Construction Road transport Other Agriculture, forestry and fishing Construction Road transport Other Figure 3 Employment statuses of workers in prioritized VET sectors, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% LFS 2011 LFS 2012 LFS 2013 LFS 2014 Wage and salaried workers Employers Own account workers Contributing family workers Not classifiable Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys In the road transportation sector only 2 out of ten jobs were employees. Almost all of the remaining workers in the sector worked for their own accounts in The percentage shares of wage and salaried employees in the sector increased by 1.2 percentage points between 2011 and The agriculture sector was dominated by contributing family work. Only a small proportion of workers earned a wage and salary in 2014, 0.6 percentage points more than in Limited growth of wage employment opportunities in road-transportation and agriculture could well be a sign of limited labour demand in the sectors due to a lack of decent and productive employment opportunities. 2.3 LABOUR/SKILLS DEMAND Labour Force Surveys do not only provide vital information on the labour skills supply they can also be used to signal labour demand when analyzing the trends of certain key labour market indicators. 8

10 Table 2 Example indicators for measuring labour skills supply and labour demand based on labour force surveys Labour skills Supply Labour Demand Educational attainment of the labour force Wage employment by economic sector over time Structure of employment Wage employment by major occupation Employment by major occupation Unemployment rate by level of education attained Employment by major sector Skills mismatch Source: Author WAGE EMPLOYMENT TRENDS BY MAJOR OCUPATIONAL GROUP WITHIN PRIORITIZED VET SECTORS Information about the occupational structure within VET sectors is essential to assist planners and individuals in making more informed, employment, human resources, and career and investment decisions. For example, this type of information usually supports governments in identifying what type of jobs are demanded on the labour market and the type of training needed to find successful employment opportunities. Also, the indicator helps to pinpoint the drivers in the local economy and the changing nature of work while highlighting arising job opportunities or, conversely, spotting where there is likely to be a surplus of jobs and higher levels of unemployment. Analysis of information about wage employment for major occupational groups in certain VET sectors can also help to locate jobs that are likely to be in higher demand and therefore might pose competitive challenges for accessing workers in the future. The analysis of Figure 4 show that the vast majority of wage and salaried workers in the road transportation belonged to the category of unskilled workers in elementary occupations (79.3 per cent) and semi-skilled plant and machine operators and assemblers in On the other end 97.4 per cent of employees the agriculture, hunting, forestry and fishing sector skilled agricultural and fishery workers. Only a small fraction of paid workers in the sector were employed in the highly skilled occupations of legislators, senior officials and manager and technicians and associate professionals. More than half of the employees (58.4 percent) in the construction sector were skilled craft and related trades workers and technicians and associate professionals as well as highly skilled professionals, legislators, senior officials and managers pointing towards a need for skilled and highly skilled employees in the sector. 9

11 Figure 4 Wage employment trends by major occupational group within prioritized VET sectors 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Agriculture, forestry and fishing Construction Road transport Other Shares in wage employment in 2014(%) Legislators, senior officials and managers Technicians and associate professionals Skilled agricultural and fishery workers Plant and machine operators and assemblers Professionals Clerks Craft and related trades workers Elementary occupations Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys A look at the percentage point changes in wage employment by major occupational groups within VET sectors demonstrates that the agriculture sector experienced the highest increases of wage and salaried employees within the occupational groups of craft and related trades worker (+ 0.4 percentage points between 2011 and 2014) and professionals (+ 0.2 percentage points between 2011 and 2014) The construction sector experienced occupational shifts in wage employment away from the group of craft and related workers towards more plant and machine operators and assemblers (+7.8 percentage points between 2011 and 2014)and elementary occupations (+5.6 percentage points between 2011 and 2014) and professionals (+2.5 percentage points between 2011 and 2014). 10

12 Percentage point change between 2011 and 2014 Agriculture, forestry and fishing Table 3 Percentage point changes in wage employment by major occupational group within prioritized VET sectors Legislators, Professionals Technicians Clerks Service Skilled Craft senior and workers agricultural and officials associate and shop and fishery related and professionals and market workers trades managers sales workers workers Plant and machine operators and assemblers Elementary occupations Construction Road transport Other Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys The road transportation sector experienced major relative shifts away from the occupational group of plant and machine operators and assemblers towards elementary occupations. However, noticeable were also the percentage point increases for the groups of technicians and associate professionals (+1.7 percentage points between 2011 and 2014) and legislators, senior officials and managers (+1.6 percentage points between 2011 and 2014) SKILLS MISMATCH High levels of educational attainment, qualifications, combined with a potpourri of transferrable skills are believed to be a good insurance against unemployment. Unemployment rates for people with lower levels of education attained are usually higher, unless fragile economic and labour market conditions, skills mismatches and/or problems with the educational system itself hinder people to find jobs regardless of their educational background and skills. Knowing the educational structure of the unemployed gives further insight into the skills mismatch. Analysis of Labour Force Survey data for Mongolia uncover that the highest unemployment rates (according to the broad definition) could be found among the economically active people that had attained secondary education (9.6 per cent) or no formal education at all (9.5 per cent) in On the opposite to be unemployed was less common among people that had a master degree or above from a university during the same time. When looking at the unemployment trends, the group of people with technical vocational training degree experienced largest advances of unemployment, from 3.4 to7.5 per cent between 2011 and Unemployment rates also rose fast for university graduates with a master degree of higher. (Figure 5) Reasons for large increases of unemployment among people with technical vocational training certificates and master university degrees or more can be manifold and would require a careful analysis to better understand the causes of the phenomenon. However, reasons are likely to be 11

13 Per cent (%) the result of lack of market relevant skills obtained or the limited availability of sufficient professional and high level technical jobs in Mongolia. Figure 5 Unemployment rates by level of educational attainment levels Change Source: Authors calculations based on micro-data from Mongolia s Labour Force Surveys Other reasons could be the lack of working experience, cultural values and norms that hinder people in rising to managerial and professional positions in the sectors of the economy that require higher education. At the same time, it has to be taken into account that particularly young men and women with high educational levels often come from a wealthier background and can afford to wait for the right job. 12

14 3 QUALITATIVE INFORMATION ON LABOUR DEMAND BASED ON SECTOR COUNCIL (SC) DISCUSSIONS In recent years Mongolia s National Council for Vocational Education and Training (NCVET) was created, consisting of a larger number of private sector organizations, to enable the participation of stakeholders at different stages of VET policy and strategy development and implementation. Under the strategic framework of the NCVET, Sector Councils were encouraged for prioritized VET sectors at the time in construction, road-transportation and engineering sectors. Up-to-date only the sector council for the construction sector has been formalized. For the remaining sectors formal approval is still pending as a result of multiple institutional changes. However, until know all sector stakeholder formations are lacking legal status, ownership, absence of clear mandates, coordination mechanism and funding to just highlight some of the core challenges. Opposite to common practice in most countries in Mongolia the name for these platforms of sector stakeholders to guide VET and match demand and supply are referred to as sector councils only instead of sector skills councils where the name itself is highlighting their role in informing skills development. Like in the rest of the world, sector councils in Mongolia are meant to be industry-led partnerships of stakeholders of a particular economic sector that are hoped to address skills mismatches and to implement solutions in a timely and up-to-date manner. Ideally sector councils unite representatives from business, labour, education and other professional groups to analyze and address skills development issues. They provide a practical perspective on a wide range of issues related to technological change, quality standards, planning, and education and training. At the core of their mandate lays the gathering of already available labour market information and analysis regarding employer expectations; hiring practices; current VET planning, development and delivery labour market trends in supply and demand within that sector. Sector councils in itself should complement this information by qualitative labour market information on employment and career opportunities and VET graduates that can help to deepen the understanding of sector specific skills development issues and thus support market driven occupational standards that can inform human resource management of companies as well as a national qualification framework. Close synergies between labour market stakeholders, the public sector and training providers help to ensure that labour market information and its analysis have a direct impact on future supply. Sector councils should also make a deliberate attempt to understand future demand in a strategic manner and to carefully monitor how occupations in different economic sectors change over time to facilitate matching labour demand with vocational training supply. International and regional experience demonstrates the importance of having appropriate institutional setups in place as well as the capacities to collect, analyze and utilize labour market information. Such mechanisms are usually embodied in so called Labour Market Information 13

15 and Analysis Systems (LMIA-systems). They are networks of users and producers of labour market information. Such an LMIA system would need to be established in Mongolia to produce timely labour market analyses that could help to reduce the time gap between the identification of highly demanded skills and changes in skills supply, ensuring that the national VET system is responsive to changing labour market demand. Labour Market Information and Analysis systems have gained enormous importance in recent years with the growing complexity of labour markets and the changes in the organization of work around the world. They are regarded as one of the most effective and efficient means of obtaining information about the labour market that can guide skills development. One of their strengthens is that they look at many interrelated labour market and skills development aspects in its broader socio-economic context, realizing that all labour market and skills development issues need to be addressed holistically. LMIA-systems go far beyond the traditional scope of labour management information systems (LMIS s) that are intra institutional (often computerized) data, information, collection and storing systems of largely administrative data that were designed during the industrial period (before the 1970 s) to assist manpower planning. This period can also be compared to a planned economy period in Central and Eastern Europe and Eastern Asia. During this period the relationship between the education and training and the labour market was more direct, occupational structures changed very slowly, planning of employment and training programmes could be done well in advance, there was no need to predict future demand of occupations and skills, and immediate employment was generally available from the education and training systems. Often governments try to update these systems and/or modify them to fulfil multiple objectives and refer to the same as Labour Market Information Systems (LMIS). Nevertheless, experience shows that none of these tools can address the complex analytical tasks and overcome lack of institutional exchange of information as LMIA-systems can. To date labour market information in Mongolia is only regularly collected to reflect the supply side of the labour market. Demand side information is limited to general business information which bears significant analytical challenges to inform and monitor VET policies and programmes. Particularly it is hindering LMIA that seeks to understand the mismatches of skills supply and demand. The sector consultations with members of the sector councils and brought some of the relevant sector stakeholders together to: Inform about general labour market trends and specific sectoral labour market challenges related to labour demand and skills supply; Learn more about Mongolia s sector councils and give an overview of best practice, roles and responsibilities from an international perspective; 14

16 Gather primary qualitative information on sectoral demand for key occupations, competencies and soft skills; Identify analytical needs and challenges. As a result of the consultations, sector specific labour market and VET stakeholders are more aware of their roles and responsibilities. They could actively facilitate to put in place structures and activities needed to contribute to demand driven education and training in Mongolia that can prepare the workforce for the specific economic sectors in the years to come. In addition, relevant sector councils have an enhanced knowledge about general labour market trends and the occupational employment structure in their sectors and there is consensus among key stakeholders on core skill needs and in the respective sectors. During the sector stakeholder consultations a short questionnaire was handed out to be filled in by all participants. The qualitative sector specific information obtained with the help of the short questionnaire and the discussions held are summarized in the following sector specific sections. They are hoped to give some in-depth insights to the current issues that hamper demand driven VET in Mongolia and provide a selected group of occupations that were identified to be in high demand. 3.1 AGRICULTURE Currently, there is no sector council available for the agriculture sector. Facilitating its establishment and to inform occupations of high demand in the sector a meeting with key employers associations in the sector was initiated PARTICIPANTS In total 14 members participated in the discussions representing the following institutions: Labour Research Department under the National Center for Information, Research and Services related to Employment (NESRIC) (under the MOL) TVET Policy and Coordination Department (under the MOL) Mongolian National Association of Sea buck thorn producers Mongolian Crop Farmers Associations Mongolian Agricultural Food Production Association Agro-Cooperatives Association Livestock Zoo-engineer s Association 15

17 3.1.2 SUMMARY OF FINDINGS Sector council Employers in the sector have not been aware of the use and benefits of sector councils. Currently, associations in the sector work mainly independently to coordinate member companies during negotiations with trade unions or government bodies, for example related to wages and legal aspects. According to the discussions during the stakeholder consultations, little support is provided by the associations to their members in relation to market research and supporting employers in finding much needed skills supply Information and analysis needs In terms of LMIA one of the key challenges is that there is hardly any statistical information available on persons employed and enterprises in agriculture. The NSO publishes regularly sector specific statistics but they usually focus on the production aspects of animals and crops. Thus a sector study would be needed to understand especially its seasonal and regional dimensions in labour supply and demand. Also the sector is suffering from non-organization. There are so many cooperatives and microand small- businesses available but not all are officially registered. Large parts of the agriculture sector are traditionally informal and the nomadic lifestyle of most farmers and herders hampers their professional organization. A repository of farmers/herders would be vital to keep track of the same and to generate vital information on their skill demands Sector specific employer challenges The whole sector is transforming its structure including the traditional organization of work that heavily impacts on occupational needs and demands for competencies and skills. Herders and farmers are no longer exclusively producing for their own consumption. Increasingly they also produce for profits from market sales and become more intensive producers. This bears significant challenges since most herders/farmers lack the skills to establish and run an organized business. Also, lots of own-account businesses expand and alter into professional enterprises. However, many new employer businesses in the sector lack human resource management skills related to recruitment, negotiation and communications to highlight just some of the critical areas. Thus VET should consider the provision of short-term courses such as know about business that equips especially young people with essential entrepreneurial skills. Also, in the agriculture sector employment is very seasonal and requires a lot of unskilled and cheap labour and assistant workers especially during harvest times. Ways should be explored to provide sufficient labourers during harvest seasons while making agreements with universities, neighbouring countries, etc. to manage seasonal labour demands in the sector. 16

18 According the sector stakeholders the production volume in agriculture will expand in the next 12 month, since food production gradually becomes more market oriented. Agro-technologists are much needed that can advise farmers on the right practices that could lead them to increased market gains. In this regard quality control is an area that is progressively gaining importance. Besides, the agricultural sector should provide business incentives to attract workers. Currently, people, especially the younger generation dreams of a city life. Nobody wants to work in rural areas. The work is too hard, badly paid and the largely underdeveloped and/or bad infrastructure, the remoteness and lack of public transportation in rural parts of Mongolia pushes people towards urban areas. The remaining ones often lack the job specific skills, competencies, necessary motivation and attitude to elevate productivity in the sector. To enhance productivity the agricultural sector increasingly highly skilled and skilled workers are demanded that bring IT skills or know how to operate state of the art agricultural equipment such as computerized milking or automated harvesting machines. Overall lots of marketing would be needed to make employment in the agriculture sector more attractive LIST OF PROPOSED OCCUPATIONS FOR VET 1. Agro-technician 2. Distributer/salesman 3. Agricultural heavy equipment operator 4. Veterinarian 5. Zoo-technologist 6. Food-technologist 3.2 CONSTRUCTION PARTICIPANTS Labour Research Department under the National Center for Information, Research and Services related to Employment (NESRIC) (under the MOL) TVET Policy and Coordination Department (under the MOL) Ministry of Construction and Urban Development Construction Polytechnic Construction Technology College Construction Development Center ADB Skills for Employment project 17

19 3.2.2 SUMMARY OF FINDINGS Sector council Sector Council was founded in 2011 but only met once thereafter. Key issues are related to the legal structure of the construction sector council that does not have defined members but rather institutions that are appointed to attend meetings on an ad hoc basis. Staff of the institutions will be send to meeting if the take place but work that might accumulate needs to be dealt with besides the primary job. Their participation is according to the stakeholders rather passive and nobody takes initiative. Because of the legal structures of the cector council in construction, which is of working group nature, there are no government funds allocated to produce outcomes and initiate professional work seeking to inform skills development in the sector. A Secretary that could facilitate sector council related work does not exist and would need to be established. Members of institutions appointed to participate in Sector Council meeting are lacking the knowledge and motivation to gather relevant information to inform and formulate occupational standards Labour market information and analysis needs One of the key constraints in providing demand driven VET was stated to be the lack of quality labour market information on employers based skill needs and the overall weak analytical capacity of staff in relevant institutions. Data from NSO is perceived to not be reliable and the data published does not meet the needs of training providers and employers. It would be very important to develop sector based tracer studies that will provide more detailed information on graduates from VET courses provided in the sector. Currently most of the VET courses offered are linked to the construction sector. Another key challenge that was raised is the fact that there are approximately 1000 construction companies registered with Mongolia s National Employers Federation (MONEF) but there is no information available on what they do exactly and which skills employers in the sector demand. Regular employers based skills assessments need to be undertaken in the sector to systematically capture employer s skills needs and translate information into VET policies and programmes. Also there should be an institution in charge that is sufficiently funded and equipped to undertake labour market information and analyses on a regular basis and produce timely reports with clear policy recommendations to specifically inform employment and skills development policies in the country. The information that is currently available is outdated and mainly of administrative nature and thus meaningless for policy making. Available analysis and research capacities are very weak and the financial resources available are not effectively utilized to undertake proper sector studies. 18

20 Sector specific employer challenges According to the stakeholder discussions, Mongolia s VET system used to be, and to date still is, entirely supply driven, where senior managers of VET institutions and trainers sit together and decided which VET courses should be offered. Businesses are not involved in this process and as a result occupational standards that do exist for the sector are not linked to the curricula thought in VET schools. Thus, vocational fields of specialization are outdated and no comprehensive skills are present in the vocational education curriculum. These comprehensive skills (subject knowledge in IT and English as well as thinking and behavioural skills) are needed for vocational graduates to succeed in today s labour market. Besides, new curriculum and teaching practices need to be accompanied by improved learning materials and facilities. Currently training amenities are old and the equipment outdated. To facilitate the transition to work, the connection between education, training and work needs to be improved. This goes beyond vocational education as such and involves strengthening direct partnership between construction companies and VET schools. How to set up and maintain a market oriented demand driven VET system is still very new to stakeholders and would require significant capacity building and knowledge sharing with VET and labour market stakeholders in the area. The GIZ has provided a lot of support in the sector but only for very few selected occupations. The construction sector offers the widest range of employment opportunities in Mongolia s economy ranging from unskilled to highly skilled occupations but due to the lack of public employment services in the country employers do not know how to find workers they are looking for and employees do not know how to find jobs. Job hunting is still relying largely on intra- personal networks. Also the construction business is very seasonal and largely informal. There are lots of construction businesses that are officially registered but only employ a handful of workers formally to avoid taxes. Further, many workers in the sector started to be employed in elementary occupations and learned through on the job training other skills. Most of the workers currently employed in the sector lack profound technical skills that prevent them from performing well the tasks required by firms. New labour market entries with vocational training certificates perform significantly worse in complex procedures and problem solving tasks than in VET related tasks and routine procedures. Performances are particularly poor in team working and in taking initiative and lead/manage tasks. VET graduates are also lacking important life skills as well attitude and work ethnics. Apparently punctuality is a very critical point that has been raised several times during stakeholder consultations. The lack of skilled workers in various occupations is perceived to be the result of failures to provide adequate learning opportunities, as well as school curricula and 19

21 teaching, for producing the skills that are in high demand. As a result firms are less productive and work is often outsourced to other foreign companies. Overall the demand for workers in the sector is expected to decline. However, according to the employers in the sector there is expected to be an increased demand for mid and high level skilled workers in the construction sector. Also work in the sector increasingly requires a set of general skills that allow employees and businesses to quickly adapt to changes in client demand due to increased competition in the sector. There are many new companies operating in the sector and rivalry is high LIST OF PROPOSED OCCUPATIONS FOR VET 1. Building frame and concrete roof maker 2. Carpenters and jointer 3. Assembler 4. Plumber 5. Electrician 6. Decorator 3.3 ROAD TRANSPORTATION PARTICIPANTS Labour Research Department under the National Center for Information, Research and Services related to Employment (NESRIC) (under the MOL) TVET Policy and Coordination Department (under the MOL) Ministry of Road, transport, construction and urban development Association of Mongolian Road transportation businesses Vocational Training school for bridge and road construction ADB Skills for Employment project SUMMARY OF FINDINGS Sector council The sector council for the road transportation sector is not formalized yet. The paperwork has been pending with the Ministry for almost three years. However, the sector council will be organized with tripartite participation whereby employers will be slightly overrepresented. Sector council meetings are planned to be held at least once a year. According to the participants, no emphasis has been placed on the analytical function of sector councils, mainly because of the lack of analytical capacities of members. The sector council was mainly created to have a forum to discuss the development of national level occupational standards, qualifications and curriculum outlines. 20

22 Associations in the road transportation sector are very strong. Nevertheless the establishment of a road transportation council was not driven by the industry itself but by the government. The lack of necessary funds to allow the sector council to operate is the key factors why it remains to date passive. To date only one meeting between nominated members was held Information and analysis needs Sector council discussions revealed an unawareness of the importance of labour market information to fullfill the councils mandate. Knowledge sharing and capacity building of council members will be vital including on the sources of sector level labour market statistics and analytical tools and practices would be crucial to allow the council to function. Some capacity should be available to understand key labour market trends in the sector and to conduct sector studies based on already available information and/or develop cooperation mechanism with research institutions that can gather the relevant information for the council Sector specific employer challenges Analysis of answers provided by stakeholders on questions outlined in the short questionnaire clearly states that the sector is lacking sufficiently skilled labour. Most of the employees in the sector lack job specific required skills or competencies (e.g. technical or job specific skills, problem solving and team working skills). Another issues highlighted that hamper the productivity of businesses in the sector is related to a poor attitude of many employees related work ethics, punctuality, appearance and manners. Many occupations, particularly the ones that require technical skills are very hard to fill. There are simply not enough applicants because the work conditions are bad and the wages in the sector are very low. Another reason is the seasonality of the work. Workers prefer to have jobs where they can get a steady income and where they have good contracts and access to employee benefits. It was raised several times that the currently existing social security system in the country discourages people from work. One participant said: Why should people work if they can stay at home and get pretty much paid the same amount of money. The fact that many highly and mid skilled occupations are difficult to fill causes many delays in sector operations. Sector council representatives expect that the number of workers needed in the sector will significantly increase during the next 12 month. Positions were workers do not perform at the required level include bridge construction engineer, lab technicians particularly to test road construction materials. Overall, the performance of technicians in the sector is very weak. 21

23 3.3.3 LIST OF PROPOSED OCCUPATIONS FOR VET 1. Heavy machinery operator 2. Bridge construction worker 3. Road-lab technician 4. OSH instructor 5. Logistics technician 6. Chef 4 CONCLUSIONS AND RECOMMENDATIONS The report uncovers a number of challenges that are linked to the provision of VET relevant issues. Trend analysis of labour force survey data has demonstrated that strong economic growth has not yet translated into sufficient gains in decent and productive employment for the majority of Mongolians. Increasing labour force participation rates, high youth unemployment and NEET rates, pronounced vulnerability in labour market access are just the tip of the iceberg and a reflection of how hard the labour market struggles to absorb the increasing number of labour market entries that in large parts do not have the education and skills required that are demanded to find a decent and productive job. Trends analyses of labour force survey results demonstrate clearly a disconnection between the skills available in the workforce and the demand on the labour market. Most pertinent in this regard is the matching of skills with the help of timely and up-to-date labour market information and analysis (LMIA) and functioning sector skill councils that inform market relevant occupation standards and thus help to better match training supply with market needs. One of the key issues resonating from stakeholder discussions held is the lack of understanding of skills demand. Although certain trends could be analyzed based on available labour force survey data, more and better quantitative labour statistics are needed such as employers based enquiries on job vacancies and skills needs in priority sectors. Additional qualitative sources of information need to be developed that can complement these official national surveys. Tracer studies for example should regular 'trace' students from education and training institutions after they have finished monitoring if they are employed, unemployed or entered into more training or left the labour force. Tracer studies are a widely used tool to investigate the effectiveness and relevance of courses and a useful tool for policy making. By using these different sources of information, skills requirements in selected economic sectors can be analyzed in the context of planning frameworks at the sector level. With 22

24 systematic and up-to-date labour market information analysis policy-makers will be able to make informed decisions regarding skills and VET reforms in the country. Equally important is the development of appropriate mechanisms to ensure that the analytical results are disseminated and used by policy makers. It is well known that LMIA is a necessary input to reforms of the technical and vocational education and training (VET) system. Current shortages in the analysis of labour market information and vis-à-vis policy development in general and skills development policies in particular include: Lack of a dedicated unit that is sufficiently trained to undertake timely and focused analysis and interpretation of basic labour market and related indicators Weak analytical capacity and low awareness of basic international labour statistics concepts, classifications and definitions among policy-makers, social partners and other stakeholders Lack of information and analysis pertaining to topics that are high on the policy agenda such as skills development, employment promotion and local economic development These challenges will gain importance in view of the far stronger emphasis that has been placed on employment and human resource development policies in more recent years. Lack of institutional setups to enable the various labour market stakeholders to exchange and use information and analysis, Limited integration of labour market research on the one hand, for example conducted by existing research institutions, and policy development on the other, mostly due to capacity constraints in the public sector. Even greater investment is required in defining information needs and in building the analytical capacity to identify and interpret labour market developments and trends and to relate these trends to policies or other factors influencing labour market outcomes, such as TVET. Overall there is an urgent need to create a network of LMIA users and producers, including government departments, employer s federations, education and training providers, statistical agencies and research organizations that can inform employment and skills development policies in tandem. Strong links have been established between the National Statistics Office and the Ministry of Labour to make sure the necessary labour statistics will be surveyed on a regular basis. Particularly at the sector level existing sector councils need to be significantly strengthened and new sector councils need to be established to actively promote skills development in a given economic sector. These Sector Councils should be permanent working structures with sufficient funds and dedicated well trained staff to identify and analyze labour market trends and skill needs in the sector while focusing on anticipating employment (quantitative) and skills (qualitative) needs within the sector, using this insight to inform the development of sectoral policies. The scope of work of sector councils should be clearly defined as well as the, working modes, composition of participants and their membership, and organizational and financial issues. Also a very important element is to identify direct benefits of engagement to employers, both individually and collectively. These details will also serve as a basis for the legal regulation 23