German enterprises abroad often encounter catastrophic standards as regards vocational education and training. By now, they choose to ensure early training of their young talent at their production sites in Asia, Eastern Europe and the USA by providing training themselves. Thus, they secure for themselves the best talent.
The steel monster Werner Gessner has installed in Vietnam rattles on relentlessly. A filling plant for canned beer, which operates almost 24/7 and produces 33,000 beer cans per hour. This is the ninth facility of its kind that Gessner's employer KHS has sold to the Sabeco brewery in Ho Chi Minh City; the plant and machinery installer from Dortmund realises in Vietnam an annual turnover of up to 50 million Euro.
Although the Vietnamese population's thirst for beer remains unabated, local growth has reached its limits due to a lack of qualified personnel. There are hardly any vocational schools and the curricula fail to meet the industry's requirements. Only a third of the labour force has received vocational education and training corresponding to their respective occupation.
"Many workers do not have the necessary qualifications for operating these highly complex facilities", says Gessner, responsible manager for KHS in Asia. His customers expect the high-priced plant and machinery installer to provide also well-trained employees – and the Dortmund-based company has difficulties in training sufficient numbers. "Many of our customers therefore complain about considerable losses in efficiency."
Implement German model on site
Gessner's solution: in order to increase the vocational training standards, he and partners on site implement vocational education and training following the German model. Together with other enterprises such as Siemens and the measuring engineering firm of Endress + Hauser, KHS has established the German Vietnamese Technology Academy at a university campus in Ho Chi Minh City. As of spring this year, this academy will provide training for 2,000 to 4,000 skilled workers each year to qualify them for work in the food industry – with curricula designed by the Germans, in training workshops equipped with German facilities. Gessners calculation: the more skilled labour is on the market, the greater the demand for production facilities.
Like Gessner, more and more German enterprises provide training at their production sites abroad, either on their own or with partners or chambers. In China, the trainers teach their apprentices to think for themselves, because in the Chinese education system practical thinking is not part of the curriculum.
Although mechanics trained in Russia can successfully repair the rather elementary Lada cars, they have to be laboriously introduced to the sensitive electronics of Volkswagen models. In India, the language barrier may be low, but a tool maker from the steel industry will lose patience over measuring systems in the chip industry, calibrated to nanometres.
So far, the enterprises go to the expense of maintaining veritable brigades of trainers, flying them across the globe to train the workforce. In the meantime, globalisation has affected small and large enterprises to such a degree that they employ many millions of people abroad, rendering the laborious individual corrective training of local employees too expensive. The trend now is to do away with cumbersome breaking-in in favour of targeted vocational education and training. Volkswagen demonstrates how. "In 2012 alone, we have hired some 1,500 apprentices outside of Germany", says VW Chief Human Resource Officer Horst Neumann in an interview with the WirtschaftsWoche magazine.
Renaissance of the dual system
Thus, a unique, age-old feature made in Germany experiences a renaissance: the dual system of vocational education and training, that is, the parallel training of apprentices in vocational schools and in companies providing vocational training. Yet there were times when education politicians were almost ashamed of this relict from the age of Bismarck's iron rule: in Europe around the turn of the millennium, academisation of vocational education and training was en vogue, standardisation was introduced into the German education system with the establishment of bachelor and master study courses.
However, the industry remained faithful to in-company vocational training and proved to be spot-on. "Given the competition for skilled labour, the companies realise that vocational education and training is not a cost factor, but that it has to become a part of the long-term company strategy", says Jürgen Männicke from the Berlin-based consultancy Educon, which advises also the German Federal Ministry of Education.
For example, in China: The, as regards population, largest country in the world has long since ceased to be a low-wage country. Some enterprises report that workers demand wage increases of 50 per cent. Moreover, more than 90 per cent of German enterprises perceive the search for qualified personnel as their greatest challenge. This is the result of a survey conducted by the German Chamber of Commerce in Shanghai. Both create problems for technology-intensive enterprises such as the mechanical engineering firm Festo.
Hence, trainer Stefan Meining has had a large metal sign affixed to Festo's main gate in Jinan. "This company provides training", it reads in bold letters. Last autumn, in this city of seven million inhabitants, grey with smog and one-and-a-half hours by train south of Beijing, Meining has trained the first 28 industrial mechanics. "The profession of industrial mechanic is unknown in China," says the trainer.
Yet Meining needs qualified personnel precisely in this field in Jinan. However, German human resource managers cannot depend on the Chinese school system. Chinese pupils are taught hardly any crafts skills at all at school, instead, the curriculum features subjects like Marxism and the art of warfare. Besides, physical work is not very popular amongst the Chinese people and many school graduates prefer office jobs instead of earning more money by working in a production line. The trend favours an academic degree, but even engineers often have to be laboriously trained by German technicians.
The Shanghai model
Chinese politicians have identified the bad state of affairs and intend to build up a vocational school system by 2015. Yet nobody is quite sure what this is to entail and how it is to work. The Germans are a step ahead: in Shanghai, the dual system has been launched as a pilot project. Together with private Chinese vocational schools, the Shanghai-based German Chamber of Commerce has implemented theoretical vocational education for occupations such as mechatronic technician, industrial mechanic and tool maker. Some 70 enterprises, including BMW, Schaeffler and Siemens, provide the in-company practical training for China's next generation of technicians.
Every apprentice spends his or her first year at a Chinese school; during the two subsequent years, in-company vocational training and school alternate. Upon completion, every journeyman receives a Chinese graduation certificate, a certificate issued by the vocational trainer and the trade proficiency certificate of the German Chamber of Commerce, which qualifies the graduates to operate machines also in Germany.
The Shanghai model is intended to be adopted across the globe. This is the vision of Yorck Sievers, Director of the Vocational Education and Training Department at the Association of German Chambers of Industry and Commerce (DIHK e. V.) in Berlin. In addition to China, he sees potential in Thailand, Mexico, Chile, Algeria and the USA. The most important requirement, he says, is merely the existence of demand on part of enterprises, for they have to provide and finance the in-company vocational training.
Brazil: largest German vocational school outside of Germany
In São Paulo, a German vocational school has been active for 30 years now. Engineers from Mercedes, VW and Krupp had established the IFPA vocational school (Instituto de Formação Profissional Administrativa), which was intended to provide their children with vocational education and training far from home. In the meantime, the institute in the southern part of the Brazilian economic metropolis has evolved into the largest German vocational school outside of Germany – the difference being that by now it provides training mostly for Brazilian students.
In the competition for well-qualified labour, the elite vocational school IFPA has become a net for enterprises to filter the best talent out of the pool. The school accepts only students fluent in German and who have a work placement contract with a German enterprise. Each year, the São Paulo school enrols a minimum of 50 young people, who in two years are trained to, for the most part, become merchants.
In addition to corporations such as BASF and ZF Friedrichshafen, Brazilian enterprises have likewise recognised the advantages this practical vocational training system provides, compared to the largely school-based Brazilian vocational education and training. Increasingly, the clever human resource managers of Brazilian enterprises approach the second-year vocational school students to entice them away from their work placements by offering them permanent contracts.
Academic degree no longer automatically a ticket to a career
The dual system has prominent fans also in the USA. Upon visiting the German corporations of Siemens and Daimler, President Barack Obama has elevated their vocational training and continuing education provision to a model for his country. Yet for these industrial businesses, the vocational education and training of their own skilled labour in the United States is an act of pure pragmatism: in spite of high unemployment rates, the States feature a lack of qualified personnel. Vocational training professions such as electrical engineering technician and chemical laboratory assistant do not exist; after high school, young Americans go to college or university. After that, it is "learning on the job" – for bankers just as for chemical laboratory assistants.
The Americans now realise that an academic degree is no longer automatically a ticket to a career and in some cases, sound vocational education and training may yield higher income. For instance, the former soldier Lawrence Franckhauser is delighted to have obtained an apprenticeship with Wacker. "What thrills me is the fact that Wacker invests a lot of time and money in the vocational training provision of its future employees", says the 33-year-old.
What Americans particularly need getting used to: apprentices receive two years of wages or scholarship funds for daily study of maths, chemistry, physics and English and for applying what they have learned at a pilot plant facility at the Wacker Institute. Also, Wacker sends the older apprentices for half a year to the production site in Burghausen in Germany for further on-site training.
"Miniature dual system" in Sri Lanka
Like Wacker, Wiestaw Kramski also flies many apprentices to Germany – from America, yet for the most part from India and Sri Lanka. To prevent the Indians from wandering off the moment they return to their home country with the German certificate in their pocket, they have to pay part of their wages into an escrow account. "The sum is paid out, when the employee has been with us for three years." The Pforzheim-based company, which manufactures printed circuit boards, sockets and plugs for plant construction firms, intends to thus prevent strong fluctuation. "We therefore have built our most recent production site in the countryside far away from urban centres like Bangalore."
More reliable than the Indians, the employees in Sri Lanka stand by the tool maker Kramski. However, this may also be due to the fact that to this day the company founder from Pforzheim is one of the largest and longest established investors on the island. 20 years ago, during a holiday trip, he struck up contact with the vocational school in the capital of Colombo and as early as in the 1990s they jointly established a "miniature dual system". Today, the qualified personnel in Sri Lanka is so fit that Kramski dispatches Sri Lankan employees to work as trainers at the new production site in India.
In Taicang, some 50 kilometres north-west of Shanghai, when guiding a tour through the factory building of the Bavarian electronics manufacturer Zollner, Oli Deng acts almost as if it was his own. Most of the 25 employees sit at a special, fully automated machine that installs gold alloys into the new iPhone. Each machine consists of 1,200 individual parts, which are assembled here – precision work for which Zollner needs skilled employees. People like Deng. At 24 years of age, he is a team leader, that is, something like a foreman at Zollner, and in the eyes of his trainer Erik Breslein he is a model apprentice. Only one year after completing his apprenticeship, Breslein had him promoted.
Deng is good and perhaps he would have moved on already, had it not been for the promotion. For money, plenty of holiday and little overtime alone are no longer sufficient in China to retain skilled workers trained at high cost. "We demonstrate to our qualified personnel what are their chances of promotion within our enterprise", says Breslein. "We give them the feeling that we want them on board." Thus, he regularly organises outings and karaoke evenings and rewards good ideas with bonus payments.
Competitive salary and good career prospects are important
Moreover, enterprises ought to approach students in a targeted manner, for instance, by way of scholarship programmes, recruiting events and job fairs. Dr Peter Bartels recommends, "When communicating with potential applicants, medium-sized businesses should concentrate on providing comprehensive information to the applicants, more specifically, on those aspects these deem most important in seeking a job, that is, the exact scope of tasks as well as career and continuing education opportunities." Yet, he adds, businesses need to be aware that information alone is not sufficient. They must be able to offer something to their future employees and this includes most definitely a competitive salary and good career prospects.
Chinese and Russian often change jobs once or twice a year, because they can earn more elsewhere. Enterprises should therefore "establish in-company vocational training and continuing education structures at their production sites abroad, which can be used also by their suppliers", says consultant Jürgen Männicke. "This allows for the development of individual career plans and provides employees with tangible perspectives."
The Vietnamese government has recognised the need for action. By 2020, it intends to increase the number of workforce with vocational training qualification to 55 per cent. International projects such as the German Vietnamese Technology Academy are to contribute to this goal. For the academy's training laboratory, KHS has already delivered the filling and cleaning facilities as well as components from the field of labelling technology.
When in these days the first students arrive, the Germans will have invested a good million Euro in the centre to start with. Werner Gessner is confident that this will pay off one day – in the form of new orders for beer filling plants.