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September 19, 2019

Financing Competency Standards Based Training of Workers

Skilled workers and technicians conduct training for new workers at the Construction Ministry’s Central Training School (Thuwunna), Yangon. Photo: MNA
Skilled workers and technicians conduct training for new workers at the Construction Ministry’s Central Training School (Thuwunna), Yangon. Photo: MNA

It is generally accepted that occupational competency standards based skills training of workers is likely to better meet employers’ needs for skilled workers. Such training should enable the worker to attain competency in the chosen occupation to the extent that their performance will meet required outcomes.
It is up to the employers to provide such training to workers whether On-the-Job in the workplace or in Training Centres operated by Accredited Training Providers. However providing such training will incur some expense to the employer.
Investment in training of workers by employers will of course yield benefits to the employers in that the quality of performance of the workers will increase. The trained skilled worker is more likely to attain the specific standards of performance required as well as lessen the cost of wastage and rework.
As the training of workers will benefit the employer, it is logical that the employer should bear the cost as well. However many employers are reluctant to invest in having their workers systematically trained and certified as they are afraid that the certified worker will leave their employment for better pay offered by other employers.
It is true that systematic training and certification raises the “worth” of the worker; and so the competitors are willing to pay more for the trained and certified worker. If that is so the current employers may lose their trained workers. Such “job-hopping” of course is linked to the availability of the certified skilled workers in the labour market. More certified skilled workers will translate in to “less job-hopping”.
Job-hopping also depends on the “Employee Retention Strategy“ of the current employers. That is, how willing the employers are to invest in hiring, employing, retaining and developing the skills of workers in their employment. This is particularly true of highly skilled workers who, when they leave, would incur much cost to the employer concerned in retraining new workers.
The solution that many countries have adopted is for the employers to collectively share the cost of training of the skilled workers. This is done through imposing a system of “levies” on the employers through enacting legislation by the parliament, and setting up a “Skills Development Fund” or the like of it. In fact several countries in ASEAN, and many countries beyond are currently practicing the system.
The 2013 Employment and Skills Development Law of Myanmar prescribes such a system and the setting up of a “Skills Development Fund”. It requires a “levy” to be imposed on the employer which may vary from 0.5% to 2% (depending on the Type and Size of the Enterprise) of the monthly wage bill of the skilled workers employed. The levy is to deposited in to the “Skills Development Fund” Account, held in a Government or Private Bank, to be administered by the responsible Ministry or Agency.
In some countries the Governments initially contributes the “Seed Money” to the fund. This of course has to be through appropriate Government budget allocation. The employers pay in the “levy” into the fund monthly, depending on the wage bill of the skilled workers. The legislation may authorize donations to the fund by corporate bodies and organizations, local and foreign, as well as by individuals.
The employers who systematically train of workers at the workplace or send the workers to training schools or centres operated by Accredited Training Providers recognized by the Skills Development Fund Authority can reclaim, in accordance with the terms and conditions of the reimbursement, the cost of such training from the “Skills Development Fund”.

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