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Human capital towards 2020


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By Shabiya Ali Ahlam With Sri Lanka gearing up to become the ‘Wonder of Asia,’ it is faced with a number of challenges. One that has been brought to light in many instances is the unavailability of human capital to help achieve this target. Although the nation has an adequate workforce, employability, especially of fresh graduates, has been questioned by many.   To assess the situation in the country in this regard, the Organisation of Professional Associations of Sri Lanka (OPA) held its 26th annual conference under the theme ‘Human Capital Towards 2020’. The conference, at which Innovation and Business Skills Australia CEO Patricia Neden was keynote speaker, was held in Colombo on 25 September with six eminent speakers, presenting their views to a fully-packed audience of over 100 participants. The objective of the conference was not only to observe the current human resource scenario, but what the situation will be in the next decade as well so organisations across diverse sectors can start taking effective measures to address the upcoming challenges. Declaring the conference open, OPA President Elect V. Ganesh expressed the OPA is of the view that the current education system of the country is geared towards academics and not employment. “New investors are coming up, and it is observed that they cannot find good human resources in the country. We have twofold issues. One is that our graduates are unemployable and the second is that investors cannot find the right people,” said Ganesh.     Human capital requirement for Sri Lanka to be the ‘Wonder of Asia’ While the ‘Mahinda Chinthana’ has laid out the five-hub concept as a strategy to avoid the middle income trap and move to the next wave of development, HR plays a major role in this regard, said Sri Lanka Institute of Technology (SLIIT) Chairman/CEO Prof. Lalith Gamage. “The problem in our country is that when people reach a certain income level, they tend get comfortable. A lot of people who can contribute to the development of the nation are seen settling for labour jobs. It is the people who lead the country into a middle income trap by becoming comfortable and complacent,” charged Gamage. Exploring how Sri Lanka can develop its HR capacity, he said focusing on the education system is one way to go about it. “We have good primary and secondary education, but they lack certain attributes,” he observed. Elaborating further he said that while there is an obvious need to know the fundamentals of a subject, an area that is not given enough focus is the development of language skills. According to Gamage, in many developed nations, 60% of the syllabus is focused on language which allows students to easily absorb contents of other subjects. He also stated that in Sri Lanka, students study for the sake of passing examinations and not for preparing themselves for employment. And the reason for this is the pressure put on students by the schools and parents. “It is the exam pressure that causes this. Rather than understanding the subject, the students cover the entire universe of questions hoping some of it will appear in their final examinations. This is shallow learning,” asserted Gamage. He said to move away from this situation the education system should focus on delivering what the industry requires since at the end of the day, it is the industry that will employ these students Touching on a few challenges in this sphere, he said in addition to the lack of accessibility to education after Advanced Level (A/L), there is a lack of responsiveness by universities to the changing environment, an eco-system based development, entrepreneurial culture in the research community, and mechanisms to encourage innovation, commercialisation and research. Gamage opined that to overcome these challenges, education must be available, accessible and affordable. A fund or loan scheme for higher education should be made available for those opting for private university. He emphasised that policy makers and industry chambers of commerce should be equipped with manpower requirement data to support current requirements that are arising out of the hub concept and global trends. Most of all joint university, R&D institutions, and industry research programs much be encouraged. Gearing the higher education for the 21st century, he said the country should take up a number of initiatives. A qualification framework, quality assurance, and accreditation system for higher education should be developed. According to Gamage, the relevance of quality teaching and learning should be promoted in all 15 universities, and human resource of higher education should be strengthened by developing the Sri Lanka Institutes of Advanced Technological Education (SLIATE).     Innovation towards enhancing employability Setting the stage for the session on ‘Gearing the Next Generation for Enhancing Human Capital,’ Commercial Bank Chairman Dinesh Weerakkody questioned the audience as to what is the biggest challenge in employability. While the audience answered this by saying it is the skills, viewpoints and attitudes of the employees, Weerakkody said it is technology. Moving on to employability, which he broke down as ‘employ’ and ‘ability,’ Weerakkody said employability means the skills that are necessary to get a job, keep a job and do well in a job. The improvement of ‘employ + ability’ of the nation’s talent pool would require the effort and intervention of the four key stakeholders, who are; employer, employee, education institute and the Government. According to the Ministry of Education, Weerakkody said students from the Moratuwa University are noted to be highly employable. While the stream that has led to higher number of employment is engineering, arts have offered the least. Stating that it is necessary to take corrective actions to make better use of the graduates, he said another big issue is salaries. The public sector employs 37.6% of graduates and the private sector 39%. The majority of these graduates, around 52.6%, are earning a monthly salary less than Rs. 20,000. This he opined is really low for someone with a college degree. When taking into account the overall employee relation climate, he said in the matrix Sri Lanka is placed in the difficult box along with the Philippines and South Korea. Shedding light on the current situation in Sri Lanka regarding employability, Weerakkody said: “Think of education-to-employability as a highway, where four drivers, the State, educators, employers, and young people, all want to get to the same destination. There are three critical intersections. That is when young people enrol in postsecondary education, when they build skills and when they seek employment. At every point, each driver needs to take account of the others to keep moving safely and efficiently.” However, he said that research indicates this doesn’t usually happen. “The four drivers don’t take each another into account. They proceed selfishly in their own lanes or they collide, leaving everyone worse off than when they started,” he asserted. To improve the situation he said at an enterprise level, firms need to get their strategy right. Firms need to look at the bench strength and begin building a leaders’ pipeline. They need to identify leadership competencies, create a dedicated environment for developing leaders and provide individual leadership development plans. Stating that it is important to take stock of the internal talent, he said: “It is necessary to be well acquainted with your current workforce in order to identify new talent. The more you know about your employees, the more opportunities you’ll have to engage them, and the more likely they’ll stick with you.” To improve readiness of graduates to the job market, Weerakkody recommended a number of measures. “Develop the work experience as part of a program of study by attaching the same to the conventional program, making generic modules available to students.” He added that the work experience could be additional to the conventional program. Incentives of work-based experience should be created through year-long placements connected to the program offering extra-credits for part-time, term-time work and/or voluntary work. “Add employability skills in consultation with the stakeholders to the curriculum in order to cope with changes, these will continue to occur and the curriculum will need regular modification,” stated Weerakkody. He stressed that teaching technical skills is not sufficient and educational institutions should be concerned with their students’ aptitude to learn. “By developing self-improvement expertise, graduates would be able to continuously develop their skills and aptitudes and will be capable of coping with the changes that occur in the future,” said Weerakkody.     Reforms for a -knowledge economy Acknowledging that the game is changing, Postgraduate Institute of Management Director Prof. Uditha Liyanage spoke on the same theme in a conceptual manner at the session on ‘Gearing the Next Generation for Enhancing Human Capital’. Sharing a few thought-provoking statements he said the top 10 jobs in 2012 did not exist in 2004 and questioned if education is provided for jobs that do not exist. “For education to be relevant, it is important we track the current trends and predict those of the future. Since education is a process of imparting knowledge, skills, and values, learning is the process of adopting them. The equation of education being equal to learning is not correct,” said Liyanage. Questioning the purpose of education, he said: “Is education for work or life? Another way of putting it is that we usually talk about instrumental value and not the intrinsic value. This question has to be answered at some point.” He observed the need to go beyond sat-ocracy, knowledge and analysis since the 21st century is transcending beyond this. There is also a need go beyond the left brain and knowledge. “A lot has been discussed about this in the past five years. Why should we go beyond the mentioned factors? We should because of a simple fundamental point. That is we are in the age of complexity. If there is one overarching principle that changes the way we ought to work, it is complexity,” opined Liyanage. He observed that people think in metaphors and treat organisations like machines. If an element doesn’t work, one attempts to fix the dysfunctional part. However, the approach does not work in the age of complexity. When taking into account the function of strategic planning, he said one was able to predict the future with a reasonable degree of accuracy. In the current context, predictability is becoming extremely difficult. “In this day and age, we need to change the way we manage. We need to manage our organisations using the strategy of a jazz band where the performance depends on the reaction of the audience, and not a marching band, where the performance is planned and perfected with practice. So we need to question, are we training our people to manage a jazz band?” If the age of complexity is realised, then one would also realise the conceptual age where it is about linier versus dynamic thinking. In this age he said right brainers will rule the world. With that Liyanage noted the world has moved to the age of emotions. “For many years, emotions were not considered worthy of discussion. But today, there is emotional logic, and a great deal is being talked about on the need to empathise.” Now he said is also the age of high concepts and touch. Stating that the mix of the mentioned ages is the formula for 21st century, he put forward the six senses of the future as formulated by American author Daniel Pink in 2006. The six senses of the future of the future are not just function but also ‘design,’ not just an argument but also a ‘story,’ not just focus but ‘synthesise,’ not just logic but ‘empathy,’ not just seriousness but also ‘play,’ and not just accumulation but also ‘meaning’. With this he said the old question of ‘make what you can sell well’ versus ‘sell what you can make well’ is still valid. The old questions in the boarder context spell out the five minds of the future, which are the disciplinary, synthesising, creating, respectful and ethical minds. “To do the right thing you need to master all five minds,” added Liyanage. Once again questioning the relevance of the education system, Liyanage asked if universities are producing people with the five minds. He answered this by stating that the subjects taught along with the syllabus must be changed in order to be relevant. With the increasing use of technology, one can wonder who is doing the teaching. With all necessary information readily available online, he quipped teaching is done by Google as the number of searches has increased from 2.7 billion in 2006 to 31 billion to date. “From content to delivery, we need look at how we are getting about the educating process. It is important to acknowledge that learning occurs when there is a behavioural change,” he stated. Concluding his presentation, Liyanage said: “We need to change what we teach and how we teach in order to produce individuals who are ready for the present and the future. We know these facts but we continue to debate and argue and nothing gets done. The way about this is to just do it.”     Building competencies for IT/BPO industry Hayleys Business Solutions International Managing Director Dr. Arul Sivagananathan said that the IT/BPO industry is the fifth largest revenue earning industry in Sri Lanka. To make it recognised as one of the main sectors that will help improve economic development, Sivagananathan said the way business is done in that sphere needs to change. “The IT/BPO industry being called a traditional industry using PCs is not there anymore. If some still think that, they are certainly behind the times. The IT/BPO industry has changed the way people work. In the future, people are going to work from home the way they live at home. It will be difficult for employers to take away what may seem important to the employees to make them come to work. The question is, are organisations able to embrace that change?” he said. Stating that only a few companies allow the use of Facebook as it is seen as a disturbance, Sivagananathan said this is changing. The younger generation, according to him, know to use such tools in a professional manner. Moving on to the IT/BPO industry, he said when looking at the broader picture, America accounts for 63% of the global IT/BPO spend while Europe Middle East and Africa (EMEA) accounts for approximately 19%. An Asia Pacific account for more than 17.6% of the global spend and is observed to be the fastest growing market expected to grow at 15-20% in the coming years. To point out the position of Sri Lanka in this fast growing industry, Sivagananathan assessed the country’s strengths and weaknesses in this regard. He noted that the nation having an educated workforce, a talent pool for specific skills, high literacy rate of 93%, time advantage since it is centrally located to West and East, and more over, being a beautiful island with a booming tourist industry are key strengths that allows the country to picked for outsource functions. Although Sri Lanka has a number of advantages that allows it to standout in the global industry, he said the country is not winning the game. Factors such as political risks, regular policy changes, lack of infrastructure in terms of intelligent buildings, high telecommunication and utility costs, lack of IT and English proficiency outside greater Colombo, and Government policies on labour laws, are weakness that pull the country down. Sharing the vision of the local industry, he said with the sector targeting to become US$ 1 billion in export revenue and aiming to create 100,000 jobs by 2016, the industry hopes to generate US$ 5 billion, offer 200,000 jobs and establish 1,000 start-ups by 2022. “The IT/BPO industry is on track to achieve the US$ 5 billion mark by 2022. Five years ago Sri Lanka was not very attractive in this sphere. Now we are on the top, creating a mark for ourselves. However, others who were not in the picture have also entered the industry and have become big. To do the same, Sri Lanka needs to leapfrog to capture the industry,” he said. Although Sri Lanka is in many ways a hidden gem for outsourcing, Sivagananathan opined it is uniquely positioned to offer companies skilled talent and a strong business environment at competitive costs. “With a population of 20 million, Sri Lanka does not offer the size advantages of countries such as China, India, and the Philippines. However, recognising its small scale, local companies focus on higher-value niche products across industries,” he said, Sivagananathan elaborated that with continued efforts to expand the talent base, reducing red tape, improving infrastructure, and establishing new knowledge cities around the country, Sri Lanka is expected to become a major player in the IT, BPO, and knowledge services industry in the next few years.     Gearing the tourism and hospitality industry for 2020 Providing a snapshot of the global industry, the Ceylon Chamber of Commerce Solutions Project Director/Consultant Srilal Miththapala said tourism accounts for over 9% of GDP, making it the world’s largest and fastest growing industry. In spite of several external setbacks, it still continues to grow at 4-5% annually and international tourist numbers reached the one billion mark in 2012. Earnings from tourism reached US$ 1 trillion in 2012 and it is observed to be the main source of foreign exchange of about 37 developing countries. Focusing on tourism in Sri Lanka in the post war scenario, he said Sri Lanka tourism has shown tremendous improvements since it has achieved double digit growth year-on-year with arrivals surpassing an all-time record of one million in 2012. Miththapala said that in the pursuit of the ambitious targets that have been set for 2016, there is a surge of tourism development taking place in the hotel sector with over 125 new hotel projects having been already approved. This will add over 7,500 new rooms to the already available 20,000 room stock of hotels and other approved accommodation establishments. Although the actual number of rooms required to meet the 2016 targets may vary depending on the market mix and average length of stay of a tourist, he noted there is no doubt that a very large number of hotel rooms and related tourism infrastructure will need to be developed in a short space of time. Currently only about 60,000 people are directly employed in the industry, while at least another 1.5 times as much are employed in the informal sector, making a total of about 150,000 persons employed directly or indirectly in the industry. “By any yardstick, more than doubling the employment in the tourism sector over four years is a huge challenge. Therefore, while everyone is scurrying around trying to develop infrastructure and build more hotel rooms, this critical HR factor is a hidden issue that will soon mushroom into a great crisis later on if not addressed immediately. While certainly building hotel rooms and infrastructure requires time, proper and relevant training and development of staff for the tourism industry also takes time. Given the competitive nature of today’s tourism industry, quality training and professionalism of staff will have a major impact on the competitiveness of the destination,” said Miththapala. Touching on the hospitality industry, he said it is evident that the hospitality management hierarchy has a very wide span of control since the industry requires relatively more numbers of “Indians” and less “Cowboys”. “The famous Pareto 80/20 rule is quite relevant here, where possibly a typical hospitality management hierarchy would have 20% management and supervisory staff, while the rest of the 80% would be blue collar front end staff,” he added. Acknowledging that the hospitality industry depends on a large number of front line staff for proper service delivery, he said the management hierarchy pyramid should be “effectively on its head”. “The front line staff, who are most important, are the often the neglected foot soldiers of the industry. It is they who create that good experience for guests which reinforces the service delivery, and generates word of mouth publicity and repeat business,” stressed Miththapala. According to him, a simple spontaneous gesture by the front line staff can have a much greater impact on guests, rather than a formal welcome cocktail or stereotyped computer generated welcome letter by the General Manager. Exploring what the core competencies and skills required by the industry are, he questioned if the conventional models of education, curriculum and skills development are adequate to meet the prevailing challenges. Stating that traditionally the hospitality trade has been dependent on conventional professional skills development with minimal development of the softer management skills, he observed that the emphasis and focus has been on the technical aspect of the job and very little emphasis has been placed on the softer aspect of attitudes, interpersonal relationships, communication skills, and others. “In Sri Lanka this is much more prevalent and today, with the industry maturing, we are beginning to see the results of this shortcoming. The expectation gap in the service delivery is rapidly increasing. No longer is our Sri Lankan smile adequate to wow our customers,” he expressed. Pix by Upul Abayasekara

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