[Global HR Forum 2011] Linking Education with the Labor Market for Increased Employment : The Swiss...

Linking Education with the Labor Market

for Increased Employment:

The Swiss WayThe Swiss Way

Prof. Dr. Stefan C. Wolter, President SFIVET

Swiss Federal Institute for Vocational Education and Training

Global HR Forum 2011, Seoul

Closeness to the labor market:

Apprenticeship?

Stefan C. Wolter 2Global HR Forum 2011

Only apprenticeship? – the

ingredients for a successful formula

1. Permeability of the education system: but concentration on

comparative advantages from early on


2. Strong partnerships (government – employers – schools):

but labor market driven

3. Good incentives: economic benefits for everyone

Permeability: but concentration on

comparative advantages

Academic universities

Professional education

Universities of applied science


Compulsory schooling (9 y)

Dual and school based vocational educationUniversity entrance diploma

Division of labor within the

educational system

The formal education system shapes our policy options in two

distinctive ways:

1. Vocational and Professional Education (VPET) should

Stefan C. Wolter 5

1. Vocational and Professional Education (VPET) should

guarantee employability, inclusion and competitiveness of

the Swiss economy (labor market needs and permeability in

the educational system are the guiding principles)

2. Academic system for research & innovation (guiding principles

are selection and global competitiveness of academic

institutions)

Global HR Forum 2011

Excellence in academia: the global

shares in the Shanghai 100 Ranking

40

50

60

70


0

10

20

30

CH UK US AUS GER NL F JAP

Share of universities Share of students

Strong partnerships: but labor

market driven

1. Employers are organized in occupational associations and

recognized as institutional partner by the government

(important to guarantee labor market mobility)

2. Occupational associations decide on curricula, training


2. Occupational associations decide on curricula, training

content and examination standards (guarantees labor market

closeness)

3. Government (and schools) defines and provides: a) content

of general education (life-long learning); b) basic vocational

skills (uniformity of skills acquisition and efficiency of

provision); c) educational degree (access to higher education)

Some important framework

conditions

• Professions (>235) cover all sectors of the economy (e.g. IT-

engineers, opticians, dental-assistants, nurses, bakers, etc.):

→ makes the VET system business cycle resistant

• Constant reforms of curriculas → rapid adaption to structural


• Constant reforms of curriculas → rapid adaption to structural

and technological change

• Every apprenticeship ends with a national (federal)

certificate, recognized by all employers (professional content is examined

by external and certified experts) → labor market mobility

• No-work contract after the apprenticeship has ended → labor

market flexibility

Incentives:

Economic benefits for everyone

Why are economic incentives important?

a) For companies: if training does not pay (apprentices’

productive contribution or savings in hiring costs), no

apprenticeship contracts are offered


apprenticeship contracts are offered

b) For potential apprentices: if it does not pay in terms of higher

salaries, the most talented youth will choose general

education

c) For the government: if they VET does not generate good

employment and salaries, investment in other types of

education is advisable

Incentives: From the firms’

perspective

• Costly regulations and requirements

(training, trainers, equipment, tests, etc.) and apprentices

wages to guarantee quality

• At least two sources of benefits:


• At least two sources of benefits:

• Productive work of apprentices during training (skilled and

unskilled work)

• Reduced hiring and recruitment costs for skilled workers

(screening and firm or product specific knowledge)

Cost and benefits for training firms

in US$

3-year apprenticeship

4-year apprenticeship

Gross cost 80’800 113’388


Gross cost 80’800 113’388

Productive contribution 93’120 115’488

Net benefit 12’320 2’100

From the apprentices’ perspective:

two sources of investment


From the apprentices’ perspective:

two sources of investment

Firm


Private rates of return: good option

values for VET on tertiary level

7

8

9

10

. in

%


4

5

6

7

Basic Vocational

Education

University Entrance

Diploma

Professional

Education (ISCED

5B)

Universities of

Applied Science

(ISCED 5A)

Academic

Universities (ISCED

5A)

rate

p.y

. in

%

Government: reduced spending due

to private investments


What makes VET successful in

Switzerland?

• Driven by the economy: VET as a driver of structural change

(rapid adoption of new technologies)

• VET provides an educational degree – attractive for talented

youth


youth

• General skills are learned in a problem oriented setting

(motivation for theory adverse youth)

• National recognition of standards and certificates across

industries and sectors (high degree of mobility)

• Economic incentives for everyone!

Thank you for your attention!Thank you for your attention!

[Global HR Forum 2011] Linking Education with the Labor Market for Increased Employment : The Swiss...

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