Training day: Vocational and technical training programmes are key to boosting the employment of nationals

Bridging the gap between secondary school graduates and university alumni, technical and vocational colleges and training programmes are a crucial component of the country’s drive to get more Saudis off the unemployment roster and into the workforce. Recognising the importance of this educational segment, the government has devoted SR23.14bn ($6.17bn) in resources to technical and vocational training under its current five-year development plan, representing a 41.6% increase over the previous plan’s outlay of SR16.34bn ($4.35bn). These investments are complemented by substantial contributions from the private sector as industries ranging from carpet production to aerospace manufacturing look to cultivate new talent for their labour forces in the future.

By The Numbers

The SR10bn ($2.67bn) training market included 936 licensed civil institutes nationwide and was growing at 6% per year according to a report from the Technical and Vocational Training Corporation (TVTC) released in October 2012. A total of 85,386 students were registered in technical colleges for the 2009/10 school year – the most recent data available from the Saudi Arabia Monetary Agency. Some 61,049 students were registered for diploma-level degrees at technical colleges, while 16,012 students attended industrial vocational schools. These schools were staffed by 7021 teachers, with 4076 at the diploma level, 2586 at industrial training schools and the remaining 359 at other institutions. According to the Saudi Arabian General Investment Authority, 70% of trainees are below the age of 30, while 46% are younger than 20.

Technical Training

Central to these efforts is the TVTC, which received a makeover in 2007. In its current configuration, it is tasked with carrying out four major objectives: overseeing training programmes, conducting research on international developments in the field, participating in technological developments and encouraging private sector investment.

According to TVTC data, there were 35 colleges of technology operating within the Kingdom as of 2012, along with 14 higher technical institutes for girls and 63 other industrial vocational institutes. In the longer term, plans call for an eventual expansion to 40 independent technical colleges and 40 independent girls’ colleges, in addition to a network of as many as 250 joint public-private institutions. The plan has experienced substantial success in growing its student and private partnership base in recent years in part due to strong financial incentives to attract private participation. In addition to helping build a pipeline of trained personnel for their businesses, private companies that establish training centres also receive commitments by TVTC to foot the construction bill for these institutions.

HRDF

Working in partnership with the TVTC is the Human Resources Development Fund (HRDF), which was created in 2000 in order to help improve public and private participation in the sector. The HRDF’s primary tool in this regard is providing fiscal incentives via grants to students and employers, allowing both to share the costs of these programmes. These can significantly reduce costs for both potential employees, which stand to have 75% of their training costs covered by HRDF grants, and employers, which benefit from the fund since it pays for 75% of employees’ salaries during training and half of their salaries through the first year of employment. Another significant partnership – this time between the Ministry of Labour, the Council of Saudi Chambers and private sector companies – is the National System for Joint Training, which offers specialised training for Saudi citizens. These programmes have produced a steady stream of talent that is ready to work in a variety of industries. Current strategic partners include the Higher Institute for Plastics Fabrication, Riyadh Polytechnic Institute, National Institute of Technology, and more.

Partnerships

Partnerships with some of the largest international companies have become commonplace as businesses seek to gain access to the lucrative domestic market. General Electric has set up a venture with TVTC to train participants for the maintenance and repair of gas turbines, electrical motors and generators used in electrical power generation plants. US automaker General Motors and Swiss-based Nestlé also operate programmes. Aerospace giant Boeing has announced plans for an aviation training programme in the Kingdom for pilots and maintenance technicians.

These arrangements are also made with domestic companies. Saudi Aramco, the national oil giant, has sponsored the new 2500-person National Industrial Training Institute in Al Ahsa, which will provide hospitality and tourism training for students.

Wage Gap

Yet despite the enthusiasm of the dozens of private companies involved in these training partnerships, the wage gap in many technical and vocational fields between Saudi nationals and the country’s approximately 8m foreign workers remains wide. Whereas in the past both local and foreign companies were able to hire expatriate workers to fill positions for a much lower wage than a national would expect, a new mandate imposes a fee on businesses that employ more than 50% foreign workers. An annual penalty of SR2400 ($640) per worker over the 50% expatriate threshold is intended to sweeten the pot for firms to hire workers from the growing number of training programmes.

Equal Opportunity

Although there are currently more female students enrolled in universities than males and the Kingdom boasts the world’s largest women’s-only university, vocational training for women has lagged behind. But with 14 technical colleges already operating and another 26 planned, the country should soon see an influx of female graduates ready to enter the labour force.

One such programme that has enjoyed much success is the Bab Rizq Jameel (BRJ) initiative developed by Abdul Latif Jameel Community Initiatives. This has created 30,444 job opportunities through the first six months of 2012, 74% of which were for women. BRJ takes advantage of assistance provided by an array of public and private institutions to first train and then place employees in a variety of different jobs. These partners include the Ministry of Labour, the Taqat and Hafiz programmes operated by the HRDF, the TVTC, the National Commercial Bank and other private organisations.

The household programme, which is particularly suited for women workers, is one of BRJ’s most successful programmes and created 15,705 jobs in the first half of 2012 according to the company. In addition to training, the organisation provides interest-free loans of up to SR6000 ($1600) that can be used by small groups to start up their own micro-businesses selling products such as sterling silver accessories, gift wrapping, embroidery, perfumes and makeup. Another BRJ programme tailored for women is the Nafisa Shams Academy for Arts and Crafts, which provides training for women in different fields such as tailoring, carpet production, factory work, customer service and public relations. According to the BRJ, the organisation trained and placed 139,529 women from 2004 through June 2012.