Manufacturers Address Skilled-Labor Shortage; ‘We Can’t Wait,’ BMW Executive Says
BANGKOK—Manufacturers here are taking matters into their own hands to patch up a weak spot of Thailand’s economy: its worsening shortage of skilled labor.
A shrinking labor pool and inadequate training for workers are constraining business and industrial growth, investors here say. Now an increasing number of companies—many in the auto industry—are rolling out apprenticeship programs aimed at beefing up the workforce themselves.
At the Mercedes-Benz training center near Bangkok recently, teenagers in blue jumpsuits worked at electrical training boards to learn about circuit technologies, wiring connections and electrical interfaces of different car components. The goal at the Daimler AG unit is for the students to be able to service and maintain all the models that are made in Thailand.
“There’s a lack of manpower, adequate skills, teaching and training to prepare young people for the job market,” said Thavorn Chalassathien, a senior vice president at the Thai unit of auto-parts maker Denso Corp. of Japan. Denso’s Thai unit has started its own apprenticeship program and last month began training some 30 vocational instructors in the latest production technologies.
The lack of adequately trained workers is a headache for Thailand, whose economic success has depended on a supply of cheap, low-skilled labor to attract foreign investment, but which is now trying to go up the manufacturing food chain amid competition from countries such as Vietnam, Cambodia or Myanmar, where wages can be as much as two-thirds lower.
Manufacturers in Thailand said it took them more than six months to find workers for about 60% of the jobs they had open, according to a survey by the country’s National Statistical Office. The sector, which accounts for nearly one-third of Thailand’s economic output, had the second-highest level of labor shortage per company in the survey, after hospitals.
Getting more skilled workers is particularly important for the global auto industry, which uses Thailand as a production hub in Southeast Asia.
Thai car makers aim to increase production to 3.5 million vehicles a year by 2020 from 2.5 million units currently, which will require an additional 120,000 workers—18% more than the current labor force of 660,000 people.
“To be competitive, we need skilled workers to create innovation and drive toward higher productivity,” said Phongsakdi Chakshuvej, an executive at B. Grimm Group, one of Thailand’s leading conglomerates, whose businesses include energy, air conditioning and transport.
Many employers say the core of Thailand’s problem is an education system that doesn’t meet their needs—especially for engineers and skilled factory workers.
Thailand this year ranked 31st out of 144 economies for overall competitiveness, but only 87th for the quality of its higher-education system—lower than Indonesia and the Philippines and nine slots below last year, according to the World Economic Forum’s Global Competitiveness Index, which compares countries across a set of factors that support productivity.
Although university enrollment has doubled over the past decade, only one-fifth of the students are in engineering and science. Meanwhile, enrollment in the vocational high schools and colleges that historically supplied much of the manufacturing work force has fallen 5% over the past five years.
Even the vocational schools aren’t giving their students the skills factory operators really need, employers say—a big reason many are sponsoring apprenticeship programs.
“We are talking about decades to get the education system to change and we can’t wait. We are in a dynamic market,” said Matthias Pfalz, president of BMW Group Thailand, a unit of Germany’s BMW AG whose car sales have tripled over the past four years.
BMW as well as Mercedes-Benz, B. Grimm Power and three other members of the German-Thai Chamber of Commerce are in the vanguard of the apprenticeship effort. The companies are focusing on recruiting vocational college students for two-year courses split between the classroom and shop floors.
The roughly 90 students who have joined the program—now in its second year—get a full scholarship, minimum-wage salary, health benefits and, in most cases, jobs after graduation.
The project is roughly modeled on the apprenticeship programs that helped Germany’s economy recover after World War II.
“All of the 50 students we recruited [this year] were offered a job by the end of a meeting with our 31 official dealers. And there’s still a lot of demand,” said Putthi Tulayathun, vice president of Mercedes-Benz Thailand’s After-Sales.
Other businesses are following suit.
The Thai Chamber of Commerce and the Federation of Thai Industries signed an agreement this month with the German-Thai Chamber of Commerce to help member companies develop their own work-study programs. A pilot program by the Thai Chamber of Commerce is expected to start in the first semester of next year to train 160 students in electric power, electronics and mechanics.
Source: http://www.wsj.com/articles/in-thailand-firms-add-apprentice-programs-1417109906
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