• Monday, March 04, 2024
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BusinessDay

Skills shortage forces manufacturers to rethink human capital strategy

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Given the deficiency in the level of manpower competence across industries in the country, a number of companies are re-thinking their training strategies to boost productivity.

Analysts believe the trend is an indication that companies are becoming less interested in higher certificates, but are beginning to adopt the German-type dual educational model, which combines apprenticeships in a company and vocational education at a vocational school in order to boost output per worker.

Employers of labour across Nigeria have complained over the years that the performance of the majority of graduates in industry does not justify their certificates. This has created a need to retrain fresh-from-school employees and has grown and fed a big corporate re-trainers industry. Many employers who wish to bypass this rigour often insist on employing foreign-educated graduates.

Dangote Industries Limited is leading the chase in the new thinking on re-training, having established an academy to train young local talents to boost the manpower needs of the nation’s industries, with a view to arming them with adequate skills to support manufacturing activities.

Aliko Dangote, president/chief executive officer, Dangote Industries Limited, said that a total of 8,000 technicians are needed in his $9 billion refinery and petrochemical investment, of which he would be recruiting 300 each year.

Recently, his firm interviewed 550 secondary school leavers, out of which 200 were shortlisted and only 50 eventually engaged.

“As a nation, one of our major challenges to industrial development is not really funding, markets, or raw materials, but rather absence of highly trained and experienced human resources to drive growth,” said Dangote, while commissioning the academy.

Construction firm Julius Berger Nigeria runs a training school for its employees. So does Promasidor Nigeria.

General Electric (GE) has also made an investment commitment of $1 billion into Calabar, Southern Nigeria, for a planned manufacturing and assembly plant expected to create 2,300 jobs. Additionally, the company plans to set up a training institute on site to build employee capacity and capability.

A lot of oil companies, such as Exxon Mobil, have also established training facilities.

Nigeria’s unemployment rate is an elevated 24 percent, according to official data from the National Bureau of Statistics (NBS).

The NBS survey also shows that in 2013, 2.1 million people entered the employment market but only 1.6 million of them were able to gain jobs. Of the 1.6 million jobs, 88 percent were for limited skills, mainly secondary school leavers. The formal sector created 152,018 jobs in the 4th quarter of 2012 and 174,326 jobs in the 1st quarter of 2013.

Managerial/professional/technical jobs occupied 41.39 percent in the last quarter of 2012 and 52.88 percent in the first quarter of 2013.

Full-time manufacturing jobs (male) created were 5,853 in the last quarter of 2012 and 7,104 in the first quarter of 2013. Part-time manufacturing job statistics show 1,016 jobs were created in the last quarter of 2012 and 1,614 in the first quarter of 2013.

In spite of this, stakeholders believe the manufacturing sector can do more in employment creation.

“The pace of growth is good but the quality of growth matters. Manufacturers need to create more jobs; there is the need to create 2 million jobs in 2014,” said Ngozi Okonjo-Iweala, minister of finance and coordinating minister for the economy, during an interactive session between her and members of the Manufacturers Association of Nigeria (MAN) in Lagos on Monday.

Quality education across the globe is a tool for human capital development. It is also regarded as a contributory tool to economic development of any nation.

In order to tackle the issue of inadequate mid-level managers, companies are turning to training programmes from high-end education providers, such as the Lagos Business School.

BusinessDay findings are that on average, the over 200 Nigerian universities churn out an estimated 2.1 million graduates yearly, who are plunged into the already-saturated labour market, with few or no jobs available to cater for them, as there is often a skills mismatch between what they have to offer and what employers want.

Peter Okebukola, a lecturer at the Lagos State University, said in an interview with BusinessDay that if the country must overcome the problem of unemployment and underemployment, there must be improved efforts in retooling the training and re-training methods at all levels of education.

“Government should tackle the problems of inadequate funding and insufficient quality and quantity of teachers,” Okebukola said.

“A higher percentage of annual budgetary allocations should be devoted to education and the allocations must be properly monitored so as to minimise the difference between budgetary allocations and amount actually released,” he added.

By: ODINAKA ANUDU &  KELECHI EWUZIE