Why do employers recruit low-skilled foreign workers?

Dhaka,  Sun,  24 September 2017
Published : 13 Mar 2017, 20:06:32
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Why do employers recruit low-skilled foreign workers?

Nurunnabi Khan
Commenting on the restriction imposed by the Bangladesh Investment Development Authority (BIDA) on the employment of low-skilled foreign workers, the Financial Express editorial of February 19 said, "The restriction imposed by the Bangladesh Investment Development Authority on recruitment of low skilled foreign workers by all means is timely."

   Considering Bangladesh's current socio-economic realities, there are no reasons to doubt about BIDA's good intentions. For a low- income country like Bangladesh with huge unemployment and underemployment problems, particularly among the youth, job creation is a priority area. At the same time, the country can ill-afford to allow outflow of a staggering US$ 5.0 billion remitted annually by the expatriates working in Bangladesh.  

As a way of explanation to the above restriction, the BIDA has pointed out that many of low-skilled categories of workers can be filled in by the Bangladeshi workers. The country has a large number of technical and vocational institutes that are producing equally qualified skilled workers.

If this is the case, why then employers in Bangladesh are opting for higher paid foreign workers? Are the employers so "naïve" to ignore their own interests?  

BIDA's argument that enough qualified skilled workers and technicians are available in Bangladesh needs to be supported by hard evidence and good justifications. Why then the employers go on hiring the ever-increasing number of foreign low-skilled workers? 

To find an answer to the above question and identify the root causes of this unwelcome trend of hiring expatriate workers, it would seem logical on the part of the government to initiate result-oriented actions. Particularly, BIDA and the government agencies responsible for administering and delivering the country's skills development system should take the lead in this regard. Among others, Employers' Associations in various sectors, the individual employers, and the well-reputed national skill providers (public, private and NGOs) should be part of this process. Here are some possible suggested steps for consideration of the government and the relevant authorities.

The first step is to carry out credible information collection and in-depth opinion survey of employers, particularly on their recruitment pattern and human resource (HR) policies relating to hiring of new workers. This should be done through full cooperation and support of the employers. This should also include the current and future demand trends of various categories of skilled workers, the reasons behind preferring foreign workers instead of Bangladeshi workers, and possible actions to change the existing recruitment practices of the employers. Opinion surveys of employers from other countries show that the employers prefer both technical skills and non-technical skills while recruiting new employees. Such non-technical skills (called as "soft skills") include good conduct, communication skills, ICT skills etc. It is important to review whether the country's training system provides such kind of "soft skills" and prepare their graduates for the work.   

The second step is to enter into dialogue with the major employers and industry associations like ready-made garment (RMG), leather, textile, Information and Communications Technology (ICT) and similar other industries to find out their views and seek suggestions on the matter. Large employers' organisations like the Bangladesh Garment Manufacturers and Employers Association (BGMEA) complain about shortage of skilled workers. According to them, they are compelled to hire foreign workers by spending hard currency since the country's skills system is not able to produce skilled workers which the industry needs. The problem in this regard is that the employers' organisations in Bangladesh generally lack the capacity and interest to conduct assessment on their own regarding their requirements for skilled or semi-skilled workers. It is advisable for the employers to initiate their own assessment with the help of donor agencies engaged in skills development system.     

The third step is to find out why the country's skill development system is unable to meet the industry requirements? What are the realistic responses from the side of both the employers and the training providers? This will involve looking at the current state of the country's labour market characterised by significant skill mismatches, i.e., supply of skilled workers does not adequately match with the demand for them. 

For example, the Education Watch Report 2016 revealed that 42 per cent of the recipients of skills training have reported 'no use' of their training in professional life. Only 22 per cent of the recipients of skills training reported to have 'fully' used their skills in occupation and 35.8 per cent 'partially'. This means that the skills on demand are not adequately produced by the country's training system. Similar results can be found from the survey reports of the development agencies like ILO, ADB, World, Bank and others. These agencies are also currently supporting major skill development projects of the government.

The fourth step is to actively promote collaboration between employers and the training providers and to strengthen industry-institute linkages in the design and delivery of technical and vocational training in the country. This can take several forms such as: public-private partnerships and employer-led initiatives like on-the-job and apprenticeship training. In other words, the national skills development system should be geared towards a demand-driven and employer-supported programme. A strong focus should be on capacity development of the system led by the government and non-government actors to successfully deliver what the industry needs. Currently, such capacity development is being supported by several skills development projects funded by important donors like the Asian Development Bank (ADB), World Bank, European Union (EU), Canada, UK, and UN agencies like the International Labour Oraganisation (ILO). These donor-led initiatives, though these are steps in the right direction, are still disjointed and needs to be scaled up and mainstreamed into the bigger national training system.  

The fifth and the final step is to allocate a certain percentage of public funds to be channeled to the private sector for skill development based on well-laid-out and measurable performance criteria and guidelines. The objective is to reward those employers who are good skill providers as well. 

This will work as a strong incentive for the employers to take wholehearted initiatives on skills training and thus to reduce their dependence on low-skilled foreign workers. The Government of Bangladesh, with the support of the development partners, has already taken the initiative to set up a Human Resource Development Fund (HRDF) but it is still at its infancy. Needless to mention, the employers and their associations would like to see prompt action and effective implementation of this funding mechanisms.     

The writer is a former ILO Official and currently a freelance consultant. babul.khan54@gmail.com
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