Human capital development in Pakistan
Pakistan ranks 128 out of the 140 countries ranked by World Economic Forum in 2015-16 in Global Competitiveness Index
The writer is Associate Professor at Middlesex University Business School, London
Explaining Pakistan’s poor productivity and competitiveness in global markets at a recent event, Dr Salman Shah, Pakistan's former finance Minister, characterised the country’s position as “perilous".
Speaking on the first day of Pakistan Institute of Management’s (PIM) Advanced Management Programme in Bhurban, Dr Shah outlined how Pakistan’s position at the bottom of most international rankings undermines growth in the country. In the Ease of Doing Business rankings, Pakistan is ranked 113 out of 185 countries; in the Human Development Index it is ranked 145 out of 189 countries; and in the Economic Freedom Index it is ranked 120 out of 178 countries. In a globalised world, “economic competitiveness is the key to growth,” he said.
Pakistan ranks 128 out of the 140 countries ranked by the World Economic Forum in 2015-16 in the Global Competitiveness Index. In comparison, Pakistan’s near neighbours are all ranked higher. For example, Bangladesh ranks 107, Nepal 100, Iran 74, Sri Lanka 68 and India 55. Even tiny Bhutan is ranked above Pakistan at 117. The index is made of the “12 pillars of competitiveness”. Each of the 12 pillars is itself a composite score of a number of measures. For example, the fourth pillar, health and primary education (Pakistan: 122) is made up of five measures, which include quality of primary education and primary education enrollment. The fifth pillar, higher education and training (Pakistan: 129) is made up of eight components including quality of the education system and quality of math and science education in both of which Pakistan scores poorly.
Dr Shah emphasised the opportunities available to the private sector to improve specific components. Research and training services and the extent of staff training, which are also part of the fifth pillar, are two such components. Training in many Pakistani companies is not given any importance. “Training is seen as an expense rather than as an investment,” noted one delegate. “In my company training is given as a reward,” observed another delegate. "We are given a choice of attending any seminar we like. There’s no plan,” said a third.
Private sector training in Pakistan is a hit-or-miss proposition. There are few genuinely capable training providers available. In an unregulated, unlicenced market, poor service providers tend to drive out good training providers just as dirty money drives out clean money in a market. Human resource directors and training managers find it increasingly difficult to distinguish between genuine value-for-money training offers and opportunists selling things they have bought off-the-shelf and repackaged with videos from the internet. This is particularly true for non-technical training, such as management development and leadership training, which is difficult to evaluate beforehand. It makes training an unnecessarily high risk activity. As a result, companies either limit training to in-house provision or abandon it altogether.
Things, however, do not have to be this way. Companies can reduce the risk of wasted resources on poor training by taking a holistic approach aligned to company strategy and operations. Aligning the training needs of individual employees to the company’s current requirements (operational training) and future goals (strategic development) is one way to ensure a better return on training investment. Companies can also evaluate operational training on the basis of its measurable effect on effectiveness or efficiency, using metrics such as increase in speed or accuracy, reduction in costs or lead time. The outcome of developmental training might only be judged in the long-term but metrics such as the rate of new product development and increasing revenue streams are useful indicators. One desirable side-effect of good development programmes is better retention of talent; this is measurable.
Another risk reduction technique is a brief but focused evaluation of the training provider. For operational training key criteria include the training provider’s certification or qualifications in the discipline and experience of serving companies with similar needs and staff profiles. Development trainers should be people who have expertise to offer or who can open alternative approaches to understanding customers and markets. This might be determined by whether they have published research or authored well-regarded articles or books. Academics and commentators with an international reputation might also be employed for this purpose, especially those whose previous work suggests they would stretch employees to think creatively.
One developmental option available to companies in Pakistan are residential programmes such as PIM’s Advanced Management Programme. Targeted at senior executives, the value of these programmes is in their immersive experience. Within a few hours, Dr Shah took this batch of executives through an extensive analysis of productivity barriers and new business opportunities. The very next day the same executives worked on developing different business models which made them explore creative solutions to the problems identified earlier.
Senior executives seldom have the time for intense analytical and creative thinking outside of work routines. If they don’t take time out to think about new ways of approaching problems and opportunities, how will they ever lead their organisation in new directions? PIM’s Advanced Management Programme is an intensive two-week programme aimed at providing senior executives with such opportunities.
Published in The Express Tribune, August 29th, 2016.
Speaking on the first day of Pakistan Institute of Management’s (PIM) Advanced Management Programme in Bhurban, Dr Shah outlined how Pakistan’s position at the bottom of most international rankings undermines growth in the country. In the Ease of Doing Business rankings, Pakistan is ranked 113 out of 185 countries; in the Human Development Index it is ranked 145 out of 189 countries; and in the Economic Freedom Index it is ranked 120 out of 178 countries. In a globalised world, “economic competitiveness is the key to growth,” he said.
Pakistan ranks 128 out of the 140 countries ranked by the World Economic Forum in 2015-16 in the Global Competitiveness Index. In comparison, Pakistan’s near neighbours are all ranked higher. For example, Bangladesh ranks 107, Nepal 100, Iran 74, Sri Lanka 68 and India 55. Even tiny Bhutan is ranked above Pakistan at 117. The index is made of the “12 pillars of competitiveness”. Each of the 12 pillars is itself a composite score of a number of measures. For example, the fourth pillar, health and primary education (Pakistan: 122) is made up of five measures, which include quality of primary education and primary education enrollment. The fifth pillar, higher education and training (Pakistan: 129) is made up of eight components including quality of the education system and quality of math and science education in both of which Pakistan scores poorly.
Dr Shah emphasised the opportunities available to the private sector to improve specific components. Research and training services and the extent of staff training, which are also part of the fifth pillar, are two such components. Training in many Pakistani companies is not given any importance. “Training is seen as an expense rather than as an investment,” noted one delegate. “In my company training is given as a reward,” observed another delegate. "We are given a choice of attending any seminar we like. There’s no plan,” said a third.
Private sector training in Pakistan is a hit-or-miss proposition. There are few genuinely capable training providers available. In an unregulated, unlicenced market, poor service providers tend to drive out good training providers just as dirty money drives out clean money in a market. Human resource directors and training managers find it increasingly difficult to distinguish between genuine value-for-money training offers and opportunists selling things they have bought off-the-shelf and repackaged with videos from the internet. This is particularly true for non-technical training, such as management development and leadership training, which is difficult to evaluate beforehand. It makes training an unnecessarily high risk activity. As a result, companies either limit training to in-house provision or abandon it altogether.
Things, however, do not have to be this way. Companies can reduce the risk of wasted resources on poor training by taking a holistic approach aligned to company strategy and operations. Aligning the training needs of individual employees to the company’s current requirements (operational training) and future goals (strategic development) is one way to ensure a better return on training investment. Companies can also evaluate operational training on the basis of its measurable effect on effectiveness or efficiency, using metrics such as increase in speed or accuracy, reduction in costs or lead time. The outcome of developmental training might only be judged in the long-term but metrics such as the rate of new product development and increasing revenue streams are useful indicators. One desirable side-effect of good development programmes is better retention of talent; this is measurable.
Another risk reduction technique is a brief but focused evaluation of the training provider. For operational training key criteria include the training provider’s certification or qualifications in the discipline and experience of serving companies with similar needs and staff profiles. Development trainers should be people who have expertise to offer or who can open alternative approaches to understanding customers and markets. This might be determined by whether they have published research or authored well-regarded articles or books. Academics and commentators with an international reputation might also be employed for this purpose, especially those whose previous work suggests they would stretch employees to think creatively.
One developmental option available to companies in Pakistan are residential programmes such as PIM’s Advanced Management Programme. Targeted at senior executives, the value of these programmes is in their immersive experience. Within a few hours, Dr Shah took this batch of executives through an extensive analysis of productivity barriers and new business opportunities. The very next day the same executives worked on developing different business models which made them explore creative solutions to the problems identified earlier.
Senior executives seldom have the time for intense analytical and creative thinking outside of work routines. If they don’t take time out to think about new ways of approaching problems and opportunities, how will they ever lead their organisation in new directions? PIM’s Advanced Management Programme is an intensive two-week programme aimed at providing senior executives with such opportunities.
Published in The Express Tribune, August 29th, 2016.