Commentary: Suspensions and lapses in SkillsFuture courses – let market forces regulate training programmes

SINGAPORE: Kaplan Professional was suspended from the Singapore Workforce Skills Qualifications (WSQ) accreditation due to serious lapses, said SkillsFuture Singapore last week.

SkillsFuture Singapore did not mention the reason for the suspension.

Notwithstanding this case, from my experience, the bulk of such lapses typically relate to whether training programmes meet their learning goals. Are trainees learning a new skill as the course promises?

But then again, why should we bother whether trainees learn anything? Market forces can decide if a course has been useful. People should naturally move away from providers that offer empty promises.

However, because the Government is paying a significant portion of the training fees, provided through SkillsFuture credits, and the co-payment is small, lapses sometimes go undetected and companies continue to profit from public coffers.

In other words, the market isn’t able to correct itself.

HERE’S A DIFFERENT MODEL FOR TRAINING PROVIDERS

A different model from co-payment can give training institutes more skin in the game.

The Lambda School in California teaches information technology skills online and charges no tuition fees. Instead, students can agree to pay a percentage of their income after they’re employed, and only if they’re making more than US$50,000 a year in the first five years.

The deal is students pay back 17 per cent of their income from their first two years of work after, if earnings exceed US$50,000 a year, with a cap of US$30,000 of fees they pay in total.

Otherwise, students also have the option of paying US$20,000 in tuition upfront and keeping their future income.

The incentive structure is clear. If the training institute does not impart transferable knowledge to trainees that can earn them a great job that pays well, the training institute does not get a single cent.

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Some form of deferred payment, conditional on a pay floor of the worker who has undergone training is possible under SkillsFuture, if the training provider agrees. Though the mechanics might seem complex at first sight, this self-regulation can be a virtuous cycle, which will require less auditing of such programmes from authorities in theory.

Lambda founder Austen Allred has said that the average income of entering students is US$22,000, a figure that triples after they leave. Eight in 10 graduates land jobs in fast-growing tech giants like Google, Amazon and Verizon.

REMAINING SENSITIVE TO MARKET DEMAND FOR SPECIFIC SKILLS

Sometimes, all an effective training provider needs to do is identify and respond to fresh gaps in the market and emerging demand for certain skills in a particular industry.

For instance, Singapore’s Ministry of National Development announced in 2018 that the Building and Construction Authority will introduce a mandatory façade audit for some buildings. Under this new regime, all buildings taller than 13m and older than 20 years will be required to hire qualified personnel to carry out an inspection every seven years.

The dangers are real. Tiles, beams and other façade features on tall buildings can fall off if unchecked and seriously hurt people. Just last year, a man was injured after a falling piece of concrete outside Wanderlust Hotel in Little India hit him.

A handful of enterprising training institutes are already offering such training programmes.

Some companies have also arranged for their staff to go for training so that they can stay abreast and be quick to capture this new market need. Some civil engineers are paying with their own money to familiarise themselves with BCA guidelines and audit framework.

Apart from certificates of completion, what matters most to this segment of workers is learning effective new skills that will enable them to perform this new audit function. Market forces should weed out ineffective training programmes because they aren’t subsidised.

Another hot area of demand is data analytics skills. Many marketing executives I know are attending night courses on data analytics at their own expense.

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Time is precious. If the courses are not useful, those undergoing training might quit after a few lessons and the take-up rate will fall.

But if the Government wants to encourage training providers to be sensitive to market demand, it’s worth considering tweaking the SkillsFuture framework to incentivise them to provide well-subscribed courses with good income growth.

LIFE-LONG LEARNING IS OXYGEN

Beyond ensuring training providers are driven by market forces, it’s critical to ingrain in our workforce a new growth mindset towards adopting new skills and ensure they are encouraged and supported to do so.

In Singapore, our unions are diversifying their value-add and shifting from worker representation to worker empowerment.

In Singapore’s new economy, which is increasingly driven by digitalisation and globalisation, employers need a flexible workforce that can learn new skills fast.

Singaporeans must understand that nobody owes us a living. Once you are employed, you must find ways to keep yourself useful.

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To achieve progression, a worker must learn new skills to move to the next job, and build up his portfolio of knowledge. This can take place within the same company or institution.

In educational institutes of higher learning in Singapore, some economists have switched from teaching theory to teaching applied econometrics and data analytics. 

If an executive remains on the same job for five years and what he does can be performed by a fresh graduate who is paid less, he might find himself at risk of losing the job or be forced to go back to apply for the entry-level job along with fresh graduates.

Imagine he has a housing mortgage, a child and other family responsibilities. How does he compete?

Once a person is caught in this vicious cycle, it can take so much more resources to help him out of his predicament, compared to if he had routinely upgraded his skills.

Workers must take matters into their own hands. Life-long learning is not a choice anymore but oxygen.

We can tweak how training institutes are funded but more importantly, we must make life-long learning into a way of life that we embrace instead of resent. Age cannot be an impediment.

I know of some medical professionals in their 60s who have started learning Traditional Chinese Medicine, including some academic professors. They may get a certificate but their main motivation is to stay ahead of the curve so that they can continue to look after themselves and their loves ones well.

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There are abundant training opportunities in Singapore – whether employer-funded programmes, NTUC-backed courses, those offered by self-help groups and many more funded by the Government.

For publicly funded training programmes, there must be accountability. But there is only so much that the Government can do. Leaving the market to discipline training providers is the best approach.

ONE MORE SUGGESTION

I’ll leave you with another example of how we can increase skin in the game for workers. Each citizen aged 25 and above in 2016 has been given a SkillsFuture account of S$500.

Instead of SkillsFuture funding payment for courses in full, it’s worth considering a co-payment model for the worker and his company, with a SkillsFuture credit dollar-to-dollar matching by the Government for some courses, so that they too have skin in the game and greater accountability when it comes to retraining.   

That way, workers feel the pinch if the training course is not helpful. Companies will also be loath to send workers for training that do not yield productive results.

Dr Chew Soon Beng is a labour economist at NTU. He is also Senior Fellow at RSIS.