Time goes by, globalisation calls and new relationships between firms and the shift in education and training, brought about by trans-national corporations, are the main challenges that HR departments are facing during the first part of the century. These new perspectives and wise insights were given by skilled expert, David Ashton. “We need to ask ourselves some questions, like what is this change telling us and where are we heading?” (in the context of the global market), said Prof. Ashton during his first paper at the seminar organised by the Foundation for Human Resources Development on 28 May. Prof. Ashton, Emeritus Professor at Leicester University, has carried out research work with major trans-national corporations for more than 40 years. This annual seminar celebrated both the 20th anniversary of the Foundation’s inception and its 10 years of partnership with the Centre of Labour Market Studies at the University of Leicester.
According to the project on which Prof. Ashton’s team has been working for the past 10 years, which involves hundreds of companies from four core economies, globalisation is threatening the traditional model of relations between the market and the education system. Moreover, the tables have since turned, and western countries, which were previously thought to be at the peak of research and development, are now looking more at how business is managed in eastern countries, particularly in Asia. The “astonishing” growth of China is, to Prof. Ashton, the best example of adaptability – a soft, but sure and steady approach. Education has been a critical factor in this fast economy, with Asia doubling its intake of university students in the last decade. Due to the second wave of globalisation in which information technology and the Internet have allowed the wide spread of knowledge and have also facilitated greater control over production processes, certain countries have made the most of their highly skilled workers. “And we in Europe are already behind them,” Prof. Ashton declared.
On this issue, Godfrey Pirotta, Professor in the Department of Public Policy at the University of Malta argued: “Investments in education are huge in Asia, where there is a perfect alignment between industry needs and education standards. We are still very far from that,” he lamented. His comments were part of the panel discussion that followed Prof. Ashton’s paper. On the other hand, Dr Christopher Bezzina, Permanent Secretary in the Ministry of Education, Employment and the Family, referred to scholarships for postgraduate students as one of the solutions, because “it will help Malta grow.”
Despite the fast growth of certain eastern countries in comparison to western countries, Europe need not necessarily be at a disadvantage but, on the contrary, can exploit its benefits and reach out to the new competencies in other regions of the world. However, this calls for new competencies in Europe as well, such as diversity management and high-level performance management, where people are truly engaged in the visions and operations of the company.
Furthermore, common HR systems to grade and classify management, professional recognition of the HR function and the development of tools that differentiate functions and talent are very important for companies to build the HR capacity in order to be able to compete, said Prof. Ashton. These globalised skill webs create global competences that enable enterprises to speed up the process of learning and skill acquisition. “With the previous, 20th century, model of learning skills, companies had to outsource training. Nowadays, companies that use training as a strategic tool are able to find trainers from within their own organisations,” he pointed out. Asian countries are, again, one step ahead in this, as they have managed to invest highly in skills upgrading over a period of time and can now capitalise on this competence by implementing changes at less cost, retaining staff because they are engaged and achieving a better return on investment for their shareholders. They can, therefore, now compete on quality and cost – a fact that has definitely moved up skills into the business agenda all around the globe.
The implication of these substantial changes threatens not just international and national markets but, most of all, traditional educational systems. Thus trans-national companies demand shorter periods of training specifically geared to business competences which, combined with “the facility of recruiting qualified workers in any country, get rid of the western idea that links university degrees with high wages”, said Prof. Ashton.
In this regard, Dr Philip von Brockdorff, Chief Executive Officer, Centre of Policy Research and Training, said: “The University of Malta is combining teaching and research, even though students are not into investigation and growth but into getting jobs easily. Therefore, a change in the culture of learning is needed”. However, Norbert Grixti, General Manager of the Excelsior Grand Hotel in Malta, said during an interview that the weakness is not in the university context but in low-skilled workers. “They have to invest more in Maltese workers, which the university is not doing because it is focused on creating lawyers, doctors, etc. Meanwhile, we companies have to provide capital to address the gaps in our educational and vocational training systems”.
FHRD Chief Executive Officer Joe Gerada said that people’s competencies had to be aligned to the right management structures and therefore leadership was critical in this respect, as competent people only functioned optimally under competent leadership.
How to respond to the challenges of these diverse changes in global markets was the focus of the second part of the seminar. Prof. Ashton, who has also acted as consultant for the United Nations International Labour Organisation and the World Bank, highlighted the use of modern management practices to make the most of employees’ skills as the key source of competitive advantage. Organisations are witnessing the beginning of new practices that aim to build common values, trust and mutual gains instead of the old-fashioned business tendencies geared to command and control, and the stimulation of more effective employee involvement and commitment will be the outcome.
Building commitment to common values alongside trust is considered the starting point from which these practices can be implemented. “Committed workers do not need to be supervised and if they make a mistake, this needs to be understood as part of the learning process. Accepting criticism has to be part of the training, while sharing information is vital for the system and for achieving goals,” said Prof. Ashton.
Bruno Cassar, Senior Vice President and head of Human Resources at FIMBank plc, confirmed this during the panel discussion, when he remarked: “As leaders and managers, the responsibility rests with us to be approachable and build trust.”
Implementing this with rewards and motivation would be the natural step forward on the wheel of success. Staff recognition and support, employee engagement, space to innovate and opportunity to participate actively in the strategy of the organisation are some measures that seem to make the difference in competition. In this respect, it goes without saying that “managers have to teach so they need to be aware of how to do it, because they must know how to give new ideas”, Prof. Ashton said.
Michael Mifsud, HR Manager at Mangas Gaming, totally agreed with this argument when he was interviewed after the seminar. “We have to implement more than just one measure and emphasise the psychological commitment of employees within the organisation. The challenge is how to combine results and relations,” he said.
Aligning these practices will make the difference between companies. Theories are already established but now is the time to implement them by making employee skills the centre of business success. This is the competence of doing as opposed to the wisdom of knowing.
Mr Martinez Cantera is a Spanish journalist at the Foundation for Human Resources Development