Making a Case for Investing in the Manufacturing Workforce in Cambodia

Little has been done to encourage investment into building training or education programs for the garment sector.  Our workforce does not have exposure, understanding or access to information on how they can do things better and more efficiently.

Our workforce is mostly rural having completed mostly primary or secondary education.  Many are illiterate and have little technical skills.  Coaching and training is provided on the job to do tasks, but its basic and stops once the employee is able to do a task.

Our workforce comprises mainly young women migrating from provincial areas to find better economic opportunities.  These young woman are not ready for the rigor, discipline and physical energy needed for an industrial environment.  They lack access to information and training to be more effective in their positions.  Nutrition and personal care are pressing issues for young women working away from home.

Word of mouth and peer counseling through relatives and friends is how most of the workforce deal with challenges in the work place.  Cultural norms play a big role in influencing how the young workforce is able to draw on management and supervisors to get better coaching within the workplace.  Management and supervisory styles are top-down and very often evokes the “fear in people” rather than a disciplined, coaching style that focuses on continuous improvement and sharing of skills

Employers are encouraged to invest in Cambodia through economic and business benefits!  Workforce remains an investment incentive & attraction:  Cost effective & plentiful!

There have been no incentives for employers to invest in their workforce.    Investors have taken a rural workforce and turned them into workers capable of delivering products to the worlds leading brands and consumer markets.  Incentives for the sector have primarily been economic and business driven, not workforce driven.  The investment into basic skills & workforce development is traditionally an area where Government should be active in providing the basic skillsets for industries, this has created a catch 22 situation for the sector.  Investors invest in building manufacturing facilities and training up unskilled workers to be skilled to the level required – not to have to reinvest again.

The industry is a CMT industry and the types of machinery and skills do not warrant employer investment into workforce or to have a multi-skilled & multi-ability workforce.  Employers don’t see a need to increase or diversify skills of their workforce regardless of the industry diversifying.   As with new enterprise establishment diversified investors will invest themselves in building their basic workforce and wait for a return on their investment.  It is still easy and economically viable to bring in foreigner workers to help do the basic set up and training.  We have a large supply of workers who are learn quickly up to a certain point.  This training is not a significant investment to make in the bigger scheme of things.  Little competition in the industry for higher skilled workers means there is no incentive to invest in up skilling workers.

Industrial relations and management views on training also have an impact on deciding whether or not to invest in the workforce

Industrial action has been a deterrent for many entering the country and remains a challenge that hinders workforce investment.  Employers doubt that investment in the workers’ skill and efficiency training will produce measurable economic benefits.  In particular:  There is an absence of credible training providers.  Because of the investment into basic skills training, typically a public service, further investment into the diversification of the workforce is not a top priority for employers.

The idea that paying for training is paying for something that the company will not benefit from.  The idea that paying for training automatically implies increased wages.  Increased wages from training investment comes through higher productivity and incentive earnings – working smarter.  Quicker delivery of goods and services should mean the company earns significantly more in proportion to employee increased earnings.  Investment in training means better skilled people who can take on additional responsibility and can be promoted through formal channels.  Increase is wages is proportionate to salary scales and vacancies to be filled, which does not increase the wage bill as the company would otherwise hire someone to fill a vacancy.  Internal promotion is significantly more cost effective than recruitment and induction of a new employee.

There are already competitive economic forces coming into play which should attract employer attention to invest in their workforce.

Some factories are paying higher wages than the established minimum wage for the industry, to attract and retain talented workers.  Competition for recruiting and retaining workers will become an increasingly challenging affair for garment manufactures in the future.  Investors from China see Cambodia as an alternative to the soaring wages and operating costs.

Skilled workers  are a better choice than paying low wages, and hiring more to do the job.  The industry is diversifying its product base demanding higher skilled and multi-skilled workers. diversified talent and abilities.  The industry will become an attractive industry for skilled workers however, will it remain an attractive industry for investors?

With ASEAN regional integration and free labour flows, the industry as a whole risks losing its position unless the pool of skilled workers grows.  Experienced workers may be able to demand higher wages in other industries, or in other countries unless garment making offers opportunities. 

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