Best-in-the-World Practices

Training & Development, June 1994 | Go to article overview

Best-in-the-World Practices


Take an international perspective on workforce quality and competitiveness. Before U.S. companies can adopt and adapt the best strategies from Europe and the Pacific Rim, businesspeople have to be able to understand and compare them. Profiles of four countries highlight this U.S. Department of Labor report.

In the past few years, the American psyche has been confronted almost every day with flattering and sometimes intimidating information about the way other advanced industrialized countries conduct themselves in order to remain economically competitive.

Much of that information glosses over significant differences between the United States and its international competitors. But such information is leading us to embrace European and Japanese models in revising our own workforce preparation, training, and retraining systems for the 21st century. What is the nature of those models? Is such borrowing warranted in our pursuit of greater quality and competitiveness?

Tighter labor markets and global economic pressures are driving government policies in European and Asian industrialized nations toward high-skill, high-wage systems. Japan, Sweden, Germany, Denmark, and other nations have maintained high standards of living, real wages, and productivity growth. The pay differentials between college-educated and non-college-educated workers are narrower in those countries than they are in the United States. Income distribution is less skewed.

In contrast, says the Commission on the Skills of the American Workforce, the United States tends to cut wages to remain competitive. According to the commission's series of reports, America's Choice: High Skills or Low Wages! we in the United States are not adequately preparing our children to be productive, multi-skilled workers.

Such indictments explain the growing interest in European and Asian approaches among American businesspeople. Two European and two Asian countries' strategies are profiled here, with special emphasis on Germany and Japan.

Germany

Germany has the world's third largest economy and is the world's largest exporter. The development of Germany's workforce begins with strategies that address the education of Germans before and as they enter the workforce. Uniform, regulated national standards govern the delivery of a highly decentralized educational program. And a dual academic/vocational system with certifications ensures the achievement of those standards. Publicly run educational institutions offer free tuition and provide educational subsidies for low-income youth.

The German government requires 12 years of schooling for children. After nine years of regular schooling, a 15-year-old can choose an academic or vocational track for the next three years. The choice depends on academic achievement and occupational preference. Only 20 percent of students enter regular university programs for an academic track. Within the vocational route, an array of options is available, particularly in apprenticeships.

A federal employment office fills about 30 percent of all jobs. Few private employment agencies exist, and those are highly regulated by the government. The employment office provides retraining in most occupational fields to displaced workers, typically lasting two years and combining classes with on-the-job training. Special one-year courses are available to the long-term unemployed.

Unemployment insurance in Germany is a national system, jointly funded by employers and employees, and managed by the government. The system provides both training and employment services. Only apprentices and people who have had job experience are covered. The payments are tied to a person's previous earnings and can last up to a year. Health and pension benefits are paid until the job-seeker obtains employment. Public welfare assistance covers unemployed workers who do not qualify for unemployment insurance; it provides 56 percent of a person's net salary. …

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