University degrees: Mindset shift needed

By Pearl Lee, The Straits Times, 13 Apr 2015

IN SINGAPORE, most students hope to get a degree.

Polytechnic officials estimate that eight in 10 polytechnic graduates here eventually go on to get a degree.

If they do not make the cut to get into any of the six public universities here, students often take a degree at a private institution, such as Kaplan Singapore or the Management Development Institute of Singapore (MDIS). Or those who have the means might head for universities abroad.

But with economists warning of a graduate glut and an increasingly complicated knowledge economy, there is a need to rethink the mentality that a degree is the be all and end all.

The most common reasons cited by students for pursuing a degree are that it gives them a better salary and brighter job prospects when they start work.

A 17-year-old student from the Institute of Technical Education said: "The higher your education, the more your job options and the better your pay."

And the results of the latest graduate employment survey support this view. The median salary of university students who graduated last year rose to a high of $3,200, up from the $3,050 for the class of 2013.

In contrast, a survey of fresh polytechnic graduates showed that their median monthly salary over the same period stayed at $2,000.

But just being armed with a degree might no longer be as important as it was in the past, as the proportion of degree holders in the workforce increases.

It also does not seem to be enough, as rates of unemployment and underemployment are rising among degree holders.

The graduate unemployment rate has risen slightly over the past four years, from 2.6 per cent in 2011 to 2.9 per cent last year. These figures, however, are still much lower than the peak of 3.6 per cent in 2009, in the aftermath of the Asian financial crisis.

But figures from the Ministry of Manpower (MOM) last year showed that more university graduates are struggling with underemployment. In 2013, about 2.3 per cent of degree holders were underemployed, up from 2.2 per cent in 2012.

The underemployed have some form of work, but not as much - or not as high-paying - as what they are qualified for.

The ministry's data also showed that degree holders form the only group that faces underemployment here. Most other Singapore workers are being placed in jobs that match their skills.

Experts said the underemployment could be due to mid-level workers being complacent and not upgrading themselves quickly enough to match the rapid changes in the economy.

As certain economic sectors become less important and shrink, companies in these sectors shed jobs. New jobs are created in new economic sectors, but they could require different skills.

Many professionals, managers, executives and technicians (PMETs) who are retrenched from jobs in the fading industries are unable to fit into the new jobs, and are thus forced to take lower-level positions, with lower pay.

Manpower Minister Tan Chuan-Jin warned last year that a graduate glut could see Singapore workers being overeducated and underemployed - a trend already unfolding in South Korea and Taiwan.

In Taiwan, the government's controversial education reforms, launched in the mid-1990s in a bid to popularise tertiary education, have led to a boom in the number of universities and, in turn, an excess supply of university graduates and a higher unemployment rate among them.

With more than 150 universities, Taiwan has a university entrance rate of almost 100 per cent; many students also take postgraduate programmes. This raises questions about the quality of the programmes as well.

At the same time, the economy has been struggling. Much of Taiwan's manufacturing sector has moved to China as manufacturing costs are lower there, resulting in a loss of jobs. Taiwan has a youth unemployment rate of about 12 per cent.

With too many graduates seeking graduate-level jobs in an environment that is increasingly losing its competitive edge, many degree holders have no choice but to take up jobs with salaries far lower than their expectations.

Fresh graduates in Taiwan earn a starting pay of $900 to $1,000, which is about three times less than what a fresh degree holder here would earn.

Human resource expert David Leong of PeopleWorldwide Consulting said: "When you have a degree, you expect to earn a certain level of pay.

"But there are so many graduates in Taiwan that there are not enough jobs for them and they settle for low pay."

In contrast, in places such as Germany and Switzerland, which champion vocational training rather than university degrees, the apprenticeship model and the focus on skills have helped to keep youth unemployment at bay.

For instance, Germany has a youth unemployment rate of about 7 per cent, while other countries in the euro zone, such as Italy, have a rate of more than 40 per cent.

Apprenticeships are seen as a key route into the German workforce, and for more than half the student cohort, the vocational path beats the academic one.

Apprentices, as young as 15, spend one or two days a week at a vocational school and the rest at a company, where they are paid.

The German vocational school system is closely tied to business and industry.

The schools "know what they need for qualified workplaces, which brings the economy forward and gives the individual well-paid work", Germany's Ambassador to Singapore, Dr Michael Witter, said at a forum with university students earlier this year.

This means that students are trained in industry-relevant skills. Moreover, German firms see training apprentices as their responsibility, pumping millions of euros into this effort each year.

At the end of the apprenticeship, students are equipped with both practical and technical skills and a sound understanding of the industry they are in - traits valued by employers.

Prime Minister Lee Hsien Loong, who visited Germany in February, said then that Singapore could learn a thing or two from the Germans when it comes to boosting worker skills.

He added that the German culture is such that apprentices tend to be loyal to their firms, and do not join another company just because it offers higher pay.

In this year's Budget debate in February, the Government unveiled its SkillsFuture initiative, meant to ramp up the skills of workers here.

Under a traineeship programme modelled after the German apprenticeship scheme, participants will spend several days a week working at a company and earning a salary, and the rest of the time studying to upgrade their qualifications.

Deputy Prime Minister Tharman Shanmugaratnam said then that Singapore needs to move to become "a meritocracy of skills, not a hierarchy of grades earned early in life".

This means that while an individual should be encouraged to achieve a degree if he makes the cut, the journey does not end there. Even after entering the workforce, he must continue to upgrade himself and prepare for future job changes.

Possessing specialised skills in a particular area is more crucial than a garden-variety degree, and will make an employee more valuable to a company.

THE SINGAPORE PERSPECTIVE
How to ensure a future where skills will grow
By Pearl Lee, The Straits Times, 13 Apr 2015

RECOGNISING Singapore's need for highly skilled workers for the economy to grow further, the Government has recently unveiled a slew of steps to encourage more people here to focus on acquiring specialised skills rather than just degrees.

The SkillsFuture initiative will strengthen the links between educational and training institutions and companies to ensure both students and working adults are taught skills that are most relevant to key industries.

The initiative signals a shift in the traditional perspectives of education being meant mainly for the young and the role that only schools take on.

Instead, both children and adults need to be educated, and both educational institutions and companies have to share the responsibility.

Under the initiative, from next year, every Singaporean aged 25 and above will receive $500 worth of SkillsFuture Credits - which can be used to offset training fees at accredited institutions - to encourage him or her to continue learning new skills.

Students of the Institute of Technical Education and polytechnics will go on more structured internships and will each be matched to a workplace mentor, rather than receiving ad hoc supervision.

Fresh graduates of these institutions will have the option of joining a new Earn and Learn programme. Modelled after the Swiss and German apprenticeship schemes, the scheme aims to match them to companies in sectors such as logistics and retail.



The participants will work and receive on-the-job training while earning a salary, and while studying to upgrade their qualifications in areas related to the work.

While schools can equip students with knowledge, they are unable to provide students with work experience.

Companies also gain from such a system as, in the long term, the pool of workers who are skilled and knowledgeable in a particular area will grow. The participants, who will be added to a firm's manpower force, will also go some way in easing the labour crunch that employers in many sectors often suffer from.

But companies - especially small and medium-sized enterprises here - have often been reluctant to train interns as they may not have the resources to do so.

To motivate employers to join the Earn and Learn scheme, the Government is giving participating companies a grant of up to $15,000 per employee hired under the scheme.

The grant is also meant to help these firms offset training costs.

So far, 61 employers have signed up for the programme and, together, they offer close to 150 places across eight sectors, ranging from food services and logistics to precision engineering.

Training for working adults will also be improved, such that it is more targeted and relevant to the industry.

Guidelines on the skills that are required for workers in critical industries to advance their careers will be drafted.


This is the fourth of 12 primers on various current affairs issues, published as part of the outreach programme for The Straits Times-Ministry of Education National Current Affairs Quiz.