93048 Policy Note 3 Skills Needs of the Private Sector in Botswana The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development, its affiliated organizations, or those of the Executive Directors of the World Bank or the governments that they represent. Policy Note 3 Skills Needs of the Private Sector in Botswana Outputs of the “Skills for Economic Growth and Diversification in Botswana” analytical work: Policy Note 1: “ Raising Botswana’s Human Resource Profile to Facilitate Economic Diversification and Economic Growth” Policy Note 2: “Labor Market Signals on the Demand for Skills” Policy Note 3: “Skills Needs of the Private Sector” Policy Note 4: “Skills Implications of Botswana’s Diamond Beneficiation Strategy” Summary Report Contents Acknowledgments vii Abbreviations and Acronyms ix Context of the Study 1 1. Human Capital and Employer Demand 2 2. Profile of Surveyed Firms 2 3. Employer Findings 3 4. Employee Findings 8 5. Wages and Earnings Analysis 11 6. Conclusion and Policy Recommendations 12 References 16 Figures Figure 1. Problematic Factors for Doing Business in Botswana 2 Figure 2. Distribution of Firm Size and Employment 4 Figure 2. Level of Education of Permanent Workforce, by Firm Size 4 Figure 3. Level of Education of Temporary Workforce, by Firm Size 5 Figure 4. Difficulty in Finding Candidates with Appropriate Skills, by Occupation 7 Figure 5. Percentage of Firms Offering Training, plus Average Number of Training Days 8 Figure 6. Causes of Skill Shortages, as Identified by Firm Size 9 Figure 7. Highest Level of Education Achieved by Surveyed Employees, by Age Group 9 Figure 8. Employee Perceptions of the Value of Education and Job-Related Skills 10 Figure 9. Employee Perceptions of the Value of Personal Characteristics 10 Figure 10. Employee Perceptions of the Value of Core Skills 11 Method by which Employees Heard of Current Job Opening, Figure 12.  by Age Group 11 Acknowledgments This Policy Note, and three others that address skills for eco- Sector Manager; and Ritva Reinikka, Sector Director, HD Af- nomic diversification in Botswana, were prepared by Tazeen rica, provided overall guidance for the project. Fasih (Task Team Leader), with contributions from Sonali Initial versions of the background papers were presented to Ballal, Margo Hoftijzer, Kevin Macdonald, Letsema Mbaya, key education stakeholders in Botswana at a workshop in De- Christopher Mupimpila, Nathan Okurut, Peter Orazem, and cember 2010. The workshop was co-organized by the Ministry Happy Siphambe. of Education and Skills Development (MoESD); critical input Valuable comments on an initial draft of these notes were provided during the workshop helped shape the current ver- received from Sajitha Bashir, Peter Darvas, Keiko Inoue, Na- sion of this report. thalie Lahire, Maureen Lewis, Peter Materu, Shwetlena Sabar- The World Bank is grateful for the support provided by wal, Cristina Panasco Santos and Chunlin Zhang. The peer re- MoESD, particularly by PS Mrs. Grace Muzila and DPS viewers were Wendy Cunningham, Amit Dar, Raja Bentaouet Dr. Theo Mooko, at various phases of the preparation of this Kattan, Zeinab Partow, Harry Patrinos, Jan Rutkowski, and report. In addition, the author would like to thank officials of Douglas Zinhua Zeng. Ruth Kagia, Country Director; Con- the MoESD and the Botswana Training Authority (BOTA) for stantine Chikosi, Country Manager, Botswana; Peter Materu, sharing valuable data and information. Abbreviations and Acronyms BOTA Botswana Training Authority CPS Country Partnership Strategy CTIF Constructing Industry and Trust Fund EESB Employer and Employee Survey in Botswana (2010) ESW Economic and Sector Analytical Work IT Information Technology MoESD Ministry of Education and Skills Development MoLHA Ministry of Labour and Home Affairs PATHS Promoting Alternative Thinking Strategies R&D Research and Development STEM Science, Technology, Engineering, and Mathematics TVET Technical and Vocational Education Training All dollar amounts in U.S. dollars unless otherwise indicated. Context of the Study Human development is one of the pillars of Botswana’s Coun- Resource Profile to Facilitate Economic Diversification and try Partnership Strategy with the World Bank (2009–13). The Growth” (note 1), “Labor Market Signals on the Demand for Country Partnership Strategy (CPS) is in line with Botswa- Skills” (note 2), “Skills Needs of the Private Sector” (note 3), na’s “Vision 2016,” which, in terms of human development, and “Skills Implications of Botswana’s Diamond Beneficiation envisions the transformation of Botswana to “an educated Strategy” (note 4). The key findings and recommendations of and informed nation” and to “a prosperous, productive and these four notes were then integrated into a short Summary innovative nation” as two key cornerstones of the strategy. In Report. line with these objectives, the World Bank with support from The first note assesses the strengths and weaknesses of the Ministry of Education and Skills Development (MoESD) Botswana’s education system (i.e., basic, technical and vo- embarked on analytical study entitled “Skills for Economic cational, and higher education) and recommends policy in- Growth and Diversification in Botswana.” The work is in- terventions to strengthen students’ acquisition of relevant formed by Botswana’s need to diversify its economy to facil- knowledge and skills. The second note examines both cur- itate stronger, more sustainable economic and employment rent labor and skills demand (based on available labor market growth and, concurrently, equip its workforce with a variety data) and expected skills demand (based on the government’s of skill sets that meet employer needs. economic strategies). On the basis of this analysis, the note The objective of the exercise is to provide the government offers recommendations on skills development and govern- of Botswana with concrete suggestions for policy interven- ment programs. The third note uses the findings of an em- tions that strengthen the skills base of the workforce and thus ployer-employee survey conducted in Botswana in 2010 to facilitate economic growth, diversification, and employment. identify skills needs and gaps from the viewpoint of the pri- The recommendations offered by this and the other notes that vate sector. The last note examines the skills implications of make up the study, are based on analyses of available data the government’s diamond beneficiation (processing) strate- and international best practices. Four policy notes were de- gy and suggests actions that can be undertaken to ensure that veloped, each of which touches on crucial aspects of strength- the nation’s skills base supports, rather than hampers, imple- ening the country’s skills base: “Raising Botswana’s Human mentation of the strategy. Skills Needs of the Private Sector in Botswana | 1 1. Human Capital and Employer Demand the workforce. Both employers and a small sample of their employees were surveyed to identify employer assessments Human capital enhances labor productivity, aiding the adop- of worker skills, labor demands, job vacancies, and training tion and adaption of technology and stimulating innovation availability. The survey was conducted during August and for economic growth. Countries with better-educated work- September 2010 and covered a random sample of small, medi- forces have higher growth rates in the long run (see Policy um, and large enterprises in two cities. Details of the survey’s Note 1). A well-skilled workforce is also an incentive for for- objectives, scope, and dimensions are provided in box 1.1 eign investors. However, employers in Botswana itself, appear A unique aspect of the survey was the detailed information unsatisfied with the skill levels of their employees, and the it provided about self-reported employee skills, the skills ex- labor force available in the country. The Global Competitive- pectations of employers, and the skills of coworkers—variables ness Report 2010–2011 (WEF 2010), for example, reports that that are not typical of labor market surveys. This note syn- firms in the country consider two of the top constraints to do- thesizes the key findings of the EESB, including labor market ing business to be a poor work ethic and lack of an appropri- rewards to education, the evolution of worker earnings over ately educated labor force (figure 1). time, growth and change in wages, the effect of certain em- Recent research emphasizes that certain key competencies ployee self-reported characteristics and skills on their wages, provide the basis for the adaptability and continuous learn- and the value of such characteristics and skills to employers. ing of workers in a rapidly advancing knowledge economy. This note is divided into six parts. The following section These competencies include cognitive, academic, and techni- (section 2) provides a profile of surveyed firms; sections 3 and cal skills; behavioral (or “soft”) skills, such as problem solving, 4 present the findings of employer and employee evaluations creativity, interpersonal skills, and work ethics; and manage- of the types of skills needed for employment. Section 5 pres- ment skills. Information on the demand and supply of behav- ents the results of econometric analysis of the determinants ioral and management skills is not commonly collected by la- of wages and wage growth for employees. The final section bor or household surveys, or by student learning assessments. proposes some concrete recommendations on how to support Given Botswana’s need to diversify its economy, it is important the development of the skills valued by the private sector in to analyze the skills that employers demand and how well em- Botswana. ployees in the country match that demand. Such an analysis can help focus policy on the critical needs of the economy. 2. Profile of Surveyed Firms The World Bank, in collaboration with the Ministry of Ed- ucation and Skills Development (MoESD) of Botswana, un- Looking at the profile of the firms that were surveyed, the dertook a survey of employers and employees in the country distribution by firm size is virtually identical to the sample in 2010 to identify the educational background and skill set population of firms in Gaborone and Francistown. Almost of the workforce in firms of different sizes. The ultimate aim 91 percent of all firms in Gaborone and Francistown employ of the survey was to assist the government in developing pol- icies to achieve Botswana’s vision of a diversified knowledge 1 Gaborone and Francistown are dominated by small firms. The database of the Central Statistics Office, as referenced in the Enterprise Survey dataset economy. Some of the issues of interest included the incidence note, suggest that there whereas a total of 30 establishments in the two cities and role of training in increasing labor productivity, as well have 100 or more employees, a large proportion of firms—virtually 1,300 of as patterns in the demographic characteristics and skills of 1,428—employ between 5 and 30 employees (World Bank 2010c). Problematic Factors for Doing Business in Botswana Figure 1.  Poor work ethic in national labor force . . . . . . . . . . . . . . . . . 17.4 Inadequately educated workforce . . . . . . . . . . . . . . . . . . . 13.0 Ine cient government bureaucracy . . . . . . . . . . . . . . . . . . 12.9 Access to nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.8 Inadequate supply of infrastructure . . . . . . . . . . . . . . . . . . 10.7 Restrictive labor regulations . . . . . . . . . . . . . . . . . . . . . . . . 8.8 In ation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 Crime and theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 Poor public health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Policy instability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Foreign currency regulations . . . . . . . . . . . . . . . . . . . . . . . 1.5 Tax regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Government instability/coups . . . . . . . . . . . . . . . . . . . . . . . 0.8 0 5 10 15 20 25 30 Percent of responses Source: Reproduced from WEF (2010). 2 | Skills Needs of the Private Sector in Botswana Box 1. Employer and Employee Survey in Botswana The Employer and Employee Survey in Botswana (EESB) aimed to identify policy directions and options that could align skills demand and supply in Botswana. The purpose of the survey was to probe deeper into human resource requirements and skills gaps from the viewpoint of employers and employees, and to use this information to shape the debate on how to make both the education system and labor market in the country more conducive to growth. Specifically, the survey was designed to help answer the following groups of questions: • What are the characteristics of job vacancies (skills requirements and wages offered)? What skills are in high/low demand? Are the skills of the available workforce a constraint to hiring, firm growth, and good performance on the job? How difficult is it to find a worker with required skills? Is the skills mismatch (gap) a significant problem? Where are the main skills gaps? • What is the role of training? Does your firm provide such training? • What are the characteristics of young workers hired by the firm? What skills do they bring? What are their main skills gaps and how do they relate to their education qualifications? What are the firm’s policies for ensuring that the skills of these young workers are upgraded? The survey consisted of a series of structured face-to-face interviews with senior human resource managers and/or owners of 500 employers and 2,500 employees of firms in two cities, Gaborone and Francistown, which represented most economic sectors and firm sizes. The survey was administered using 2 types of questionnaires: one for employers and one for employees. Given the size of the firm population—960 firms with more than 5 employees—an attempt was made to interview every firm in the population. With a non-response rate of 47 percent, the final sample consisted of 511 establishments with at least 5 full-time employees. In addition, an employee questionnaire was administered to 18 percent of full-time employees, yielding a total of 2,500 completed questionnaires. The final geographic distribution of the sample was 315 firms in Gabo- rone and 196 in Francistown. The sample of employees interviewed can be summarized as follows: • Three employees were interviewed in each of the 240 establishments with up to 7 employees • Four or five employees were interviewed in each of the 199 establishments with 8 to 27 employees • Between 6 and 19 employees were interviewed in each of the 54 establishments with 28 to 97 employees • Between 20 and 30 employees were interviewed in each of the 18 establishments with more than 97 employees Sources: Author; World Bank 2010c. between 5 and 29 employees. In the EESB sample, this pro- employees. Table 2 lists the main reasons for firm expansion portion was 86 percent. Although only 4 percent of the sample or contraction. Specifically, 21 percent of firms grew due to an consisted of large firms (employing 100 or more employees), increase demand for goods and 20 percent, in order to deliver almost 53 percent of the workforce is employed by these larg- higher-quality goods. Interestingly, of the firms that contract- er firms (figure 2). In terms of sectoral distribution, a large ed, similar proportions cited a reduction in the demand for proportion of the establishments surveyed were engaged in goods as the reason for the reduction in the number of work- wholesale and retail trade (table 1).2 ers; however, almost 25 percent cited the economic downturn Wholesale and retail trade, along with manufacturing and (this reason was expected, given that 2008–09 was a period of construction, accounted for about half of all employment. global recession). Within manufacturing, the garment industry accounted for 21 percent of firms, followed by fabricated metal products 3. Employer Findings (13 percent) and textiles (10 percent). In terms of the composition of the workforce, most em- Employers identify skills constraints as an important factor in ployees fell between the ages of 25 and 54 (77 percent), with doing business in Botswana. Issues related to work ethics and roughly only two out of ten workers between the ages of 15 the need for appropriate behavioral skills were also repeatedly and 24. (None were less than 15 years of age.) In terms of cited as an important concern, as the lack of such skills ap- changes in the size of the workforce, 60 percent of the 511 es- pears to effect productivity.3 Additionally, it appears that the tablishments experienced no change between 2008 and 2009; workforce lacks job-specific skills, in particular, the higher-or- 28 percent increased and 13 percent reduced their number of der skills associated with mid-level management positions, as well as engineering, science, and technology skills. 2 Of the 511 establishments interviewed, 6 were owned by the government and accounted for 3.9 percent of the total number of employees of all estab- lishments interviewed. Thus a small proportion of the sample represented the 3 Behavioral skills are understood in this paper to include job attitudes, government-owned sector. communication, team work, and problem solving. Skills Needs of the Private Sector in Botswana | 3 Figure 2.  Distribution of Firm Size and Employment er words, the constraint is poor signaling. Each of these issues (percentage) can be viewed by employers as skills constraints, but the poli- cies to deal with them are very different. This section attempts 81% to identify which of these constraints best reflects the reality of the private sector in Botswana. There is a mismatch between employers’ educational 53% requirements and the actual educational attainment of their workers The highest proportion of permanent employees working in 24% 23% the 511 establishments interviewed in the EESB had a General 15% Certificate, that is, they had completed upper secondary edu- 4% cation or form 5 (figure 2). The surveyed firms reported very few temporary employees (a total of 422 employees among the Small Medium Large 511 establishments), but almost 50 percent of these workers Size of the Firm had post-secondary technical and vocational education and Source: World Bank (2010c). training (TVET) (figure 3). Since the general secondary edu- cation completion rate is relatively high in Botswana, a large number of workers in the labor force have a General Certifi- Distribution of Firms by Sector and Employment Table 1.  cate. Yet when employers were asked about the required min- (percentage) imum level of education for specific occupations, the highest proportion responded that tertiary education was needed (see % of all Type of firm surveyed firms table 3). Agriculture, hunting, and forestry 1.8  evel of Education of Permanent Workforce, Figure 2. L Mining and quarrying (natural resource extraction) 0.2 by Firm Size Manufacturing 14.9 (percentage of total employees) Construction 5.1 40 Wholesale and retail trade; repair of motor vehicles Small Medium Large and motorcycles 49.7 35 Hotels and restaurants 3.5 30 Transport, storage, and communications 5.1 25 Financial intermediation 2.3 20 Real estate, renting, and business activities 3.3 15 Public administration and defense; compulsory 10 social security 1.8 5 Education 2.7 0 Health and social assistance 2.7 Did not Completed Junior General Post- Tertiary Tertiary Post- complete primary certi cate certi cate secondary technical general graduate Other 6.8 primary school technical or education education Total 100.0 Source: World Bank (2010c). Source: World Bank (2010c). A shortage of “employability” traits in the labor force is Table 3 reveals that the minimum level of education that frequently cited as a major obstacle to private sector devel- employers seek for various categories of workers is surprising- opment throughout the developing world and even in a num- ly high; for instance, it is expected that a General Certificate ber of developed countries. Such perceptions can be real or a is required for elementary occupations.4 The actual educa- manifestation of other labor market constraints, but are often tion level of their employees is much lower. Though the EESB easier verbalized as lack of appropriate skills. In fact, the con- does not allow for a qualitative assessment of these numbers, straints faced by employers might be a skills mismatch, that as there are no open-ended questions in the survey, this note is, an appropriately trained labor force, but trained in fields speculates on a few possible explanations. First, either em- ployer expectations are too high in terms of skills needs or that are not in demand. Alternatively, employers may be expe- riencing poor skills matching, that is, they are unable to find the people with the right skills due to inefficient labor market 4 As defined by Sondergaard and Murthi (2012, 44, note 4), “Elementary clearing mechanisms, such as job placement services and ef- occupations consist of simple and routine tasks that mainly require the use of hand-held tools and often some physical effort.” ficient dissemination of information on job availability. In the Given high enrollment and universal pass rates in basic education (stan- same way, the workforce, young workers in particular, may be dard/grades 1–7), a high proportion of the population in Botswana has a com- unable to signal to employees the skills that they have—in oth- pleted General Certificate, that is, upper secondary education. 4 | Skills Needs of the Private Sector in Botswana Reasons for Firm Expansion or Contraction Table 2.  Firms that increased employment Firms that decreased employment Number % Number % Non-response 38 27.0 0 0.0 New production methods 14 9.9 12 18.8 Increased/decreased demand for goods 30 21.3 14 21.9 Increased demand for higher-quality products 28 19.9 11 17.2 New products require new skills 7 5.0 11 17.2 Economic upturn/downturn 24 17.0 16 17.2 Total 141 100 64 100 Source: World Bank (2010c). they have low expectations of the outputs of the Botswana ed- tor skills. This finding identifies a clear weakness in the voca- ucation system. Alternatively, this finding may signal a skills tional and technical education system in Botswana. A similar mismatch where employers are unable to hire the right indi- picture, but of lesser intensity, appears to apply to managers, viduals for available jobs. although in their case, employers also lament the difficulty of finding valued personal traits and core skills. Appropri- Figure 3. L  evel of Education of Temporary Workforce, ate personal traits appear to be a difficult skill to find among by Firm Size professional workers, technicians, clerical workers, and ser- (percentage of all temporary employees) vice and sales workers—most likely not due to a lack of these 80 specific skills in the workers employed in these positions, but Small rather, to the premium value of such skills in these client-ori- 70 Medium ented jobs. 60 Large A large majority of surveyed firms provide on-the-job training 50 40 For employers who hire candidates with less than the desired educational and/or skills level for a particular occupation, on- 30 the-job training can help bring employees up to the desired 20 skill level. According to the EESB, almost 71 percent of the 10 firms surveyed offer training to their employees and 67 per- 0 cent offer some kind of training to new hires. In other words, Did not Completed Junior General Post- Tertiary Tertiary only 33 percent of the firms surveyed consider new hires ready complete primary certi cate certi cate secondary technical general for work without additional training. Indeed, in interviews primary school technical or education education with major firm owners in Gaborone, employers admitted that they do not encourage new employees to operate sophisticated Source: World Bank (2010c). plant machinery without supervision or training. Specifically, almost 55 percent of all firms surveyed provide Skills gaps are particularly acute for skilled workers training in job-specific technical skills (table 4). The intensity The EESB asked employers to list the most important skill of training varies in terms of the number of days, with smaller for an occupation, with skills grouped into one of three cat- firms on average providing around 17.5 days a year in job-spe- egories: personal characteristics, core skills, and job-specific cific skills training, plus 18 days per year of information tech- skills. Personal characteristics were defined as innate traits, nology (IT) and computer skills training. It is interesting to such as honesty, commitment, hard work, and punctuality. note that almost 50 percent of the firms surveyed also train Core skills were defined as aptitudes required for employment workers in behavioral skills. The implications and benefits of that could be learned over time, either at school or elsewhere. such training to both employers and employees are discussed This category included such skills as basic literacy, numera- below in section 6 of this note. cy, communication, problem solving, and team work. The last category, job-specific skills, was defined as theoretical knowl- Hiring times increase with the level of skills needed edge, educational attainment, and specific job experience re- The extent of the skills mismatch encountered by the firms can lated to particular occupations. also be identified by the time it takes to fill vacancies. Based on A telling picture emerges when looking at how employers EESB data, it appears that it takes the longest time for a firm to rank the difficulty of finding appropriate candidates with cer- hire a manager (7.1 weeks) or professional (6.4 weeks), where- tain specific skills (figure 4). Potential candidates lack different as it takes on average only 1.7 weeks to hire a worker for an types of skills, depending on the occupation, but the most elementary occupation or a sales or service position (table 5). glaring gap appears to be in the job-related skills of craft and Although this finding indicates a lack of qualified applicants related trade workers, as well as plant and machinery opera- for management and skilled worker positions; part of the short Skills Needs of the Private Sector in Botswana | 5 Table 3. Minimum Required and Actual Levels of Worker Educational Attainment, by Occupation Education level Minimum required* Actual average** Tertiary technical (39%) General certificate (24%) Managers Tertiary general (36%) Junior certificate (23%) Post-secondary TVET (21%) Tertiary general (54%) Tertiary technical (38%) Professionals Tertiary technical (43%) General certificate (33%) Post-secondary TVET (28%) Tertiary general (39%) Post-secondary TVET (40%) Technicians Tertiary technical (25%) General certificate (34%) Post-secondary TVET (22%) Tertiary technical (29%) General certificate (31%) Clerks Tertiary general (26%) Junior certificate (30%) Post-secondary TVET (26%) Tertiary technical (43%) General certificate (26%) Service and sales workers Post-secondary TVET (26%) Junior certificate (24%) Tertiary general (26%) Primary education (22%) Skilled agriculture, fishery, and forestry Tertiary technical (67%) Post-secondary TVET (56%) workers Tertiary general (33%) Tertiary technical (33%) Tertiary general (35%) Completed primary (37%) Craft workers Tertiary technical (48%) Junior certificate (32%) Not completed primary (30%) Tertiary general (35%) Primary education (37%) Plant and machine assemblers and operators Tertiary technical (48%) Junior certificate (32%) Not completed primary (30%) General certificate (43%) Not completed primary (24%) Elementary occupations Junior certificate (37%) Primary education (24%) Primary education (21%) Junior certificate (20%) Source: World Bank (2010c). Notes: General certificate means General Certificate of Completion of upper secondary education. Junior Certificate means a certificate of completion of lower secondary education. * Lists educational levels that 20 percent or more employers indicated as the minimum for an occupation. ** Lists educational levels that 20 percent or more employees have actually attained. Table 4. Percentage of Firms Offering Training to Employees, by Export Status Type of training Exporting firms Non-exporting firms Total Job-specific technical skills 58.4 53.9 55.0 General thinking skills 52.8 43.0 45.4 Behavioral skills 56.8 50.3 51.9 Health and safety skills 59.2 49.7 52.1 Computer and IT skills 52.0 32.9 37.6 Source: World Bank (2010c). hiring time for elementary occupations can be attributed to the ception among employers in Botswana is that it is quite cum- simplicity of the contractual processes for such occupations. bersome to hire expatriates. Employers must first advertise a vacancy and wait for a mandated period for qualified appli- A substantial number of expatriate workers are employed in cations. If no such applications are submitted by Botswana, the country, even in elementary occupations the employer can write to the Ministry of Labor and Home When faced with skills shortages in a country, governments Affairs (MoLHA) and request permission to hire an expatri- often turn to expatriates to fill skills gaps. However, the per- ate, providing proof that no Botswana with appropriate skills 6 | Skills Needs of the Private Sector in Botswana Difficulty in Finding Candidates with Appropriate Skills, by Occupation Figure 4.  (% of firms rating a characteristic “very difficult” or “almost impossible” to find) 60 50 40 30 20 10 0 personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills personal characteristics core skills job related skills Managers Professionals Technicians and Clerical support Service and Skilled Craft and Plant and Elementary All categories associate workers sales workers agricultural, related trade machinery occupations professionals forestry and workers operators shery workers Source: World Bank (2010c). was available for the job. The application is then reviewed by examined with the findings of a graduate tracer survey con- special sector committees for verification and identification of ducted by the Construction Industry Trust Fund (CITF) in any unemployed Botswana with relevant skills registered with 2006. On one hand, almost 41 percent of those who complet- the MoLHA’s employment services unit. Once this process is ed CITF training institutes did not find employment, while completed, the employer is allowed to submit an application on the other, 22 percent of foreign workers with work per- for an employee work permit.5 mits in Botswana were employed in the construction sector. EESB findings show that almost 30.7 percent of the firms As discussed in Policy Note 2, this discrepancy is most like- surveyed reported hiring an expatriate in the two years before ly a manifestation of the high reservation wages of Botswa- the survey. On average, expatriates were a larger percentage of na. Alternatively, it could indicate that CITF training is of the workforce of larger firms than that of smaller and medium such poor quality that employers are unable to find sufficient firms (table 6). The most common occupations for which they skilled workers in the country and succeed in obtaining work were hired were, in order of frequency, engineering, account- permits for foreign workers, despite the cumbersome process ing, and management; these workers were most commonly described above. hired from Zimbabwe, South Africa, and India. The government of Botswana maintains a good database on Employers agree that poor education is a major cause of foreign workers in the country. The figures provided by Sta- skills shortages tistics Botswana (CSO 2011) indicate that a large proportion When asked about their perceptions of the cause of skills of total work permit holders (11,966) in 2010 worked in el- shortages, larger firms felt labor laws and regulations were not ementary occupations (30 percent), professional occupations conducive and that the employees were not well prepared in (18.5 percent), and as craft workers and technicians (almost behavioral skills by local educational institutes. Medium and 15 percent each). In terms of sectors, the highest number of small firms both attributed the shortages to the poor quality of work permit holders in 2010 (and for a few years preceding education provided by local educational institutions. that) were in agriculture (30 percent), followed by construc- tion (22 percent). Skills constraints in Botswana appear very real These numbers present quite a paradox, particularly when A skills mismatch appears to be one of the key factors caus- ing the skills constraint. There also appears to be poor skills 5 Process explained by MoHLA staff in a February 2012 meeting. matching if, as discussed above, the unemployment level of Skills Needs of the Private Sector in Botswana | 7 CTIF graduates is comparable to the percentage of foreign terviews was to understand their perceptions of the skills and workers employed in the construction industry. This finding education requirements of their current and previous jobs. may, however, reflect another reason for the skills constraints: Of the 2,500 employees interviewed, the largest proportion the high reservation wage of Botswana workers, whose salary (70 percent) were between 25 and 39 years of age; less than expectations keep them from accepting jobs. The next section 15 percent were younger than 25. There appears to be strong on employee findings helps clarify whether these findings in- employer loyalty in the country, as workers 40 years and older dicate an issue of poor skills signaling or poor skills matching. had been with their current employers for more than 8 years on average. However, this finding may also indicate hiring and Figure 5. P  ercentage of Firms Offering Training, plus firing rigidities in the labor market. Average Number of Training Days Workers consider educational attainment—but not vocational skills—an important determinant of employment 70 Small Medium Large 60 In terms of educational attainment, EESB data on employ- 50 ee education levels reflects the current educational profile of 40 the country’s population. The largest number of employees 30 20 who have a General Certificate i.e., a certificate of comple- 10 tion of higher secondary education are less than 25 years of 0 age. For those above 40, this proportion is much lower (less than 25 percent; figure 7). On job speci c technical skills On general thinking skills On behavioural skills On health and safety On computer skills and IT On job speci c technical skills On general thinking skills On behavioural skills On health and safety On computer skills and IT Almost three-quarters of employees consider their educa- tion to be helpful to them in their current jobs, a proportion that falls slightly (to 70 percent) among the cohort over 40. This finding is not unexpected, as experience in a job gains more value than educational qualifications do over time. Most employees consider practical knowledge of a job and % rms o ering training Average duration of training in educational attainment as the main reasons why they are em- number of days ployed in their current positions (figure 8). A high propor- Source: World Bank (2010c). tion also believe practical knowledge of a job is appreciated by managers. Interestingly, they do not consider general or advanced vocational, job-specific skills a strong determinant 4. Employee Findings of employment, nor do they think managers appreciate these skills. Transcripts and grades did not rank highly in any of Most workers surveyed were between 25 and 39 years old the four survey questions on education and employment; it As mentioned earlier, 2,500 employees of the 511 surveyed thus appears that transcripts may not be the only way to sig- establishments were interviewed. The objective of these in- nal appropriate skills sets. Of note, transcripts appear slightly Average Time Needed to Fill Vacancies, by Firm Size, Export Status, and Type of Occupation Table 5.  (weeks) Size of firm Export status Non- Total Exporting exporting Small Medium Large firms firms Managers 7.1 7.2 8.5 7.1 7.2 7.1 Professionals 5.1 7.6 10.2 4.1 7.3 6.4 Technicians and associate professionals 4.8 4.0 5.7 6.0 4.4 4.6 Clerical support workers 3.4 2.5 6.3 4.0 3.2 3.3 Service and Sales workers 1.4 2.3 7.0 1.1 2.0 1.7 Skilled agricultural, forestry, and fishery workers — — — — — — Craft and related trades workers 3.2 2.0 6.0 4.0 2.9 3.0 Plant and machine operators and assemblers 1.5 2.0 4.0 3.0 1.7 1.9 Elementary occupations 1.5 1.5 1.7 1.7 1.5 1.7 All categories 5.2 4.8 6.0 5.2 5.1 5.1 Source: World Bank (2010c). Note: —: not available. 8 | Skills Needs of the Private Sector in Botswana  auses of Skill Shortages, as Identified by Firm Size Figure 6. C (percentage of firms identifying a cause) 60 Small Medium Large 50 40 30 20 10 0 Quality of the education and Labor protection Shortage in number of local Lack of necessary personal Worker emigration Profesionals moving to other training o ered by local laws and regulations professionals trained by soft skills o ered by local sectors of the economy or educational insitutions local institutions institutions other enterprises Source: World Bank (2010c). more relevant to getting hired for workers between 25 and 39 (figure 9). Of note, reliability and punctuality is also a trait that than workers younger than 25 or those 40 and above. It may employees would like to see more in their coworkers. simply be that fresh graduates find another way to be intro- Asked to rank core skills, employees considered commu- duced into the labor market, while the older cohort becomes nication and team work most important for getting hired, employed more on the basis of experience. The 25–39-year- whereas they believed managers valued client/customer care, old cohort, on the hand, needs transcripts to signal ability communication, and team work skills, together with trust- (World Bank 2010c). worthiness, most highly (figure 10). With respect to their co- workers, employees believed colleagues needed better team Similar to employers, employees consider personal work and communication skills. characteristics most important for becoming employed A high proportion of employees consider personal character- Employees overwhelmingly find job training beneficial istics, such as their commitment and hard work, to be among Approximately 40 percent of employees interviewed had re- the main reasons for being hired in their current jobs, followed ceived training in their current jobs. Employees younger than by reliability, punctuality, and honesty. Workers also believe 25 years of age were more likely to have received training than these characteristics, together with the desire to learn and the older workers. And almost 94 percent of employees who had ability to work independently, are appreciated by management received training agreed that it proved beneficial in their job. Highest Level of Education Achieved by Surveyed Employees, by Age Group Figure 7.  (percentage of all respondents) 50 16- 24 years 25-39 years 40 years and older 45 40 35 30 25 20 15 10 5 0 Did not Completed Junior Certi cate General certi cate Post-secondary Tertiary technical Tertiary general Post-graduate complete primary primary school (Form III) (JCE) (Form V) technical or education education (Masters, Ph.D) Source: World Bank (2010c). Skills Needs of the Private Sector in Botswana | 9 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70 10 Got you hired here | Your manager appreciate in you Figure 8.  Got you hired here Figure 9.  You like in coworkers Minimum Your manager appreciate in you Your coworkers need to perform better Got you hired here You like in coworkers Punctuality Your manager appreciate in you Reliability and Source: World Bank (2010c). Source: World Bank (2010c). Domestic You like in coworkers education Your coworkers need to perform better required level (Botswana) of education post-secondary Your coworkers need to perform better Got you hired here Got you hired here (percentage in agreement) Your manager appreciate in you Your manager appreciate in you (percentage in agreement) You like in coworkers education secondary Foreign post- You like in coworkers Hard Work Your coworkers need to perform better Commitment and Your coworkers need to perform better Got you hired here Your manager appreciate in you Got you hired here You like in coworkers transcripts Grades and Your coworkers need to perform better Your manager appreciate in you Got you hired here You like in coworkers Your manager appreciate in you Adaptability the job You like in coworkers Desire to learn and Theoretical Your coworkers need to perform better knowledge of Your coworkers need to perform better Skills Needs of the Private Sector in Botswana Got you hired here Got you hired here Your manager appreciate in you Your manager appreciate in you the job You like in coworkers Practical knowledge of Honesty You like in coworkers Your coworkers need to perform better Got you hired here Your coworkers need to perform better Your manager appreciate in you Got you hired here You like in coworkers Employee Perceptions of the Value of Personal Characteristics experience in the same eld Previous work Your coworkers need to perform better Your manager appreciate in you Got you hired here Employee Perceptions of the Value of Education and Job-Related Skills You like in coworkers Personal Your manager appreciate in you appearance You like in coworkers Your coworkers need to perform better di erent eld experience in Previous work Your coworkers need to perform better Got you hired here Got you hired here Your manager appreciate in you Your manager appreciate in you General You like in coworkers workplace You like in coworkers Your coworkers need to perform better independently Ability to work Got you hired here Your coworkers need to perform better Your manager appreciate in you General Got you hired here You like in coworkers speci c skills Your coworkers need to perform better Your manager appreciate in you Got you hired here You like in coworkers Your manager appreciate in you You like in coworkers Other physical tness, health) attributes (e.g. Advanced speci c skills Your coworkers need to perform better experience in a vocational job- vocational job- Your coworkers need to perform better  mployee Perceptions of the Value of Core Skills Figure 10. E (percentage in agreement) 60 50 40 30 20 10 0 Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Got you hired here Your manager appreciate in you You like in coworkers Your coworkers need to perform better Communication Team working Problem solving Use of information Planning and Customer care Responsibility, Motivation and Self-management skills skills skills and communication organizing skills skills reliability and comittment and technology trustworthiness entrepreneurship Source: World Bank (2010c). Note: Core skills were defined by the ESSB as aptitudes required for employment that could be learned over time, either at school or elsewhere. This category included skills such as basic literacy and numeracy, as well as “soft” (or “behavioral”) skills such as communication, problem solving, and team work. Figure 12. M  ethod by which Employees Heard of 5. Wages and Earnings Analysis Current Job Opening, by Age Group This section presents the main findings and statistics from 60 16- 24 years 25-39 years 40 years and older a detailed econometric analysis of EESB data.6 Its goal is to identify those skills that are better rewarded in the private sec- 50 tor, in other words, the skills that are in high demand in the economy. 40 Returns to education are highest for tertiary education in 30 the private sector Education almost universally helps improve earning power. 20 Rates of return to education identify the marginal increment of return to each level of education. For Botswana, wage anal- 10 ysis of EESB survey data reveals that the attainment of tertiary education or higher, increases a worker’s wages by 67 percent. 0 This finding is consistent with earnings trends in other devel- Friends Family Internet Magazine/ Flyer/ University Other oping countries (Di Addario and Patacchini 2008; Buchinsky newspaper Information posted et.al. 2010). On the other hand, a General Certificate has no Source: World Bank (2010c). significant effect on a worker’s wages. As discussed above, there appears to be employer loyalty in Botswana, which seems Most workers find jobs through informal networks to benefit employees. Looking at job tenure, as measured by In order to identify whether individuals face difficulty in find- years of employment with a firm, the longer an employee stays ing the right jobs, figure 12 shows how employees report find- with a firm, the higher his or her wages and the faster his or ing their current employment. It appears most of them find jobs through informal networks of family and friends rath- 6 The details of the econometric modeling have not been included here; er than through formal mechanisms. It should be noted that however, background equations and estimations can be provided upon re- quest (tfasih@worldbank.org). Policy Note 2 of this series also addresses the these mechanisms tend to benefit well-connected and/or bet- rates of returns to education, but because these rates are based on the Labor ter-off segments of society much more than other groups and Force Survey of 2006, the returns relate to all sectors, including the public can thus perpetuate inequality. sector. Skills Needs of the Private Sector in Botswana | 11 her wages grow over time. On the other hand, experience (not Conclusion and Policy 6.  necessarily with the same firm) only affects current wages and has no impact on other measures of wages. Recommendations Wage analysis appears to confirm high reservation wages This note used the findings from the Employer and Employees among Botswana workers Survey in Botswana to identify the labor market rewards to education, the effects of self-reported characteristics and skills EESB data show an average unemployment duration of almost by employees on wages, the value of such characteristics and one year prior to being employed among employees between skills to employers, the determinants of wage gain over time. 16 and 39 years old, and of almost 1.5 years for workers 40 In addition, EESB data provided a number of interesting in- years and older. The length of previous unemployment in- sights into the demand for skills in the private sector in Bo- creases current wages, albeit by a small factor. The positive im- tswana. Given that there is a common perception of skills con- pact of length of unemployment on wages implies that work- straints in the private sector, the note analyzed EESB data in ers in Botswana hold out for better jobs, and thus a longer order to identify whether these constraints represent an actual search means a greater reward.7 lack of skills, a skills mismatch, poor skills matching of work- Training and skills levels impact current wages and wage ers to the requirements of their jobs, or a skills signaling issue. growth differently Based on the major findings outlined below, it appears that skills constraints in Botswana reflect both a lack of skilled la- Training. Training provided by employers was measured by bor and a skills mismatch: both incidence (trained or not) and intensity (number of days trained). By both measures, it does not appear to be a signifi- • Employers have high expectations of the skill levels of pro- cant predictor of current wages, although being trained is pos- spective employees and highly over-rate the educational itively associated with accelerated wage growth within a firm. requirements of various occupations. For instance, even for Core skills. The core skills (see figure 10 above) related to the elementary occupations, the minimum education level re- hiring of an employee have a strong and positive impact on cur- quired by the majority of employers was a General Certificate. rent wages. But once the employee is hired, these skills do not This finding points either to a skills mismatch or a low per- contribute to rapid wage growth. For job-related skills, there is a ception of the quality of the Botswana education system. positive impact of an almost 9 percent increase in current wag- es. Workers’ estimation of the skills needed by their coworkers • ESSB data also appear to indicate a poor vocational and are negatively related to their current wages, implying that gen- technical education system, given that employers find it eral incompetence tends to lower everyone’s productivity. difficult to hire plant operators and craft-related trade work- Skilled occupations. Generally speaking, being in a high- ers, and that a very low proportion of employees consider skilled occupation (relative to low-skilled elementary oc- vocational skills to have been important in their hiring. cupations) has a positive and significant effect on wages. • It takes firms a relatively long time to fill vacancies, and For instance, managers receive a 60 percent wage premium, employees seem to get information on existing vacancies while professional workers earn a 71 percent wage premium, mainly through informal channels, such as family and compared to workers in elementary occupations. On average, friends. managers earn over 7 times more and professionals, more than 5 times more, than these workers. • Employees hold out for better jobs for up to an average of one When looking at the occupational distribution of average year, indicating a high reservation wage among workers. earnings by year (table 6), ESSB data show that roughly one- • Practical knowledge of a job and possession of the min- third of workers in the sample are in elementary occupations, imum level of education required for a job appear to be which are the lowest-paid occupations in Botswana.8 The next the main self-reported reasons for getting hired. Man- lowest-paid occupations are agriculture, forestry, and fishing, agers value personal characteristics, such as commitment, but that group represents less than 1 percent of the employee hard work, punctuality, reliability, and honesty. Employees sample. The low proportion of these occupations is due to the confirm the importance of these characteristics, and also nature of the survey, which focused on firms, whereas most report team work and communication skills as reasons for Batswana in agriculture, forestry, and fishing are self-em- being hired. ployed and engaged in subsistence household production. It • Wage regressions shows that higher education and high- is clear that the differences in educational levels and skills re- ly skilled occupations (e.g., managers and professionals) quired for different occupational categories translate into oc- are associated with high wage premiums. The core skills cupational wage differentials that persist over time with only and personal characteristics cited by both employers and modest differences in relative earnings. employees as important for employment have a positive im- pact on current wages, but not on wage growth. Policy recommendation #1: Make a strategic shift and expand tertiary education 7 The issue of high reservation wages is also discussed in Policy Note 2. Botswana has high enrollment and completion rates at the 8 The EESB collected information on wages for three years: 2008, 2009, basic and secondary education levels. Admittedly, the issue and 2010. 12 | Skills Needs of the Private Sector in Botswana Table 6. Predicted Annual Wages by Industry and Occupational Category 2008 2009 2010 Wage Wage Wage (in pula) Index (in pula) Index (in pula) Index a Industry Agriculture, hunting, and forestry 48,528 1.11 48,854 1.11 49,021 1.12 Mining and quarrying 176,663 4.04 177,849 4.04 178,082 4.06 Manufacturing 48,510 1.11 48,836 1.11 49,021 1.12 Construction 61,302 1.40 61,714 1.40 61,698 1.40 Wholesale and retail trade 60,059 1.37 60,462 1.37 60,476 1.38 Hotels and restaurants 56,512 1.29 56,890 1.29 56,954 1.30 Transport, storage, and communications 55,980 1.28 56,356 1.28 56,387 1.28 Financial intermediation 73,783 1.69 74,278 1.69 74,608 1.70 Real estate, renting, and business activities 61,818 1.41 62,232 1.41 62,318 1.42 Public administration and defense 46,976 1.08 47,291 1.08 47,099 1.07 Education 43,692 1.00 43,984 1.00 43,915 1.00 Health and social assistance 58,636 1.34 59,029 1.34 59,278 1.35 Other 56,954 1.30 57,526 1.31 57,662 1.31 b Occupation Managers 121,714 7.38 122,530 7.36 123,007 7.39 Professionals 92,627 5.62 93,249 5.60 92,967 5.58 Technicians and associated professionals 61,711 3.74 62,124 3.73 62,318 3.74 Clerical support workers 39,662 2.41 39,929 2.40 39,736 2.39 Service and sales workers 38,488 2.34 38,745 2.33 38,561 2.32 Skilled agricultural, forestry, and fishery workers 35,108 2.13 35,343 2.12 35,596 2.14 Craft and related trades workers 38,548 2.34 38,806 2.33 38,561 2.32 Plant and machine operators and assemblers 39,212 2.38 39,475 2.37 39,736 2.39 Elementary occupations 16,482 1.00 16,647 1.00 16,647 1.00 Source: Author’s econometric analysis of EESB data. Note: Pula is the national currency of Botswana. a. Index is occupational wage relative to the average for the education industry. b. Index is occupational wage relative to the average for elementary occupations. of quality education remains a challenge at these levels.9 As a ematics (STEM) skills, as well as on research and innovation. middle income country, Botswana has achieved close to uni- However, the country’s current grants/loan program does not versal primary education and has a high enrollment rate at the support postgraduate study, thus either employers or students secondary education level. However, low returns to completed will need to pay for it. Since the private sector in Botswana is higher secondary education (i.e., the General Certificate) and not yet robust, students and/or employees who are funded for the demand for tertiary-educated individuals even for less ac- postgraduate studies, work predominantly in the public sector. ademically demanding occupations point to a need to build In order to support skills training that will facilitate the the higher education system in the country. growth of the private sector, the government urgently needs Given the high wage premium to tertiary and higher lev- to prioritize the delivery of good-quality tertiary education, els of education, the private benefits of tertiary education particularly STEM skills. The grant/loan program should ac- are high. As such, tertiary education should not be as heav- cordingly gradually shift towards post-graduate education in ily subsidized as it is in Botswana.10 If the country is to move these disciplines in order to provide a cadre of highly skilled towards a knowledge-based economy, however, postgradu- ate and doctoral level studies need to be encouraged, with a workers for the private sector. strong focus on science, technology, engineering, and math- Policy recommendation #2: Support the development of core skills throughout the education cycle 9 See Policy Note 1 of this ESW. 10 The government of Botswana offers a grant/loan program to all students As discussed, core skills such as honesty, reliability, team work, at the undergraduate level of tertiary education. Because of low recovery rates, communication, and problem solving are considered import- however, even the loans end up effectively being grants (see Policy Note 1). ant for employment in the private sector. A concerted effort Skills Needs of the Private Sector in Botswana | 13 Table 7: Identified Constraints for Skill Provision for the Private Sector Interventions Constraints Short term Medium to long-term Financial incentive to enter post-graduate Lack of skills gained at studies. Good quality basic and secondary education; tertiary level of education Intensive pre-entry courses to remedy lack of Industry-university R&D partnerships Job relevant appropriate skills for tertiary level skills constraints Introduction of specific curricula to develop Lack of appropriate core Comprehensive training programs with specific critical thinking and behavioral skills from early skills core skills training components; childhood. Mostly General Certificate Intensive on the job training; Move the educational profile of population holders in the labor Internship programs; further towards the right for a knowledge based markets Hiring skilled foreign workers economy Skills mismatch PPP model of providing required training Well operating sector committees to identify Lack of specific technical/ through government facilities with private skill needs for industry and a responsive training vocational skills sector/industry experts sector Source: Adapted World Bank 2010a for Botswana context. to systematically develop such skills throughout the education try. More specifically, graduates of basic education should be a cycle is needed. Certain successful pedagogic approaches at trainable and flexible group of workers who can adapt to em- the preschool and primary school levels have been introduced ployer needs. On-the-job training can help new hires acquire to accomplish these goals in developing countries. One of the skills in areas of need to the employer, provided that they have leading examples is the “Tools of the Mind” approach, which certain pre-requisites, for instance, basic knowledge of science teaches strategies to help children gain control of their behav- and mathematics for technical work. Such training could be ior and the practice of self-regulation using developmentally at the job site or off-site with an accredited training provider. appropriate games and activities (World Bank 2011). Another Yet employers do not always prefer on-the-job training due to approach called “Promoting Alternative Thinking Strategies” the fear of poaching (that is, they incur sunk costs if a trained (PATHS) teaches self-control, emotional awareness, and social employee is hired by another firm). In order for Botswana’s problem-solving skills to elementary school children (Ibid.). government to support this type of training, the training In addition, programs that bundle short, technical training funds collected via the training levy need to be utilized. As courses with training in behavioral skills, as is the practice of discussed in Policy Note 1, these funds are underutilized due many of Latin America’s Jovenes programs (box 2), would be to cumbersome procedures. The government needs to simpli- useful for individuals who have graduated from the education fy these procedures for employers. system without marketable skills. The government of Botswana does operate an internship Policy Recommendation #4: Use Public Private Partnership program that to date has provided internships to almost 4,500 Models for Specific Vocational Training individuals, one quarter of who have been absorbed into em- Most employees did not rank job-specific vocational skills as ployment. Such internship programs can provide excellent important for getting hired. It also appears that specific TVET work-based experience and aid employer-employee matching training has no relevance to the skills demand of the labor mar- without significant cost or risk to the employer. However, in ket. Personal interviews with employers, for example, revealed Botswana these programs are still mainly concentrated in the that training for specific industries appears to be a concern. public sector. The training levy collected by the government One way to address these concerns is to partner with the pri- should be tapped to provide incentives for the private sector vate sector and provide tailor-made training courses for specific to develop well-designed programs for the interns that they industries in a public-private partnership model. Such short, absorb. Specifically, there is a need to integrate fixed modules intensive training modules would need to be developed in part- on general behavioral skills and work-based ethics into the nership with the private sector, with employers committing ex- internship programs. In addition, a monitoring component pert trainers from their pool of employees and the government needs to be built into such programs so that both employers providing training facilities at one of their well-equipped TVET and employees can provide input on its efficacy. colleges. Such courses would, moreover, need to be flexible and reviewed on a regular basis to ensure their relevance. Policy recommendation #3: Promote on-the-job training In conclusion, the challenge for the government is to cre- Botswana is endowed with a relatively high share of lower and ate an optimal framework for training based on well-defined upper secondary graduates. If the quality of basic education is roles and responsibilities of the public sector, private firms, good, this pool of individuals should be an asset for the coun- and households. 14 | Skills Needs of the Private Sector in Botswana Box 2. A Comprehensive Training Program for Youth: The Jovenes Program in Latin America and the Caribbean The Jovenes Program in Chile began in 1992 and was based on the experience of youth training programs in Great Britain and the United States. There are three basic features of this training model. First, it targets youth and disadvantaged popula- tions with low chances of joining the formal labor market. Second, it seeks to increase the social capital and employability of participants. In this context, the social skills or job readiness training module and the internship phase that follows training allows participants to gain valuable skills and then gain experience in a formal sector job. Third, the Jovenes Program relies on the market to reveal the demand for training (the participation of the private sector, which provided internships, was intended to guarantee the pertinence of training courses) as well as its supply (the provision of courses is determined in a market of training institutions where public and private training providers competed to offer courses). To explore the effect of the Jovenes Program on earnings in the Latin America and Caribbean region, a rigorous impact evaluation was conducted of the program implemented in the Dominican Republic. The results of a randomization of training among eligible interested applicants show that members of the treatment group have monthly labor earnings of RD$484—17 percent higher than those of the control group. Examining various subgroups, the estimated earnings impacts are larger for the youngest age group and residents of Santo Domingo. The impacts also seem to be larger for those with some secondary education (a 21 percent positive impact versus 9 percent for people with only primary education). In terms of cost-effectiveness, even a modest impact on monthly earnings (conditional on employment) is economically significant and large enough to potentially offset the costs of the training over the course of two years, if the impact persists. Sources: Galhardi (2002, p 13); Sehnbruch (2006); Betcherman et al (2007, p50). Skills Needs of the Private Sector in Botswana | 15 References Betcherman, G., M. Godfrey, O.S. Puerto, F. Rother, and Sondergaard, Lars, and Mamta Murthi. 2012. Skills, Not Just A. Stavreska. 2007. A Review of Interventions to Support Diplomas: Managing Education for Results in Eastern Young Workers: Findings of the Youth Employment Europe and Central Asia. With Dina Abu-Ghaida, Inventory, SP Discussion Paper 0715. Washington, DC: Christian Bodewig, and Jan Rutkowski. Directions in World Bank. 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