Quarterly Business Magazine

Human Resources

Building Human Capital
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After decades of political instability and economic stagnation, many competent professionals have reluctantly left Myanmar to survive elsewhere. On the macro level, this brain drain, coupled with the sanctions have hampered the nation and as a result, have deprived it of its invaluable workforce and distanced it from the rest of the world. Consequently, local businesses have been struggling to retain their in-house talent pool. Despite the high value placed on education in Myanmar’s culture, an economy corrupted by cronyism and an education system— particularly higher education—debilitated by underinvestment made it difficult in the past to build a skilled workforce for today. It only took decades of repression and misleading policies to exhaust a thriving nation.

However, the worst is over for Myanmar without a glance back. Under the incumbent administration, Myanmar lost the weight of sanctions and merited attention for reconciliation by redeeming herself in the eyes of the international community. From many perspectives, things have been made much easier than it was for investors and policymakers to reverse the decades-long brain drain in Myanmar. Recent developments in the country have been exciting for Myanmar around the world. Many of the Myanmar have consecutively taken initiative under an astonishing series of reforms and returned to the country and be ahead of the curve. Although some are optimistic, they are still waiting out for further transformation of the country to take place.

On 2 August 2013, Career Development Consultancy Company Limited (CDC) successfully organized a job fair for Myanmar citizens in Singapore- the first ever job fair held abroad with many local and foreign companies participating such as Coca Cola, Schneider, Ooredoo, City Mart, AA, Forever Group, KBZ Bank and many more. Foreign corporations  rushing to invest in Myanmar generated certain employment opportunities to attract Myanmar nationals working abroad. According to the new Foreign Investment Law enacted in 2012, a foreign company entering Myanmar must appoint at least 25% to 75% of skilled citizen workers within the initial six-year period of operation. Norway’s goliath, Telenor Group alone is recruiting 3,000 locals for its telecom expansion.

On 22 September 2013, Aung San Su Kyi, Leader of the National League for Democracy, spoke to over 150,000 Myanmar citizens residing in Singapore to consider returning and make use of their skills and experience in reconstructing Myanmar. Indeed, the time has come for the nation to reach out to its citizens and prepare for a flight of opportunities boarding to Myanmar. The registry of Directorate of Investment and Company Administration (DICA) so far listed -33,698 local companies and 2,243 foreign companies in Myanmar, as of 4 October 2012.

Many economists and experts predict a quick turnaround and a steady progress for Myanmar as projections from external sources such as McKinsey’s June 2013 report on Myanmar underlined the country’s potential to quadruple its GDP by 2030. The International Monetary Fund finds that Myanmar could become “the next economic frontier in Asia”, with its vast natural resources, young workforce and strategic geography between India and China. These advantages could mend ways and position Myanmar back on the geopolitical power map but it comes with a challenge for the government and the private sector to inv est in building human capital. Foreign investors have concerns over the availability and capability of managers and workforce to steam the growth engine but so far, few is concentrating on fostering skilled labour: the most essential supply of all.

Such concerns raise the question: what has been provided to back the demand in Human Capital? Economic outlooks summon tremendous pressure on building human capital as investors set their eyes on the gold rush in the market. The nation offers access to an estimated number of 60 million people—the world’s 20th largest population—who if made productive, should increase the nation’s economic value. According to 2011 statistics from the Ministry of Labour, Employment and Social Security, the working population of Myanmar is 30.13 million. Although the total labour force is projected, demographics of the labour force is not available. In fact, the Ministry will only conduct a new Labour Force Survey in 2014 with help from the International Labour Organization (ILO). The most recent Labour Force Survey of the country was collected in 1990.

Developing countries such as Myanmar need a big push simultaneously in both infrastructure and industry because they complement each other to sustain. To enable the nation through human capital, the value of skills, knowledge and experience must be acknowledged. Corporate culture transformation and government action are necessary- a change in values and a change in policy.

The Myanmar government instituted free and mandatory public schooling at the dawn of the twentieth century to provide workers the skills needed for the industrial age, however, the private sector must collaborate to support today’s workforce adjust to twenty-first century realities to push the country’s economic potential beyond borders. Myanmar has its network of institutions in place but it still lacks the capacity to take on more students. The government must control expenses and improve access to higher education-relocate all universities back to urban areas and limit annual tuition increases at public universities and partner with foreign academies on refining accreditations.

A number of Yangon’s top public and private business schools share a school of thought on the importance of Human Resources in business and have collaborated on providing demographics of their students. Out of the 11,012 capable business and economics students nurtured in Yangon (January 2012-July 2013), an intriguing find reveals that 50% of the students are currently employed, 74% are female, and 95% fall in the age group of 18-30. A majority of the students are self-financing their education to meet job requirements that suddenly shifted to engage with the international community. Private business schools in the commercial city offer exceptional diploma and certificate programs—designed for students seeking higher education, career advancement or entrepreneurship—from globally recognized awarding bodies from countries such as the United Kingdom and the United States. Unfortunately, not everyone can afford the time or money for private schooling. There are very few institutions in the country which provide education loans for students and employees eager to upgrade their competencies.

Compared to other ASEAN countries, Myanmar’s attrition rates were the highest in 2012, risen from 5.1% to 8.8% (2011 & 2012 TRS, Mercer) Businesses must attract, retain and groom human capital from within. Although, money is not the sole incentive to guarantee retention, annual increase in salary budget by the private sector is minimal. Budget allocation for HR is usually low as the role of human resource management in most local businesses are negligible. The majority of Human Resource Managers at work do not enable the full capacity of human resource management. Regardless of the total number of personnel employed in businesses, human resource departments in Myanmar usually consist of very few people to being almost non-existent. In most cases, the available workforce is underused; as a result, businesses employ more workers and take on heavy overhead expenses. Many of the Human Resource issues facing the private sector arise from a failure to manage the existing workforce to its optimal efficiency and underinvestment in job-related trainings. Not many companies keep continuous track of progress on employees as few of them consider it a meaningful investment. Induction training for new employees are usually unfamiliar, along with other similar practices which are the norm in the private sectors of other countries. There are often instances in which employees are requested to deliver an unanticipated work—a job they have not been trained for—or risk devaluation. Thus, employees pursue trainings at external establishments to upgrade their competencies; and to absorb educational expenses, they generally expect higher returns from employers through career advancement.

Even then, proficiency in the field is often over-looked or unacknowledged due to inflexibility in the standardized valuation system that often unintentionally tolerates discrimination of professionals against age or gender. Few mechanisms are in place to adequately analyze the existing knowledge and skills of employees; hence it is often difficult to assess the untapped potential of the existing workforce in Myanmar. That said, there is certainly a requirement to increase the local knowledge base with relevant skills and exposure to efficiently scale up to engage with the international community.

To support human capital management in practice, Myanmar must protect the rights and interests of its workers. Revision is needed for most of the labour laws, many of which are outdated. To enhance the skills of Myanmar workers, Singapore Polytechnic International is cooperating with the Ministry of Labour, Employment and Social Security for the establishment of the National Quality Assurance System and workforce skill development. The Employment and Skills Development Law—to increase job opportunities, reduce unemployment rate, protect and promote capabilities of the workforce—is under process for enactment this year.

With the ASEAN Economic Community approaching in 2015, the economic landscape will undoubtedly change; subsequently, the dynamics for handling human resource will advance, calling for an effective management of Human Capital for Myanmar.
 

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