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Published on January 7, 2008

 "When a child wants to eat fish, we should teach him how to catch fish rather than telling him to buy it in the market."

So says Deputy Prime Minister and Industry Minister Kosit Panpiemras in describing how Thailand should be providing skilled workers to meet the desperate human-resource needs of its industries.

Thailand's industrial sector is facing a shortage of skilled workers because it has given more importance over recent decades to developing its production processes rather than its human resources.

The workforce shortage is one factor eroding the country's competitive edge in the struggle against export rivals China, India and Vietnam. More and more manufacturers are attempting to shift away from labour-intensive production to rely more on advanced technology, to add value to their products, but the problem remains: there are not enough skilled workers to meet their demands.

"I think a failure in our educational system is the main obstacle to creating human resources with the potential to develop the country," Kosit says, and he goes on to accuse the university system of failing to provide students with sufficient work skills for employment in the real world.

Most university faculties train students through textbooks and create their skills on paper rather than training them by working in the real sector, he says, and as a result university students do not have the ability to work when they graduate.

In Kosit's opinion, university students should train in real performance as well as studying theory from textbooks, much as medical faculties train their students in real situations.

He says medical students do this from the third year of their studies, having iternships in hospitals from their fifth year until they graduate, which is why they then have the experience to take care of patients.

He points out too that they learn to be medical specialists after their bachelor's degrees, so that Thailand's medical experts have the experience to compete with those anywhere in the world.

"If we want to build a skilled workforce to serve the country's growth we have to change our educational system and business strategy to spend more on training, as well as joining with universities to train students before they graduate," Kosit says.

The Siam Cement Group (SCG), Thailand's biggest industrial conglomerate, stands as proof of much of what Kosit says. Ever since its establishment in 1913, the group has realised the importance of developing human resources and has never faced a shortage of qualified workers.

"We have four maxims that have made us the country's leading industrial conglomerate," says SCG president Kan Trakulhoon. "They are adherence to fairness, dedication to excellence, belief in the value of the individual and concern for social responsibility."

He says good human resources lie at the heart of doing business successfully.

SCG begins training members of its workforce when they are still in the third year of their university studies. Over its entire 95 years it has accepted applications for training from third-year students of engineering, accounting and marketing.

Senior students whose grades are over three are selected to take part in the group's internship programme with the managers of different departments. They get personal tuition from the group's senior managers, all of whom have at least 20 years' experience on the job.

"Not only do they get knowledge of professional working processes, but we also try to teach them good corporate governance," Kan says.

The group also hosts a competition for its trainees. Successful students are taken to Japan to observe working processes and to meet executives in leading firms.

"We also have more training programmes for university students," Kan says. "One is called Cementhai Career Choice. It orients junior university students to prepare them for their careers."

When students graduate and begin working for SCG, the group provides a "road map" outlining training programmes for personnel at each level, from technicians to executives.

"New staff members must undertake between three and six months' training to teach them about the group's business philosophy, its culture and their carrier path," he says.

The group's human-resource department provides training programmes every year at which staff members' ability and experience are assessed to determine what job description suits them best.

It also offers 10 scholarships a year for its officers to undertake further studies at leading overseas universities such as Walton College of Business and Kellogg School of Management, both in the US.

"Our staff members know where their career paths lead in the future. That's why our staff turnover is lower than in other Thai companies," he says.

Kan himself began his SCG carrier in 1977, the year he graduated with a bachelor's degree in electrical engineering from Chulalongkorn University. Later he was granted a company scholarship to study for master's degrees in engineering and management at the Georgia Institute of Technology in the US.

He held management positions in various of SCG's business units, including petrochemicals, cement and ceramics, before becoming president and chief executive in January, 2006.

"I'm a product of SCG's human-resource system," Kan says. "I was given skills to become a professional. I knew what I would be."

The group sets aside about Bt600 million a year for classroom training.

At present the SCG Group employs 24,800 workers in more than 100 major companies. Kan says it plans to increase that total by 6,000 workers over the next five years as the group expands beyond Thailand into the rest of Southeast Asia. Four thousand of those new workers will be local staff in the countries concerned. The rest will be Thais.

Kan says 60 per cent of SCG's current employees are engineers and scientists and that the group aims to become a leading innovator by 2015.

It has long enjoyed the ability to raise manufacturing productivity and manage its plants for economies of scale. Now the group is expanding and planning to create innovative products by research and development. This means SCG has to adjust its human resources to deliver a research role, as well as combining science and commerce.

"When we set our new target to become a leading innovation firm, we had to employ research-and-development staff, especially scientists, who would research innovative products. This was a new area of personnel in our business, so we had to employ professionals from the market. We will in future try to develop our own staff in the area."

The group's research-and-development budget, which was around Bt170 million in 2005 and Bt350 million in 2006, rose to about Bt700 million last year with the recruitment of doctoral graduates to work on research and development and intellectual property.

Kan says the annual research-and-development budget will rise to more than Bt1 billion within a few years.

"Although we aim to become an Asean leader by 2015, we will not focus on financial returns," Kan says. "We are concerned about our staff and how to train them to be the manpower for the group in the future. SCG is not only an industrial conglomerate but also an institute to build a high-quality workforce with the ability to drive our business in the future."

This is why SCG has never faced either a shortage of skilled workers or a lack of top management talent to replace retirees, he says.

Chalida Ekvitthayavechnukul,

Somluck Srimalee

The Nation