Analysis_of_PPPs_in_Workforce_Development_FINAL_public_(1)_(1).pdf

Moroccan Public Private Partnerships in Relation to Workforce Development A Research Study of Effectiveness

Harvard Business School Global Impact Experience Team February 2013

Contents Acronyms and Abbreviations

Synopsis – Objectives & Scope

Methodology

Executive Summary

PPP Effectiveness Study

Overview of PPPs

External Challenges Identified by Private Sector

Top Skill Gaps Identified by the Private Sector

Perception of Workplace Readiness

Overview of Education and Vocational Training Systems

Vocational Training Strategy

OFPPT

Continuous Training

CFA-IE Overview

‘Instituts Spécialisés’ Overview

Characteristics of Effective PPPs

Observations

Recommendations

Conclusion

Appendix

Case Study (PPP) – HYATT

Case Study (PPP) – Maroc Modis

Case Study (PPP) – Koutoubia

Case Study (PPP) – ADDOHA Foundation

Case Study (PPP) – Institut des Métiers de l’Aéronautique

Case Study (PPP) – Cummins

Case Study (PPP) – OCP Skills

Case Study (PPP) – Education For Employment Morocco

Case Study (PPP) – Morocco Agency for Solar Energy

Case Study (PPP) – Interlinge

Case Study (Non-PPP) - Attijariwafa Bank

Case Study (Non-PPP) - Hassan II

Case Study (Non-PPP) – FedEx

Case Study (Non-PPP) – Giant Link

Case Study (Non-PPP) – Federation National du Batiment et des Travaux Publics

Case Study (Non-PPP) – AMIDEAST

Case Study (Non-PPP) – LaSalle College

Case Study (Non-PPP) – Royal Golf d’Anfa

Acronyms and Abbreviations

APC – Approche Par Competences - Competencies Based Approach

AREF - Académies Régionales de l’Éducation et de la Formation

BTS – Brevet Technicien Supérieur

CGEM – Confédération générale des entreprises du Maroc

CFA-IE – Centre de formation professionnelle par apprentissage intra-entreprise

CSF – Contrats Spéciaux de Formation

DOE – Département de l’emploi

DFP – Département de la formation professionnelle

EFE – Education for Employment

ESITH – Ecole Supérieure des Industries Textiles et de l’habillement

FNBTP – Fédération Nationale du Bâtiment et des Travaux Publics

GIZ – Gesellschaft für Internationale Zusammenarbeit, German Organization for International Cooperation

GOM – Government of Morocco

IFC – International Finance Corporation

IMA – Institut des Métiers de l’Aéronautique

MOE – Ministre de l’emploi et de la formation professionnelle

MOHE – Ministre de l’enseignement supérieur

OFPPT – Office de la Formation Professionnelle et de la Promotion du Travail

PPP – Public-private partnerships

TFP – Taxe Formation Professionnelle

USG – United States Government

Synopsis – Objectives & Scope

The anticipated new strategic direction of USAID Morocco will focus on workforce development through engagement of public and private sector partners. In preparation for USAID Morocco’s new five-year strategic plan set to launch in the third quarter of 2013, the Economic Growth office commissioned a group of Harvard Business School (HBS) students to conduct a Rapid Assessment to facilitate the planning process.

In order to determine how USAID can most effectively impact human capacity development in Morocco, the office needs to have a fundamental understanding of the current landscape of the Moroccan workforce. Specifically, USAID has asked the HBS team to investigate the effectiveness of Public-Private Partnerships (PPPs) in workforce development. The evaluation will address the type of programs currently in existence, what has worked well and what improvements can be made. Also, the study should offer insight into private sector employment needs in the short and medium term.

Equipped with this information, USAID Morocco will be able to better design its new strategic objectives for the next five years.

This study was conduct in partnership with the Harvard Business School’s Global Impact Experience program. GIX is a student-led and service-driven initiative which has been in existence at Harvard Business School since 2009. The overarching mission is to provide the HBS student community with high-impact opportunities to engage with communities across the world and be exposed to the concepts and practices of international development. Projects are designed with sponsoring organizations to help students put into practice knowledge gained from their business education, and are comprised of small teams that spend the 2 to 3 weeks of the winter term of their second year working on assignments. Projects often involve providing support to enterprises in developing countries to improve their effectiveness and sustainability.

Methodology

The Rapid Assessment was conducted by four second-year Harvard Business School students (Team) over a period of thirteen working days in January 2013. The team consisted of following members:

Al Chick: Five years in manufacturing, operations/supply chain, and management consulting Josh Choi: Six years investment banking and private equity Clementine Contat: Six years in supply chain, investment banking, and audits Julie Li: Four years in corporate banking and strategy

The goal of the study was to survey a wide selection of private companies as well as government entities to understand what role public private partnerships play in workforce development in Morocco.

First, the Team held introductory meetings with USAID and other USG agency representatives to gain an overview of the Moroccan economy and education system. The Team then cast a wide net in an effort to schedule meetings with a diverse set of public and private organizations by using contacts from USAID, the American Chamber of Commerce, the Moroccan Ministry of Employment and personal connections.

Out of the 60 outreach attempts, 44 responses were received and 43 interviews were ultimately conducted. The majority of interviews were conducted in-person and a small number were held via phone or email. For in-person interviews, the Team traveled to sites in Rabat, Casablanca and Fes.

Seventy-four percent of interviews were conducted in English, while the remaining interviews were conducted in French. Interviewees included company executives, human resource directors and training program directors.

In order to ensure data consistency, the Team developed two different questionnaires to be used in the interviews. The first questionnaire targeted companies who have engaged in PPPs for workforce development and the second targeted companies who have not engaged in these types of PPPs. For other organizations that did not fit into a category (private education institutions, PPP implementers), the interview questions were centered on understanding training services provided and the skill gaps of the population served.

Executive Summary

Workforce development is a major need in Morocco. One out of three youths between the ages of 15 and 24 in Morocco’s urban areas is unemployed. The highest unemployment figures are found among high school and college graduates. Unemployment rates are disproportionately higher for graduates from open enrollment university programs (22.3%), as well as graduates of secondary school (21.7%) and vocational training institutions (19.7%). While it is difficult to determine the exact supply of jobs that could be fulfilled if the potential workforce were better trained, many companies have expressed that their businesses could be enhanced if the Moroccan employee pool were better skilled.

Skill sets required by employers can be divided up into two parts – hard skills and soft skills.

Hard skills, like finance, engineering and actuarial sciences are adequately met via company and job specific training. However, soft skills, like punctuality, integrity and drive are becoming more crucial as Moroccan companies seek to be more competitive in its local and international markets. These soft skils are what seem to be lacking most in the Moroccan workforce. The Team’s research identified four skills that companies believe should be improved within the Moroccan workforce – professionalism, communication, customer service and motivation.

In evaluating current PPPs within the framework of workforce development, the team found difficulty in discerning which programs make more significant inroads into solving the workforce challenge. The primary reason behind this is that there is a lack of consistency or standardization across programs, there is a lack of accountability in PPPs, and best-practices are not observed or shared. The team observed that PPPs set up for corporate social responsibility purposes tend to have ample resources at their disposal, yet are effective in providing the right training for youths to obtain meaningful employment. Conversely, programs with the specific objective of providing employment tend to have less resources and marketing capacity, yet provide practical and meaningful training.

Internship programs have also suffered from ineffectiveness due to the lack of centralization and structure.

For PPPs to be effective to all stakeholders, the Team provides a six point recommendation:

1. Clearly establish goals and state objectives that are agreed upon by all parties involved

2. Action should be designed so each party understands the steps its organization must take to achieve the common goals

3. Develop a marketing plan for the training program

4. Design curriculum that effectively address the private sector’s skills needs

5. Make internship experience a mandatory offering within PPPs, and the GOM should provide resources to a network of medium sized firms that can provide valuable work experiences

6. Integrate performance management systems that track metrics based on the program’s objectives

PPP Effectiveness Study

Overview of PPPs While the concept of PPPs has become a familiar working term in the Moroccan economy, there is no standard definition or common understanding of what a PPP actually entails. Thus, to some extent, programs affiliated with the government can be mistaken as a PPP by citizens and working professionals.

For the purposes of this study and using the guidance of USAID, the Team has defined a PPP as follows:

A Public-Private Partnership combines the assets and experience of strategic partners, leveraging their capital and investments, creativity, and access to markets to solve complex problems facing governments, businesses and communities. USAID utilizes public private partnerships to improve social and economic conditions in developing countries. This approach to partnership relies on the overlapping interests of the U.S. Government's strategic objectives for foreign assistance and the core business goals of industry.

Due to the lack of understanding behind the mechanics of a PPP, there is a wide spectrum: from Private to Full PPP programs (Figure 1).

Private programs are those that have a limited to non-existent public affiliation. They are characterized by private companies self-funding the creation, implementation, and operation of the workforce development program. Students who take part in these training programs often pay tuition with any form of subsidies or grants coming directly from the private company and not the government;

thus, private school education is also included here. Further, we also categorize specific CSR programs at this end of the spectrum. In particular, we refer to programs that do not have a long-term vision of how workforce development will assist the needs of Morocco’s industry hiring needs, but rather, are primarily concerned with improving their public or brand image by providing training programs.

In the middle of the spectrum are the ‘gray area’ programs that have some of the characteristics of a PPP. These programs have a degree of affiliation with the public sector. The government will collect taxes and use the tax revenue in order to redistribute it through workforce development programs. One such program is the Contrats Speciaux de Formation in which the government subsidizes a portion of the on-the-job continuous training costs of companies. Another is the Direct Help Mechanism within the Auto, Aeronautics, Electronics, and Offshoring sectors where the government provides a financial contribution for training in recruitment and continuous training over a three year period. The contribution can reach up to $7,800 (64,000 MAD) per person employed.

On the far right end of the spectrum are full PPP programs. These programs have a strong affiliation with the government. Both the private and public work hand-in-hand and are coordinated to create a workforce development program. This coordination involves time and resources dedicated from both sides. Typical resources would include financial contribution and expertise in the form of dedicated staff and knowledge documents (e.g., training material). This report will dive deep into two PPP programs supported by the Government of Morocco: Centre Formation par l’Apprentissage Intra Entreprise (CFA-IE) and Institut Specialisés. It should also be mentioned that the Team also examined special programs or ‘one-off’ programs such as the one that exists between Cummins and OFPPT. This program can be considered a CSR initiative with the potential for a number of long-term positive benefits.

Figure 1

External Challenges Identified by Private Sector As part of the goal for this study, the team sought to understand the challenges faced by the

Private Sector in workforce development and determine how PPPs could help facilitate a smoother hiring and development process for incoming employees. Only until we understand these challenges can we propose characteristics of effective PPPs. There are numerous external factors that impede on a private company’s ability to hire a competent worker. These challenges can be categorized in four distinct areas: 1) Political System 2) Economic System 3) Educational System 4) Social System.

Political System Labor laws in Morocco restrict employers from firing employees. Thus, firms such as FedEx have stated that they hire 30% fewer staff a year than what they would like as it is difficult to remove the ‘bad apples’ or poor performers once they are hired.

Within certain industries like construction, firms are prohibited from employing staff that are outside pre-established hiring zones or boundaries. Thus, they often hire the available person in a geographic area, and not the best available person for the position.

Economic System Every economic system faces boom and bust cycles. However, Morocco uniquely faces challenges with the pressures imposed by unions particularly in low-skill labor workforces in manufacturing.

Morocco also faces the risk of a talent drain into the informal sector, which some studies show account for about 40% of jobs in the urban areas. With a national income tax in the 30% range, there is an incentive for citizens to turn to the informal sector for employment.

Educational System Employers often face difficulty with finding candidates that meet a minimum educational requirement for a specific role. For one, employers have voiced a strong need for bilingual French and Arabic speakers. Because the Moroccan government has made Arabic the official dialect taught in primary schools since 2003 and plans to expand its use to all levels of education, proficient French speakers are harder and harder to come by. Also, employers value prior work experience. This is an asset that is scarce because practical training is not integrated in the traditional Moroccan school system. Furthermore, Moroccan youths have been critiqued for their lack of professionalism and other soft skills upon entering the job market. Finally, while advanced degrees such as engineering or medicine have certified accreditation systems, other trades lack established accreditation processes.

Social System The social values of Moroccan youths have come into question by leading private institutions in Morocco on a number of occasions. Within a large financial institution, anecdotal evidence supports youths finding ways to ‘game the system’ and commit petty theft. The specific need that was identified as lacking in this instance was a sense of morality and ethical behavior. In other instances, the passion and motivation of working came into question. A leading offshoring executive indicated that employees leave at the first instance of adversity; many of whom were trained by the company lack the ability to persevere and overcome obstacles.

Top Skill Gaps Identified by the Private Sector The following are the leading skill gaps identified by the private companies interviewed over the course of this rapid appraisal:

Professionalism Since most youths entering the formal workforce for the first time have had no prior professional experience in the form of internships or apprenticeships, many employers identified “professionalism” as a main complaint. Examples include: punctuality, attention to detail, integrity, etc.

Communication French language proficiency is a requirement for most positions, including textile sewers. Most interviewees stated that the lack of verbal or written French language skills deterred them from hiring many youths. In addition to language skills, professional communication skills are also lacking, including self-presentation and interviewing abilities.

Customer-Service In rapidly growing sectors such as hospitality, tourism and Business Process Outsourcing (“BPO”) call centers, high-quality customer service is crucial. Many employers expressed dissatisfaction with their workforce’s lack of customer orientation.

Motivation Low levels of motivation, drive and self-confidence among youths are common “skill gaps” identified by employers. Though these are typically thought of as personality traits, many interviewees believe that these types of soft skills could be taught with proper training and guidance.

Perception of Workplace Readiness A survey was conducted to understand the readiness of private companies in partaking in or continuing to partake in PPP programs.

Executives were asked to use a rating scale from 1 – 5 (with 1 being strongly disagree and 5 being strongly agree) to rate these statements:

1. The industry is an important growth driver (e.g., GDP, Employment)

2. The government believes that the industry is essential for Morocco

3. Without this program there would be enough people ready for the industry

4. PPPs are effective for the industry it serves

5. There are enough PPPs in the industry

6. PPP is the solution

The results are displayed in Figure 2.

Figure 2

Three key observations were drawn from the survey.

• Most sectors identified need for additional workforce training beyond programs offered by public educational institutions.

• Companies engaging in PPPs are strong advocates of their programs and believe that more PPPs are the solution.

• Companies currently conducting proprietary training programs tend to be less enthusiastic about the usefulness of PPPs in workforce development and prefer training programs that are self-funded.

Thus, it will be imperative to continue to educate companies about the key benefits of workforce development when participating through PPPs.

Overview of Education and Vocational Training Systems To understand the impact and function of PPPs in the field of work force development, we must first take a look at the educational environment in Morocco.

The Moroccan educational system is composed of four modules: Under the age of 6, kids must go to pre-school. Afterwards, they go through six years of primary school (age 6-12) validated by a Certificat d’etudes primaires giving access to secondary education consisting of three years of middle school (college) and three years of high school (lycée), for a total of 12 years of primary education. After passing the baccalauréat, students can go on to tertiary education in Moroccan universities (public or private) or enroll in engineering or business schools.

In parallel, youth aged 15 or over who have completed at least five years of primary school can enter the vocational training track. The vocational training track is comprised of practical and specialized training designed to prepare young people for work upon completion.

The vocational training track delivers four levels of certification, for which training can be accessed according to the level of prior general education attained:

• Specialization - required to have completed the sixth year of primary education

• Qualification - required to have completed the ninth year of primary education

• Technicien - required to have completed the twelfth year of primary education

• Technicien specializé - required to have passed the baccalauréat. These trainings last for one to five years and include a compulsory professional immersion. Immersion can last for one month per year or up to 50% of the training time (alternance), or even 80% of training time (apprentissage).

Some short trainings, called Formations qualifiantes, are also available and have been designed to improve the employability of persons inactive in the market in a wide variety of jobs.

Except for the BTS, which falls under the responsibility of the DOE, vocational training falls under the responsibility of the DFP. The vocational training policy is defined by the DFP and mostly implemented by the OFPPT, which manages training centers across different sectors and specialties.

While the general education up to baccalauréat is coordinated by the MOE, the general tertiary education is coordinated by the Ministry of Higher Education (MOHE). This separation of responsibilities between two distinct ministries within the government can create some issues, since orientation in middle schools does not necessarily present all vocational training options offered by the DFP.

Another related vocational training model is apprentissage (apprenticeship). Also known as the second chance track, apprenticeship is a vocational training with a social purpose and focuses on the workplace. Beneficiaries are school dropouts, with no minimum level of education. Students spend 80% of their time working and only 20% in a classroom.

Vocational Training Strategy The MOE is in charge of setting the policies and coordinating the training between the eighteen training departments (line ministries such as Agriculture, Tourism, Industry and the OFPPT). The goal of the DFP is to support and, if possible, anticipate the training needs of the businesses, public or private.

The DFP and its public training operator, the OFPPT, are charged with supporting their partner ministries and providing each priority sector with the training programs needed to achieve the ambitious sectoral growth and employment targets.

Since 2001, Morocco has launched several sectoral initiatives to develop the Moroccan economy. Each sectoral initiative, such as Vision 2020 for tourism and emerging industries, Maroc Vert for Agriculture or Competitivite de la Logistique for logistics, is related to a vocational training strategy that should enable the country to fill the jobs created through the strategic initiative. For example, to prepare for the ten million tourists expected in Morocco by 2020 and the 72,000 jobs created as a consequence, several training centers in tourism have opened with the support European program

MEDA1.

Besides the key sectorial initiatives, the DFP works closely with the professional associations and the private sector to define the schools’ curriculum and make sure that they are consistent with the recruiters’ needs. Thus, professional associations can reach out to OFPPT for designing new trainings that are lacking. For instance, the OFPPT is working with the Federation Nationale du BTP (FNBTP) on developing a training center in public infrastructure and machinery driving. Such a center did not exist before and the collaboration is deemed very productive by the FNBTP. The OFPPT does not seem to be proactive about these collaborations, but is definitely very receptive to any private sector initiative, such as the Cummins partnership.

The DFP has been implementing their current strategy since 2004 to reform vocational training and respond more closely to the needs of employers. The reforms include a new teaching method, called Approche Par Competences (APC) that is more practical and task oriented than a traditional teaching method. This approach is also supposed to fit more closely to the specific needs of future employers. Thus the length of training is not fixed, but depends on the specific requirements of each job. In order to standardize the tasks and qualification levels required by each job, the DFP has launched the creation of the Referentiel Emploi Metier (REM), referential tables by sector detailing existing job types and the Referentiel Emploi Competences (REC), referential tables detailing job skills requirements.

The REM for tourism, for example, would indicate that in the tourism industry, one can be a cook, a waiter, or a host at the front desk. The REC, in turn, may indicate that a waiter must be able to take an order and clean a table in five minutes. The referential tables initiated for tourism, textile, offshoring, 1 The acronym MEDA derives from the French: Mesures d’accompagnement. The MEDA programme is the basic financial instrument for cooperation between the EU and Mediterranean countries.

aeronautics and ITC can be utilized by human resources managers, training centers designing curriculum and employment intermediaries that match job offerors and job seekers.

The DFP is also developing training modes focusing on the workplace as a place for training, especially for apprenticeship. An apprentice spends 80% of his or her training time at the workplace and only 20% in a classroom for theoretical knowledge. This formula facilitates the integration of youth in the labor world, but also allows them to get valuable on the job experience with a future employer, whether in the apprenticeship’s company or another. The apprenticeship program is coordinated by the DFP with public partners including ministries, public organizations (Entraide Nationale, AREF), NGOs (Orient Occident, Union Nationale des Femmes Marocaines) or private companies with the CFA-IE format. The apprenticeship training can grant a diploma from Ouvrier Specialisé to Technicien if the student has completed the required years of general education prior to entering the training. Otherwise the training grants the student a certificate upon completion. The distinction between a diploma and certificate is mostly administrative since the training undergone by the trainee is identical in both cases.

Therefore, it does not make a difference as far as professional employment is concerned.

Not only is the DFP increasing its collaboration with the private sector via stronger involvement of professional association in the curriculum definition, but it is also entering in structured public-private partnerships through the concept of Gestion deleguée (delegated management), wherein the government delegates training to the private sector professionals. Three structures of delegated management are currently operated by the DFP. For the CFA-IE and the Instituts Specialisés, a school or a training center subsidized either partially or entirely by the government, is managed by a private corporation overseen by the government and delivers a public diploma. The third structure is the direct help mechanism, which consists of a three-year government subsidy for new hires’ training. Companies must belong to one of the four key sectors to apply (offshoring, automotive, aeronautics and electronic) and can choose any operator to provide the training, with a reimbursement cap of USD$7,700 (64,450MAD) per new employee.

In terms of evaluation, the DFP is updating their evaluation and audit methods for both the private and the public sector in order to grant homogenous certifications. The DFP is also conducting insertion rate studies in order to assess the efficacy of the vocational training system, however the frequency could be increased since the last study occurred in 2008.

These initiatives definitely go in the right direction. However, the implementation might bring up some challenges. The volume of vocational training managed by OFPPT has grown significantly with the sectoral initiatives; however the quality of training still attracts some criticism. Some employers, especially in textile, complained about the lack of discipline and professionalism of OFPPT graduates and their lack of motivation for their sector. This might point out a dysfunctional orientation system. The OFPPT trainings are also considered too theoretical and too far-off from the actual needs of the employers, especially because the students lack practical training and the equipment are outdated. The slow development of workplace focused training formulas does not allow for changing of perception.

As of today, apprenticeships and alternate training only represent 20% of vocational training, which is far from sufficient to mitigate the lack of workplace skills experienced by the recruiters regarding vocational training graduates. One of the reasons is the disengagement of OFPPT. The OFPPT closed its Centre de Formation par Apprentissage (CFA) in 2008 following some bad experiences with the placement of interns in the 2005-2008 periods. Most apprentices experienced poor supervision or were taken advantage of with inadequate jobs, such as janitorial responsibilities, thus the apprenticeship failed to perceptibly improved the apprentice’s employability. Apprenticeship can also be difficult for very young people, for which tight supervision is key. OFPPT therefore decided to focus on other strategic initiatives until they are able to invest in solving the problem of supervision in apprenticeships.

OFPPT

The OFPPT is a public entity, placed under the supervision of the DFP. However, the head of the

OFPPT is directly appointed by the King and the OFPPT steering committee includes the unions (25%) and the employers (25%) along with the MOE (50% + presidency). Therefore the OFPPT is operates largely autonomously from the DFP.

The OFPPT has three missions:

1. OFPPT is in charge of vocational training. It oversees 327 training centers and trains 310,000 students, including 70,000 formations qualifiantes, on an annual basis.

2. OFPPT provides numerous services in the field of continuous training, including training catalog development, customized trainings, curriculum development and recruiting assistance. OFPPT is a training provider competing with other providers in the field of continuous training with at least 16% of market share. (The presence of public funding dramatically increased its competitiveness and the OFPPT has been accused by the private sector of being in possession of a monopoly, especially for public contracts awarded.) The OFPPT is also in charge of Contrats Speciaux de Formation (Special Training Contracts) through which companies can receive a subsidy for providing continuous training for their employees.

3. OFPPT is in charge of business start-up assistance and as such provides training and coaching for the young graduates of vocational training and young entrepreneurs with ideas.

The OFPPT has a budget of 2.9B MAD (USD$3.4M) for 2013, half of which comes from the Taxe

Formation Professionnelle (TFP). The TFP is a special taxation amounting to 1.6% of gross salaries which is dedicated to vocational training and continuous training. The remaining half of the budget comes from internal revenues generated by services provided to companies, as well as an optional government subsidy ranging between 0% - 5% of the OFPPT budget.

The OFPPT experienced a tremendous growth between 2001 and 2012. The number of students increased from 50,000 to 310,000, and grew between 15% and 18% per year over that period. According to the OFPPT, this growth has three origins: an increase in technician positions available, an improvement in training quality and the sectorial strategies mentioned earlier.

Continuous Training Another key aspect of the workforce development system is continuous training. Such training is provided to active employees and is key to enhancing the competitiveness of Moroccan firms, according to the CGEM. Indeed, better trained employees will be more productive and thus, contribute to increases in company output. A study by the DFP showed that employees that had gone through continuous training were more effective than their colleagues. But more importantly, the study showed that the lack of continuous training hinders the performance of Moroccan firms, as their existing employees will not master the latest technologies relevant in the field. This in turn affects firms competing globally.

Another factor of competitiveness lies in the existence of sectorial observatories. These structures, managed by sectorial associations, are similar to think tanks and are designed to perform strategic sectorial analysis and provide some tools and insights to local companies to define their vision and plan ahead, both in terms of human training needs and strategic or technological shifts within their sectors.

Both the continuous training and the observatories are crucial tools to increase the competitiveness of Moroccan firms so that they can gain market share, grow and create more job opportunities for Morocco. There is certainly a need for a more qualified and better-prepared workforce in this country, but there is an even more pressing need for more jobs to accommodate the growing population. AMIDEAST proclaims that one out of three youths between the ages of 15 and 24 in Morocco’s urban areas is unemployed. The highest unemployment figures are found among high school and college graduates, reaching a rate of nearly 60%; it is not surprising that most youths turn to the informal sector or worse, inactivity.

The creation of Groupement Interprofessionnel d’Aide et de Conseil (GIAC) by sector, the standing-up of REQs and REMs for some sectors, and the CSF mechanism establish a strong framework to answer the pressing need for sectorial strategic orientation and continuous training. However, the implementation of the tools mentioned seems to be lagging behind and do not seem to be fostering growth and job creation within the Moroccan economy.

The CSF is a tool to incentivize companies to perform continuous training. Under certain conditions (clear training plan and strategy), firms can receive subsidy in the form of a refund of 70-90% of the cost of their annual employee training with a cap equivalent to their TFP. Unfortunately, the CSF are underutilized; only one third of the budget allocated to CSF actually claimed by companies.

According to the OFPPT, currently in charge of approving the CSF applications, smaller companies do not use this opportunity to train their employees with a large subsidy because of their size and lack of management expertise. For very small companies, organizing any company training is impossible given the limited number of participants; sending away one or two employees might seriously burden the firm’s ability to produce. Also, family-owned businesses often lack professional management and human resource departments. According to professional associations such as FNBTP, the low success of CSF results from the complex and administrative application process that only bigger firms have the resources to master. The OFPPT wants to facilitate the process with a catalog of training, but professional associations would rather simplify the process such that companies are allowed to invest their TFP directly into continuous training.

The GIACs, managed by professional associations, have the dual objective of promoting continuous training and performing strategic analysis for the sector. These organizations have been created to fill the role of observers. However, today they do not have the means and the power to operate and act as a steering and planning entity for the sector they serve. According to the CGEM, the GIACs are insufficiently funded. The TFP, amounting to 1.6% of payroll, finances portions of the OFPPT budget, the GIAC and the CSF. Thus, 30% of the TFP is theoretically allocated to continuous training. The GIAC budget is defined by a committee and is related to the previous spending and activities of each GIAC, but is not related to the total TFP per sector. The GIACs and the professional associations were not involved in the sectorial strategic plans such as Vision 2020/Plan azur. These sectorial plans were essentially steered by the Ministry with little involvement of professional association until the recent logistical initiative (Plan Pour le Developpement de la logistique) wherein a sound governance organization includes both the ministry and the professional association and the GIAC as a central coordinator and planner. This set up ensures a sustainable development plan since the sectoral vision goes beyond a one shot strategic plan, but is followed up through a central organ representing the private business and their interests. A similar setting could be valuable for all sectors.

The REQ and REM launched for the tourism industry are qualification and job description grids.

These grids create a common language for job seekers, training centers and business to design relevant trainings adapted to the future hiring needs of the companies. The reference tables have been created, thus far, for only the tourism and automotive sectors. The sustainability of these reference tables is worrisome since they were created as part of international cooperation with European funds and the project lacks real ownership. While a department within the DFP is supposed to be in charge of updating the grids, the grids have never been updated and there is no update planned. The department employees who were originally tasked with the project are no longer present today, which has left the current team without legacy to complete the task.

Continuous training and observatories definitely offer opportunities for PPPs since the structures are now in place, but they are still very young and they lack both funding and expertise to have their desired impact on growth and job creation. Some Instituts Specialisés partnerships that include organizations such as ESITH and IMA can definitely play a role in enhancing and fostering continuous training and sectorial strategic planning. These institutions create a powerful bridge between the academic world and companies because they allow company employees to benefit from a dedicated training center. These centers are not only dedicated to the sector and its latest trends and technologies, but they also provide a potential for outsourced R&D where researchers such as PhD students or academics could increase the R&D resources of the company. International organizations or donors can also support the creation and the functioning of continuous training and observatories with diverse approaches. For instance, the IFC is designing a new project called E for E, which aim will be to facilitate the communication of sectoral data such as reference tables and GIAC data to stakeholders, such as job seekers, students and training centers, thus could be a critical knowledge intermediary for each sector.

CFA-IE Overview Within its new strategy for vocational training, in the delegated management initiative, which includes the development of learning by apprenticeship, the DFP designed an educational public-private partnership model called CFA-IE. The first was created in 2004-2005 in collaboration with GIZ (formally GTZ). The CFA-IE model allows private corporations to open within the company a training center and deliver an official vocational degree, such as specialization and sometimes qualification. The CFA-IE strives toward a dual objective of inserting young school dropouts into the workforce (insertion rate) and training a qualified/specialized workforce to increase the competitiveness of Moroccan industries.

The CFA-IE is a three-year partnership between the DFP and the company governed by an agreement that details the conditions of the partnership.

The DFP finances the curriculum, the initial training for instructors and a yearly subsidy ranging from 3,000 MAD (textile) to 5,000 MAD per apprentice (agro-processing). However, to incentivize companies to retain apprentices and motivate them to stay, the state pays half the subsidy at the beginning of the program per apprentice and the remainder upon graduation of the apprentice, depending on the number of apprentices who actually graduate. In addition, if the attrition rate is more than 20%, the global subsidy is decreased in proportion to the excess attrition rate.

The company provides the training facility, equipment, trainers, and an optional monthly stipend for apprentices. The training usually lasts one year and consists of 20% theoretical training in a company classroom (10% of theory and 10% of practical initiation, mostly concentrated in the first few months) and 80% practical training, wherein the pupil is an apprentice within a company’s operations.

The curriculum is developed with a competency-based training approach (APC) with the assistance of outside organizations specializing in the company’s sector training, such as GIZ or ESITH. At the end of the training, proctors composed of professionals, teachers and members of the DFP evaluate the apprentices as a final exam. In some cases, apprentices also take a written exam to validate their theoretical knowledge and literacy. Successful apprentices earn an official diploma.

Each company working with a CFA-IE is in charge of recruiting and selecting candidates. The apprentices must be at least fifteen and at the most thirty years of age, but each company has some flexibility around age.

To promote and support the CFA-IEs, a supervising cell composed of four persons was created with ESITH. Together with the professional associations and the DFP, this cell reaches out to local businesses or foreign firm’s local subsidiaries to explain the CFA-IEs benefits. The supervising cell is also in charge of helping training centers set up the CFA-IE. They help organize exams and provide educational support to the training centers, but they are not responsible for exerting any control or audit. The CFA-IE carries out some insertion analysis by maintaining a graduation statistics database and following up with the companies with specific action plans to address attrition rate.

The CFA-IE format started with the textile sector in 2004 in collaboration with GIZ and AMITH, and then extended to leather, tourism and the automotive industry, in collaboration with the sectoral-based professional associations. The textile industry, identified as one of six key industrial growth areas by the Strategic Initiative Emergence in 2005, requires a large and qualified workforce, but also an increased flexibility to respond to the new nature of customers’ orders and to stay competitive with low cost textile-producing countries of Eastern Europe and Asia. The tourism sector was also identified as a key growth driver for Morocco with the Vision 2020 strategic initiative, and the CFA-IE concept was implemented with GIZ. In 2008-2009, following the relocation of a Renault plant, a study identified the automotive industry as a large potential for Morocco and triggered the creation of CFA-IE for automotive suppliers. The concept has been extended to the construction sector and the agro-processing industry through two individual initiatives from ADDOHA group and Koutoubia, both leaders in their sectors. However these CFA-IEs are exceptions in their sectors and other companies in the sector do not have the financial capacity to sponsor their own CFA-IE.

The interviews with CFA-IE in textile, tourism, agro-processing and construction demonstrated that the CFA-IE presents very interesting features to solve the gaps of the public offer in the field of vocational training, especially those concerning issues with apprenticeships.

First, the employers benefit from a qualified and flexible workforce trained on the company’s specific operations and on the company’s equipment, with a large part of actual practice (80% of the time on the production line and 10% of the time on equipment within the classroom). For instance, Maroc Modis and Interlinge both operate in the very specific field of lingerie and no outside training offer could provide the trainees with the complex skills required for lingerie sewing. In the field of meat processing, Koutoubia created the first training center for the meat industry. At Maroc Modis, the one-year training allows trainees to acquire varied skills and master at least three different operations. These learned skills become crucial as they grant workers the skills they need to deal with dramatically reduced lead times as well as tackling orders that are often small and diverse. Ibtitex, another textile CFA-IE interviewed, has been able to produce orders in one week to its primary customer Cache-Cache.

This newly trained and multipurpose workforce comes also handy to replace an aging and less flexible population of sewers.

The CFA-IE offers a reservoir of young talents. A company can theoretically adjust the size of the program and hiring volume to fit their actual needs. It also allows them to select the best candidates when the class is large enough. The young hires are also already immersed in the company culture when they finish the training. Moreover, the lack of soft skills mentioned by most companies as a barrier to hiring youth is usually addressed early, and trainees are instilled with good practices and professionalism basics such as respect, timeliness and duties in the first weeks of the training. The CFA-IE does represent a significant investment for the companies, especially for facilities such as the brand new ADDOHA Foundation Firdaous Center. But, the CFA-IE facilities and equipment can also be used for other purposes such as continuous training for existing employees.

From the trainee point of view, the CFA-IE is a great opportunity for underprivileged youth to get a second chance at skills attainment after they drop out of the general education track. ADDOHA is dedicated to disadvantaged kids from neighboring low-income villages and offers them an opportunity to get a sustainable, formal job. During the training, the youths acquire practical skills while training with a contractor of ADDOHA and receive a scholarship and a salary. They then have a high chance to be hired and work on a long term local ADDOHA project if they do not quit the program before graduation.

No statistics are available yet regarding insertion rate since the center only opened in September 2012.

For programs such as Koutoubia and ADDOHA, the programs’ managers are willing to help the trainees set-up their own shop or work in competing companies if they cannot or do not want to be placed within Koutoubia or ADDOHA’s contractors. On top of that, the trainees end the program with a branded certificate or diploma, which can be very valuable for a further career within the industry with brand names such as Hyatt and Sofitel. They can also boast about their professional experience, which helps them stand out among numerous competing job seekers.

Lastly, the strong link created with the company and the constraints imposed by the government, such as a maximum attrition rate of 20%, protects apprentices from abuse. During 2003- 2008, the apprentices were not managed properly by the hosting companies and were sometimes allocated to menial tasks, such as cleaning. The trainees did not have any hiring prospects and the companies had no incentive to retain them or hire them. The CFA-IE formula fixes these issues with a partnership between the company and the government. A coordinating body within ESITH follows up with each training facility and offers an investment with the hosting company if they reach a hiring goal from the apprenticeship program.

Overall the CFA-IE initiative is interesting because it theoretically solves the problem of qualified labor and the problem of youth looking for a job. However, the government did not reach its target of 100 CFA-IEs by 2007. Only 86 CFA-IEs have been authorized so far and a significant number has not renewed their partnership after three years. This result points out the lack of sustainability of the model and the challenges experienced by employers creating a CFA-IE.

Most companies hosting a CFA-IE experienced high attrition rates, with rates as high as 40% for Maroc Modis. The dropout of trainees is detrimental to the company for several reasons. First, the company might not end up with enough qualified candidates to recruit at the end of the program.

Maroc Modis planned to hire only from the CFA-IE for entry-level sewers, but had to open positions to other recruits that needed further training. The company encountered costs to train the apprentices and did not enjoy the benefit of skilled employees or the whole state subsidy due to high attrition. Half of the subsidy is paid upon graduation and the whole subsidy is also pro-rated when the attrition rate is over 20%, therefore a high attrition rate drastically diminishes the government incentive. Faced with this challenge and the recent financial crisis, most companies have given up. Seven out of ten textile CFA-IEs have closed since the program inception. Because of the government incentive losing value when companies are unable to maintain acceptable attrition rates, only the largest companies can sustain these apprenticeship programs. The high attrition rates seem to be traceable to several factors, including the length of the training, difficulty of the job and lack of motivation of trainees for the industry. Some trainees find the training too long because they think they could be working instead and earn a full salary. They thus quit before finishing the program and find a job at a competing firm.