A young workforce and low labour costs have equipped Cambodia with the potential to attract plentiful foreign investment. But as investments pour in, rising demand for high-skilled workers has outstripped the country's modest capability to supply them.
As a result, many top management positions in Cambodia are occupied by foreign expatriates. Native Cambodians remain indispensable at the bottom of the jobs pyramid in manufacturing, construction, services and agriculture.
Closing the skills gap and developing higher-quality human resources if officially on the national reform agenda but the government agencies in charge have not been up to the task and funds are not sufficient.
"It is a fact that we are not as productive as Vietnam in terms of skills in the manufacturing sector. That is because there is a lack of investment in training, education and skills building," said Sandra D'Amico, vice-president of the Cambodian Federation of Employers and Business Associations (Camfeba) and managing director of HRINC Cambodia, the country's leading human resource services firm.
Still, she sees Cambodia as an exciting economy to work in because of a young and very dynamic workforce that is ambitious to learn. As well, Asean integration will spur authorities to develop human capital.
"Cambodian people work more slowly than Vietnamese, but can do the same work with very much patience. If properly instructed, Cambodian people can do the job more precisely," said Hiroshi Uematsu, CEO of the Phnom Penh Special Economic Zone (PPSEZ).
CLASSROOM CONCERN
The transition period from school to work is an important consideration for investors, who want to see more promotion of life-long learning in Cambodia. As it stands, the basic education system is deficient education system and vocational training is below standard and not responsive to real labour market needs.
Industries such as garments and construction are becoming more machine-intensive, which requires more people with engineering expertise who specialise in mechanical subjects.
"To meet the demand of a more diversifying economy, we need more people who are trained in science and mathematics, so they would be able to attend engineering schools and not to go to a social science school," said Dr Hang Chuon Naron, Minister of Education, Youth and Sports.
Only 3% of Cambodia's 250,000 university graduates graduate from engineering schools. "We need more engineers to work in construction. The government is trying to upgrade some of the technical colleges to institutes in order to provide more engineers and more skills for the business community and for the economy," the minister said.
The high dropout rate — over 20% of total student-age individuals — is also a problem as many people tend to start working out of economic necessity before finishing the education.
The Cambodian government in 1999 began promoting equal access to primary education through stepped-up investments. As a result, today almost 98% of the school-age population or about 2 million people have access to primary education. At the secondary level, the gross enrollment ratio (GER) is only 53% or around one million students. However, only half of those students go on to graduate from high school.
With about one-third of Cambodia's population of 15.1 million aged between 15 and 30 years, the supply of workers is not an issue but their skills need to be better.
"Tightening the education system and evaluating students through an examination process before they attend university are important. To improve the quality, we must make students work harder," the minister said.
However, the quality of students depends on the quality of teachers and schools. The government is trying to introduce incentives such as better budget allocations for schools based on their performance, as well as salary increases for teachers. Most teachers are paid about US$100 a month, far less than labourers, and thus 90% of them work second jobs.
"Changing the education system will require better pay for qualified teachers," acknowledged Dr Chuon Naron. "But if salary increases alone could solve the problem, that would be really easy, but it's not. We have to help them build a promising career path and that is even more complicated."
The minister believes education quality will improve gradually over time, and notes that Cambodia has faced challenges that are unique in the modern world. "After the Khmer Rouge, we had to train new teachers from scratch," he said.
It's been just over two decades since the country began rebuilding the education system destroyed by the murderous Pol Pot regime, which purged thousands of scholars, professors, and teachers.
The good news, said Mr Uematsu of PPSEZ, is that many Cambodians who fled abroad during the civil war coming back and bringing their training and skills from developed countries. "These people will play a key role in developing businesses in Cambodia," he said.
BUSINESS BURDEN
Nevertheless, the education system can't work miracles and businesses are being counted on to commit time and money to training as well, especially in 21st century skills such as critical thinking, problem solving, and teamwork.
"Employers usually provide newcomers with different types of training, but it's a little different here because there is a very huge lack of critical thinking in Cambodia," said David Marshall, head of corporate and institutional banking, ANZ Royal Bank.
"Soft skills like critical thinking need to be pushed in primary and secondary grades, so that when they come to join the workforce, they have some pretty decent critical thinking and problem-solving skills in place."
He said businesses should take part in encouraging students and parents, at least those of their employees, about changing attitudes toward education. In China and Singapore where education is highly valued, parental engagement is very significant.
"A cultural shift is definitely needed in Cambodia, but we have to make sure that we're not expecting a sudden change in the workforce capabilities in the next couple of years."
Businesses in Cambodia now spend millions of dollars on education and training, much more than in other countries where the need is not as great, said Mr Marshall.
Unfortunately, stiff competition for talent means that people who get trained in one company often leave to seek more money at another. "It really hurts us as we spend two or three years of training. We have to accept that but it is painful," he said.
However, Ms D'Amico of Camfeba believes training is a two-way street. Companies need to understand their workers' expectations and workers need to understand their employers' concerns.
"As employers, you can't only invest in training people and then complain because they leave, because we have to look at the career path. Are we increasing salaries when people are more productive? Are we managing their career growth?" she said.
"Managing expectations of young people coming out of schools or out of universities is important to create a modern and effective workforce."
Businesses in Cambodia have helped to fund training institutes in the garment sector as well as culinary training in the hotel sector. In general, there are great opportunities to invest in ongoing training in Cambodia.
To provide alternative career paths, students must be encouraged first to complete high school and then to further their studies. If they choose not to go to university, they should be encouraged to pursue technical vocation education and training, which offers a shorter and more practical programme that allows them to enter the labour market and be productive right away, Ms D'Amico said.