RECAP–Human Capital Development (World Café) May 6, 2021

One of the richest countries in human resource, Ethiopia, is still challenged with a sparse supply of skilled and efficient labour force. Currently, the country has seen the number of graduates from higher institutions increase over the years, yet there is a huge gap in terms of the actual skill that is required on the job.

Such status calls for investment in human capital to benefit individual workers as well as the economy in which they participate, creating greater earning potential and an increased ability to build wealth. This is particularly true of education. Countries that invest highly in education enjoy greater per capital income and sustainable economic growth. With all this in mind, AWiB believes the challenges the human resource sector is facing should be discussed as well as brainstorming ways on how we can develop competent human capital.

The usual AWiB’s monthly event took place at Hilton Addis on May 6th, 2021. At exactly 6 p.m. the event began by Abigeya Getachew, AWiB’s board member, who gave an introductory speech as an overview on AWiB and what the following few hours would look like.  The first part of the night would be discussion, the second for Q&A.  The monthly event was made possible with sponsors Yetem Trading and Barsebe Industries.

The program’s speakers were welcomed with a warm greeting:

  • Frehiwot Worku Beyene has worked with Ethiopian Airlines for 22+ years. During her time with ET, she assumed positions of vice president – Human Resources Management (6 years), controller (5 years), and executive vice president – Corporate Services (4 years).

After the airline, she became the Secretary-General of the Ethiopian Red Cross Society (8 years). During her professional journey, she has had to manage various organizational changes and growth strategies. Her major professional skills are human resource management and leadership development.

  • Girum Ketema is a highly qualified human resources and management professional with hands-on skills and expertise to provide senior leadership. He currently serves as Chief Executive Officer of EGA Management and Financial Solution PLC, a private consulting firm that he co-founded with his colleagues in 2015.  Being a SHRM certified HR Practitioner, Girum has worked with international organizations in Ethiopia, around Africa, and the Middle East.  He also serves as President of Societies of Human Resources Management in Ethiopia (SHRME).

Girum has over 24 years of practice in Human Resources Management, Organizational Development, Operations Management and Administration, Project Management, and Financial Management and Grants/Contracts Management. He has worked for renowned nongovernmental organizations with various capacities ranging from technical expert positions to senior management responsibilities. Girum received his MBA from Indira Gandhi National Open University and his BA in Management from Addis Ababa University.  He also holds a post-graduate diploma in Strategic Management.

Speakers introduced themselves and began by answering the reason they think it is relevant to enhance human capital development.

For Frehiwot, human capital is the base for the functional operation of any company. Our current education system does not necessarily equip students well enough for efficiency, which makes investing in the development of human capital very important.  Girma added not having a competent human capital resource these days cannot be an option. We have to collectively build our human capital to stay in the market and be competitive with the rest of the world in whichever industry it may be. He further noted that an organization/company will be primarily graded by its human capital abilities.

Abigeya asked Frehiwot:  What are the challenges in human capital development? What do you think is the role of the private sector in developing the human capital force?

Frehiwot responded by stating the challenge to be mainly the backwardness of understanding the need to develop human capital, as understanding is the first step that is required to take action in develop it. It is not when people graduate and earn their degree or master’s paper that we say they can perform well in a specific workplace. This is because it isn’t enough to assist them when it comes to practicability. We have to add value and invest in their competency so the company can be efficient in the long run. It is obvious that most companies have not yet understood the essence of investing in human capital.

– Abigiya asked Girma:  What does it take to develop the human capital that one already has?

Girma answered by confirming the demands of employers: when employers want to hire someone into their sector, potential employees should come with skills from both formal and informal knowledge that will enable them to perform their best. But that isn’t the reality in our country. In most cases in Ethiopia, the way we are training future employees is around 85-90% or at times 100% theoretical while the needs of the employer center on experience and practical knowledge. There is a wide gap between what the employer is looking for and what the potential employee brings to the table. To resolve this gap, people should get continuous training to help them in their profession and do the jobs they are hired to do. He highlighted statistics from a 2020 study on Ethiopia by “Human Development Report” which concludes that the way we educate our potential employees, the literacy rate, and availability of the job training are low compared to most countries. In addition, in Ethiopia we are training/utilizing 38% of our workforce while neglecting 62% of our active workers. Even though it’s said that budget is the primary reason to hinder development, the reality shows otherwise.

Question to both speakers:  How can we fill the gap created in developing the large amount of human capital that the workforce provides? How can we increase work discipline and work ethics? How can we increase productivity in terms of increasing skill?

Frehiwot said being disciplined in our work begins with us as individuals. In addition, an organization should engage and be willing to know the potentials along with the desires of its employees to increase performance. Leaders in companies should study their environment and plan by aiming to create engagement and commitment as part of their job. It is only when we can understand our employees’ abilities and desires that we can have successful leadership.

Girma added that by immersing the essence of work ethics and discipline into our children and families, we will have a lasting impact in the development of human capital as a whole. The other solution is providing students like fresh graduates with employability skills that will be necessary when they get a job instead of wasting fresh minds and their efforts. In addition to these solutions, human capital development should be put as an integral part of our organizational culture (by looking at successful companies like Ethiopian Airlines). Identifying the characteristics of employees and looking into their potential is key to provide them with the necessary skillsets training. By doing this, proficiency can come even if it is with only a small number of employees.

After the Q&As, members were given chances to promote their services and/or products to the audience. The evening continued by taking two questions to the tables for discussion, each question given a 20-minute limit. Facilitators from each table summarized points discussed and directed unanswered questions to the speakers. In between the discussions speakers went around tables to share their insights and later answer questions the audience had.

Question 1. Let us discuss the link (or lack thereof) between college education and practical knowledge. The system teaches purely theory in Ethiopia. What can we do? The challenges are obvious…what should be done to bridge the gaps?

  • Institutions should provide employability training before or right after students graduate.
  • Companies should give away the necessary intellectual tools to their potential employees when they are hiring instead of demanding experience each time.
  • Students as individuals should boldly push towards working on themselves and approach opportunities openly in order to equip them with the practical aspects of their studies.
  • Having a leader who enhances great work culture paves the way for employees to instill the culture in their work.

Question 2. In discussing elevating our human capital, budget is always the issue. There are structured on-the-job trainings.

  1. Why is this not being done?
  • Almost all problems raised can be collectively identified as a problem of leadership and commitment. It is not related to the budget. This is because learning and development is not simply only training; there are several opportunities to assist workers to learn and develop without requiring financial ability.
  • The decline in the quality of education from primary to higher education level is another cause.
  • Training opportunities are in reverse being a source of income for the company instead of benefiting the employees due to the unstructured framework.
  1. What options do you know? There are numerous ways to enhance human capital in the workplace:
  • Educating people in the leadership role on the importance of building human capital in the workplace and the resulting greater good
  • Being creative in providing cost-effective methods: online training, shadowing, mentorship, etc.
  • Government should step in and set up minimum requirements that aim in elevating human capital in the workplace for different sectors. This may be done through regulation or policies.
  • The training itself should be well-studied with quality standard.
  • Facilitating ways to enhance commitment, high moral values and the culture of hard work among the society

The event concluded in AWiB-style by Abigeya thanking everyone for coming, inviting non-members to join AWiB, giving gifts to the speakers. Lastly, the moderator connected those who needed rides home with those offering.  The next AWiB monthly is June 3—Investment Climate:  Agriculture in the Ethiopian Economy.

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