23 december 2011

Prime Minister Vladimir Putin chairs a meeting in St Petersburg on training skilled workers

“We have decided to establish 5,000 Russian government educational stipends for the best students of vocational schools, lyceums, colleges and technical schools,” the prime minister said. He also suggested that businesses and regions come up with similar programmes and initiatives.

Opening remarks by Prime Minister Vladimir Putin:

Good afternoon, colleagues.

Today, we are discussing a very important social and economic issue. We will be talking about training skilled labour, not just labour, but specifically highly-skilled workers who are in high demand in both civilian and defence industries, including all high-tech industries that form the foundation of our economy's competitiveness.

We have set ourselves ambitious tasks regarding modernisation of Russian industry and all aspects of our life. We are talking about fundamental modernisation and dramatic improvements in the business environment. Not long ago, we discussed improvements to the business environment with our colleagues from Delovaya Rossiya (Business Russia). We are discussing these issues with other business communities as well. We are all well aware that we cannot solve these issues without the involvement of people, without so-called human capital, without dramatic improvements to its quality, without improving ourselves. All of us need to improve. As a matter of fact, this is precisely the goal that we are going to discuss today.

Unfortunately, much has been lost over the decades. We know that our industry seriously contracted in the 1990s. We just started to overcome this legacy in the early 2000s. We lived through two crises, in 1998 and 2009-2010. A crisis typically results in a contraction in output, so the economy did not need all that much skilled labour back then. This is part of the problem as well. Many Russian educational institutions working in this sphere got stuck in the 1980s, including their educational and technical base.

This has all become a real problem now, and it is hindering the growth of the labour market and its ability to secure high-quality and effective employment. The problem we are facing today is the shortage of high-skilled labour. A survey conducted by Opora Russia – is that correct, Mr Borisov (Sergei Borisov, president of Opora Russia, a public organisation of small- and medium-sized businesses) – this was your survey? So, the survey conducted by Opora Russia revealed that shortages of highly-skilled labour was at the top of the list of problems affecting the Russian economy, surpassing even such sensitive issues as corruption and administrative barriers. This honestly came as surprise to me, the more so since, in my opinion, Opora Russia took a fairly representative sampling. They polled 6,000 small- and medium-sized businesses in 40 Russian regions, which is quite representative.

Here is another specific example. The St Petersburg recruitment agencies reported that they had been seeking assembly fitters and electric welders for the shipping industry for over three months now. It doesn't seem like there should be a shortage of such workers, but they were unable to hire the number of workers that they needed with the required skills. Electric welders in the shipping industry are a separate caste altogether, working with piece goods. Still, in principle it would seem that there should be enough of them. However, they failed to recruit the required number of these specialists over a period of three months, despite the fact that the salary they offer is quite good, at over 50,000 roubles per month.

Obviously, the problem is very complex. First, the issue has to do with a lack of occupational standards and clear competency requirements. Second, the social prestige of the primary and secondary vocational training is low. Arguably the most important factor is the disconnect between the vocational training system and the real-life economic and market needs.

This is what I think should be done above all. The development and introduction of occupational standards should be substantially accelerated. The basic guidelines for educational institutions should also be developed as soon as possible. These guidelines should clearly specify the qualifications, skill sets and areas of expertise that are currently in high demand. It is essential that employers, businesses and unions take part in the development of these occupational standards. I also suggest developing effective frameworks for involving businesses in the development of additional training programmes, and assessing the quality of training and acquired skills. To do this, we need to establish a nationwide employee certification system for priority economic sectors within the next two years. Self-regulating business associations will play the key role in this system. Their representatives should become part of the administrative bodies of these certification centres, and should oversee the work carried out by such entities. Let me assure you that the government will provide the organisational and financial support for building such a system.

The occupational certificate should guarantee the need in the market for a particular profession, as well as a decent salary, and it should also confirm the high skills of a person who holds such a certificate.

If we set forth stringent requirements for the quality of training, we will at the same time be raising the social prestige of these occupations and will thereby guarantee respectable employment, just like it's done at the educational institution where we are now. Mr Karpeyev, the head, just told me about the enthusiasm with which employers hire his graduates. They would love to hire even more, but there are not enough of them to meet the needs of all St Petersburg-based enterprises.

The second important area of work should focus on encouraging businesses to invest in training and improving the training system. I know that we will participate in a conference call today, in which our colleagues from Cheboksary, Izhevsk, Cherepovets and Pervouralsk will share their experiences in this area. I'm aware that, for instance, Severstal invests heavily in training specialists. I can see Mr Mordashov, the head of the company, on the screen, and I hope that he will tell us more about this work.

There are good examples in the metallurgical, car-making and aircraft-building industries, but, unfortunately, there are not enough of them. There have been far too few thus far. The government is prepared to provide direct support to these endeavours that are undertaken by businesses based on co-financing arrangements. We have had a lot of success with this approach with the national Education project.

As you may recall, we allocated 8.8 billion roubles from the federal budget towards these purposes from 2007-2009. The regions matched these amounts with another 3.2 billion roubles, and businesses provided 5.5 billion.

Our next step was a project, scheduled for implementation in 2011-2013, to support regional highly-skilled worker training programmes. The participation of employers and key enterprises in this programme was a prerequisite for the provision of federal funds.

This project now includes 30 regions. Together, these regions will be able to invest an additional 10 billion roubles in the development of vocational training in Russia, of which 2.5 billion will come from the federal budget. We have already allocated 970 million roubles from the federal budget for these purposes in 2011.

I believe that this project should be further expanded by including additional industries and additional regions that are experiencing severe shortages of trained personnel. I would like the Ministry of Education and other colleagues to look into this proposal and come up with ideas in the near future.

My third point is that by using federal support and funds provided by businesses, we will be able to promote primary and secondary education. I have mentioned this already, but I want to emphasise that Russian regions should intensify their focus on this issue, and they should do so not only because it falls under the issues overseen by the regions. Above all, they should do so because a good vocational training system serves the interests of the regions themselves and is a prerequisite for their socio-economic prosperity.

There are several problems that I would like to bring to your attention. Almost one-quarter (can you imagine?) of buildings that are run by the primary and secondary education system are in disrepair and in need of major renovations. The educational institution where we are now is an exception to the rule. The people in St Petersburg who are responsible for this deserve praise. I can see that teachers and students here are happy, and that the sports and other facilities here are excellent. Unfortunately, there are too few of these institutions that train skilled specialists. Unlike this one, many existing educational institutions lack cafeterias and gyms. Here there is a gym, a swimming pool and outdoor exercise equipment. But, like I said before, this is an exception rather than the rule. In this regard, I believe that the right thing to do would be to go ahead and help regions to repair unsafe buildings. I would like to ask the Ministry of Education and the Ministry of Finance to develop proposals to this end.

I didn't even ask about the salaries of teachers who work here, but teachers' salaries across Russia are quite modest. The salary for a teacher working at a primary vocational training institution is about 10,000 roubles [a month]. There are places where salaries are higher, but the average figure is even below 10,000. Salaries of teachers working at secondary vocational training institutions average 15,000 roubles per month. In certain regions, teachers are paid just the minimum wage. I am not sure how this is possible at all, and it is not acceptable. We are now consistently working to raise the salaries of teachers working at secondary schools to the level of the average salary. Of course, we will strive to increase salaries paid to good specialists working at art schools and other similar institutions to the average level. The issue of raising the salaries of people working at preschool institutions has been brought up many times. However, we should not forget about the vocational training system, either. I would like the federal government and regional governments to come up with specific proposals about improving things in this sphere. If we don't pay decent salaries, we will never be able to hire the specialists that we need.

I would like to make it clear that Russian regions have everything they need to improve this situation. I am aware of the financial issues. There is never enough money. However, I also know that the majority of Russian regions will end the year with a surplus. I hope that my colleagues in the regions will pay very close attention to this issue. We will keep in touch with regard to all of these matters. I am also aware that the situation in some regions is not all that bad. Still, I repeat, we need things to be good not just in certain regions, but across Russia.

My fourth point is that we need to make sure that young people are able to see the promise of a vocational training and of the new economy. They should be able to see that the meaning of occupations is changing. Let me refer to the experience of the institution where we are now. It's clear that students are excited to be able to study here. They have access to the latest equipment and they are studying things that actually will be essential at their future high-tech work places. Our project to create 25 million modern jobs is designed to create an entirely new level of employment, raise the demand for skilled labour and, at the same time, raise its social prestige. Talents and skill should be encouraged. Special educational stipends have been paid to the top students of higher educational institutions for quite a while now. I believe that a similar system should be introduced for primary and secondary vocational institutions. This is why we have decided to establish 5,000 Russian government educational stipends to be paid to the best students of vocational schools, lyceums, colleges and technical schools.

I suggest that regions and businesses consider establishing similar programmes and initiatives.

I propose organising our work as follows: First, we will hear from our colleagues from the regions, and then those who are present in this audience.

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Vladimir Putin’s closing remarks:

Good afternoon,

I will not reiterate the importance of the issue we are discussing today. I’d merely like to say that quite recently, just a few years ago, we did not consider it to be so important. We said, well, we don’t have highly-skilled workers but this is not such a big problem. It seemed as though what we had was sufficient. But now, given the growing national economy and the forthcoming modernisation of all spheres of our life, especially production, it has become abundantly clear that our lack of highly-qualified workers presents the same obstacle to development as restrictions related to infrastructure, such as a lack of roads, electricity and communications. These workers are critical for our development. It has become perfectly clear that neglecting this sphere in the past few years has created a barrier, and the shortage of highly-qualified workers is restricting our growth. This question is moving to the fore of our agenda.

Many interesting and important proposals have been voiced today. I’d like to thank our colleagues in the regions who told us about what they are doing. They have also made highly specific proposals on ways to improve this sphere. We heard them from Cheboksary and other places (I have committed them to memory, and we will certainly try to formulate them). Our colleagues have made some very interesting proposals. We will summarise them and try to carry them out.

Needless to say, everything that concerns tax breaks warrants special attention from us. I completely agree with Mr Shokhin and our other colleagues that we should not be afraid of taking action in this sphere. We must display caution while still moving forward. I think we will find compromises there that will help us to overcome difficult obstacles effectively and in good time.

I am grateful for your cooperation today. Thank you very much!