Lessons from Germany in Human Capital

The global recession has forced employers to lay off resources to remain competitive. Often enough, its a tough decision for managers, as finding talent is a daunting task in any economy.
In an effort to work around the economic upheaval of the recession, the German government introduced a policy. Working short time to overcome the crisis, Kuzarbeit in German, has been referred to as the German economic miracle.
Perhaps as a result of the policy German employment rates fell marginally through the recession and are marginally lower than pre-crisis times, now.
Compare that to United States, where despite the addition of 162,000 new jobs in March, the unemployment rate is still hovering around the 10 percent mark, and there are good reasons to learn from the German model.
Instead of laying-off workers, German employers were encouraged to reduce working hours. In return, government funded agencies would subsidize 60 percent of the lost earnings. Better yet, if the spare time was used for training and education, the subsidy is upped to a full 100 percent.
Thats fabulous; but what in the world can Pakistan get out of this, one might inquire.
Pakistan is a young and increasingly urban economy. Half its citizens are under twenty and two thirds of the population has yet to reach its thirtieth birthday.
Given the countrys poverty situation, economic necessity dictates children to work instead of going to school. For the same reason, many workers have no chance of improving their skill set in a hope to achieve a higher standard of living. A citizen development strategy is imperative for Pakistan. Employers should be encouraged to reduce working hours, in case they are burdened with wage costs, and invest a portion of their labour cost savings in the training and development of employees.
Policy makers in Pakistan, who generally prefer short-term solutions, must understand that this initiative will pay dividends in the long term. They must realize that developing human capacity may be the single most important measure to the countrys future.
The provision of mandatory education for every child in the 18th Amendment is a refreshing change in the right direction. One only hopes that it will be implemented in letter and in spirit.