The Forum for Partners in Iran's Marketplace

October 2019, No. 92


Outcome of Degree Inflation!

"Many students after graduation fail to find a job to fit their field of study and expertise because they are not familiar with the business environment in practice."

While statistics show that more than 70% of those who have mastered professional training have succeeded in finding their way into the labor market, experts believe that the prevalence of degree inflation in the country has not only increased unemployment but also deprived the country of using skilled labor force.

One of the important advantages of technical and vocational training is its applicability. For the same reason a high number of graduates who have completed their professional courses are absorbed into the labor market very quickly.

In today’s world, thanks to development of technology and consequent widespread changes, many countries have moved from resource-based economy to knowledge-based economy. This in turn has led to the emergence of three axes of innovation, technology and competence in the development and progress of countries.

Accordingly, many developed and developing countries have quickly turned to skilled and qualified workforce training and have benefited from the strategic role of skill training in their large-scale planning and policy making. Minister of Cooperatives, Labor and Social Welfare, Mohammad Shariatmadari says: “Under conditions that we are faced with lack of skills, we need to move towards skill training and fight against skill poverty, and by providing young people with technical and vocational training, take steps in preparing the ground for employment of skilled forces.”

According to Shariatmadari, the demand for employing highly skilled workers, staff and forces in the industry is currently increasing, and the role of the private sector in providing training is essential. “Skills are not restricted to technical ones alone. We need to develop soft skills such as entrepreneurship, verbal skills and communication skills, because the importance of these skills in people is not less than hard and specialized skills,” he says.

Today, one of the most important problems facing the country’s labor and employment market is the weakness of the work culture and skill training; and it seems as long as the working culture in Iran does not change there will not be a tendency to work in different sectors and professions. The importance of the topic of training is so high that in the Sixth Development Plan, increase in skills among graduates has been projected and boosting development of skills along with the academic centers has been paid attention.

Degree inflation has become commonplace because of the attractiveness of educational degrees for employment and determining wage levels, and has gradually become social prestige. Soleiman Pakseresht, Deputy Minister of Cooperatives, Labor and Social Welfare and Head of the Technical and Vocational Training Organization believes that many people in the country are not aware of the status and importance of training in the development of human resources, the economy and the life of enterprises, but the challenges in the field of human resources and resources of the country such as low efficiency and productivity, and lack of readiness to enter the labor market, have given rise to reflection on the status and function of the development of higher education and university degrees. 

Converting Degree Inflation to Social Prestige: Pakseresht believes a desirable educational system for training the manpower applying to enter the labor world is a system of vocational and technical training. He added that degree inflation, due to attractiveness of educational qualifications for employment and determining wages in accordance with existing laws and regulations, has been developed and gradually assumed cultural admission and social prestige.

He added: “At one time our challenge was illiteracy but now it is lack of expertise. When most of the young people entering the university are intent on employment and entry into the labor market, it is clear that they should be trained according to this orientation. Such training should occur from the outset in a vocational and technical training system that has its own specific characteristics; that is, the person who applies for entry into the labor market, based on his professional talent and interest at the high school, enter an educational course designed for the training of these people from the very outset.”

In the meantime, Pakseresht, referring to the Law on Comprehensive System of Technical, Professional, and Vocational Training states: “The upstream legislation will fill the gap between the policy of coordinating skills in the country and the mechanisms that need to work together in a system. In this law, the High Council of Technical and Vocational Training is foreseen, its chairman is the first vice president and its secretariat is based at the Ministry of Cooperatives, Labor and Social Welfare. The role of this council is to increase coordination in intergovernmental and inter-sectoral policies, and its main task is to overcome the challenges of governance of skill training.”

While surveys show more than 70 percent of those who have undergone skill training find their way into the labor market quicker, experts believe that the “prevalence of degree inflation” in the country has led to not only unemployment, but also being deprived of skilled labor force. A labor official says unemployment will not be rooted out in the country unless a society keeps distance from degree inflation and people from the early ages become familiar with practical and skilled training.

Abavi says: “Many students after graduation fail to find a job to fit their field of study and expertise because they are not familiar with the business environment in practice. This is while in other countries they invest on skill training and the individual is treated as a human capital because in these countries the economy and production and the labor market depend on skilled labor force and they invest on workers, students and managers.”

He maintains that prevalence of degree inflation impedes the training of skilled and expert forces. “As long as the tendency of the community, the Ministry of Science, Research and Technology and the establishment is towards degree inflation, we cannot expect to have skilled and expert workers, and it takes years for the system to be reformed and for this mentality change.”

In the same vein, the head of the High Center for Labor Trade Association says: “A survey of the employment status of graduates shows that over the past years we have defined fields of study for students that have had no labor market demand, and for many years we have admitted students in these fields. For the same reason, today we are faced with a high unemployment rate of graduates who are desperate and disappointed. Unemployment will not be eradicated in the country unless we reject degree inflation and invest on skill training.”

In his opinion, in our country, more attention is being paid to degree inflation than specialization, and unfortunately, students are only thinking about receiving a degree until the end of their studies, and consider theoretical lessons prior to practical lessons. Referring to the Sixth Development Plan’s goal of creating one million jobs in the country, Fatholahi said: “In the plan, the government has been tasked with removing unemployment and providing job opportunities by creating around one million jobs a year. This requires training skilled and expert force.”

He proposes the creation of an all-inclusive database of businesses and says the database can bring jobseekers and employers close to one another alike. This database, he says, will make jobseekers aware of the needs of the job market and are known to firms, as well as employers find their needed workforce.

Some time ago, the first meeting of the High Council of Technical and Vocational Training was held in the presence of the first vice-president, minister of cooperatives, labor and social welfare, minister of science, research and technology, and the head of the Technical and Vocational Training Organization. The council was formed following the adoption of the all-inclusive system of technical, professional, and vocational training in 1396 (2017/18). The objectives of this law were to promote the culture of work, entrepreneurship and professional ethics based on Islamic and national values; improve the quality of technical, professional and vocational skills, and reduce the gap between the level of competencies required by the current and future needs of the labor market.

According to this law, the all-inclusive system of training tries to train specialized, skilled and efficient human resources in line with current and future labor market needs and enhance entrepreneurial capacity and increase the role of technical, professional and vocational training in production, growth and dynamism. Earlier, the Ministry of Cooperatives, Labor and Social Welfare had offered to allocate €50 million from the National Development Fund resources to boost the country’s skill development to spend on maintenance and updating of workshop equipment and strengthening the field of skill development.

According to the report, economic experts believe that the most effective reason that university graduates are not recruited by the labor market is the weak and lack of close links between universities and the job market. In the face of increasing unemployment among young people and college graduates and the lack of skills in the society, it is important to benefit from technical and professional training and the Technical and Vocational Training Organization plays a key role in development and institutionalizing these trainings and training skilled forces.

Today, technical and vocational training in various sectors of the industry, agriculture and services is provided on the basis of the labor market demand, which suggests that by mere university degree and theoretical knowledge one cannot enter the labor market; it seems that reaching the peaks of the business requires passing through the tortuous road of the labor market, possessing the necessary skills and undergoing skill, technical and specialized courses.


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  October 2019
No. 92