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The Earn, Learn, Return Model:


A New Framework for Managing the Movement of Workers
in the APEC Region to Address Business Needs
EXECUTIVE SUMMARY

Skills shortages and mismatches remain an acute concern for businesses and governments
in the APEC region alike, and are steadily growing worse. In 2013, around 50 percent of
surveyed employers in APEC economies struggled to fill jobs with suitably qualified
candidatesplacing the APEC region far above the global average of 35 percent.
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Another survey found that the vast majority of employers in the region support increased
talent mobility as a solution to these challenges.

These shortages partly reflect longer-term demographic changes, like low birth rates and
an aging population, but are also the result of mismatching labor supply and demand.
With so many career choices, millennials and the technologically savvy rarely want the
challenging jobs required by many sectors. Businesses struggle to fill roles with qualified
candidates, as education systems fail to adapt to the current labor market and young
jobseekers seek out opportunities elsewhereincluding overseas. Demand for more
workers at all skills levels continues to grow, creating critical skill shortages in some
sectors. Meanwhile, existing labor migration management frameworks encourage migrant
workers to use unauthorized migration channels or lapse into irregular status, causing
additional social problems.

Historically, economies grew in large part by opening channels for permanent settlement,
as exemplified by the United States during the 20
th
century. However, there is a shift
away from this permanent settlement model as governments attempt to minimize the
economic, cultural, social and security impacts of permanently absorbing newcomers.

This paper describes a new and practical set of ideas intended to offer a solution that is
sensitive to the economic, cultural, social and security concerns of many APEC
economies within an increasingly globalized world.
The APEC Business Advisory Council (ABAC) hopes to work with APEC to develop an
improved framework that can efficiently manage labor flows in the region. This
improved framework is patterned after successes of the global shipping industry, which
has one of the worlds most sophisticated systems to manage the international movement
of seafarer.

The framework is critical to enable policymakers to manage worsening skills shortages,
and tackle some of the inefficiencies and corrupt practices underpinning this challenge. It

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Manpower, 2013 Talent Shortage Survey: Research Results, Milwaukee: Manpower Group. 2013 Available at
http://www.manpowergroup.us/campaigns/talent-shortage-2013/
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would encourage coordination between businesses, workers, and government regulatory
agencies to establish a more effective and responsive labor mobility system. It would
encourage workers to return home regularly, with portable benefits, thus reducing the
permanent loss of human capital in source economies. The framework would also
provide safer working conditions for workers, with on-the-job training and better skills
development.

This brief outlines the APEC Business Advisory Councils Earn, Learn and Return
model a more efficient, systematic, and transparent framework for the management of
the movement of workers centered around four key elements:

1. A sector-based regulatory structure built around a new category called an APEC
Worker. APEC members could identify or create the ideal multilateral or
regional organization that would provide the governance structure for each sector.
For example, the International Maritime Organization governs the shipping
industrys workforce.

2. An APEC-wide regulatory convergence of training, assessment and certification
of skills and qualifications for each position in each sector.

3. An APEC-wide transparent, regulated and standard process for the recruitment,
job placement, and deployment of workers. The work contracts are circular in
structure allowing the worker to return home regularly, ideally every year. There
are agreements on work conditions and benefits guided by the market in the
destination economy. Employers, not workers, pay placement fees, and
recruitment agencies are effectively regulated. The APEC Worker would have a
Travel Card which serves as a regionally recognized identification document
certifying a workers occupation in a given sector.

4. A next generation of APEC-wide services catering exclusively for the needs of an
APEC Worker including among others, insurance, social security, banking
services, (discounted) airfares, and free or discounted communications.

This Earn, Learn and Return model framework builds on the successes and best
practices from the shipping industry, as well as some agriculture and manufacturing
industries worldwide. It provides a long-term, regional, and sector-based approach to
managing the movement of workers and workforce development that contributes to
achieving one of the key goals shared by governments and businesses in the APEC region
today: The attainment of sustained and inclusive economic growth fundamentally
supported by workers with the skills and qualifications demanded and recognized by the
labor market.
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I. Introduction
Skills shortages and mismatches in the APEC region remain acute and are projected to
worsen as economies recover from the global financial crisis of 2008. This trend is
exacerbated by demographic changes like low birth rates and aging populations that
threaten to shrink the economies of numerous APEC economies.
The growth of knowledge-based industries, such as high-tech manufacturing and
financial and business services, has altered the aspirations of the young (especially in
developed economies) and exacerbated shortages of workers across many sectors. With
so many career choices, millennials and the technologically savvy rarely want the
challenging jobs required by many sectors. Some economies with young populations of
jobseekers lack the educational systems capable of delivering the skills required by the
labor market. Many also see their workers permanently emigrate, causing a brain
drainespecially of the most talented, many of whom have little or no intention or
incentive to return home. At the same time globalization has only increased businesses
demand for more workers at all skills levels, raising skill shortages to critical levels in
some sectors.
Attracting and retaining human capital remains a top concern among APEC businesses. A
2012 study found that an overwhelming majority (82 percent) of business executives in
the region believed talent mobility would have a positive, very positive or
extremely positive impact.
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More recently, Manpower Groups annual Talent Shortage
Survey found that in 11 APEC economies, one in two surveyed businesses struggled to
fill jobs in 2013. As Figure 1 below shows, this proportion is much higher than the global
average of 35 percent.


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University of Southern California Marshall School of Business, Trade in Services in the APEC Region:
Challenges and Opportunities for Improvement, Report. September 2012. Available at
http://www.chamber.org.hk/en/doc/USC_Marshall_ABAC_2012_Report_Final.pdf
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Figure 1: Proportion of Businesses Reported Having Difficulty in Filling Jobs, 2013

Source: Manpower, 2013 Talent Shortage Survey: Research Results, Milwaukee: Manpower Group. 2013 Available at
http://www.manpowergroup.us/campaigns/talent-shortage-2013/

Even more importantly, the survey reveals talent shortages are a growing issue in three of
the largest Asian economiesChina, Japan and Singaporewhere the proportion of
employers reporting skills gaps increased from 2012 by 12, 4 and 10 percentage points
respectively. Eighty-five percent of Japanese employers experienced difficulties filling
jobs in 2013, the highest level recorded in the surveys eight-year history. Reported
shortages are also at a six-year high in Canada, having risen 9 percentage points year-
over-year.
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Manpower, 2013 Talent Shortage Survey: Research Results, Milwaukee: Manpower Group. 2013 Available at
http://www.manpowergroup.us/campaigns/talent-shortage-2013/
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Four Drivers of the Skills Gap
Broader demographic changes like low birth rates and an aging population aside, there
are many complex reasons for this widening skills gap in the APEC region.
First, economies struggle to build adequate human capital in the areas that are most
relevant to economic development. Educational workforce development programs often
lack linkages to real-world labor market needs, and remain inaccessible to those who
might benefit most from them.
Second, most education and training qualifications are not portable or transferable.
Workers crossing borders are often unable to put their skills to productive use because
their qualifications, experience, and knowledge are not readily recognized in the
destination economys labor market. The resulting waste of human capital represents a
loss to employers, host communities, and workers themselves. Barriers to transferring
skills and experience are a major impediment, particularly in regulated occupations where
applying for the right to practice can be an extremely time-consuming and difficult
process for foreign nationals.
Third, effectively deploying workers across borders through regulated channels remains
difficult despite the introduction of stricter rules designed to deter rising unauthorized
migration. Although many workers move to and within the region through regular
channels, a significant number do not or later lapse into irregular status. Many workers
leave home with huge debts incurred from paying exorbitant fees to recruitment agents.
Workers often overstay their visas when there is no opportunity to renew their contracts,
as they are reluctant to return home and then pay these fees all over again. Unauthorized
migration and the lack of social protections for unauthorized workers lead to major social
problems, making labor mobility a sensitive issue for both sending and receiving
economies. It also highlights the need to design a new labor mobility framework.
Lastly, countries have historically relied on permanent migration to grow their economies.
For many, however, this model needs revision, as governments aim to minimize the
economic, cultural, social, and security impacts of permanently incorporating newcomers.
III. The Earn, Learn, Return Model: A New Framework for
Managing the Movement of Workers
This paper describes a new and practical set of ideas to manage regional labor mobility
effectively and address existing skills gaps in a way that is sensitive to the economic,
cultural, social, and security concerns of many APEC economies. To address these skills
shortages and mismatches, the APEC Business Advisory Council (ABAC) seeks to work
with APEC leaders, in particular through the Human Resources Development Working
Group, to develop an improved framework to manage the movement of workers
efficiently around the region.
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This new framework would eliminate current inefficiencies and corrupt practices that
underscore the social problems faced by migrant workers, and source and destination
economies alike. In the long term, solving these social issues will require improvements
in education systems including better-targeted vocational training, higher levels of
participation by women, and changes in retirement practices. Nevertheless, without a new
framework, APEC economies ability to manage the worsening skills shortages will be
severely hampered.
Improving the management of worker mobility would facilitate the development goals of
source economies and efficiency goals of destination economies. These reforms would
address the permanent loss of human capital in source economies, and the social costs
brought about by long separation of families. In destination economies, a new framework
would streamline labor flows with a coordinated approach involving businesses, workers
and government regulatory agencies alike that allows businesses to employ and retain in-
demand workers. Workers in turn could work in secure and safe conditions, learn while
on the job, and regularly return home with fully portable benefits.
The Earn, Learn and Return model would be a more efficient, systematic, and
transparent framework for the management of the movement of workers. It builds on four
key elements taken from the successes of the global shipping industry, which has one of
the worlds most sophisticated systems to manage international labor mobility.

1) A sector-based regulatory governance structure built around a new category
called the APEC Worker
The APEC Worker arrangements would have a governance structure arranged by
sector and tailored to each sectors specific needs. For example, ABAC envisions one
APEC Worker framework for healthcare workers and another framework for engineers.
APEC economies could establish a new entity, or identify an existing regional or global
organization, to create and develop the international regulatory structures needed for an
efficient circular flow of workers. For example, the International Maritime Organization
(IMO) governs the shipping sector through agreements with IMO member states on the
standards for seafarers. This innovative set-up makes it easier for immigration regimes to
identify and approve seafarers visa applications. Like the IMO, the governing body
would audit APEC members government agencies on their compliance with established
rules and standards, who would then audit local employment agencies and training and
educational institutions.

2) An APEC-wide regulatory convergence on education and training, assessment
and certification of skills and qualifications for each position in each sector

ABAC also envisions that the same governing body would harmonize standards for
education and training, assessment, and certification, and would ensure compliance of
APEC members. The APECwide harmonized standards would lower the costs for
education, training, and examinations of workers. Harmonized training would also allow
for skills upgrading while workers are abroad.
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3) An APEC-wide regulatory convergence on a transparent and regulated process
for the recruitment, job placement, and deployment of workers

The model envisions the convergence of transparent regulations for recruitment,
deployment and job placement processesparticularly on work conditions and
benefits thus giving workers an educated choice on whether or not to accept a position.

A key feature of the framework is the circular nature of work contracts, with the worker
returning home regularlyideally every year to maintain close ties to home. The
framework also envisions that placement fees are paid by employers, not workers.
Contracts are renewable to prevent overstaying. A worldwide review of mobility systems
by the U.S.-based Migration Policy Institute found that inflexible work arrangements,
such as nonrenewable visas, visas tied to particular employers, and no flexibility to
switch to other admissions categories, encourage workers to overstay their visas and
lapse into irregular status.
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The APEC Worker Travel Card would be issued to every worker and would serve as a
seal of good employmentconduct. Sharing similar features with the Seamans Book,
bearers of the Worker Card would be grouped based on specific skills, occupations, and
professions. This feature would make visa processing simpler and more efficient.

4) A next-generation framework of new services for the APEC Worker, covering
insurance, social security, bank accounts, (discounted) airfares, and free or
discounted communications

There is an opportunity for APEC economies to develop a fresh, viable, and sustainable
new category of services that transcend national regimes to meet APEC Workers needs.
These services would include insurance coverage across APEC, a new social security
regime where payments are made to an APEC-created agency and are fully portable
between APEC economies, specially created banking services, (discounted) airfares, and
free or discounted communications.

Start Small and Build by Sector

Far from suggesting a blanket, cross-sectoral approach to worker mobility, ABAC
recognizes that the model works best if adapted to meet specific industry needs. Box 1
below shows, for instance, how the shipping industry has developed a world-class system
for managing the movement of seafarers.

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Kathleen Newland, Dovelyn Rannveig Agunias, and Aaron Terrazas, Learning by Doing: Experiences of
Circular Migration, Insight. Migration Policy Institute: Washington, 2008. Available at
http://www.migrationpolicy.org/research/learning-doing-experiences-circular-migration
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IV. Conclusion: Bridging the Gap between Vision and
Implementation

For ABAC, the promise of the Earn, Learn, Return model is straightforward: a steady
supply of needed workers in destination economies, safer and legal movement of workers
who earn and learn, and inflows of remittances to source economies that can then benefit
from their workers skills when they return home. This model does not just benefit APEC
economies: studies show that (contrary to popular conceptions) many workers hope to
return home, either on a temporary or a permanent basis.
Box 1: The Shipping Model

Seafarers within the shipping industry are some of the most governed workers in the
world today. The international seafaring labor force falls under the jurisdiction of the
UN International Maritime Organization (IMO), which provides its global
governance framework, and the International UN Labor Organization (ILO), which
oversees seafarers rights and benefits.
The IMO imposes global safety, environmental, and other minimum standards in
mandatory training and certification. As a result, certificates are mutually recognized,
and a seafarer can work on any ship regardless of flag state. Maritime colleges and
training centers also need to be IMO audited and accredited.
The ILO imposes recruitment and job placement regulations, and minimum work
conditions and benefits. Contracts are short and circular in structure, with a
maximum of 10 months of work and a two-month paid vacation.
Seafarers have visas but there are very few reported instances of crew jumping ship
and becoming undocumented. Employers pay for all costs of placement and
deployment, and provide global insurance and tax-free pay. There is even a special
discounted airfare for seafarers, at 30 percent of the regular fare.
These circular labor flows enable seafarers to pursue diverse career paths while
maintaining close ties with home. They can become part of the global talent pool,
using their expertise and knowledge to perform services needed by the industry at
home and abroad.
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ABAC looks forward to working with HRDWG to identify the next steps for
implementing this proposed model, and building up the future prosperity of the region,
sector by sector.

There are several key issues that could form the basis for future discussion. These
include:

Should the framework cover both skilled and unskilled workers? This proposed
framework presupposes that with the sector-by-sector training and certification
framework in place, no worker will be considered unskilled.

What is the optimum duration for each repeat contract? The experience of the
shipping industry shows one-year contracts help workers maintain close ties with
home; thus the framework envisions workers returning home yearly.

What practical steps would be needed to create APEC-wide governing bodies to
harmonize sector-based standards for recruitment, job placement, education, training,
assessment, and certification and, even more importantly, ensure the compliance of
member economies?

What practical arrangements would be needed to create a sector-based APEC Worker
Card?