Case Study One: Enrichment program in power generation

To place VET P1 and IP1 collaboration in context, it is important to provide a brief historical review and evolution of both institutions, briefly outlined in Table 5.7.

Table 5.7: VET P1 and IP1 partnership chronology (2008–2011)

Partnership opportunity emerges 2008

Initial partnership discussions between VET P1 and IP1 2008

Discussion to offer the program 2008

Initial agreement signed 2008

Training in enrichment program commenced (one group per year) 2009–2014

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Background

VET P1 is a polytechnic: a high level vocational education institution that has a special mission to provide vocational education in applied technology disciplines. It has a long history of excellence and is one of six pioneer polytechnics founded by the Indonesian government in 1982, assisted by the World Bank. The institution is located in East Java.

A polytechnic is a professional educational institution. Its goal is to prepare its students to be work ready by developing specific applied skills in a particular area. In order to achieve this objective, a polytechnic provides learning experiences and sufficient training to shape professional skill in science and technology. The ratio of learning composition between theory and practice is 45:55% respectively, offered over six semesters using learning materials based on the recent industry demand in Indonesia.

As a higher education institution, VET P1 is a part of the National Education system in Indonesia. Its objective is to prepare students to become members of society and equip them with professional abilities. It also has a role in contributing to people’s welfare and enriching the national culture.

VET P1 also established various collaborations or partnerships with industries, both nationally and internationally, in order to keep up with rapid industrial development.

The corporate partner in this case is IP1, a subsidiary of an international power company and a world leader in the development of co-generation and independent power plants. This subsidiary manages, operates and maintains a coal-fired power plant located in a rural area in East Java and is owned by a national energy company.

IP1 is a third party in the ownership of shares in power plant units 7 and 8, and subsequently the national electrical company; the company is owned by the government for distribution of electricity to the public directly. Thus, IP1

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does not sell its products direct but rather sells them to a subsidiary electrical company which is bound by contractual agreement. The company's products are then distributed to communities in Java and Bali, Indonesia. These products are directly regulated by government so that IP1 does not need to conduct marketing concerned with price fixing, promotion and distribution of its goods/products.

The following highlights the chronology of development and implementation of the VET P1 and IP1 partnership (see Case Study One: “Enrichment program in power generation”). In its four year history, the partnership has experienced changes in the training schedule and training materials, and has survived in a tumultuous corporate environment.

Genesis of the partnership Environmental issues

Initial conversations for forming the partnership between VET P1 and IP1 began in 2008 and the partnership commenced in the same year. This partnership is contract-based and renewed every year. There are two main drivers from the company’s point of view. First, when a new unit in their power plant was being built, IP1 experienced problems in finding qualified entry-level employees with the skills in ‘power generation’ to operate and maintain the plant.

Additionally, the company did not have so-called ‘luxury time’ to train new employees, because it would have been time consuming and therefore costly. Therefore, IP1 urgently needed to collaborate with educational institutions that could deliver subjects or courses to the students in ‘power generation’ before they completed their study. At this time, IP1 began to look for an academic institution to offer the ‘power generation’ program. The IP1 partnership coordinator explained his efforts in engaging a potential academic institution that would become IP1’s partner:

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I was permitted to move ahead and initiate some preliminary discussions regarding the feasibility of this and initially contacted my VET P1 colleague, since VET P1 was the most adjacent academic institution…which at the time was where IP1’s power plant sites were located… obviously people

considered that VET P1 had more prestige, undoubtedly in electrical engineering, so IP’s leader and all staff at management level were

enthusiastic about the prospect of seeing whether we could talk to VET P1 in creating this new program for our new employees (IP1, Interviewee, 2011).

The second driver was the corporate social responsibility (CSR) of IP1. CSR is the commitment of business to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development (Den Hond, Bakker & Neergaard 2007). There was a potential need for new employees, operators and technicians at IP1 after the Indonesian government had launched 10.000 megawatts of electricity during the first phase and a further 10.000 megawatts during the second phase through a new power plant located at IP1. The IP1 manager described this program to the prospective academic partner:

I think this is a good opportunity for an educational institution like VET P1 to prepare the students at early stage and before they graduate by giving them the new knowledge in ‘power generation’ needed by IP1 (IP1, Interviewee, 2011).

From VET P1’s point of view there were two main drivers for undertaking this partnership. First, there was the reputation of IP1 as a large international company in power generation. Second, it provided a great employment opportunity for VET P1 graduates with the relevant competency, which is highly desirable by the power generation industry.

IP1’s next step after having created an opportunity to work with VET P1 was building support for the idea of the partnership. IP1’s partnership coordinator found that VET P1 had not ever offered any of its academic programs off site. Nevertheless, the VET P1 partnership manager brought the opportunity back to his academic institution, mentioning it initially to the director of VET

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P1. The VET P1 partnership manager depicts the response of his director thus:

After preliminary discussion with the representative from IP1, I went to my director and mentioned this partnership opportunity. He was indeed sympathetic. He said that it was an interesting idea; however, it still needed approval from variety sources such as teaching staff, the head of the study program, and most importantly the head of electrical engineering department (VET P1, Interviewee, 2011).

VET P1 and IP1 appear to have taken a ‘textbook approach’ in formalising their agreement from the outset. A formal memorandum of understanding or agreement was perceived as essential. The first MoU was executed in 2008. The terms of the agreement covered all aspects including technical assistance, financial arrangements and a guaranteed number of students. Subsequently, the contract has been renewed every year.

The guidelines for the technical assistance agreement and the implementation of the ‘Enrichment program in power generation’ between IP1 and VET P1 formalised the partnership.11 _{The program provides professional vocational}

education, which combines the regular education of VET P1 with special competency courses for IP1 to achieve special and relevant levels of competence.

The participants in this program were fifth semester students in the Diploma 3 program in electrical, mechanical, and chemical engineering at VET P1. The enrichment program was carried out in two places: at VET P1 for ‘in- class training’ within the fields of electrical, mechanical and chemical studies and at IP1 for ‘on-the-job training’, specialising in power generation operations, maintenance and engineering.12 The curriculum consists of

11 _{Technical assistance agreement guidelines (IP1-VET P1) signed on 19 November 2008.} 12 _{This partnership was documented in print media in Indonesia and can be accessed}

electronically, see page 9 on http://issuu.com/surya-epaper/docs/surya-edisi-cetak-19-nov- 2009

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generic courses developed by IP1 for their employees. In addition, the participants undertake a technical English subject to strengthen their English proficiency.

There were both financial and non-financial benefits. Since the partnership is funded by the company, VET P1 could financially benefit because the funding obtained enabled the institution to support other programs internally through cross-subsidisation. A non-financial benefit for VET P1 was that its staff could develop their skill by undertaking field training on site at IP1. On the other hand, the financial benefit for IP1 was a reduction in their recruitment and training costs. The participants were well prepared with the skills needed by the company, so in future training costs will be lower because they have been trained to company standards already. Recruitment costs were also reduced because the company had found a ‘ready to use’ workforce which can be drawn from participating students.

There are three non-financial benefits for IP1 in this partnership. First, there was an increase in the company’s reputation not only in their region, but more broadly in East Java. Second, the partnership helped to fulfil company obligations as one of the industry players that should be involved in this area of expertise for the broader power generation industry, and third, because the company had prepared the participants early, the quality of their work would improve. Of the 25 students who undertook the training program, almost 80% were employed by the company.

Two major challenges arose for VET P1 as a vocational education and training provider in this partnership. First, the scheduling for this program was considered too long by the students. The subject was delivered every week for one semester over 10 weeks every Saturday. One way of overcoming this challenge was for VET P1 to have a contract with the students which required they attend training regularly. The second challenge was preparing the teachers to deliver the course subject according to industry needs. VET P1 sent some teachers to IP1 to attend basic training. This

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enabled them to experience and witness the process involved during a ‘power outage’ before they delivered the subject to their students.

There were also two challenges for IP1: one internal and the other external. The internal challenge came from the program itself. The content of the modules was not simply theory, but rather it was more applicative and practical. Moreover, the modules were also related to all equipment in the power plant. On the other hand, the course materials from VET P1 were not entirely applicable to IP1, so staff from VET P1 who were responsible for teaching this program had to be trained in five basic modules on site for several days to become familiar with the process on site. These modules covered areas such as basic power plant operation, plant science, plant cycle, basic electricity and basic water chemistry.

The external challenge faced was the resentment from surrounding communities towards the power plant, since the recruitment for new employees was based on tight selection, and all who accepted were from outside of the company’s local region. When the students started work, they also started to live and interact with surrounding communities near the power plant. In order to reduce the distortion in recruitment and the lack of local access to training opportunities and work at IP1, the company approached community leaders and met with them to discuss the problem.

As a result the company came up with a breakthrough program called ‘Talentpool’.13 _{All applicants living near the power plant with above average}

ability and who had not been lucky to get a job were identified and included into the ‘Talentpool’ program over two to three weeks. This program was run by IP1 and provided them with basic knowledge in power generation. Some of the participants were hired by IP1 as soon as they completed the program.

13 _{Talentpool is recruitment software for HR Departments of companies. It helps them}

streamline their recruitment processes, meet hiring targets and get instant reports to track performance. Talentpool caters to companies of all sizes and strengths.

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Mostly they work in semiskilled jobs (i.e. maintenance and warehouse). Some also have the opportunity to work in other companies.

The partnership between VET P1 and IP1 was the most successful according to the VET P1 coordinator. VET P1 gained a number of academic benefits in this “enrichment program” partnership. First, the students gained more practical knowledge than the traditional “academic” programs offered and this program matched industry needs. Second, not only the students, but also the teaching staff at VET P1 gained more practical knowledge and more opportunities to attend other training programs regarding new industrial skills or competencies provided by IP1, at no cost. According to IP1, this partnership was also its most successful one. Other partnerships had neither the focus nor commitment. “On-the-job training” partnerships between educational institutions and their industry partners usually only ran for about two to three months, and thus participating students did not gain the level of knowledge and experience in industry they expected.

The program was driven by the polytechnic, not by the industry partner. Thus, what was delivered did not always match the company’s needs. This enrichment program in power generation was well organised. The modules were arranged in two stages: six basic modules delivered for six months before on-the-job training and six additional modules afterwards. After completing all modules, the student participants did the second round of ‘on- the-job training’ for one year with four months’ rotation through all sections of the power plant. This provided more exposure for students and helped them understand all work processes on site.

The value of this partnership is approximately Rp. 400 million, which equals about AU$43,000 per group. There were two IP1 employees involved: a program manager and program administrator. The company also involved eight engineers and supervisors in ‘on-the-job training’. Eight personnel from VET P1 were involved in this program, covering both teachers and administrators.

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Training model issues

The training model for this program was designed to be modular and flexible. Each module consisted of a manual plus video. The first five modules were delivered on campus at VET P1 and presented by lecturing staff, with the video being used to provide an illustration and visual experience of the power plant. The following 15 modules were not only presented through lectures and videos, but also involved a program of site visits to observe the real equipment in situ.

The training materials were fully designed and customised by IP1 to develop a wide range of skills. This meant participants coming from different study programs offered by VET P1 (e.g. electrical, mechanical and chemical engineering) all used the same modules. For example, students from chemical engineering studied plant instrumentation which is the domain of mechanical engineering. In the same way, students from mechanical engineering learned about water treatment so that all student participants were multiskilled.

Management of staff development needs that emerged during the program involved a sharing of team skills across VET P1 and IP1 staff. For VET P1’s staff, this skill sharing was a good opportunity to gain valuable current industry knowledge while monitoring students on site at IP1. Furthermore, most of the knowledge that staff gained could be used to improve student learning at VET P1. The administrative arrangements for this enrichment program were mostly carried out by VET P1. This administrative support came from the electrical, mechanical and chemical engineering study programs. For ‘on-the-job training’ programs plus additional modules, all administrative arrangements were supported by IP1.

People issues

The participation of teaching staff at VET P1 in implementing the ‘Enrichment program in power generation’ was essential and there were

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advantages for those involved in the partnership. The staff from three study programs from VET P1 had opportunities to share knowledge during their internship at the power plant. They also discovered how the company carried out human resource development and how the business plan worked. This knowledge could be used to offer new training programs needed by the company, and which could be offered by VET P1.

For those teaching staff interested in this program with IP1, the remuneration was attractive. Teaching in this program, especially off site, was above the usual workload of the teaching staff. As the VET P1 manager describes:

This enrichment program is a challenging but very attractive one in terms of the financial incentives. I don’t think they (teaching staff) would participate if they were not being offered a very interesting package. Frankly speaking, they are just doing certain kinds of teaching like once a week, but the incentive was tempting (VET P1, Interviewee, 2011).

For employees from IP1 it was their chance to deliver relevant knowledge they held to the students. Also it motivated IP1 employees to be involved as lecturers and not only refresh their knowledge, but reduce their routine work which could, in turn, lead to boredom. Employees who were not directly involved in delivering formal training took on a mentoring role and assisted students in learning new job roles.

The ‘people issue’ challenges that emerged as needing improvement in this partnership, and in VET P1’s other partnerships, was certifying the expertise of its staff. Many of VET P1’s staff are capable trainers and have a lot of experience in that role. However, some of them do not possess relevant certification, or they are not licensed, either nationally or internationally, to conduct training for the power generation industry. Consequently, they could not be involved in the training partnership with industry since the industry demanded all trainers involved should be certified with, or be a member of, relevant professional associations.

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There were two main ‘people issue’ obstacles for IP1 in this partnership. First, the program was run over two years. After one year the students graduated, and then they spent a further year with the company. While this program is also part of IP1’s corporate social responsibility, there were no bonds requiring the students to work at IP1. They were given priority to join the company through an accelerated recruitment process; however, they were free to find work with other companies. Second, there was restlessness amongst existing employees regarding this enrichment program.