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LCQ18: Earn and Learn Pilot Scheme for Retail Industry

     Following is a question by the Hon Kwok Wai-keung and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (June 29):


     The Government, the Vocational Training Council (VTC) and the Hong Kong Retail Management Association jointly launched a Pilot Earn-and-Learn Scheme for the Retail Industry (the Pilot Scheme) in 2014 to provide participants with an opportunity to "earn and learn" and to pursue a well-defined progression pathway, aiming to attract talents to join the retail industry. The leaflet and the web page of the Pilot Scheme clearly indicated that graduates of Diploma of Foundation Studies would be entitled to a monthly income of not less than $11,000 and the monthly income of graduates of Higher Diploma could even reach $13,000, provided they continued to be employed by the same employer as during the training period. However, in April this year, some graduates of the Pilot Scheme relayed to the trade union concerned that upon graduation, they were employed by the same employer as during the training period, and really earned a monthly income of $11,000 in the first three months, but subsequently, they were only given a basic monthly salary of about $5,000, plus a sales performance-linked commission. In mid-April this year, VTC issued a press release, indicating that a graduate's monthly income of not less than $11,000 referred to the basic salary plus commission. In this connection, will the Government inform this Council:

(1) whether the authorities have conducted an investigation into the situation of Pilot Scheme graduates receiving a monthly income of less than $11,000; if they have, of the findings; if not, the reasons for that;

(2) whether the reference that Pilot Scheme graduates will be entitled to a monthly income of not less than $11,000 is confined to an applicable period, such as the first three months of employment; if so, of the reasons for that; if not, how the authorities exercise monitoring to ensure that the monthly salary paid by employers to graduates is not less than $11,000;

(3) why the authorities, in the past, had all along not stated clearly in the leaflet and on the web page of the Pilot Scheme that a monthly income of not less than $11,000 referred to the basic salary plus commission;

(4) whether it knows the respective numbers of positions with a monthly salary of not less than $11,000 offered to the graduates by the first and second cohorts of employers under the Pilot Scheme; among such positions, of the number of those with commission included in the salary, as well as the average basic salary of such positions; and

(5) given the under-enrolment in the past two cohorts of the Pilot Scheme, whether the authorities have formulated measures to increase the enrolment in the third cohort of the Pilot Scheme; whether they will consider inviting employee representatives to co-monitor the implementation of the Pilot Scheme; if they will, of the details; if not, the reasons for that?



     The Earn and Learn Pilot Scheme for the Retail Industry (the Pilot Scheme) is one of the three measures for manpower development of the retail industry launched by the Government in 2014 to alleviate the continuing manpower tightening problem of the retail industry.  The Pilot Scheme is implemented by the Vocational Training Council (VTC) in partnership with the Hong Kong Retail Management Association (HKRMA), which enables Secondary Six graduates to attend classes on campus while acquiring work experience with participating employers and receiving a Government allowance of $2,000 per month.  This not only helps ease the manpower strain of the retail industry, but also attracts aspiring youngsters to join the retail workforce.

     My reply to the various parts of the Hon Kwok's question is as follows:

(1) As pointed out in the funding proposal for the Pilot Scheme submitted to the Finance Committee of the Legislative Council, employers would offer a salary of no less than $11,000 per month, which may include basic salary, commission and allowances, to the graduates of Foundation Diploma (FD) programme under the Pilot Scheme, if they become full-time employees of the companies concerned.

     As the nature of business and operation mode vary among retailers, participating companies will work out their own remuneration arrangements in the light of actual operation and employ the FD graduates at a salary level as mentioned in the funding proposal.  The HKRMA has also taken timely action to draw employers' attention to the details of the Pilot Scheme, including the salary level.  The remuneration arrangements for and the actual income of the FD graduates after joining the retail industry will be covered by a tracking survey to be conducted later.  Details are set out in part (4) of the reply below.

(2) The reference to a salary level of $11,000 per month under the Pilot Scheme is a general reference applicable to various remuneration arrangements adopted by the participating companies.  According to our understanding, full-time employees in the retail industry are normally employed under a continuous contract.  Details of the Government's monitoring work are set out in parts (4) and (5) of the reply below.

     Separately, according to the 2015 Report on Annual Earnings and Hours Survey published by the Census and Statistics Department in March 2016, the median monthly wage (including commission and tips not of gratuitous nature, guaranteed bonuses and allowances, etc.) of employees aged 15 to 24 across the industries was $11,400, while the median monthly wage of employees (regardless of age) in the retail industry was $12,000.

(3) The VTC and HKRMA have been promoting and providing basic information about the Pilot Scheme through their web pages, promotional leaflets etc., which are updated and beefed up from time to time.  In fact, participants of the Pilot Scheme have learnt of the remuneration arrangements through various channels.  On the orientation day prior to the commencement of the relevant programme, the VTC has clearly explained to the student-workers that if they were to become full-time employees of the companies concerned upon graduation, the employers would offer a salary of no less than $11,000 per month, including basic salary, commission and allowances.  Moreover, as employees of the companies concerned during the 18-month FD programme, the student-workers were able to gain a good understanding of the characteristics of the trade and the remuneration arrangements adopted by their companies.  The VTC and HKRMA have ensured that the latest web pages and promotional leaflets fully reflect the relevant remuneration arrangements.

(4) In essence, the Pilot Scheme seeks improvement through practice as well as testing and trying out of the arrangements.  It also takes time for the student-workers and employers to acclimate to reap the full benefit of the Pilot Scheme.  For the FD programme under the Pilot Scheme, the first cohort of student-workers recently graduated in March 2016, while the second cohort will complete the programme in February 2017.  At present, over half of the first cohort of FD graduates has joined the retail workforce.  The VTC plans to conduct a total of three tracking surveys within two years after the graduation of the student-workers, the first of which will be conducted in the third quarter of this year.  These surveys not only help gauge the employment and articulation profile (including remuneration arrangements and salary levels) of the student-workers upon graduation for effective implementation and improvement of the Pilot Scheme, but also facilitate the summing up of experience from the Pilot Scheme, so important reference for providing support to the retail industry and manpower training may be drawn in future.  Details are set out in part (5) of the reply below.

(5) In the first two years of the Pilot Scheme, the actual student intakes were admittedly not as high as initially expected and some students had dropped out over the course of time.  We believe these were the result of a combination of factors.  The retail sales performance is one of the factors.  The retail market has suffered setbacks in recent months, reflecting a change in the spending pattern of visitors to Hong Kong and a drop in visitor arrivals.  The still uncertain local and global economic outlook has an adverse impact on the local consumption sentiment.  Apart from changes in the broad environment, students dropping out during the programme are also a natural course of event.  On the other hand, a significant number of student-workers had gained an understanding of the retail trade through the Pilot Scheme and decided to join the retail workforce as early as possible by dropping out.

     Amid a slowdown in economic growth and increasing downside risks in external environment, the retail industry still renders strong support to the Pilot Scheme.  Participating employers continue to provide a large number of internship placements, covering such areas as cosmetics, watches, clocks and jewellery, fashion, electronic and telecommunication products, offering a wide range of internship opportunities for the student-workers.  Their commitment to long-term manpower development is demonstrated through monetary support and other efforts, such that the student-workers may acquire work experience while at school.

     In 2016-17, the VTC and HKRMA will continue to make every effort to promote the Pilot Scheme through various channels, such as posters, leaflets, advertisements, VTC's website, social media, talks and Programme Info Day, in order to boost enrolment and attract more youngsters to join the Pilot Scheme.  The VTC organised a programme briefing in May this year to provide information on the programme and tips on interview techniques.  In addition, students who wish to join the Pilot Scheme may also enrol in the programmes and attend a job interview at the campuses of the Hong Kong Institute of Vocational Education on July 13, 2016, the day on which the Hong Kong Diploma of Secondary Education Examination results will be released.

     The Government will continue to monitor the operation and progress of the Pilot Scheme through a steering group comprising representatives from the Government, the VTC and HKRMA, and the effectiveness of the Pilot Scheme will be reviewed in due course.  In the process, the Government will closely monitor the conditions of graduates working in the retail industry.  Were there be any unsatisfactory cases, the three parties would examine the specific circumstances and follow up.  In addition, the VTC keeps abreast of the developments of the retail industry through the Retail Trade Training Board (RTTB) which comprises stakeholders of the retail industry (including employee representatives), so as to ensure that the VTC's vocational and professional education and training (including the Pilot Scheme) can meet the projected manpower requirements of the industry.  The RTTB will also advise the VTC on curriculum development, course planning and quality assurance issues.  The experience gained from the Pilot Scheme will serve as an important reference in this regard.

     We will do our best to implement and improve the Pilot Scheme and provide graduates with a clear articulation and career ladder, with a view to injecting new impetus into the retail industry and helping the industry enhance its professional service standards.

Ends/Wednesday, June 29, 2016
Issued at HKT 12:31


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