Center for Young Professionals banking apprentices and trainer share experiences with CEMETS Summer Institute participants.
Strong sector-based associations are key to the success of the Swiss apprenticeship system. In my final blog in a three-part series on the Swiss Vocational and Professional Education and Training (VPET) system, I showcase Center for Young Professionals (CYP), the nonprofit center for basic banking education in Switzerland. In previous posts, I introduced VPET and shared my observations from visits to two Swiss companies’ apprenticeship programs.
What is a Sector-Based Association?
In Switzerland, the labor market is organized by occupational sector with each broad sector having its own association. These associations work in partnership with the cantons (regions) and the federal government to design and implement occupation-based apprenticeships. The federal government provides support and quality control for all approved occupations, including 230 at the upper-secondary level. This is a key function that prevents an imbalance between employers and educators. If employers dominate and skills become too narrowly tailored to specific employer needs, both the occupation and the student are disadvantaged. If educators dominate, then alignment with labor market needs may suffer.
Spotlight on the Swiss Banking Association and the Center for Young Professionals
The Swiss Banking Association is responsible for supervising the banking sector and jointly educating the next generation of employees in partnership with schools and member companies. The association leads a process with the cantons and federal government to develop the legal qualifications for certification in a variety of banking careers, learning objectives and standards, curriculum to be taught in companies, and the contents and methods of assessment. The Swiss Banking Association and five banks established CYP to provide the foundations of the occupation to all banking apprentices.
An impressive feature of the Swiss system is the thoughtful planning process for each apprenticeship occupation. It requires seamless coordination among the three learning sites: company, vocational school, and intercompany courses. The majority of career-focused learning occurs in the bank on the job, where apprentices spend at least three days a week. By the third year of their apprenticeship at the bank sites, 19 year olds may advise private banking clients, carry out risk management assessments, or conduct research—the task of the young apprentice we interviewed. But the sector association provides a highly valuable context for work in specific banks.
During several trips to Switzerland, I have visited banks with young apprentices as well as CYP’s Zurich location. The CYP headquarters is located in an attractive, rehabilitated foundry building housing restaurants, shops, and art spaces. At the professionally outfitted offices, small groups of apprentices ages 15 to 20 work in teams on project-based assignments related to topics such as deposit services, money laundering, investment instruments and markets, and financing.
Banks recruit and hire their own apprentices, but CYP provides the broad foundational education and training that introduces young apprentices to the skills, knowledge, and history that underlie all banking professions. CYP was founded in 2003 as a nonprofit association and now has 27 member banks and another 47 associated members. Members include the largest banks in the country like Credit Suisse and UBS, with smaller banks using CYP services but not participating as full members. CYP serves 90 percent of the banking apprentices in Switzerland—around 5,600 young people per year. Young people spend one day per month at CYP where they all gain similar knowledge and skills that are tested and certified.
Through its governing structure, the Swiss Banking Association collaborates with the CYP. Over the years that I’ve visited CYP, the approach to learning has changed in response to banking industry needs. Called Connected Learning, the CYP approach now emphasizes self-direction, cooperative learning, and reflection. All students are required to keep a reflective journal. Problem solving was always part of the approach, but now CYP is moving toward an entirely case-based teaching method, including the use of role playing. Students prepare their cases at home using a tablet and then problem solve together in teams of four with a teacher.
Sector-Based Associations Offer Valuable Benefits
While the curriculum may not sound unusual, the functions of CYP and associations similar to the Swiss Banking Association do not exist in the United States—and certainly not to educate 15 year olds. The association’s role as an education institution is the “hidden glue” in the highly successful Swiss apprenticeship system. Three learning places synergistically work together: the school provides general education (languages, higher mathematics, economics, and ethics), the company offers firm-specific education, and intercompany courses ensure a certain measure of commonality and quality across an entire occupation.
A primary result is to prevent what economists call “free riding,” or the use of common services—in this case, training of young professionals—without contributing to their costs. One reason U.S. companies do not like to spend resources on training entry-level workers is that the trainee may take their skills and the company investment elsewhere so that a competitor benefits; this is called “poaching.” With sector associations designing, implementing, and monitoring education and training and creating standardized assessments for each occupation, all companies benefit. Swiss employers will tell you that they even encourage their young professionals to change companies knowing they will be able to replace their departing apprentice with someone just as well-trained. In addition, because associations develop the competencies and accompanying assessments for a finite number of named and state-approved VPET careers, employers know the skill sets of each person they hire.
Associations also spur innovation and new ideas. Small companies and those less connected to the global marketplace lack the resources to keep up with technological innovations or cutting-edge trends. By having occupation associations lead the training, these enterprises benefit both from training apprentices who are learning current skills and knowledge through the curriculum and intercompany courses, and from hiring recent graduates. The government and industry associations also require that curricula are regularly updated so that recent completers have up-to-date knowledge and skills.
Finally, training designed by an industry association protects students from exploitation. One failure of apprenticeship systems in some other countries is that training is not an education function carried out in partnership with the state. Young recruits become company employees, not broadly educated learners who can transfer their skills from one company to another. Consequently, they are stuck in their training companies and have difficulty advancing or leaving. Alternatively, programs without quality assurance, like external examinations, risk apprentices being used as cheap labor without learning anything transferable at all. While high percentages of Swiss apprentices do stay on at banks like Credit Suisse, they enter permanent employment fully aware of the choices and opportunities within the sector. They also know that finding another apprenticeship in a different field, or attending a university of applied sciences or even a PhD program, is a possibility.
Lessons for the U.S.
If there are lessons to be taken from this brief account of industry associations, it is to encourage a greater number of U.S. industry associations to work with their state and regional branches to create standards, curricula, and assessments in partnership with educators. While a good number of industry organizations have ventured down this road, it is by no means systematized, broadly adopted, or uniformly well-coordinated with the education sector. And, to take it one step further, companies could tax themselves to create a common training fund to mitigate the possibility of free riding.