For discussion
on 6 February 1998



Members are invited to recommend to Finance Committee the retention of the following supernumerary post in the Education and Manpower Bureau up to 28 February 1999 to enable the continued secondment of a suitable officer to the Employees Retraining Board -

1 Senior Principal Executive Officer
(D2) ($110,000 - $116,800)


The Employees Retraining Board (ERB) needs the continued service of a Senior Principal Executive Officer (SPEO) to implement new measures to improve the effectiveness of the Employees Retraining Scheme (ERS). The supernumerary post, which makes the existing secondment arrangement possible, is due to lapse on 1 March 1998.


2. The Secretary for Education and Manpower (SEM) proposes to retain the supernumerary SPEO post for another year up to 28 February 1999 to continue the existing arrangements for seconding a suitable officer to the ERB as its Senior Deputy Executive Director.


3. We have recently completed a comprehensive review of the ERS to revamp the Scheme and improve its effectiveness in meeting the requirements of employers and the retraining needs of the local workforce. The major recommendations arising from the review and accepted by the Administration are at Enclosure 1.

4. As a result of the review, the effectiveness of the ERS will no longer be measured merely by the number of retraining places offered, but also the extent to which the graduate retrainees can sustain employment in the market in the long term. To this end, a package of measures, as at Enclosure 2, has been drawn up. The need to implement these measures in phases and to ensure prudent management of the Board's financial resources has given rise to a significant increase in administrative and management work to be undertaken by the Executive Director and the Office of the ERB. These additional requirements have called for substantial strengthening of the top management of the ERB.

5. To cope with this demand, SEM created under delegated authority a supernumerary SPEO post for six months from 1 September 1997 to enable the secondment of a suitable officer to ERB to assume the post of Senior Deputy Executive Director. The secondee is now providing the Executive Director with full-fledged administrative support, especially in respect of internal management, financial and resource control as well as auditing of the ERB, and in overseeing the day-to-day operation of ERB along the direction laid down in the review. He has relieved both the Executive Director and the existing Deputy Executive Director of the heavy burden of additional administrative workload. With strengthened administrative support, the Executive Director could focus more of his time and efforts on strategic planning and marketing, especially in fostering a better collaboration amongst ERB, its training bodies, employee and employer groups.

6. To date, the ERB has made considerable progress in implementing the various improvement measures arising from the recent review, mainly in the design of courses for new arrivals, transfer of skills-upgrading courses to the Vocational Training Council, development of a fee charging system for part-time General Skills Courses for employed workers and implementation of the revised retraining allowance. As regards the restructuring of the training programme, and the performance-oriented payment system for training bodies, the Board has adopted an integrated and holistic approach since they are crucial to the future direction of the entire ERS. It has been actively exploring, in conjunction with the training bodies and the employer groups, the possible options regarding the mode of training courses, follow-up counselling arrangements, funding criteria and performance evaluation criteria. We expect that it will take some more time before the revamped retraining programme and the related monitoring and appraisal system can be put firmly in place.

7. In view of the latest progress of the measures, we consider it necessary to extend the secondment of the SPEO to the ERB for another year, up to 28 February 1999, so that the officer could see through the implementation of all the important recommendations, and lay a solid foundation for the improved operation of the ERB in future. This arrangement is also necessary to ensure continuity of operation, given that the new Executive Director to be recruited through open competition is expected to be in post only in the second quarter of 1998 at the earliest.

8.The main duties of the Senior Deputy Executive Director of the ERB and the organisation chart of the Office of the ERB are at Enclosures 3 and 4 respectively.


9. The notional annual salary cost at MID-POINT and the full annual average staff cost of the proposal, including salaries and staff on-cost, are -


Notional Annual Salary Cost at Mid-point

Full Annual Average Staff Cost

No. of Post







10. We will recover the full cost, including the staff on-cost, of the proposal from the ERB.


11. The ERB was established in October 1992 under the Employees Retraining Ordinance. It is tasked with administering the ERS which seeks to help workers adjust to changes in the labour market by providing them with suitable retraining courses. ERB is a funding agency of the retraining programme but not a direct provider of training. It is funded by the recurrent income from the levy paid by employers of imported workers at the rate of $400 per worker per month of employment. The retraining programme is currently provided by 59 training bodies at 134 training centres and over 260 types of courses are being offered.

12. The Government provided a grant of $300 million to the ERB on its establishment in November 1992 and another grant of the same amount in May 1996. To enable the Board to implement the revamped ERS, the Government made a third capital injection of $500 million into the Board in February 1997.

13. Under section 3 of the Employees Retraining Ordinance, the ERB comprises a Chairman and a Vice-Chairman who are non-Government officials, as well as representatives of employers, employees, Government departments and training bodies. The Office of the Board, which provides executive support and implements the Board's decisions, is headed by an Executive Director.


14. The Civil Service Bureau supports the proposed retention of the supernumerary post.


15. As we propose to retain the SPEO post on a supernumerary basis, we will report the retention of it, if approved, to the Standing Committee on Directorate Salaries and Conditions of Service in accordance with the agreed procedure.

Education and Manpower Bureau
January 1998

Enclosure 1 to EC(97-98)64

Key recommendations arising from the review of the Employees Retraining Scheme

  1. Whilst the ERS should primarily focus on providing retraining for the unemployed with no more than lower secondary education and aged 30 or above, with flexibility on age and educational attainment in individual cases, the ERB should also provide retraining for the employed who need to receive basic skills training so as to sustain their employment.

  2. The ERS should be extended to cover new immigrants who should be subject to the same admission criteria as applied to local residents but with flexibility over individual cases.

  3. The retraining programme should in future take the form of a specially-designed package of job-oriented intensive training courses, aimed at helping the retrainees to secure and hold down their jobs.

  4. All the existing Skills Upgrading Courses (which account for 2% of all the part-time retraining courses) should be transferred to the VTC in phases. The ERB should continue to provide the General Skills Courses (which account for 80% of the part-time retraining courses) on condition that they meet three new criteria: (i) quality assurance; (ii) cost-effectiveness; and (iii) availability of a suitable fee charging system. The VTC will collaborate with the ERB and the training bodies on the quality assurance and accreditation of their General Skills Courses, as well as on possible bridge-over arrangements between the courses offered by both training authorities.

  5. The On-the-Job Training Programme in its present form should be gradually phased out but the concept of on-the-job training should be retained as part of the overall retraining programme for the unemployed. On this basis, the ERB should work in collaboration with the training bodies and employer groups to review the Programme, with a view to devising a new and improved programme.

  6. The existing rate of retraining allowance should be maintained for all full-time courses, except for those attending one-week courses. Additional safeguards should be put in place to prevent abuse by retrainees.

  7. The ERB should critically evaluate the number and composition of the training bodies with a view to improving their effectiveness and monitoring their performance and quality.

  8. An objective system for assessing the performance of the training bodies and to ensure that the training will be placement-focused should be set up. Based on these twin principles, the ERB should work out a reasonable and acceptable formula with the training bodies and implement the system over a reasonable period of transition of say, one year.

Enclosure 2 to EC(97-98)64

Additional tasks to be undertaken by the Employees Retraining Board as a result of the Review

  1. To design, and monitor the progress of retraining courses for new arrivals;

  2. to restructure, in consultation with employer groups and training bodies, the retraining programme into a specially-designed package of employment-oriented training courses, aimed at helping the retrainees to secure and hold down their jobs, and to devise a suitable funding criteria and performance appraisal system for the new courses so developed;

  3. to oversee the transfer of all skills-upgrading courses from ERB to the Vocational Training Council (VTC) by phases;

  4. to implement and monitor the progress of the fee-charging system for the part-time General Skills training courses for the employed;

  5. to devise and implement a new and improved programme of the On-the-Job Training Scheme which should include a new training allowance and a quality monitoring system;

  6. to oversee the implementation of the revised training allowance system such that only retrainees who have completed full-time courses lasting more than one week will be entitled to the retraining allowance at the rate of $1,000 per week, and to introduce suitable safeguards against abuses;

  7. to critically evaluate the number and composition of the training bodies under the ERS with a view to improving the training bodies' effectiveness and the ERB's monitoring system over their performance and quality;

  8. to draw up a placement-tied and performance-based payment system for the training bodies which will ensure that their training programme and follow-up services are genuinely capable of helping the graduate trainees to sustain their employment in the market; and

  9. to develop a new and modern computerised data management system which will enable the ERB to compile updated statistics on the training and employment record of individual trainees so as to facilitate a more effective monitoring of the effectiveness of the retraining programmes.

Enclosure 3 to EC(97-98)64

Job Description of the Senior Deputy Executive Director of Office of Employees Retraining Board

(Senior Principal Executive Officer)

Main Duties and Responsibilities

  1. To assist the Executive Director in overseeing the smooth operation of the ERB, including internal administration, financial control and audit, resource management and Management Information System;

  2. to assist the Executive Director in overseeing the financial management of the Employees Retraining Fund;

  3. to assist the Executive Director in administering the Employees Retraining Ordinance and recommending revision or amendment to it as and when required; and

  4. to assist the Executive Director in implementing the tasks arising from the review, including monitoring the progress of retraining courses for new arrivals, transferring the skills-upgrading courses from the ERB to the VTC by phases, implementing the fee-charging system for General Skills training courses for the employed; revamping the On-the-Job training programme, monitoring the implementation of the revised retraining allowance system, evaluating the number and composition of the training bodies under the ERS and drawing up a placement-tied and performance-based payment system.