the italian system of continuous on-the-job training and the interprofessional funds

The Italian System of Continuous On-the-Job The Italian System of Continuous On-the-Job Training and the Interprofessional FundsTraining and the Interprofessional Funds

Conference "Financing of Further Conference "Financing of Further Professional Professional Training“ “

Prague - 10th November 2006Prague - 10th November 2006

Giancarlo DenteFondazione Giacomo BrodoliniRome, Italy

In the last 10 years the average growth rate of the Italian economy was equal to 1.7% compared to 2.2% of the Euro area and 3.4% of the U.S.A.

During 1996-2003 the average growth rate of the productivity was 2.4% in USA, 1.2% in EU and 0.6% in Italy

General overview

Economic and social factors

Economic and social factors

Labour force quality is a key-element of long-term economic performance

In Italy the average education level is below the advanced countries’ figures (OECD area) and the Italian students’ performance is not competitive

Labour Force Quality

Comparative indicators underline significant delays:

20% of Italian workers participate in training activities (EU average is 40%)

25% of Italian companies organize training courses for their employees (EU average is 60%)

Training activities

A low educational level of the labour force

Reduction of the convenience to invest in human capital

Main causes

The structural features of the Italian manufacturing system:

- small enterprises

- local markets

- goods with a low innovation intensity

- low propensity to training investment

Main causes

Consequences

Consequences

Policies

Policies

Three main paths to fund “continuous on-the-job training”:

1. ESF (Measures D.1 and D.2)

2. National laws on “continuous on-the-job training” (’93 and 2000)

3. Interprofessional Funds only for the employed

Policies

Period 2001-2004 2.2 bln EUR allocated to continuous on-the-job

training (19% of the total of public resources for education&training)

Continuous on-the-job training absorbed 0.05% of the total spending for ALMPs (Active Labour Market Policies)

European Social Fund’s contribution to continuous on the job training policies amounted on average to 60%

Policies

The main policy innovation within the current national continuous on-the-job training system (2001)

The Funds are financed on a compulsory basis by enterprises via the National Welfare Institute (0.3% of the employee’s gross earnings)

Interprofessional Funds

In 2005 resources coming from the payment of 0.3% of gross earnings amounted to 610 mln EUR

Causes: the increase of gross earnings and the positive trend of dependent employment


Enterprises have the power to decide the destination of their contributions:

Ministry of Economy (2/3) and Ministry of Labour and Social Policies (1/3) may use them respectively to co-finance ESF and national training measures

Contributions may flow into one of the 11 Interprofessional Funds set up bilaterally with the social partners and tasked with planning and managing vocational training initiatives for their members


Start-up period of the Funds will end at the beginning of 2007

Definition of the institutional procedures to be implemented by the MLSP and National Welfare Institute

General and detailed agreements between social partners and employers’ organizations


Almost 363.000 enterprises joined the Interprofessional Funds until 2005

Most of them became members of the Fund promoted by their sector organizations

On average the enterprises members of the Funds employ 14 people (the Italian average dimension of an enterprise is of 7 employees)


Million EUR

Semester

Available resources Committed resources

•20% of resources were committed to continuous on-the-job training in 2005


Multiplier effect: enterprises added on average 0.65 EUR to each Euro used to finance continuous on-the-job training measures

In 2005 the Funds’ average contribution for each

worker participating in continuous on-the-job training initiatives was 423 EUR. The highest contributions refer to managers (1000 EUR on average per person)


The distribution of employed people working in enterprises members of the Funds is not homogenous across the country:

50%National average level

20%Southern regions

54.6%Lombardia

55.3%Veneto

60.6%Emilia-Romagna


Strong segmentation in the distribution of continuous on-the-job training. The profile of the participant:

- employee of a big enterprise working in the service sector and located in the North

- clerks and managers participate the most in continuous on-the-job training activities


The participation rate is strongly related to the contract type:

- permanent contract 50% - fixed-term contract 30% - part-time 31% - collaborators 17%


Few enterprises invest in continuous on-the-job training and fewer use public resources (public policies represent only 10% of total investments in the field)

Significant gaps between the needs of end-users and the procedures of public interventions (funding delays, lack of information, skepticism about vocational training impact)


Workers participating in continuous on-the-job training activities: 10-15% (EU objective is 12.5% of people 25-64 by 2010)

Typology of continuous on-the-job training: specific firm courses (30.4%), sector courses for different enterprises (30.6%), courses for independent workers (39%)

Employment condition of participants: dependent (67.6%), atypical (2.4%), independent (30.1%)

The Emilia-Romagna Region

9.1%>54

23.7%Low secondary and elementary schools

51.2%High secondary schools

14.3%University

EDUCATION

39 yearsAverage age

88.3%25-54

2.6%15-24

AGE

41.5%Women

58.5%Men

GENDER


Profile of the trainees: experienced and qualified employees with permanent contracts, having homogeneous careers and holding secure and generally well paid jobs

Only a small share of the trainees (8% of the total) are people holding less stable and worse paid jobs (women, employees with segmented careers enduring periods of temporary unemployment, foreigners, people over 55, part-time workers)


Low-skilled workers and employees of small companies are not involved in continuous on-the-job training courses

Therefore arise concerns on the future sustainability of the current industrial structure: the need to change the actual productive specialization (manufacturing) and to cope with delocalization processes

Consequently, continuous on-the-job training initiatives play a strategic role


Social dialogue on labour market has a strong tradition in the Emilia-Romagna governance model

At the same time there are sharp contrasts between social partners and employers’ associations caused by different interests


Thanks for your attention!

Giancarlo DenteFondazione Giacomo BrodoliniVia A. Depretis, 6500184 Rome – [email protected]

the italian system of continuous on-the-job training and the interprofessional funds

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