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

Conference "Financing of Further Professional Training “ Prague - 10th November 2006. The Italian System of Continuous On-the-Job Training and the Interprofessional Funds. Giancarlo Dente Fondazione Giacomo Brodolini Rome, Italy.

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

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  1. Conference "Financing of Further Professional Training“ Prague - 10th November 2006 The Italian System of Continuous On-the-Job Training and the Interprofessional Funds Giancarlo Dente Fondazione Giacomo Brodolini Rome, Italy

  2. 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

  3. Economic and social factors Economic and social factors

  4. 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

  5. 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

  6. A low educational level of the labour force Reduction of the convenience to invest in human capital Main causes

  7. 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

  8. Consequences Consequences

  9. Policies Policies

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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 Interprofessional Funds

  15. 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 Interprofessional Funds

  16. 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) Interprofessional Funds

  17. Available resources Committed resources Interprofessional Funds • 20% of resources were committed to continuous on-the-job training in 2005

  18. 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) Interprofessional Funds

  19. The distribution of employed people working in enterprises members of the Funds is not homogenous across the country: Emilia-Romagna 60.6% Veneto 55.3% Lombardia 54.6% Southern regions 20% National average level 50% Interprofessional Funds

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

  21. The participation rate is strongly related to the contract type: - permanent contract 50% - fixed-term contract 30% - part-time 31% - collaborators 17% Interprofessional Funds

  22. 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) Interprofessional Funds

  23. Workers participatingin 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 conditionof participants: dependent (67.6%), atypical (2.4%), independent (30.1%) The Emilia-Romagna Region

  24. GENDER Men 58.5% Women 41.5% AGE 15-24 2.6% 25-54 88.3% >54 9.1% Average age 39 years EDUCATION University 14.3% High secondary schools 51.2% Low secondary and elementary schools 23.7% The Emilia-Romagna Region

  25. 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) The Emilia-Romagna Region

  26. 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 The Emilia-Romagna Region

  27. 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 The Emilia-Romagna Region

  28. Thanks for your attention! Giancarlo Dente Fondazione Giacomo Brodolini Via A. Depretis, 65 00184 Rome – Italy dente@fondazionebrodolini.it

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