Chapter 8. The Impulsa Perú initiative to improve local worker’s skills and employability

The Impulsa Perú is an active labour market programme that is designed to improve the employability of disadvantaged people with structural disadvantage in the Peruvian labour market. It aims to use partnerships between the state and training providers to respond to skills needs from employers.

  
KEY FINDINGS
  • Peru is a developing economy with a large, informal and unskilled workforce. The global downturn of 2008 had lasting impacts on the economic and labour market performance of Peru. In response, the government invested heavily in an active labour market programme to improve the employability of a number of disadvantaged groups, including the disabled and the persistently unemployed.

  • The Impulsa Perú programme aims to providing subsidised training and entrepreneurship support services at the local level to applicants. Enterprises who have received graduates of the programme have noted that it was effective in improving workplace productivity.

Background

This chapter is a qualitative and quantitative analysis of the Impulsa Perú programme, which was undertaken from 2012 to 2015. It analyses the main characteristics, impacts, costs and consequences of the Impulsa Perú programme. In the context of the global financial crisis in 2009, forecast growth rates for developing countries were reduced to just 0.9%. This was particularly disappointing in the context of an average annual increase in economic growth amongst developing countries of 7.6% between 2004 and 2008.

In this context, the Ministry of Employment and Work Protection (Ministerio de Trabajo y Promocion de Empleo, MTPE) of Peru developed the Impulsa Perú Programme in 2009 for the benefit of unemployed persons lacking work competences or suitable jobs for their skills. The Impulsa Perú Programme is the continuation of the “Revalora Peru” Programme (implemented from April 2009 through August 2011) and the “Vamos Perú” Programme (run from September 2011 through March 2015). The funding arrangements of the programme have evolved over this period of time in congruence with changes in the national Peruvian administration.

Tableau 8.1. Economically active population (EAP) by employment levels, Metropolitan Lima area, 2004-14

Employment Levels

2004

2009

2010

2011

2012

2013

2014

Total EAP (thousand)

4 104.4

4 514.0

4 703.7

4 781.2

4 812.2

4 885.1

4 916.5

EAP Employed (thousand)

3 717.2

4 135.4

4 332.1

4 414.8

4 484.9

4 594.2

4 642.6

Fully Employed (thousand)

1 421.7

2 122.1

2 332.8

2 542.0

2 658.4

2 840.2

3 053.6

Under Employed (thousand)

2 295.5

2 013.3

1 999.3

1 872.8

1 826.5

1 754.0

1 589.0

By Hours (visible)

674.3

636.4

627.9

547.1

541.5

536.8

486.5

By Income (invisible)

1 621.2

1 376.9

1 371.4

1 325.7

1 285.1

1 217.1

1 102.5

EAP Unemployed (thousand)

387.2

378.5

371.6

366.5

327.3

290.9

273.9

Trained Labour

368.4

354.5

351.7

344.2

305.4

272.9

246.9

Untrained Labour

18.8

24.1

19.8

22.3

21.9

18.0

27.0

Source: National Institute of Statistics and Information (INEI) – Permanent Employment Survey.

Description of the programme

The general objective of the Impulsa Perú programme is to “promote jobs, improve labour skills and broaden the employability of those in the active economic pool (PEA) that are unemployed, underemployed or at the risk of losing a job”. Particular programme objectives include:

  • Strengthening labour market skills of those who are unemployed, underemployed or at risk of losing their job, through training courses and vocational education;

  • Recognising competencies, capabilities, abilities, performance, aptitudes, skills and the knowledge of targeted groups to meet specific occupational profiles established through skills certification (Recognition of Prior Learning).

  • Strengthening capabilities for those in the candidate pool with strong entrepreneurial potential for self-employment.

To be eligible for participation in the Impulsa Perú programme, the candidates need to meet a set of requirements:

  • Those wishing to participate in the Job Competency Certification (CCL) must be over the age of 18 years. Applicants must also have a minimum of two years of general work experience and one year of work experience. Candidates receiving training should be between 30 and 59 years of age.

  • Programme applicants must have a minimum incomplete high school studies or incomplete studies in higher learning.

  • Programme applicants must also be in a vulnerable employment situation, an adult head of household with at least one child and an income of less than PEN 1 500 per month.

  • The programme also targets persons with disabilities. Those with disabilities who wish to participate in the programme must have their Disability Certification issued by the Ministerio de Salud, by ESSALUD or by the Fuerzas Policiales hospitals.

Governance of the Impulsa Perú Programme

The programme was implemented by Employment Centres, which delivers services according to sector. Employment centres also implement other job projects, including Trabajo Perú, Jóvenes Productivos and Perú Responsible. Employment Centres are operated by Regional Offices.

Impulsa Perú is an employment economic development programme that depends functionally on the Viceministerio de Promoción del Empleo y Capacitación Laboral through the Ministerio de Trabajo y Promocion de Empleo (MTPE). The organisation is made up of four (4) Management Units, Zone Units and an Executive Co-ordination Office. In this set up the Program has, to date, 11 Zone Units, which are in the country’s following regions: Ancash, Arequipa, Cusco, Ica, Junin, La Libertad, Lambayeque, Piura, Puno San Martin and Tacna.

Between April 2009 and June 2011, the total amount invested in Impulsa Perú was PEN 62.39 million (or USD 26.46 million). This represents an average investment of PEN 31 million per year. A number of funds were also received by the National Fund for Employment Education and Work Promotion (FONDOEMPLEO), a public entity for private law. This was created with the purpose of financing projects to educate workers and promote sustainable job opportunities. Since its establishment in 1998 its goal has been to evaluate, select, finance and monitor labour. It is financed by contributions from enterprises.

Tableau 8.2. Funding for the Impulsa Perú Programme (millions)

2009

2010

2011

2012

2013

2014

2015

Public

PEN 32 (USD 11.1)

PEN 10 (USD 57)

PEN 21.8

PEN 14.3 b/

PEN 9.8

PEN 9.3

Private (FONDOEMPLEO)

PEN 2.9

PEN 4.6

Private and Public Associations

PEN 4

Federal Reserves

PEN 100 (USD 32.8)

Source: MTPE.

In November 2011 with DU N° 058-2011 PEN 20 million (USD 7 407 407) are included PEN 6 million (USD 2 222 222) of which were used in 2011 and the balance moved to 2012. (USD 1 = PEN 2.7).

With DS.028-2013 resources are included in the framework for the benefit of the fishermen.

Between 2012 and 2015, the total budget for the program rose to PEN 58 502 198 (USD 17 515 628). During this period, the average annual investment was PEN 19 500 732. The budget for the Impulsa Perú programme has progressively declined from 2012 to date. In 2015, the total funding for the project was PEN 14 million, of which 33% was obtained through FONDOEMPLEO Projects and the rest (77%) from ordinary resources. In 2015, the project benefited 10 145 people in 17 Regions. Since 2013, the Impulsa Perú Programme has been primarily financed through the line item assigned to the Labour Section through the ProEmpleo Budget.

Figure 8.1. Funding of the Impulsa Perú Programme
picture

Note: Total Budget (includes the cost of entering into an agreement, operating expenses and administrative expenses), according to SIAF. The budget reported includes the resources granted by FONDOEMPLEO.

Source: MTPE. Information provided by Impulsa Perú.

Programme structure and available supports

Programme Component 1: Training for Work Placement

This path strengthens the work skills of unemployed and underemployed people as well as those at risk of losing their job with the aim of enhancing their employment opportunities and facilitating their entry into the job market. Training is offered in a number of fields, which are determined on the basis of socioeconomic studies performed by MTPE and validated by Zonal Chiefs in co-ordination with their regional business sectors. These fields include: construction, manufacturing industry, agricultural sector, and services, (hotel management and tourism, financial, and others).

The process starts with a macro evaluation consisting of a socioeconomic labour diagnostic in each of the regions where the Program is carried out. This analysis is complemented with an evaluation of specific labour needs with the objective of defining employment and job training needs according to field or business sector.

Between August 2011 and December 2015, 36 916 individuals were involved the programme. The assigned budget for this field is equivalent to PEN 52 million. The component is carried out through two (2) free services: 1) Skills Training Service; and 2) Employment Service. The training entities (whether public or private) are selected through public tender, where the training services requested by businesses are allocated via a bidding process. The Program has opted to work with public training entities, to the extent that they represent lower costs and the awarding procedure is shorter.

As of the course of 2014, the Programa Vamos Peru, subjected itself to the framework of the Programa Presupuestal Proempleo, (Pro-employment Budgetary Program), which in administrative terms meant performance-based funding. This change resulted in variations in programme implementation. For example, the programme was increasingly oriented to those 30 years and older. The number of participants fell from 18 804 in 2012 to 3 027 in 2015. The MTPE broadcast a public invitation for participants and did not co‐ordinate with syndicates or business guilds.

Courses are delivered by educational institutes and are typically 6-9 weeks in length. The average cost per person ranges between PEN 800 and PEN 1700. An example of the impact of training for work placement is the case study of the TOTTUS company. TOTTUS is a supermarket chain which sells food products, cleaning supplies, personal hygiene products, clothes, home improvement, and other similar items to the general public. TOTTUS began its operations in the Peruvian market in 2002 and currently has 10 000 employees in 49 stores throughout the country. In Great Place to Work, TOTTUS ranked as one of the best employers in Peru for 12 consecutive years.

TOTTUS has personnel trained by Impulsa Perú Program, for customer service, warehouse jobs, and food production. Mr. Hugo Castro from Area Personal Selection provided the following information:

  • Bolsas de Trabajo, organised by MTPE is the mechanism used to find personnel to incorporate into the company. Area de Seleccion is in charge of recruiting, but each individual store evaluates each employee.

  • TOTTUS found that the training provided by the Impulsa Perú Programme improved employee retention and development.

  • However, some communication problems were encountered with the personnel trained by MTPE, which impacted performance in retail sales to the general public. These types of communication issues were more common among the workers from the Cono Norte y Este region.

  • TOTTUS believes that MTPE should emphasise training that develops “soft skills”, which would help improve customer service and customer relations (e.g. empathy, attention to detail, etc.).

  • TOTTUS has personnel with disabilities that have been trained by MTPE. As a company they have identified factors that would allow them to incorporate deaf-mute personnel in customer service (cash register) and supervisors with sign language. They also have personnel that have had their job skills certified by MTPE.

Programme Component 2: Training and Technical Assistance for self-employment.

This component provides training and specialised technical consulting to those who wish to set up their own businesses or enhance their current undertakings. These people wish to establish enterprises in the manufacturing, commerce and services industries. The programme involves orientation, training and technical support for self-employment. The program has three stages: Focusing Stage, Formative Stage, and Implementation Stage. This programme is particularly valuable because it is intended to generate both direct and indirect employment. Between August 2011 and December 2015, the number of participants in this programme component was 3 554. These services were carried out in fourteen regions. Monitoring and evaluation of beneficiaries of this programme component has not yet been completed. The budget allocated to this line of work was PEN 9 million.

The formative stage of the intervention model gives the participants skills and training to develop their business plan during the application review process. The participants receive training in management, production, presentation, product, processes, marketing, market segmentation, value proposition, market value, costs, cashflow and other issues. The training is structured as follows:

  • 20 academic course hours to develop “soft skills”;

  • 40 academic course hours to develop entrepreneurship management skills or further business acceleration;

  • 20 academic hours in training to develop a business plan or a business improvement plan;

  • 80 academic hours for technical assistance.

There are other additional features of the module, including a Business Plan contest, where approximately 20% of participants compete for seed investment.

Programme Component 3: Job Skills Certification

This line of work focuses on recognising and accrediting skilled labourers, thus promoting dignified employment, higher self-esteem and improved productivity. The Program accredits up to 13 occupational profiles.1 The MTPE evaluates the requirements of the business sector through socioeconomic studies to define the occupational profiles that are subject to work certification.

Between August 2011 and December 2015, the number of participants in this programme component was 13 070, and more than 70% of the participants were able to certify their competencies. The budget allocated to these specific services was PEN 11 million. The targeted regions are defined by FONDOEMPLEO in relation to entrepreneurial contributions and the needs of each place. The Impulsa Perú Program defines the projects or contests in which it will be presented in accordance to the evaluation of the work markets previously undertaken.

The Executive Regulatory Management Office of the MTPE establishes the rules, directives and procedures on which accreditation processes (administrative section) are based, and creates the occupational profiles, (80 accredited profiles) outlined in the Catalogo Nacional de Perfiles Ocupacionales9 that are most requested by the private sector. The Regulatory Office evaluates, authorises and accredits the certification centres, which are the entities that specialise in determining specific occupational profiles. The Program also contracts with private and public firms through contracts and agreements, respectively. They can be public or private entities dedicated to training and job training. Some are public institutions, like Centers of Technological Innovation (CITE), and others are private, such as institutes of higher technical education.

Recent research analysed the impact of the accreditations offered by CITE Madera on the employability, productivity and income for industrial carpenters from Villa El Salvador, a district in Metropolitan Lima. Amongst its main conclusions, the study found that:

  • 43% of those interviewed confirmed that their sales increased after having recieved certification.

  • 56% noted improvements in productivity.

  • 51% of certified noted continuous improvement in their work capacities; 20% mentioned improvements in the quality and competitiveness of their products; 18% saw an increase in their prestige in the industry; and 11% saw improvements in their salary and job posts.

  • 87% of those interviewed received positive feedback from their clients with respect to their work quality and overall performance.

  • 96% of those interviewed noted reductions in production time and/or improvement in the quality of their products, while 86% confirmed having improved their employability.

Impacts of the Impulsa Perú Programme

Between April 2009 and August 2011, Revalora Peru (the first iteration of the Impulsa Perú project) impacted more than 55 000 people. In the second iteration of the programme between August 2011 and December 2015, the programme was known as Vamos Perú and benefitted 53 531 people in 24 Regions across Peru. Between September 2011 to December 2015, the Impulsa Perú programme reached 53 531 people, who accounted for 17% of the eligible pool of 319 000 unemployed and underemployed Peruvian citizens. In this pool of participants, 56% (28 771) are males and 44% (22 517) are females. Divided by age group, 43% (22 031) are below the age of 30 while the remaining 57% (29 257) are adults.

Likewise, the programme managed to integrate candidates from populations considered vulnerable: during the time permitted by the Fishing Authority, 4 580 (8.9%) of traditional fishermen were provided with job restructuring training. Another sector that was served by the Program included 1 100 people in the Valle del Río Alto Apurímac y Ene (VRAE) Zone, an area with a significant historical links to the illegal drug trade. Finally, the programme has benefited persons with disabilities (467), prisoners (355) and those returning from abroad (305).

Almost 80% of the participants that took part in the programme between Setember 2011 and December 2015 took part in training to improve their job placement opportunities (as salaried workers). Approximately 24% of programme participants received skills ceritifcation and a further 7% were trained for self-employment. As a result of the programme budget funding reductions, the number of participants fell by 40% over its lifetime, from 21 561 participants in 2012 to 10 145 in 2015.

Figure 8.2. Beneficiaries of the Impulsa Perú Programme
picture

Source: Ministerio de Trabajo y Promoción del Empleo (2015).

Tableau 8.3. Number of beneficiaries by service line, 2012-15

Service

Participants1

Training for job placement

32 223

Training for self-employment

 3 545

Job Skills Certification

13 070

TOTAL

48 838

1. Total number of people are evaluated to measure their competence, or who have been beneficiaries of that program.

Across the lifetime of the programme, participation in Job Placement Training fell from 87.21% of the participants in 2012 to 29.83% in 2015. In comparison, the percentage of participants in the Job Skills Certification process grew from 4.67% in 2012 to 70.16% in 2015. This was a result of the changes to the financing and governance of the programme – in particular, the increased use of the budget from ProEmpleo Budget resulted in an increased focus on the certification of work competencies. MTPE is implementing an evaluation process that monitors programme beneficiaries through an audit of their electronic payroll information.

Tableau 8.4. Impulsa Perú Programme

Period

Physical Goals-Participants beginning training

Physical Goals-Evaluated Participants

TOTAL1

Training for Job Placement (%)

Training for self-employment (%)

Job Skill Certification (%)

2012

87.21

 8.11

 4.67

21 561

2013

88.64

 6.13

 5.22

 7 694

2014

37.84

14.01

48.13

 9 438

2015

29.83

0

70.16

10 145

1. The preliminary information is subject to verification with the final reports delivered by Entidades de Capacitación (ECAP) Training Entities or Centro de Certificación (Certification Center) and validated Impulsa Perú.

Source: MTPE.

Strengths of the initiative

A number of the strengths of the programme include:

  • The Impulsa Perú programme is an example of an Active Labour Market Programme (ALMP) that aims to enhance the employment and production capabilities of Peruvian citizens who are in vulnerable employment and social situations. In that sense it should not be understood as a social assistance programme, (where the participants play a passive role), but rather as an employment service that looks to generate and improve work opportunities through training and certification to facilitate formal employment or self-employment.

  • The programme has improved the reintegration of socially vulnerable people into the labour market in a sustainable way.2 The total number of participants in the programme since its inception is 102 595.

  • It offers the Peruvian business sector a better trained, competitive and productive workforce, trained to produce higher levels of profitability. In the words of the Executive Co-ordinator: “We work for the private sector. Our responsibility as the State is to give workers the proper due for their skills.”

  • As part of a departmental programme to build adequate employment, the Programa Impulsa Perú programme is one component of an integrated strategy which offers up to twelve (12) services in the areas of employability and income and four (4) economic development services.3 Similarly, multi-departmental employment observation labs have been established (with the co-operation of MTPE, Ministerio de Educación (MINEDU), and of the Instituto Peruano de Administracion de Empresas (IPAE)). Similarly, an online portal (Ponte en Carrera4) has been developed to offer information about the jobs, profession and salaries in the Peruvian labour market. This is a public-private initiative led by two ministeries and one private centre for higher learning (IPAE) that seeks to inform young people about current occupations demanded by the employment market to inform professional and training decisions.

  • With the co-operation of the private sector, the programme has successfully proven its ability to generate income sources by participating in FONDOEMPLEO projects.

  • According to the statements made by interviewed officials, the programme should be redirected to greater skill certification and training for self-employment. It is their opinion that greater attention and resources should be assigned to the Labour Sector.

Weaknesses of the initiative

The officials interviewed enumerated a number of limitations and obstacles which made it difficult for the programme to have a larger impact.

Budgetary Limitation

The programme experienced a significant decline in funding in the 2012-15 period. According to the interviewed officials, this is a problem that prevents and hinders coverage for the totality of participants at the national level (319 000). Impulsa Perú receives PEN 10 million, just 20% of total funds available for employment support programmes. Promoting public private partnerships (PPP) can promote the sustainability of programmes like Impulsa Perú. For example, an agreement with ALAC (Associacion los Andes de Cajamarca) to train workers in the Yanacocha mine enabled the training of 680 participants.

Changes to criteria in resource assignment

In the framework of the 2014 Budgetary Program, the Ministerio de Economía y Finanzas (MEF) set a series of new goals that must be achieved by the programme to receive the assigned financing. These goals changed the criteria for measuring the Program’s impact. For example, with the new criteria in force, the amount of time allotted for the job placement of participants was reduced from two years to one year. In addition, it was mandated that a minimum of 50% of participants must find formal employment to secure additional funding. This goal was difficult to achieve in the national context, as the total percentage of those informally employed amongst the Peruvian population of economically active people is 72%, which can rise to 90% in cities like Huancavelica. In some regions, there are structural problems that make it difficult to obtain formal work placements for programme participants, largely due to a lack of businesses or insufficient economic activity.

On the other hand, the evaluation criteria do not take into account the trained participants that generate their own employment (self-employment). For example, in Cajamarca, a region in recession, 47% of the participants were able to be placed in jobs with qualified businesses, but the rest found employment opportunities with informal businesses and others in self-employment. Similarly, in an informal sample of 100 programme participants, 47 people were able to generate work for themselves, while 15 were employed by formal businesses, and the rest (around 35) found employment in the informal sector.

Persons with Disabilities

There have also been difficulties in meeting the job placement quotas for persons with disabilities. At the root of the problem is the imbalance in the supply of trained personnel to the actual business labour demand. The number of available vacancies is below the number of participants targeted for the Training Program.

Amongst the reasons given by the interviewed technicians is the uncertainty about the infrastructure required to incorporate persons with disabilities into the work force. In some cases, a completed secondary school education and a minimum three month work experience is required. Many participants are unable to meet these requirements. For example, those aged 30 to 59 years old tend not to have the required basic education. In addition, the participants’ job earnings in the Program are low, (the minimum salary), making it less attractive to those over 30 years old, who tend to have greater financial obligations. In general, municipalities also do not have current records of the disabled population. Such limitations hinder the ability to target disabled participants.

What are the main lessons for other emerging countries?

The Impulsa Perú Program was created to improve occupation and unemployment outcomes across Peru through the implementation of training services, competencies accreditation and labour mediation. Since its establishment in 2009 and until 2015, the Program has provided services to at least 55 000 adult beneficiaries.

The lack of proper evaluation on impacts of the programme constitutes an important limitation to its proper functioning and potential evolution. Monitoring of the income levels or of the quality of employment (formal or informal) for programme beneficiaries has only begun recently. However, a recent academic study that evaluated the impacts of skills accreditation on construction workers found significant differences in terms of productivity, income and self-esteem.

The limited Budget assigned by the Ministry for Economy (MEF) embodies the main limitation in terms of reach and impact of this programme on the targeted population, leaving a broad range of groups unable to access support from the State. The identification of options for job training are defined by the programme through the analysis of internal statistical information, which is then validated and supplemented with the analysis produced by the Program’s Zonal Chiefs in each region. There has been no direct participation from entrepreneurial organisations nor business groups in this process.

In accordance with the sentiments expressed by interviewed businesses, the programme represents an important method of training people whose level of education is low or who have incomplete secondary schooling. However, the trained personnel that are introduced into the workplace have some skills limitations, including with respect to communication and interpersonal relations (especially in jobs that required direct interaction with the client). More of a focus on soft skills may assist programme participants in future employment.

References

Impulsa Perú programme, www.impulsaperu.gob.pe/inicio.

Tottus Reporte de Sostenibilidad 2015, www.tottus.com.pe/static/sostenibilidad.pdf.

CHIA Picasso, Leonor Eugenia. Las Competencias Laboraes en el Sector Madero : El caso del Servicio Tecnolólogico Especializado de Certificación Laboral de CITEMadera. Tesis de licenciatura en Gestión Empresarial, por la Pontificia Universidad Católica del Perú.

Notes

← 1. These are: industrial carpenter, knitted garment maker, phytosanitary evaluator, janitorial worker, flat-weave garment maker, pattern cutter, buildings electrician, embroiderer, alpaca fiber hand-knit worker, garment and piece printer, asparagus crop collector/crate packer.

← 2. In accordance with a thesis case performed with the beneficiaries of the work accreditation, there is a percentage of accredited workers that manifest having improved their salaries and productivity.

← 3. The Impulsa Perú Program is one of four of the social programs implemented by the MTPE. The other three are: Perú Responsable, Trabaja Perú and Jóvenes Productivos.

← 4. www.ponteencarrera.pe/.