Assessment and recommendations

Skill needs are shaped by structural and cyclical factors affecting the demand for and supply of skills. Economic growth, financial crisis, changes in the composition of economic output, as well as the so-called mega-trends (globalisation, population ageing and technological progress), are all important factors influencing the demand for skills. On the other hand, skill supply is influenced by labour market trends (namely participation rate, employment rate, duration of unemployment, average number of hours worked), education outcomes and investment in training activities.

Fast and frequent changes in these structural and cyclical factors call for a closer and continuous connection between employment and education. Research has shown that technological progress, for instance, only strengthens the case for more formal education and training: jobs made up of routine tasks that are easy to automate or offshore are in decline and jobs requiring cognitive skills have been growing. Even if jobs are not destroyed, in many occupations, it has become essential to periodically acquire additional skills as the ones already possessed become obsolete and the content of work changes. Coding skills, for example, are now being required well beyond the information and technology sector.

As career spans are lengthening, general education and vocational degrees acquired at the start of a working career do not provide all the skills need throughout one’s working life. At the same time, employers now have a broader range of options to get the job done: automation, offshoring, outsourcing through the use of self-employed and freelance workers or contracting the services of temporary work agencies. Overall, skilled and unskilled workers alike face the prospect that their existing knowledge and abilities becoming obsolete, unless provided with lifelong re-skilling opportunities.

In Brazil, the speed of population aging is projected to be significantly faster than what has been experienced by most developed economies. This will significantly affect both demand for and supply of skills. On one hand, demand for health and personal care services are likely to increase. On the other, the longer working lives needed to compensate for a rising dependency ratio will change skill supply too: older workers have more experience but there is also some evidence that the ability to process information declines with age.

Brazil was particularly successful in developing and adopting new technologies during the third industrial revolution. In particular, production of hardware and software was higher than in other developing economies, as well as the use of automation in the banking sector, for example. But the country has still to catch-up with the current trends of artificial intelligence, machine learning, smart and autonomous systems or the internet of things. At the same time, increasing integration into the global economy will create new opportunities and propel growth. But it will also affect the content of exports and the stage at which Brazil contributes for Global Value Chains (GVCs). Profound changes in the industrial structure are to be expected in the coming decades.

As these changes have not yet fully materialised, Brazilian policymakers have a window of opportunity to prepare for the transformations ahead. This report aims at providing policy recommendations, based on best practices internationally, to prepare the Brazilian skill development system so that it is ready to support people in acquiring the relevant skills for a changing world of work. With the majority of people affected by these changes already in the workforce, the focus is placed on adult learning systems.

Mapping available adult learning opportunities is a complex task. Adult learning refers to a very broad range of activities related to the upskilling of individuals who have already left education, including formal (i.e. school-based and to obtain a formal qualification) and non-formal (i.e. participation in seminars, workshops, on-the-job training, short courses not leading to a qualification, etc.) training. In addition, adult learning systems are difficult to define and delineate. They consist of a range of sub-systems with different actors, objectives, inputs, activities and degrees of organisation. Each of these sub-systems overlaps with other areas, such as initial education or labour market policies.

Despite these difficulties, high-quality adult learning is as a major policy tool to ensure the labour force’s adaptability in light of the changes expected to affect the quantity and quality of jobs that are available, as well as the skill-sets they require. As adult training courses tend to be of short duration and target the current generation of workers, adult learning is also a policy tool that allows for faster intervention and materialisation of results.

One key feature of the adult learning system in Brazil is precisely the provision of short training courses called “Cursos de Formação Inicial e Continuada (Cursos FIC)” (initial and continuing training programmes). Short training courses or “Cursos FIC” are professional qualification courses that do not necessarily fit within the Brazilian formal education system. Such courses do not lead to a certificate that can be considered equivalent to a secondary or tertiary educational degree. To that extent, these courses are sometimes considered free-form qualification (“qualificação livre”) as opposed to formal qualification (“qualificação formal”).

The Brazilian government has launched several initiatives in the recent years to promote participation in FIC courses. The latest of these initiatives was launched in 2011 and is called PRONATEC. A large part of this report is dedicated to assessing the pros and cons of this programme and, based on best practices internationally, to provide recommendations on how to address the key challenges identified.

Key challenges identified

There are no rigorous and systematic initiatives to carry out Skills Assessment and Anticipation (SAA) exercises.

SAA exercises are tools to generate information about the current and future skills needs of the labour market and about the available skill supply. The information produced by SAA exercises can inform policy makers in charge of designing employment, education and training, and migration policy. SAA information can also be useful to workers’ unions, associations of employers and individuals.

In Brazil, there are good quality administrative data sources to track trends in the labour market by occupation, by sector and by region, such as RAIS and CAGED. There are also reliable sources of administrative information regarding enrolments and graduations to track trends in education and training, such as data from SISTEC. On the other hand, the entries of the regularly updated Brazilian Classification of Occupations (CBO) cannot easily be linked to specific skill requirements. Consequently, any analysis of trends by occupations and field-of-study cannot be easily linked to particular competencies required on the job. In addition, there are no surveys following graduates or employers, vacancies or working conditions surveys, to collect more precise information on skill needs across the country. This makes it more difficult to interpret the information obtained and translate it into concrete recommendations for education and training, employment and migration policies.

Even with the existence of reliable sources of information, in Brazil, there is no system in place to conduct regular, consistent and nation-wide skills assessment analyses. Forward-looking approaches are missing entirely and there is no department in the government that has been specifically given the responsibility of conducting SAA exercises to inform policy makers.

Several ministries have developed web portals to disseminate some related SAA information to individuals and stakeholders. However, such initiatives have not been coordinated: they overlap in some of the information provided and none of them really connects skills needed, training courses available, career counselling and employment opportunities.

Finally, while there have been some good initiatives (such as, for example, the SAA analysis conducted by SENAI São Paulo, an employer association from the manufacturing sector), they have been scattered and have not been extended to all regions of Brazil, nor all sectors of activity. On top of that, due to lack of cooperation between government and employers’ associations, the results coming out of these initiatives have not had any repercussions in terms of public policy.

As a consequence, large-scale adult training programmes, such as PRONATEC, have offered training courses that are not well aligned with labour market needs. A large number of training participants are enrolling in courses leading to occupations for which there are few work opportunities, or equipping them with skills that are no longer needed in the labour market.

There is no standard procedure to assess and recognise previous experience, as well as skills and knowledge acquired informally.

While there is a decentralised programme in Brazil for the formal recognition of prior learning, called “Rede CERTIFIC”, this programme was never fully developed and implemented. Very few schools became members of the “CERTIFIC” network and the number of certificates issued remains very small. As a consequence, individuals have no means of proving that the experience and knowledge they have accumulated over time is sufficient to enrol for training courses with entry requirements. This could represent a barrier in access to adult learning, especially for the low skilled.

In particular, for the PRONATEC adult learning programme, the lack of a well-established framework for the formal recognition of prior learning means that assessment that candidates possess the level of skills needed to participate into training remains largely at the discretion of individual staff from different PRONATEC partners and based on formal qualifications. As a result, older workers, for instance, seem to have benefited less from the programme, although they might be the workers at higher risk of exclusion from the labour market due to technological changes.

There are some challenges with the implementation of the PRONATEC adult learning programme.

PRONATEC has a very interesting governance structure that favours collaboration between different ministries and administrative levels. This collaboration is one of the most successful aspects of the PRONATEC programme. Thanks to this governance structure and the involvement of several ministries and state departments of education, PRONATEC has been able to reach a wide public and to address training needs for all sectors of activity: health, defence, business and administration, industry, tourism, etc. The fact that all ministries coordinate towards a single programme also avoids the duplication of efforts and overlap of initiatives. With a single programme, several policy objectives, concerning the action of several ministries, can be pursued: broader coverage of adult training opportunities, promotion of inclusiveness, reduction of poverty, improvement of labour productivity, competitiveness and export capacity.

The programme was also designed to leverage some of the best features of its predecessors – PLANFOR and PNQ – and improve upon some of their limitations. For example, PRONATEC gives a less central role to state governments and municipalities by not transferring public funds directly to lower administrative levels. This makes it easier to control how the public funds are used. With the governance structure of PRONATEC, local authorities still have the opportunity to address local training needs by expressing their needs to the Ministry of Education or other relevant ministries.

PRONATEC has a very exhaustive geographical coverage, which is quite impressive for a large and diverse country like Brazil. The programme has reached remote areas of the Amazon, with the use of mobile training units from SENAI for example. However, there are still some challenges with the design and the implementation of PRONATEC at the geographical level.

First of all, the training subsidy transferred to training providers and training participants is fixed and independent of the individual’s economic and social background, the location of the training course, the type of training provider and the specific training course being taught. With the PRONATEC programme, all training providers receive the fixed amount of BRL 10 (Brazilian reals) per student/hour taught. From that value, BRL 2 must be transferred to the student.

However, individuals have different capacities to save and invest in their own professional development. Individuals with different family situations also have more or less opportunities to enrol in lifelong learning opportunities. Training participants from different regions have different commuting costs to school as a function of local infra-structures.

Furthermore, the fixed subsidy generates significant variation in the incentives of training providers to adapt their methods and curricula, and in their ability to invest, expand and innovate their course offering. Large training providers have an advantage over small training providers. Providers with a wider variety of courses can more easily balance out losses on one course with benefits from another. Providers with a limited number of courses on offer are more constrained.

The fixed training subsidy value also means that training providers have incentives to offer training courses with the lowest provision costs, so as to maximise their benefits. These may not necessarily be the courses that are most needed in the labour market. This situation may lead to further distortions in the alignment of training offer and training needs.

Another challenge in the implementation of PRONATEC consist in the lack of investment in public awareness campaigns in recent years which used to play a key role in promoting the benefits of adult learning. Additionally, distance learning has not been really widespread for FIC courses, although it would be a cost-effective alternative to mobile training units to reach individuals living in remote regions of the country.

Finally, the process of enrolling in a PRONATEC training course can be lengthy and cumbersome, involving two layers of administrative procedures: pre-enrolment with a PRONATEC partner and confirmation of enrolment at the training school. At each stage, documentation has to be presented, forms filled, among other things. This excess bureaucracy and formality can be a potential barrier to access adult training for individuals who only have basic skills and/or those who lack time.

There is a lot of heterogeneity in the functioning of different types of training providers, potentially translating into significant differences in training quality.

Public training providers have to comply with formal procedures and legal formalities to hire new staff. Once hired, public employment contracts are highly protected. Private institutions and technical schools from the S-system have much more flexibility in the way they manage their teaching staff. Consequently, it is easier for them to adapt their training offer quickly to what is required by employers. This can have a substantial impact on re-employment rates and on teaching quality, leading to significant differences across training providers.

Additionally, not all training providers offer career guidance services to participants, assisting them on the transition to work after course completion. A small number of technical schools complement their professional qualification courses with training in soft skills, such as team work, work ethics, etc., but this is not a requirement and many training providers across the country do not offer this type of support. Finally, while training centres from the S-system have developed a formal framework to evaluate the quality of their short technical courses, not all training providers offering FIC courses subsidised by the government through programme like PRONATEC conduct such assessments. Such differences can eventually lead to large differences in the quality of training provision across schools.

Key policy recommendations

Develop a government-led Skill Assessment and Anticipation (SAA) system that could be complemented by independent initiatives from local authorities and other stakeholders.

To achieve robust and reliable results, SAA exercises should rely on a combination of both quantitative and qualitative data, as well as combining information from different sources. A good labour market information system and reliable information about education enrolment and graduation rates could be complemented with a survey of employers, which should be representative at the sectoral and sub-national levels.

The Brazilian government should devote resources to creating a team or department that would conduct systematic and regular SAA analyses. Approaches that build on recent trends or analyse the current situation and forward-looking approaches should be combined. While no particular method is better than the others, some of the methods that could be considered are the quantitative forecasting model developed by the Department of Jobs and Small Business in Australia, or the method implemented by SENAI São Paulo, both discussed in this report. Developing a more detailed description of skills associated to each occupation listed in the CBO would be one possible way forward to translate results from an occupation-based SAA system into an outlook for particular skills.

Complementary regional and sectorial exercises are strongly recommended as they can facilitate more targeted policy making. To minimise the costs, these could be carried out for two or three sectors and regions each year, following a rotating structure.

Alternatively, to ensure regional coverage, several municipalities could team-up and pool resources so as to develop a local SAA structure. These regional-specific SAA structures would not necessarily need to stick to administrative state circumscriptions. For example, border municipalities from different states, but which are well-connected in terms of infra-structures, important flows of workers commuting across them, local firms trading with each other, etc. would be good candidates to team-up. State governments should support the creation of such local SAA networks, for example, through campaigns to raise awareness of their importance, or by organising training workshops where SAA methods are explained or taught. Staff involved in the development of local SAA frameworks could meet regularly across the country to share and learn from everyone’s experience.

In terms of sectoral coverage, the government could collaborate and coordinate with institutions from the S-system that have developed their own sectoral SAA analyses, so as to benefit from their efforts.

Finally, regarding dissemination, having one single platform that centralises all the information has proved quite effective in other countries. Web platforms that are particularly successful tend to have more than one interface depending on the targeted audience or to allow for an interactive experience, tailoring the information to users’ interests. MTb, MEC and MDIC could coordinate to develop links between their portals or develop together a unified platform that aggregates all the functionalities that their separated initiatives have.

Adult training programmes, such as PRONATEC, should rely on SAA exercises to determine the training courses to be offered and publicly subsidised.

If a government-led SAA system is developed, MEC could produce sector- and region-specific catalogues of FIC courses that would offer a restricted number of training courses but respond more adequately to skill needs. Only courses from such restricted catalogues would be subsidised. This would limit the extent to which training institutions are able to influence the course offer of PRONATEC, while at the same time, provide incentives for training institutions to develop courses that are in high demand.

The government could then consider implementing a training voucher system. Individuals entitled to a training voucher would be free to choose one of the training courses contemplated in such restricted FIC catalogues, carefully defined based on systematic SAA methods. Implementing a training voucher system would not invalidate the actual governance structure of PRONATEC. Different ministries and SEEDUCs could continue to collaborate, coordinate, and be involved in the (i) selection of individuals from their target population to attribute training vouchers; (ii) development, analysis and dissemination of SAA methods.

At the same time, the implementation of such training voucher system would contribute to: (i) simplify the procedure for participation in a PRONATEC training course, by removing the two layers of administrative proceedings (pre-enrolment and confirmation of enrolment); and (ii) increase motivation levels and eventually reduce drop-out rates from subsidised FIC courses.

Nevertheless, the implementation of a training voucher system should be accompanied with the development of public career guidance services, to ensure that individuals have access to timely and accurate information about training opportunities and make adequate choices. Career guidance can be delivered by Public Employment Services, specialised public guidance services, or yet, career guidance websites. One-stop-shops, where individuals can get all the information they need in one place, such as the ones opened in Luxembourg, could also be considered.

Training providers should comply with some guidelines to be able to offer subsidised training courses. Compliant training providers should be certified by the government accordingly.

In order to minimise the heterogeneity in training quality across institutions and to improve the overall quality of FIC training courses, further requirements should be imposed on training centres to qualify for public funding and offer subsidised training courses. Such requirements should include:

  • To organise induction sessions before the start of a training course so as to set expectations right and reduce drop-out rates;

  • To offer career guidance services, assistance in looking for a job or a practical internship to gain experience in the field of study;

  • To offer some training in soft skills, such as team work, corporate responsibility, professional behaviour, entrepreneurship, etc., in addition to technical skills;

  • To develop a formal framework to evaluate training courses;

  • To increase the offer of flexible learning opportunities – perhaps with a minimum threshold of FIC training courses offered via distance learning, part-time or in the evening. Alternatively, subsidised training courses could be structured in a modular or credit-based format.

Regular inspections of centres offering subsidised training courses could be conducted to ensure that these requirements are met. In Japan, clear guidelines are provided to training providers. Only training providers who can demonstrate that they comply with such guidelines are accredited and allowed to offer training courses subsidised by the government. The Japanese government conducts regular inspections to training providers and requires the submission of several documents to ensure that guidelines are effectively implemented. The Japanese government also offers workshops to staff at training institutions to clarify the content of such guidelines and provide concrete examples on how to implement them. Similar practices could be considered in Brazil.

If a training voucher system is implemented, only certified training providers, complying with all these requirements, and offering training courses from the restricted FIC catalogues, should be considered by individuals entitled to the voucher. This would also contribute to increase overall training quality, by fostering competition between different training institutions.

Finally, public hiring of professors for PRONATEC courses should be made simpler so that public providers are not lagging behind other training providers and can respond quickly to new training demands.

Training subsidies to individuals and training institutions should be adapted to the economic and social background of the participant, as well as differentiated across regions, training providers and training courses.

One argument in favour of a constant training subsidy across regions, training providers and individuals is that it simplifies the administrative burden of transferring public funds to training participants and institutions. Additionally, differentiating the value of the subsidy across individuals or institutions could lead to undesirable situations of discrimination or personal favours. However, there are other ways of avoiding abuses of power and misuse of public funds.

The government could consider differentiating the amount of the subsidy that is transferred to training institutions and participants based on clearly defined criteria. For example, groups that tend to participate less, who live in remote areas with poorer infra-structures or far from training institutions, could receive higher individual subsidies (“Bolsa-formação”). Training providers that are located in remote areas and struggle to attract professors or develop good-quality infra-structures, could receive a higher subsidy per student/hour taught. Finally, training courses that are identified as being in high demand in the labour market (based on SAA exercises), but that are costly to provide because they require specific equipment or specialised instructors, could also be subsidised by the government at a higher student/hour value. As long as the overall procedure is kept transparent, it becomes easier to detect possible frauds and abuses of power. This system of multiple values for the training subsidy - depending on clearly defined and observable individual and institutional characteristics, as well as the particular training course taken - could be accompanied with regular audits to partners and staff attributing them, as well as schools and participating individuals. The government could set up a computerised management system of the training subsidies attributed, where information about individual participants could be cross-checked with administrative databases on earnings, wealth and the receipt of other social benefits.

If a voucher system is implemented, individuals could choose their training provider and training course freely and hand-in the attributed voucher to the training institution of their choice. The training institution could then claim the funding to the government by returning all training voucher collected and specifying the training courses chosen by the participants. The government would transfer to the training providers an amount based on that information. Such amount should cover the costs of training provision, as well as transportation costs and a meal per day for the participants. The former would remain with the institution, while the later would be paid by the institution to the training participant – following the current financing procedures of PRONATEC.

Whenever participants pick training courses that are highly demanded in the labour market, but more costly to provide for requiring specific equipment or specialised instructors, the student/hour taught of that course could be funded at a higher value. Similarly, training institutions in areas of the country where it is more difficult to attract instructors or develop high-quality training infra-structures, could also receive a higher value per student/hour. Finally, training voucher could have a unique identifier linked to the individual who benefits from it and has handed it over to the institution. Based on family, social and economic conditions, as well as living area, the amount transferred to the training provider to cover for transportation costs and a meal per day for the participants should also be higher.

Training providers eligible for a higher student/hour value should be clearly identified based on objective and transparent criteria. Training courses that are considered particularly in high-demand in the labour market, but more costly to provide, should also be clearly identified within the restricted list of courses available in a region-specific FIC catalogue developed based on systematic SAA methods.

A large-scale programme for the recognition of prior learning should be developed and effectively implemented. Public awareness campaigns to highlight the benefits of participation in adult training should also be conducted.

Developing a full-scale system to recognise prior learning could improve the Brazilian adult learning system, and in particular, the PRONATEC programme in two aspects: (i) it would contribute to engage older workers into adult learning, who might be excluded from the programme on the basis that they lack entry requirements; and (ii) it would establish a standardised framework to select candidates who do not possess formal qualifications, minimising the amount of discretion by staff working for different PRONATEC partners. One possibility would be to promote further the already existing programme “Rede CERTIFIC”.

The government should also resume public awareness campaigns for participation in adult learning opportunities. Public awareness campaigns can come in many forms and do not necessarily need to be linked with a particular adult training programme. Public awareness campaigns can use media channels, the organisation of public events, direct mail, etc.w

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