Chapter 3. Increasing training participation and inclusiveness

A large and growing number of firms and workers are covered by Training Funds. However, certain firms (e.g. SMEs) may still face substantial barriers in adhering to/using the schemes, and training may not reach the most vulnerable workers (e.g. the low-skilled, older people). This Chapter looks at the barriers (e.g. administrative, time-related, financial) that can undermine the access to and use of Training Funds and highlights potential mechanisms to make the scheme more inclusive.

    

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

3.1. Encouraging SMEs to use Training Funds

Italian SMEs benefit less from the financial support available through the Training Funds than bigger firms. This section highlights the many obstacles – e.g. financial, informational, and administrative – that hamper their access to and use of TF-supported training.

3.1.1. SMEs are less likely to provide training to their workers

In Italy – like in other countries – smaller firms are less likely to provide training to their workers than larger firms. Data from the European Continuing Vocational Education Survey shows that training provision increases with firm size: 57.1% of small enterprises (with 10-49 employees) provide training to their workers, compared to 82% of medium-sized enterprises (with 50-249 employees) and 93.3% of large firms (250 employees or more).

While a similar pattern can be found in other countries, in Italy the gap in training provision between small and large firms is very high (36.2 percentage points),1 the highest among OECD countries with available data, after Hungary (52.9), Greece (49.6), and Poland (46.9), and well above what can be observed in countries like Latvia and Norway where this gap is virtually inexistent (see Figure 3.1). This gap is particularly worrying considered that SMEs in Italy represent the vast majority of firms while larger firms (with 250 employees or more) represent only 0.08% of all enterprises (OECD, 2017[1]).

Figure 3.1. Enterprises (10 employees or more) providing training, by firm size, 2015
Percentage of all enterprises
picture

Note: Training includes CVT courses and/or other forms of CVT.

Source: Eurostat, based on the Continuing Vocational Education Survey.

3.1.2. SMEs less often receive financial support for training

Not only Italian SMEs train less their workers compared to larger firms, but also when they do train, they use funding support available (such as the one provided by the Training Funds) much less often than larger firms. Indeed, SMEs in Italy are typically less likely to use Training Funds funding and take up the opportunity to train their staff, while large companies often take the lion’s share of training funds (Johanson, 2009[2]) (OECD, 2014[3]).

While on average SMEs represent the vast majority of all TF-supported firms – as of October 2017 83.4% of the supported firms had less than ten employees, 13.9% had 10 to 49 employees, and 2.3% had 50 to 249 employees, and 0.4% had 250 employees or more (ANPAL, 2018[4]) – these figures must be contrasted with the distribution of firm size in the population.

Indeed, ISTAT’s elaborations of the Continuing Vocational Education Survey show that only 6.2% of small firms (10-19 employees) that provide training to their employees receive financial support from training funds, a share that evenly increases with firm size up to 64.1% for very large firms (with 1000 employees or more) (see Figure 3.2).

Worryingly, SMEs’ lower use of financial support from Training Funds is not compensated by a more extensive use of other financing channels. Indeed, as shown in Figure 3.2, SMEs are also less likely to receive other types of financial support for training e.g. tax incentives, EU subsidies (e.g. European Social Fund), government subsidies, or other (private) sources.

Overall, SMEs seem to pay training using their own financial resources, probably due to a number of reasons, including: the lack of a sufficient number of employees to be eligible for funding; lack of information about the availability of Training Funds (and other public) funding; and administrative barriers to access to funding (see later sections for further details).

The under-representation of SMEs among recipients of Training Funds support represents a missed opportunity for Italian SMEs to tap on existing financial resources to expand workers’ training and potentially improve their performance and competitiveness.

Moreover, the inequality in the uptake of JIFPs-supported training may effectively lead to a redistribution of resources from smaller to larger companies, and therefore may widen, rather than reduce, the divide between different-sized companies (UNESCO, 2018[5]).

Figure 3.2. Enterprises (10 employees or more) that received financial support to provide training, by firm size, Italy, 2015
% of enterprises that provided training
picture

1. Percentages do not add up to 100% because multiple answers are possible.

2. “Other” refers to receipts from private foundations, receipts from external bodies/persons for the use of the enterprise's own training centre, receipts for training provision to external bodies/persons that are not part of the enterprise.

Source: Istat, based on the Continuing Vocational Education Survey 2015.

The under-representation of SMEs in levy-supported training schemes is a challenge that Italy shares with other countries. In Ireland, for example, only 3% of micro-firms (with less than 10 employees) participate in Skillsnet-supported training, compared to 79% among larger firms (with 50-249 employees) (ILO, 2017[6]). Similarly, sectoral training funds in Belgium and the Netherlands see a lower take-up of training by SMEs (OECD, 2017[7]; Eurofound, 2016[8]; Eurofound, 2016[9]).

Perhaps Italy could draw from the experience of OECD countries that have tried to address similar challenges in the past. Korea, for example, at the beginning of the years 2000s’ implemented a comprehensive policy package specifically aimed at increasing the use of training levy schemes among SMEs, which has been very successful and is still running today (see Box 3.1).

Box 3.1. Increasing the use of Levy-Grant schemes among SMEs: The example of SME Training Consortium in Korea

In the mid-1990s, the Korean government introduced a training levy-grant scheme, to which all enterprises (including SMEs) were required to contribute as part of their unemployment insurance fees for their workers.

Despite the flexibility given to firms – e.g. firms had a great degree of autonomy to choose training providers, courses, and methods – the levy-grant system did not work properly for SMEs. Indeed, only 4.7% of SMEs offered levy-supported training to 4.2% of their workers, compared to 77.6% of large enterprises and 37.5% of workers.

This was considered as a serious policy issue, as SMEs accounted for 99.9% of the total enterprises and provided 86% of all contracted employment opportunities in the country. The scheme was considered to be inequitable, too, considered that although many SMEs paid the contributions to the levy, very few benefited in the end.

To address this challenge, in 2001 the Korean government piloted the Training Consortium Pilot Program for SMEs with the specific objective of removing (financial, organisation, technical) barriers to SMEs’ use of the levy.

The pilot organised SMEs (within the same sectors/industries) into a Training Consortium (TC). Each TC set up an Operational Committee (OC), composed of various stakeholders such as member SMEs, local Chamber of Commerce and Industry, Ministry of Labour field office. The TC was managed and run by two training specialists, which were responsible for:

  • conducting skills and training need assessment of each member SME (e.g. through interviews with SME managers and workers);

  • planning training programme activities of member SMEs;

  • contracting with training providers and SMEs to train their workers collectively;

  • carrying out networking activities with TC members, through a web page, emails, and periodic meetings;

  • carrying out evaluation studies upon completion of training courses.

The Training Consortium Pilot Program for SMEs considerably improved the use of the levy-grant scheme by SMEs: the proportion of member SMEs which offered training for their workers increased from 11% to 50% within a year of the pilot’s implementation. The increase in the utilisation of the levy brought positive results on workers’ productivity, and helped relieving skills shortages faced by SMEs. In addition, it helped in setting up a demand-driven training system, through the establishment of a strong partnership among stakeholders.

In 2003, the pilot was scaled up to the national level and today is considered as a successful flagship programme under the aegis of the Ministry of Labour.

Source: Lee and Sahu (2017[10]); Lee (2016[11]).

3.1.3. Further reducing the cost of training for SMEs

One reason for the lower uptake of Training Funds by SMEs may be linked to the direct cost of training. Typically, Training Funds cover only a share of the training cost (roughly 65% of total costs),2 and SMEs (unlike larger firms) may find it difficult to pay for the difference.

Moreover, because Training Funds refund costs only after that training has taken place, many SMEs may face cash flow constraints that make it impossible for them to pay upfront the cost of training, especially if refunds take place after a long period of time.

Opportunity costs can also be high for SMEs. Employers (especially in SMEs) may find it challenging to continue paying workers’ salary while they are on training, and replacing employees for the duration of the training may be difficult and expensive.

Another key challenge is that SMEs in general incur a higher training cost per worker compared to larger enterprises, because they have a smaller number of employees and thus cannot benefit from economies of scale.

Finally, Italian SMEs – unlike larger firms – are typically unable to use all Training Funds’ financing channels available. While all SMEs can have access to collective accounts (by submitting training proposals to public calls), often they do not accrue sufficient savings in their individual account – whose resources are directly linked to firms’ number of employees and their wages (see Section 2.2).

For example, data published by the largest TF, Fondimpresa, shows that among all participants to training activities financed through individual accounts, 43.7% are part of a very large firm (500 employees or more), while only 3.5% are workers from micro-firms (1-9 employees) (Fondimpresa, 2016[12]).This is despite the fact that micro-firms employ 45.9% of all Italian workforce (OECD, 2017[1]).

Table 3.1. Participants in individual account, Fondimpresa, 2016
Number and % of participants, by firm size

Firm size

Number of training participants

% of participants

1-9 employees

67 643

3.5%

10-49 employees

272 938

14%

50-99 employees

208 227

10.7%

100-249 employees

329 085

16.8%

250-499 employees

221 994

11.4%

500 employees or more

854 182

43.7%

Total

1 954 069

100%

Note: Participants are counted only once when they have participated to more than one training programme.

Source: Fondimpresa (2016[12]).

Training Funds have put forward several innovative practices to reduce the direct cost of training for SMEs. For instance, some Training Funds (e.g. Fondimpresa) can provide SMEs with additional financial resources (contributo aggiuntivo) when they are unable to finance training programmes solely through the individual account.

Several attempts are also being taken to help SMEs build economies of scale – although they could be expanded more broadly. For example, the SMEs network - Associazione Piccole Imprese (A.P.I.), brings together Italian SMEs so that they can pool employees into the same training programme, share the cost of training, and benefit from reduced costs through economies of scale. However, in the views of some stakeholders the awareness of SMEs of this approach is still limited (OECD, 2014[3]). Finally, over the past years, some Training Funds (e.g. Fonarcom) have adopted “aggregated” enterprise accounts into which several SMEs can pull resources together – however, recently the legal viability of these accounts has been questioned by ANPAL.3

Going forward, there are additional policy options that Italy could explore to reduce training costs for SMEs and ultimately increase take-up, building on the positive experience of countries that have been confronted with similar challenges:

  • Grant SMEs higher reimbursement rates, so as to reduce the direct cost of training for SMEs. This is an approach that has already been implemented by some OECD countries with a levy scheme in place. In Poland, for instance, the National Training Fund4 finances 80% of training costs for larger firms and 100% for micro-firms5 (Eurofound, 2016[13]). In Korea, the training levy grants a higher refunding rate for SMEs, 270% of training levies paid, against 100% for larger firms.

  • Shorten/remove delays in reimbursements. One policy option would be to have the TF pay for the training at the time of approval of the training plan, rather than through reimbursements. This would limit the financial constraints SMEs can face when advancing payments. This approach is adopted in Korea (Lee and Sahu, 2017[10]).

  • Reduce opportunity-costs of training. One way to do that is to reimburse firms for workers’ wages during training. For example, in Denmark, when an employee receives full wages while attending a course, the employer may apply for grants (e.g. state grant for adult training, VEU godtgørelse)6 or in some cases receive top-ups from training funds to cover workers’ wages. Similar top-up mechanisms are also being implemented by some training funds in the Netherlands (OECD, 2017[14]). Another way to reduce opportunity-costs is through job rotation schemes, whereby firms are given support to find a temporary replacement worker (e.g. usually an unemployed person) during the training period. These schemes today can be found in some OECD countries (Denmark, Finland) (OECD, 2017[15]; OECD, 2019[16]).

  • Exempt, or reduce, contributions paid by SMEs. Some countries have adopted this strategy to encourage SMEs to take up training levy schemes more extensively. In France, training levies are 0.55% for firms with less than 10 employees, and 1% for larger firms. In Malaysia, the Human Resource Development Fund (HRDF) levy scheme applies a payroll levy of 0.5% for SMEs (with less than 50 employees) and 1% for larger firms (Ziderman, 2016[17]). In Brazil, the National Industrial Apprenticeship Service (SENAI)7 imposes a 1% payroll levy on all industrial enterprises and 1.5% for large companies (more than 500 employees) (see Table 2.1).

3.1.4. Fostering a learning culture among SMEs through entrepreneurs’ training

But further reducing the cost of training, alone, will likely not suffice to raise the use of Training Funds by SMEs. According to several stakeholders, what is also limiting the full use of Training Funds is the lack of a learning culture among Italian SMEs.

There may be several underling reasons. One relates to Italian SMEs’ low demand for skills. The productive structure of the Italian economy is characterised by many small, family-led, businesses, which are often concentrated in traditional sectors. These businesses often employ low-skilled workers and produce low value-added goods, and therefore may see little value in workers’ training (OECD, 2017[18]; OECD, 2017[19]).

There is also little awareness of the benefits of training among Italian SMEs. Because systematic impact evaluation of (TF-supported-) training is scant in Italy, many SMEs may not be fully convinced about the benefits of continuous training, for example on firms’ performance.

Negative perceptions of training quality may be another issue. According to several stakeholders, there seems to be a general perception that sponsored-training is often of poor quality and as such not very useful.

All in all, it seems that fostering a learning culture among Italian SMEs will partly rely upon efforts to shift the Italian productive system towards the use of new and high value-added technologies (e.g. through industrial policies - see Section 4.7), nurture an impact evaluation culture and improve training quality (see Chapter 5).

On top of these efforts, changing entrepreneurs’ attitudes towards training – e.g. through their own continuous upskilling – seems like another important step towards a more extensive use of Training Funds. Indeed, entrepreneurs are those who ultimately decide on firms’ training strategies, especially in SMEs, and influencing their approach towards training could translate into better learning opportunities for staff. On the one hand, training content could specifically focus on human resources management practices and the importance of providing learning opportunities to employees. On the other hand, participation to training (even if not specifically focussed on HR management practices) could indirectly foster a learning culture among entrepreneurs.

While promising initiatives have been undertaken in Italy to promote entrepreneurship training, their outreach is limited, and mainly focused on young people (through initial education) or jobseekers (through the PES) (OECD, 2014[3]) – with little continuing training opportunities for established entrepreneurs.

One key challenge is that entrepreneurs cannot benefit from TF-supported training opportunities, as by law Training Funds can solely target dependent staff (whether non-managerial employees or employed managers) for whom firms pay the contribution of 0.3% on payroll (see Section 2.2).

In this context, one policy option worth exploring would be to encourage Training Funds to finance entrepreneurs’ training, through additional contributions – alongside what has already been done on ad-hoc cases by certain Training Funds. For example, the Training Fund FAPI has recently allowed entrepreneurs of micro-firms to participate in training through the payment of additional contributions (Fondo Formazione PMI, 2017[20]). Similarly, in 2010 and 2012, Fondo Formazienda and the Lombardy Region have promoted joint grants, which included entrepreneurs as beneficiaries.

Alternatively, the government could provide additional funding to cover entrepreneurship training, similarly to what is already being done in some OECD countries. In Finland, for example, the Education Fund uses contributions from the State to finance the entrepreneurs’ adult education allowance.

3.1.5. Raising awareness about financial opportunities available through Training Funds

One key challenge to a more extensive use of Training Funds among SMEs is that there is a general lack of awareness of the public support for workforce training (OECD, 2014[3]), and still too many Italian firms – especially SMEs – are not aware of the existence of Training Funds.

In Italy, several actors – including the government, social partners, Training Funds – could take responsibility for making Training Funds more widely known. The government could lead broad information awareness campaigns to raise awareness among SMEs on the benefits of continuous learning, and within this context promote the various financial support mechanisms available for training, including support available through Training Funds. Social partners, too, could do more to disseminate information among their members about funding opportunities available through Training Funds, leveraging their existing networks. And while each TF has its own outreach strategy, more can be done. For example, regional branches of the Training Funds could be expanded8 to reach out to smaller firms located in remote areas, although this expansion would probably result in higher administration costs. Alternatively, in a view to contain costs, Training Funds could strengthen their links with existing organisations/associations (e.g. trade associations – associazioni di categoria) to promote their activities further.

But having more SMEs enrol in a TF will not be enough. Even member firms sometimes are not aware of being registered in a TF and therefore do not use the funding they are entitled to receive (Casano et al., 2017[21]). Indeed, evidence shows that only around 6% of the associated enterprises actually receive support for training programmes (Müller and Behringer, 2012[22]).

Further efforts need to be undertaken to promote the use of Training Funds among member firms, drawing from what has already been done by some Training Funds. For instance, Fondimpresa, sometimes restricts funding to training plans that include a certain share of firms that have never benefited from Training Funds-funding before. Foncoop uses regional branches to reach out to firms that are enrolled to Training Funds but do not use funding.

The lack of awareness among SMEs about training funds opportunities is a challenge that Italy shares with other countries: in Hungary, for example, some employers do not make full use of the possibilities offered by the training levy as they are not aware of them (Kis et al., 2008[23]); in Poland over 55% of firms have no knowledge about training funds and only 4.3% use them (Eurofound, 2016[13]). However, there are international good practice examples that Italy could learn from. For instance, Ireland has developed the Irish Government’s Supporting SMEs campaign, which aims at increasing awareness of the range of Government supports available for start-ups and small businesses. In the context of this campaign, the government has developed an online guide (“Supporting SMEs Online Tool”) conceived to help Irish start-ups and small businesses navigate the range of Government supports – including financing possibilities offered by the training levy scheme (i.e. Skillnet Ireland).

3.1.6. Reducing administrative procedures and red tape

Administrative requirements and red tape may be another key barrier to the utilisation of TF funding by SMEs. Unlike larger firms, SMEs often do not have a department exclusively devoted to planning, organising, and managing staffs’ training – and thus they may find it difficult to cope with grant application procedures.

Indeed, data from the Continuous Vocational Training Survey show that in Italy 38.2% of firms with 10-49 employees have a specific person or unit responsible for organising CVT or have a training plan or budget including CVT, compared to 67.7% in firms with 50-249 employees and 87.9% in firms with 250 employees or more.

Moreover, SMEs may find it challenging to assess the training needs of their workers and tend to be discouraged more easily by a burdensome application process without knowing whether their application will be successful or not (OECD, 2014[3]).

Training Funds have already taken significant steps to reduce red tape and simplify firms’ procedures to access funding. In a view to attract more firms, in fact, virtually all Training Funds have moved towards keeping paperwork at a minimum (see Section 5.3).

However, in the future, more could be done. As pointed out in a recent OECD report on SMEs in Italy, in order to minimise red tape, Training Funds could implement a simplified application procedure for SMEs, which would require firms to describe their training needs and the expected training outcomes (rather than designing a detailed training plan). The detailed training needs analysis and specification of the training contents could then be assigned to specialised trainers, who would take this burden away from the SMEs (OECD, 2014[3]).

3.2. Encouraging vulnerable workers to participate in training

As in other countries, in Italy vulnerable employees (e.g. the low-skilled; older workers) generally benefit less from training opportunities, often because employers tend to train those employees who are most likely to succeed and turn the skills gained into company profits (OECD, forthcoming[24]). Encouraging vulnerable workers to have access to TFs-supported training opportunities is crucial to ensure that training opportunities are available to all and that no one is left behind.

3.2.1. Vulnerable groups typically remain excluded from training opportunities

In Italy, the incidence of adults’ participation in training varies considerably depending on socio-demographic and employment characteristics, with important inequalities in access to learning opportunities. While vulnerable groups struggle to participate in adult learning in all OECD countries, they seem to be particularly lagging behind in Italy.

Looking at socio-demographic characteristics, older people, women, lower-skilled and low-wage workers in Italy are less likely to take part in adult learning, when compared to both more advantaged groups in Italy and similar vulnerable groups in other OECD countries. Elaborations of the PIAAC Survey (see Figure 3.3), show that:

  • Only 8.3% of older people (55 and over) participate in training compared to 23.9% of the prime age population (25-54). This places Italy at the bottom of the OECD distribution, with older people performing worse only in Greece and Turkey.

  • Among women, 17.3% participate in training compared to 23% among men. Italian women participate much less in training compared to women in other OECD countries, with the only exception of Greece and Turkey.

  • The low-skilled (i.e. with low literacy and/or numeracy skills) in Italy are much less likely to participate in training than more skilled people.9 They also tend to participate much less than peers in other countries, with only low-skilled in Greece, Lithuania, Slovak Republic and Turkey performing less well.

  • Only 14.2% of low-wage workers (i.e. those earning less than two third of median wages) participate in training compared to 33.5% of higher-wages employees. This places Italy at the very bottom of the OECD distribution.

When analysing participation rates by employment characteristics, it appears that in Italy the unemployed, the long-term unemployed, temporary workers, and workers in SMEs are less likely to take part in adult learning, when compared to both more advantaged groups in Italy and similar vulnerable groups in other OECD countries. Indeed, elaborations of the PIAAC Survey (see Figure 3.4), show that:

  • In Italy, only 10.7% of the unemployed population participate in training compared to 28.5% of the employed. Across OECD countries, only the unemployed in Lithuania and the Slovak Republic participate less.

  • The long-term unemployed are particularly lagging behind: only 5.4% of them participate to training, the lowest share in the OECD and almost five times less than the OECD average of 24.3%.

  • Large differences exist among employed people as well, and particularly between workers in temporary and permanent contracts. Indeed, only 21% of temporary workers in Italy participate to training, compared to 32% of permanent workers – a share that is lower than any other OECD country (OECD average 49.8%).

  • Participation to training differs also depending on the size of the firm: only 27% of workers in SMEs participate to training, compared to 39.6% of workers in larger firms. Again, Italy performs much worse than the OECD countries considered, with the only exception of Turkey.

3.2.2. There are several barriers to training participation

Many adults in Italy are not willing to train. The analysis of the Survey of Adult Skills (PIAAC) suggests that 67% of adults did not participate and did not want to participate in adult learning activities in the year preceding the survey – the highest share in the OECD after Greece and Turkey and well above the average of 43% (see Figure 3.5).

One explanation for the lack of willingness to train might be that some adults in Italy are not sufficiently aware of the need for training or convinced of its effectiveness, returns and impact on career progression opportunities.

Another possible explanation relates to poor wage progression prospects, which is particularly relevant in a country like Italy where wage increases are more linked to seniority than productivity (OECD, 2017[19]). Recent research, in fact, shows that wage returns to adult learning are quite disappointing in Italy compared to other OECD countries with available data (Fialho, Quintini and Vandeweyer, forthcoming[25]).

Even those adults who are willing to train in principle face several obstacles to participation – that relate to time, financial and course availability constraints. According to PIAAC data for Italy, being too busy at work is by far the most frequently cited barrier to learning, reported by 40% of potential learners, followed by childcare or family responsibilities (19%), cost of training (15%), the fact that the course or programme is offered at an inconvenient place or time (5%), lack of employer’s support (3%), and lack of pre-requisites (3%) (Figure 3.5).

Overall, this evidence suggests that Italy needs to strengthen policies to motivate adults to train – including policies that better link wage progression to productivity, along the lines of the recently implemented “contratti di produttività(OECD, 2017[19]) – and implement measures aimed at removing barriers to participation for adults who are willing to participate in principle.

Figure 3.3. Gap in participation by socio-demographic characteristics
% of adults participating in formal and non-formal job-related learning
picture

Note: Belgium refers to Flanders only, United Kingdom to England and Northern Ireland; formal and non-formal job-related education and training.

Source: PIAAC (2012, 2015).

Figure 3.4. Gap in participation by employment situation
% of adults participating in formal and non-formal job-related learning
picture

Note: Belgium refers to Flanders only, United Kingdom to England and Northern Ireland; formal and non-formal job-related education and training.

Source: PIAAC (2012, 2015).

Figure 3.5. Barriers to participation in training
picture

Source: OECD stat.

3.2.3. What is the role of Training Funds in ensuring that the most vulnerable are trained?

In Italy – like in other countries with a levy scheme in place – there is an open debate on whether (and to what extent) the low participation of vulnerable groups in training should be dealt with by Training Funds or with via other instruments of public nature (e.g. European Social Fund).

Considered that the levy is entirely financed through employers’ contributions, there is a certain resistance (from employers) in excessively limiting or steering firms’ decisions on the use of funds. Moreover, targeting support in favour of particular workers may generate substitution effects (i.e. between subsidised- and non-subsidised training participants).

The experience of OECD and emerging countries shows that the training levies’ design plays a key role in whether they benefit the most disadvantaged. In some countries (e.g. Spain, the Netherlands), training levies are not specifically designed to be inclusive and often the most vulnerable are the least likely to benefit.10 Conversely, in some countries (e.g. Singapore, South Africa) training levy funds are conceived to explicitly target disadvantaged groups.11

In Italy, while in principle Training Funds have potentially a big role to play to ensure that training efforts are focused on those groups of workers who would otherwise receive little training, in practice firms have a great deal of autonomy to decide what workers to train.12

While whether Training Funds should explicitly target vulnerable workers remains an issue of open debate, what is certain is that Training Funds should not exacerbate existing inequalities in training opportunities, or decrease skills financing for the most vulnerable relative to others.

Going forward, Training Funds could focus their efforts on ensuring that at least part of the funding is used to train vulnerable workers. For instance, trade unions could help monitoring the targeting of training programmes with an eye to the access of vulnerable groups. As another example, when using the collective accounts, Training Funds could give priority access to, or develop specific grants for, vulnerable groups, alongside what has already been done in ad-hoc cases by some of the Training Funds.13 Shifting the responsibility to train from employers to individuals (e.g. by using individual training plans more broadly) (see Section 3.2.4), and adopting more flexible training delivery methods (see Section 3.2.5) are other policy options that Training Funds could look at going forward.

Of course, there is only so much that Training Funds can do to ensure that nobody is left behind, and complementary policies need to be strengthened/put in place by the government too. For instance, policies aimed at removing workers’ barriers to training (e.g. education and training leave; financial incentives for workers to take-up training), additional measures that shift the responsibility of training away from firms and towards workers (e.g. through Individual Training Accounts; or individual rights to training), together with effective coordination mechanisms with other actors involved in adult learning14 (see Chapter 6) are also crucial.

Good initiatives of this type are already being implemented in Italy. For example, according to a recent collective agreement, starting from January 2017 all firms in the metalwork industry have to provide 24 hours of training to each worker, every three years. In the absence of training, the worker has the right to participate to external training activities, for which two-thirds of spending should be borne by the firm for a maximum of EUR 300. This is a step in the right direction, although it is still too early to assess the effectiveness of the measure.

While these policies typically fall outside the responsibility of Training Funds – and are beyond the scope of this report – they can play an important role in ensuring that Training Funds reach vulnerable adults.

3.2.4. Using individual training plans more broadly

Shifting the responsibility to train from employers to individuals is one way to ensure that the most vulnerable have access to (TF-supported) training opportunities. Individual training plans can, at least in principle, help achieve this objective by targeting financing to workers at risk.

In Italy, individual training plans are one of the four financing channels through which firms can have access to TF funding (see Section 2.2). They are often financed through a voucher given to firms to sponsor individual workers’ training.

Much like the other financing channels, individual training plans can be accessed through public calls, and therefore Training Funds have room to target them to certain categories of workers (including the disadvantaged).

Despite their potential to address the specific needs of vulnerable workers, however, individual training plans are the least frequently used type of TF-supported training, involving only 8.9% of firms and 1.6% of participants (see Table 3.2). One reason behind the low use of this financing channel may be that the content of training, being associated to the needs of specific individuals, may end up being very fragmented and therefore costly.

Table 3.2. Types of TF-supported training, 2016
Firms and participants benefiting from TF-supported training

Number of firms

% of firms

Number of participants

% of participants

Firm

33 497

49.0

1 358 590

87.1

Individual

6 110

8.9

24 909

1.6

Sectoral

16 756

24.5

72 777

4.7

Territorial

12 052

17.6

104 120

6.7

Total

68 415

100.0

1 560 396

100.0

Note: The table includes training plans approved by TF from January to December 2016.

Source:. ANPAL (2018[4]).

Moreover, this instrument is rarely used to support the training of vulnerable workers. Firms typically decide how to spend the voucher (including on which beneficiaries), and they often use it for employees in senior positions, or to address specific needs of micro-firms (ANPAL, 2018[4]). In order to reach the most vulnerable, individual training plans need to be accessed on workers’ demand without intermediation by the firm. So-designed, individual training plans may have the potential to empower vulnerable groups who would otherwise not receive any training by firms.

On top of using individual training plans more broadly and targeting them to the most vulnerable, Training Funds also need to assist workers to make the right skills decisions. For example, vouchers would need to be accompanied with skills assessments procedures to shed light on workers’ skills gaps, guidance services to orient workers towards good quality training opportunities (and possibly training that brings highest wage returns), and skills certification procedures to increase workers’ motivation to participate (see Section 5.2). These complementary support measures are particularly important for certain category of vulnerable people (e.g. older workers) who are less aware of the importance of training and less likely to spontaneously seek learning opportunities.

Going forward, Training Funds could grant a certain percentage of funding to individual training plans, while in parallel tight them to the most vulnerable and further invest in support measures (e.g. skills assessment; guidance; certification) to ensure high take-up.

Some Training Funds have already taken good steps in this direction. For example, the TF for temporary agency workers (i.e. Forma.Temp) has developed an effective training voucher system. The beneficiary of the voucher15 has the right to a maximum of EUR 5 000 worth of training delivered by pre-identified training providers.16 Interested candidates can directly apply for the voucher – without intermediation of the firm or the temporary agency – and can receive guidance and information support (e.g. on training opportunities available) by local Training Funds branches or through a dedicated electronic platform (www.form-and-go.it).

Going forward, the challenge for Italy will be to ensure that other Training Funds implement such a training voucher system, building on the experience of Forma.Temp. Italy could perhaps learn from what is happening in the Netherlands, where the government has already recognised the need to shift the responsibility for training from employers to individuals as a key skills policy priority. Similarly to what Forma.Temp is doing in Italy, in the Netherlands STOOF, the training fund devoted to temporary agency workers, has put in place a schooling voucher (EUR 500) which employees can directly access, without intermediation by the firm. The interesting aspect of the Dutch example is that other training funds in the Netherlands are also trying to adopt the schooling voucher system on a pilot basis, building on the experience of STOOF.

3.2.5. Adopting more flexible training delivery methods

Traditional training delivery methods (e.g. classrooms) may be ill-suited for adult workers, who have different needs compared to young people in initial education. Providing flexible learning opportunities (e.g. through e-learning), that are compatible with individuals’ private and working lives, can help adult workers to combine their work and family responsibilities with education and training. Flexible learning opportunities can be particularly helpful for the most vulnerable, such as those working in remote areas (e.g. where training providers are scant) and for certain categories of workers who may need flexible training arrangements to be able to participate in training (e.g. parents of young children).

Italy seems to do better than other countries in the delivery of e-learning programmes. Elaborations of PIAAC show that 24.7% of individuals state that at least one of their (job-related) learning activity (in the past 12 months) was organised as distance learning, against 19.4% on average among PIAAC-participating countries.

Similarly, in Italy distance or time constraints seem to be less of a barrier to training participation. Only 5.3% of individuals wanted to participate in (further) training but did not for time or distance constraints, compared to an average of 11.9% for PIAAC-participating countries (see Figure 3.5).

Despite this positive picture, there is room for Training Funds to support e-learning more proactively. Indeed, the classroom remains the most frequently used type of TF-supported training, representing 77.5% of participants. 11.8% of participants take part in e-learning programmes, and the remaining participate in other types of flexible learning such as on-the-job training, workshops, job rotation or job shadowing (ANPAL, 2018[4]) (see Table 3.3).

Table 3.3. Types of TF-supported training delivery methods

% of participants to TF-supported training

Classroom

77.5%

E-learning

11.8%

On-the-job training

5.8%

Job rotation or job shadowing

2.6%

Seminars or workshops

1.2%

Self-learning groups

1%

Total

100%

1. Data includes programmes approved in 2015 and started in 2016.

2. The question provides multiple answer choices. Therefore the sum of the answers is higher than the total of programmes approved. For the calculation of “% of training programmes” the sum of the individual answers is used.

Source: (ANPAL, 2018[4]).

In the views of many stakeholders, one of the reasons as to why TF-supported training is often delivered in classrooms is that this training delivery method is often easier to organise and monitor (e.g. through spot inspections). At the moment, different stakeholders claim that Training Funds are ill-equipped to monitor training that is delivered in more innovative manners, e.g. through e-learning, job rotation or job shadowing. In order to use more innovative learning methods further, Training Funds need to be adequately equipped to monitor and evaluate the successful delivery of all programmes, including e-learning (e.g. through – ex-ante, in itinere and ex-post examinations to test the competences acquired; and/or through skills certification).

Another key challenge of expanding e-learning opportunities is that some adults – e.g. those with low skills – may find it difficult to access more digitalised training programmes. Indeed, elaborations of PIAAC data seem to suggest that these adults are less likely to use e-learning than other population groups.17 In order to improve access to online learning, and avoid that vulnerable groups remain excluded, it is important to ensure that adults are equipped with adequate ICT skills to start with.

References

[4] ANPAL (2018), “XVIII Rapporto sulla Formazione Continua”, http://www.anpal.gov.it/Dati-e-pubblicazioni/Documents/XVIII-Rapporto-formazione-continua.pdf (accessed on 28 March 2018).

[21] Casano, L. et al. (2017), “Bilateralità e formazione”, https://moodle.adaptland.it/mod/book/view.php?id=21892 (accessed on 7 February 2018).

[8] Eurofound (2016), “Sectoral training and development funds: the Netherlands”, Eurofound.

[9] Eurofound (2016), “Sectoral training funds (STF): Belgium”, Eurofound.

[13] Eurofound (2016), “Training fund in enterprises”, https://www.eurofound.europa.eu/printpdf/observatories/emcc/erm/support-instrument/training-fund-in-enterprises (accessed on 3 April 2018).

[25] Fialho, P., G. Quintini and M. Vandeweyer (forthcoming), Returns to different forms of job-related training: Factoring in informal learning, OECD Social Employment and Migration working paper.

[26] Fondartigianato (2012), Invito 1° - 2012 per La realizzazione di attività di formazione continua per Il sostegno e lo sviluppo dei livelli produttivi ed occupazionali Fondo Interprofessionale per la formazione continua.

[12] Fondimpresa (2016), Le attività di Fondimpresa, http://www.fondimpresa.it/images/in_cifre/attivita_fondimpresa/Le_attivita_Fondimpresa_26-10-2016-sito.pdf (accessed on 28 June 2018).

[20] Fondo Formazione PMI (2017), Finanziamento a sportello di PIani di formazione continua per lavoratori di PMI e Grandi imprese, https://www.fondopmi.com/wp-content/uploads/2017/01/FAPI_A1-2017_SportelloImpresa_del.CDA_n.3_30032017.pdf (accessed on 12 May 2018).

[6] ILO (2017), “Upskilling SMEs”, International Labor Organization, http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/documents/publication/wcms_609267.pdf (accessed on 12 April 2018).

[2] Johanson, R. (2009), “A review of national training funds”, The World Bank, SP Discussion Paper No. 0922, http://siteresources.worldbank.org/SOCIALPROTECTION/Resources/SP-Discussion-papers/Labor-Market-DP/0922.pdf (accessed on 26 June 2018).

[23] Kis, V. et al. (2008), “Learning for Jobs OECD Reviews of Vocational Education and Training Hungary”, OECD, https://www.oecd.org/hungary/41738329.pdf (accessed on 3 April 2018).

[11] Lee, K. (2016), “Training by Small and Medium-Sized Enterprises: Innovative Cases and the Consortium Approach in the Republic of Korea”, ADBI Working Paper Series, http://www.adb.org/publications/skills-training-small-and-medium-sized-enterprises-innovative-cases-consortium-approach-korea/ (accessed on 12 April 2018).

[10] Lee, K. and D. Sahu (2017), “Training Levy-Rebate Incentive Scheme and SME Training Consortium Program to Address Unemployment and Low Productivity in SMEs – A Korean Policy Case CASE STUDY”, Global Delivery Initiative, http://www.globaldeliveryinitiative.org/sites/default/files/case-studies/sme_korea_case_study_final.pdf (accessed on 12 April 2018).

[22] Müller, N. and F. Behringer (2012), “Subsidies and Levies as Policy Instruments to Encourage Employer-Provided Training”, OECD Education Working Papers, No. 80, OECD Publishing, Paris, https://dx.doi.org/10.1787/5k97b083v1vb-en.

[16] OECD (2019), Getting Skills Right: Future-Ready Adult Learning Systems, Getting Skills Right, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264311756-en.

[14] OECD (2017), Educational Opportunity for all. Overcoming inequality throughout the life course, https://www.oecd-ilibrary.org/docserver/9789264287457-en.pdf?expires=1526287982&id=id&accname=ocid84004878&checksum=60C3CF89A1F7CB65DE2C44B966DEDEA0 (accessed on 14 May 2018).

[1] OECD (2017), Entrepreneurship at a Glance 2017, OECD Publishing, Paris, http://dx.doi.org/10.1787/entrepreneur_aag-2017-en.

[15] OECD (2017), Financial Incentives for Steering Education and Training, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264272415-en.

[19] OECD (2017), Getting Skills Right: Italy, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264278639-en.

[18] OECD (2017), “OECD Skills Strategy Diagnostic Report: Italy”, https://www.oecd.org/skills/nationalskillsstrategies/Diagnostic-report-Italy.pdf (accessed on 26 March 2018).

[7] OECD (2017), “OECD Skills Strategy Diagnostic Report: The Netherlands”, https://www.oecd.org/skills/nationalskillsstrategies/OECD-Skills-Strategy-Diagnostic-Report-Netherlands.pdf (accessed on 31 March 2018).

[3] OECD (2014), OECD Studies on SMEs and Entrepreneurship: Italy, OECD Publishing, Paris, https://doi.org/10.1787/20780990 (accessed on 28 June 2018).

[24] OECD (forthcoming), Training levies in Southeast Asia: what do they offer and how should they be organised? Lessons from global experience, OECD Publishing, Paris.

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[17] Ziderman, A. (2016), “Funding Mechanisms for Financing Vocational Training: An Analytical Framework”, IZA Policy Paper No. 110, http://ftp.iza.org/pp110.pdf (accessed on 4 January 2018).

Notes

← 1. The gap refers to the gap between the percentages of small firms that provide training, compared to percentages of large firms that provide training.

← 2. The average training cost of training plans concluded in 2016 was EUR 284 per participant, of which EUR 184 paid by an TF and the remaining EUR 100 paid by the firm. See ANPAL (2018[4]).

← 3. These are accounts into which several firms (generally SMEs) pull resources to be able to accrue sufficient funds to finance workers’ training. Although they can be designed in different ways, typically one leading firm is appointed by the TF to represent the interests of associated firms and can decide how to allocate resources. These “aggregated” enterprise accounts were originally conceived by FonARcom as an instrument to give SMEs further access to financing – but have subsequently been implemented by several Training Funds.

← 4. Krajowy Fundusz Szkoleniowy

← 5. With a cap of 300% of average wage per employee.

← 6. In 2016 it was equal to around EUR 450 per week, or 80% of the maximum unemployment insurance benefit rate

← 7. A sectoral training agency managed by the employer-side (National Confederation of Industry)

← 8. Of the 19 Training Funds (excluding Forma.Temp) that are currently active today, only 6 have operational regional branches.

← 9. The low-skilled refer to those who scored at or below level 1 in literacy and numeracy in the PIAAC survey. These are compared to all those people who scored at level 2 or above.

← 10. For example, the training levy in Spain is found to be mainly used to support the training of male, middle-aged, and qualified employees; and sectoral training funds in the Netherlands may also suffer from these problems as only few funds are targeted to the vulnerable (Müller and Behringer, 2012[22]).

← 11. In South Africa, for example, the policy objective of the training levy is that 85% of the training programmes should benefit blacks, 54% women, and 4% the disabled (OECD, forthcoming[24]; Johanson, 2009[2]). In Singapore, the Skills Development Fund was designed to actively target lower-income workers, undereducated individuals, and small and medium-sized enterprises (SMEs) (UNESCO, 2018[5]).

← 12. Reliable data on participation to TF-supported training by individual characteristics is not available (see Chapter 5), and therefore it is difficult to assess with precision to what extent Training Funds funding are channelled towards the most vulnerable workers.

← 13. Fondartigianato, for example, has already granted priority access to funding to youth (under 29) and women (Fondartigianato, 2012[26]).

← 14. E.g. training financed by regions, training programmes for low-skilled adults provided by Centri Provinciali per l’Istruzione degli Adulti (CPIA), and training for the unemployed provided by the Public Employment Service.

← 15. Beneficiaries need to be temporary agency workers, or unemployed people who have recently been temporary agency workers.

← 16. The list includes training providers accredited (by the region, Ministry, or by the TF), public or private institutions that organise Master programmes, or training providers that release skills certification

← 17. Indeed, elaborations of PIAAC data confirm that the low-skilled in Italy are less likely to use distance learning compared to the higher-skilled: among low-skilled adults (with PIAAC literacy scores level at 1 or below) who have participated to (job-related) learning activity (in the 12 preceding the survey), only 16% report that at least one learning activity was organised as distance learning, compared to 28% of high-skilled adults (with PIAAC literacy scores at level 4/5).

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