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Ecbo

“The impact of sectoral training and development funds in the Netherlands on employee-training and the possible link with payback clauses”. Ecbo. Centre of expertise on VET

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  1. “The impact of sectoral training and development funds in the Netherlands on employee-training and the possible link with payback clauses”

  2. Ecbo Centre of expertise on VET In partnership with universities, knowledge institutes and the field, we organize a knowledge infrastructure and develop knowledge of relevance to VET- Dutchnational consortium coördinator forReferNet

  3. This presentation uses information from 2 ecbo studies: O&O monitor (study sector funds for training and development, or STDF’s) Monitor post initial education

  4. Sectoral funds for training and development

  5. SectoralFundsfor Training andDevelopment (O&O funds)? Funds= money. A small percentage (0,5 tot 2%) of the total wage bill within a branch/sector creates a fund. Governing board exists of social partners in a branch / sector Original (and primary) goal is “anti poaching” (investment in training by company A; hiring of employee by company B) Usage of the funds is broadly determined by the collective agreement (CAO) Funds often have an organisation, sometimes one or two persons, sometimes over 40.

  6. Collective agreements The Dutch model of wage setting is often centralised in collective agreements. These agreements are wider than wages and hours. There are 200 sector collective agreements, and about 800 (large) company collective agreements. About 84 % of all employees work within a collective agreement.

  7. Study, STDF’s and collective agreements? • Collective agreements can only be classified by the ministry as “generaly extended” if they also provide in agreements on training • STDF’s, deriving from these extended collective agreements can only be recognized if they operate transparently • Only recognized STDF’s can apply for ESF subsidies via the department • Ergo: recognized STDF’s are only active when collective agreements provide clauses on training.

  8. STDF’s

  9. Finances STDF’s (mil)

  10. Expenses In 2006 STF’s spend around 188 mil on Training and development. In 2009 this was 336 mil euro: almost double. One can expect a rise in expenses in 2010 due to the measures taken as a reaction to the financial crisis. In the perspective of life long learning: OSA studies show that approx 35% of companies use a variety of subsidies to fund training. About half of them use STF’s.

  11. Primary goals of funds.

  12. Collective agreements: training Regardless what goals they have: funds need to follow the collective agreements Researched 105 agreements in 118 branches. Training agreements are primary focussed on functioning in the company, in the ‘own’ sector. Compared to 2005 the focus did not really change.

  13. Stipulationson training in 105 collective agreements

  14. Results of STDF’s? There’s a lot of critisismtowardsfunds. Are theytoo “rich”? Do theyspendtheirmoney “well”? Research did not show effects. The existance of STDF in particular sectors did not show a higher training rate. Butit is difficulttomeasure succes: No clear goals (what is succes?) Relative small share in the training market

  15. Post initial training

  16. Post initial training in prior 12 months. (n = 3061 employees. repres. NL)

  17. Pay back clauses • 85% of post initial training is paid by the employer • In 2010 47% employees report a payback clause • In 1999 this was 10%, in 2000 28%, in 2005 46%.

  18. Paybackclausesby sector

  19. Payback clauses by level “Low” level = primary, lower secundary education (lo, lbo, vmbo) “Middle” level= higher secundary education (mbo, havo, vwo) “High” level = tertiary education (hbo, wo)

  20. Payback clauses • Grew from 10% in 1999 to 47% in 2010 • Present in all sectors: • most in financial sector (66%) and ICT (58%) • least in cultural sector (31%) and construction (33%) • Almost 1/5 of employees are unaware • Higher educated are more often aware • Higher educated employees have a higher chance to have to deal with payback clauses, particularly for selected trainings.

  21. STF’sandcommunalitywith pay back clauses? • They are both a reaction to the fear that investments by company A are used by company B • They both find their basis in the collective agreement • STDF’s: originally to prevent free riders by sharing risks. • Pay back: to prevent free riding by forcing extra ‘loyalty’ from employees • STDF’s seem to have less influence over the years, payback clauses are rising

  22. What impact? • Employers also invest without STF’s • The financial incentive to train employees is smaller that we think • The STF’s seem large but are not always know (and some bureacraty is feared) by employers) • The role of STF’s is changing from ‘banks’ to ‘centres of knowledge’ • But funds have to react on collective agreements. Hence the enormous growth in spending on training and development. These agreements are focussed on the own company / sector.

  23. Finally • Modern times ask for a more flexible workforce, the need for inter sector mobility is more and more frequently being discussed. • This requires flexible and ‘easy accessible’ training. • Training agreements that are primary company or sector oriented (based on companies fear of loosing investment through poachers) should be adapted to these needs.

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