Tailor-made training programmes in Bulgaria

MUTUAL LEARNING PROGRAMME: PEER COUNTRY COMMENTS PAPER - BULGARIA Tailor-made training programmes in Bulgaria Peer Review on Tailor-made training programmes Luxembourg, 23-24 April 2009 A paper submitted by GHK in consortium with CERGE-EI and Radostina Bakardjieva Date: 20 April 2009 1

This publication is supported for under the European Community Programme for Employment and Social Solidarity (2007-2013). This programme is managed by the Directorate-General for Employment, social affairs and equal opportunities of the European Commission. It was established to financially support the implementation of the objectives of the European Union in the employment and social affairs area, as set out in the Social Agenda, and thereby contribute to the achievement of the Lisbon Strategy goals in these fields. The seven-year Programme targets all stakeholders who can help shape the development of appropriate and effective employment and social legislation and policies, across the EU-27, EFTA- EEA and EU candidate and pre-candidate countries. PROGRESS mission is to strengthen the EU contribution in support of Member States' commitments and efforts to create more and better jobs and to build a more cohesive society. To that effect, PROGRESS will be instrumental in: providing analysis and policy advice on PROGRESS policy areas; monitoring and reporting on the implementation of EU legislation and policies in PROGRESS policy areas; promoting policy transfer, learning and support among Member States on EU objectives and priorities; and relaying the views of the stakeholders and society at large For more information see: http://ec.europa.eu/social/main.jsp?catid=327&langid=en The information contained in this publication does not necessarily reflect the position or opinion of the European Commission. 2

CONTENTS 1 LABOUR MARKET SITUATION IN BULGARIA... 4 1.1 Employment in Bulgaria... 4 1.2 Unemployment in Bulgaria... 5 2 ASSESSMENT OF POLICY MEASURE... 7 2.1 The objectives, general guidelines and target groups of the policy... 7 2.2 Employment Programmes and Measures... 7 2.3 Vocational education and training... 8 3 QUESTIONS... 11 ANNEX 1: SUMMARY TABLE... 12 REFERENCES... 13 3

1 LABOUR MARKET SITUATION IN BULGARIA 1.1 Employment in Bulgaria During 2003-2007, the Bulgarian labour market experienced very dynamic development under conditions of stable economic growth. Employment grew robustly; unemployment has been declining steadily reaching record low levels. However, the current economic downturn is expected to have an adverse impact on economic activity, employment and unemployment. In particular, during 2003-2008, the activity rate grew to 53.8 % and the unemployment rate dropped from 13.7 % in 2003 to 5.6 % in 2008. Table 1: LABOUR FORCE, EMPLOYED AND UNEMPLOYED IN BULGARIA DURING 2003-2008 1 (in thousands) Year Labour force Employed Unemployed Activity rate (%) Employment rate (%) Unemployment Rate (%) 2003 3283,1 2834,0 449,1 49,2 42,4 13,7 2004 3322,0 2922,2 399,8 49,7 43,7 12,0 2005 3314,2 2980,0 334,2 49,7 44,7 10,1 2006 3415,7 3110,0 305,7 51,3 46,7 9,0 2007 3492,8 3252,6 240,2 52,6 49,0 6,9 2008 3560,4 3360,7 199,7 53,8 50,8 5,6 Comparing 2003 and 2008, employment grew by 18. 6 % experiencing record growth during 2008. During the same period, the activity rate increased from 49.2% to 53.8%, and the employment rate from 42.4% to 50.8%. Those developments resulted in declining numbers of unemployed and discouraged workers during this period. 2 The age specific activity rate for individuals aged 15-64 in 2007 was 66.3 % and their employment rate was 61.7%. Positive trends in employment growth rates are observed in all age groups. The highest in the growth was in the age group of 25-34 years-old, and the lowest among those of pre- retirement age (55-64 years-old). Upper secondary education workers have the highest employment share (59%) 3. A notably lower share is found among those with higher or lower levels of education: tertiary educated 25.2%, lower secondary education 13.6%, primary or lower education 2.09% 4. The employment rate is notably higher in urban areas (55.5% in 2008) compared to rural areas (39. 6%). Consequently, the unemployment rate in rural areas is higher (9.1% in 2008) compared to urban areas (4. 5%). 5 The unemployment rate among women is somewhat higher compared to men. 1 Average dates, National Statistical Institute Information, 2008. 2 Bulgaria- Statistical View- 2007, Sofia, 2008, p.15-17. Discouraged persons in Bulgaria are considered those who are unemployed without hope and job search. 3 Upper secondary education includes: secondary vocational and secondary general education. 4 Employment and Unemployment, 2008, No 3, NSI, p.42. 5 Employment and Unemployment, 2008, No3, p. 48. 4

Table 2: Activity, employment, and unemployed rates by in rural and urban areas of Bulgaria in % 6 Activity rate urban Activity rate rural Employment rate urban Employment rate rural Unemployment rate urban Unemployment rural 2003 53,5 39,3 46,6 33,0 12,9 16,2 2004 54,0 40,0 47,9 34,2 11,2 14,6 2005 54,2 39,2 49,3 33,8 9,0 13,7 2006 55,8 40,8 51,6 35,2 7,5 13,6 2007 57,0 42,0 53,9 37,3 5,6 11,2 2008 58,1 43,5 55,5 39,6 4,5 9,1 Table 3: Employed and unemployed by gender (in %) 7 Activity rate Male Activity rate Female Employment rate male Employment rate female Unemployment rate male Unemployment rate female 2003 54,5 44,2 46,8 38,4 14,1 13,2 2004 55,3 44,6 48,4 39,5 12,5 11,5 2005 55,4 44,4 49,7 40,0 10,3 9,8 2006 56,7 46,3 51,8 42,0 8,6 9,3 2007 58,2 47,5 54,4 44,0 6,5 7,3 2008 59,8 48,3 56,5 45,5 5,5 5,8 1.2 Unemployment in Bulgaria During 2003-2008, registered unemployment declined thanks to macroeconomic stability, high economic growth, investments, and active employment programs and vocational training. In 2008, the average annual number of unemployed reached its lowest levels (6.3%) 8 since 2003. In January and February 2009, the rate of registered unemployment showed slight increases and reached 6.5%, and 6.69 % (compare to EU-27 rate 7.9%). The ratio of unemployed women to men is 59.7%: 40.3% and the incidence of unemployment among women is higher. The age structure of unemployment reflects specific age structure of the Bulgarian population. In 2008, the proportion of unemployed 15-24 years old was 8.7%, compared to 14.2% in 2004. Corresponding proportions of unemployed youth without qualification and with basic and lower education only are 79.4% and 68.8%, respectively. A high share of those groups has persisted for many years. Active labour market policies (ALMP) implemented by the National Employment Agency are focused on supporting labour market inclusion. In particular, it focuses on young people aged up to 29 and persons aged +50. The number of registered long-term employed (>12 months) dropped by 50 % from 248,152 in 2004 to 115,669 in 2008. But the relative share of this group among the unemployed remains high at 57 8% in 2007, 49.5% in 2008, compared to 52.9% in 2004. ALMP target primarily long-term unemployed, aiming to reduce their number. The problem is difficult because the professional qualification and education level of unemployed individuals in this group are very low. The long-term unemployed need training in literacy and professional training. 6 Employment and Unemployment, 2008, No 3, p.42-43,national Statistical Institute Information, Sofia, 2008. 7 National Statistical Institute Information, Sofia, 2008. 8 www.az.government.bg 5

The relative share of unemployed with disabilities was 5.3% (12,486 persons) in 2008 compared to 4.1% (19,210 persons) in 2004. Table 4: Unemployment in Bulgaria 2003-2008 9 Indicators 2004 2005 2006 2007 2008 2009 (January) Registered unemployment 469 223 424 381 356 054 286 980 233 719 240 782 Women 257 747 237 355 204 606 171 457 145 984 147 190 Age <25 66 896 57 035 42 610 29 366 20 291 20 015 Age <30 123 824 106 890 82 004 57 883 41 657 41 650 Age +50 123 408 119 753 110 161 102 668 92 547 94 505 Long-term unemployed Unemployed with disabilities Unemployment rate (%) 248 152 237 390 203 812 165 856 115 669 81 428 19 210 21 071 21 034 14 414 12 486 11 791 12,67% 11,46% 9,61% 7,75% 6,31% 6,50% Based on the international ILO definition and the Labour Force Survey, in 2007, the employment rate of the prime age population 15-64 years of age was 61.7%, the female employment rate 57.6 %, the youth employment rate (15-24) 24.5%, the old aged employment rate (55-64) 42.6%, the part-time employment rate 1.6%, and average retirement age was 64.1 years. The unemployment rate was 6.9%, youth unemployment rate (15-24) 19.1%. The share of early school leavers is 16.6% and 85.1% of 22 years old completed upper secondary education. 9 www.az.government.bg 6

2 ASSESSMENT OF POLICY MEASURE 2.1 The objectives, general guidelines and target groups of the policy Bulgarian training policies are in line with the new Integrated Guidelines for Growth and Jobs. Priorities are sustainability of employment through improved skills, better adaptability and higher productivity of labour and enhancement of relocation of laid-off persons to new jobs via vocational training and retraining. In 2008, total expenditure on employment and training programmes including vocational training of unemployed and employed was BGN 173,097 thousand, some 9.1% less compared to the previous year. Expenditure on vocational went up by 15.9% from BGN 11274,1 thousands to BGN 13070,1 thousands. The major part of funding goes to employment programmes (79.8%). The relative share of measures is 12.7% and for vocational and motivation training - 7.6 %. 10 Table 5: Expenditures on Programmes, Employment Measures, Training and for Vocational Training (2006-2007) 11 (in thousands BGN) 2006 2007 Programmes 155,719 138,075 Measures 23,411 21,953 Vocational Training 11,274 13,070 Generally 190,404 173,098 2.2 Employment Programmes and Measures There are a number of programmes which combine vocational training in areas of local labour market need, with appropriate work placements. However, these are not tailored to individual employers as in the example from Luxembourg, but meet vocational training standards set for particular sectors. The main objective of the Project for Young School Dropouts is social adaptation and increasing employability of registered unemployed school drop outs from primary or secondary education. They are provided with courses in professional qualifications and/or in key competencies reflecting local labour demand. It includes an internship for a period of up to 6 months for successful graduates. Subsidies are provided for each unemployed hired under the Programme for the duration of employment, but not more than 6 months for internship and not more than 12 months for apprenticeship. Sources of funding are guaranteed by the State Budget. The main implementing institutions are Ministry of Labour and Social Policy, Ministry of Education and Science, National Employment Agency. In 2008 200 unemployed young persons are professionally trained through this Project. Another programme targeted at a growth sector experiencing some labour and skill shortages is Beautiful Bulgaria. The main objective of the Beautiful Bulgaria project is to train unemployed individuals in professional qualifications in the construction and tourism sectors. Target groups are registered unemployed individuals and employees of small, medium-sized and family tourism oriented businesses, craft production and construction enterprises, MLSP, National Employment Agency, municipal and regional administrations, NGOs and implementing institutions. Funding is provided by the state budget, municipal budgets and external sources. The statistical office of MLSP reports for 1, 200 trained persons in 2008. 10 Yearbook 2007, National Employment Agency, 2007, p.32-33. 11 Own calculating on the basis in National Employment Agency Information. 7

In addition, there are a number of general programmes aimed at activating unemployed individuals through training and support for business start ups. The main objective of the Job Opportunities through Business Support Project (JOBS) is to create permanent jobs and training for unemployed to start their own business. The implementing organizations are MLSP and UNDP, Ministry of Economy and Energy, municipalities. Funding sources are the State Budget through MLSP, UNDP, too. A number of 6, 500 persons were professional trained in 2008 on the basis of component Training of JOBS Programme. The main objective of the Activation of Inactive Persons National Programme is to activate and attract inactive and discouraged people back to the labour force. Participation in training programs requires registration at employment offices. Implementing institution are MLSP, National Employment Agency and partners Centre for Human Resource, municipalities and NGOs, as all fund sources are from the state budget. 45 unemployed were trained and hired through component Training in this Programme. The main objective of Roma Literacy and Qualification Programme is to raise the educational and qualification level of disadvantaged unemployment individuals and to enhance their employability. The target group are unemployed with various ethnic backgrounds and low literacy skills. Beneficiary status includes the participation of unemployed individuals in literacy courses with duration up to 5 months participation in training for professional qualification. The main source of funding is the State Budget. Implementing institutions are MLSP, National Employment Agency with partners Ministry of Education and Science, Regional and municipal administrations, employers, too. The implementation result of this Programme is 1,300 trained persons in 2008. 2.3 Vocational education and training Vocational education in Bulgaria represents a complex system of various institutions- public and private, various activities and specific engagements. The aim is to provide professional degrees, retraining for a different profession, upgrades of professional skills, adjustments to ongoing changes in professions/jobs, receiving more qualifications with a view to promotion, becoming familiar with new subjects to increase employability. Table 6: Vocational institutions in Bulgaria by kind of ownership 12 Vocational schools/ art schools, voc. gymnasiums, colleges/ Vocational training centres Higher schools 2004/5 2005/6 2006/7 2007/8 500 Of which private:43. 53 Private 16 495 Private: 43 114 Private 102 53 Private 16 506 Private:43 155 Private 143 53 Private 16 503 Private:43 207 Private 188 53 Private 16 Professional schools in Bulgaria have great potential. Vocational training centres organised by National Agency for professional and training are main institutions providing adult education. Currently, the main priority is to create an information system monitoring supply and demand for vocational training, enhancing participation incentives, reinforcing coordination between institutions, introducing flexible forms of education and upgrading of skills. 12 Own calculation on the basis of information of NEA. 8

Vocational training can be also organised by employers. A study, organised by National Statistical Institute, observed continuing vocational training in 53,060 firms (8,037 15.1% public, 45,023 84.9% private). Internally and externally provided courses (ratio 2/1) are the main form of continued vocational training at the enterprise level. Training courses provided by SMEs are rare. Major courses provided are in English language, Sales and Marketing, Finance, Computer skills, Services-transport, tourism, engineering, technology and manufacturing. The costs amount to BGN 39 905,2 thousands (0.38% towards GDP), corresponding to 162 BGN per participant. The pioneer in the firm provided vocational training is the TNC 13 having very good experience. 14 The system of tailor-made training prepares unemployed for jobs in business and the other spheres of public life. This training also provides certified qualifications for particular professions. Tailor-made training also has motivation components. Tailor-made training requires tripartite approach and existence of education standards. The acquisition of professional qualification through tailor-made training is regulated by framework programmes approved by the Minister of Education and Science. The main institutions in this field are Ministry of Labour and Social Policy, the National Employment Agency, the Ministry of Education and Science, the National Agency for Vocational Education and Training, the Human Resources Development Centre, the National Institute for Training of Principals, training institutions, NGOs, and municipalities. The number of unemployed people included in vocational training courses grew during the last five years. In 2007, the excess demand for specialists with secondary or lower education was the highest in the following professions: salesman, sewers, machine operators, cooks, drivers, etc. Among occupations requiring secondary and higher education, the most demanded were car mechanics and fitters, followed by civil engineers, mechanical engineers, doctors of medicine and nurses. According to statistics, there has been persistent demand for waiters, bartenders, economists, sewers, drivers of motor vehicles real estate agents. Young people aged up to 29 traditionally have the highest share (35-37%) among trained unemployed individuals. Unemployed individuals with secondary education are a major group involved in courses (54.7%). About 62.9 % of course graduates do not find any job, but their qualification formally matches with labour market requirements. In line with the dynamic changes, the largest number of unemployed has been trained in word processing, food processing, hairdressing, administrative services, accounting, beautician services, automotive equipment, confectionery, landscaping and greenery. The demand for professions requiring secondary or lower education has been the highest for salesmen, sewers, machine operators, cooks, drivers, and auto-mechanics. The registry data indicate growing numbers of unemployed involved in vocational training courses, and growing number of courses. Table 7: Employed participating in vocational training courses and number of courses 2004-2007 15 2004 2005 2006 2007 Participants 31, 426 27, 859 31, 153 35,120 Graduates 30, 986 36, 444 16 30, 335 29, 535 Courses 1, 469 1, 516 1, 552-13 R. Bakardjieva, Corporate Social Responsibility of the Firms in Bulgaria, Project by Institute of Economics, BAN, Economic Studies, 2008, No 3. 14 Ibid. 15 Own calculate on basis of Information from NEA. 16 Including unemployed starting training in one year and finishing the other year. 9

Tailor-made programme for a confectioner requires 1 month of training corresponding to 130 hours (60 hours of theory and 70 hours of practice). This training leads to a qualification certificate. Florist training requires 300 hours (128 theoretical training, 172 practical training) for primary educated participants. Chef training lasts for 2 months, 190 hours (90 theoretical training +100 practical training). Those unemployed interested in tailor-made training have to submit official request to the labour offices and enclose their CV and educational degrees. Inclusion into training is selective, not automatic. 627,3 thousand people have participated in professional training, 612, 6 thousand in formal training (97.6%), and 19,5 thousand in non-formal training (2.4 %) 17. Generally, the results indicate that almost all reviewed programmes and measures improve the chances of a participant to find a job on the primary labour market. Vocational training implemented by the National Employment Agency increases the chances of the unemployed to get a job. The training of employed individuals has a positive impact on their remuneration and improves career progress within a company. In this sense the following are very important: 1. Building of an informational system on labour demand and supply, and provision of vocational education and training. 2. Strong collaboration between state institution and businesses in the field of vocational training. 3. Increasing investment in further education through suitable public-private partnership using European criteria. 4. Direct contracts between schools and firms for purposeful education. 5. Effective use of funds from European programmes. 6. Increasing prestige and popularity of further and long-life education. 17 Employment and Unemployment, 2008, N03, p.49. 10

3 QUESTIONS What are the approaches to identify skills needed in the large companies and in SMEs? What are the criteria in Luxembourg for the selection of potential trainees? How to improve the evaluation of the training policies? 11

ANNEX 1: SUMMARY TABLE Labour market situation in the Peer Country High activity rate in Bulgaria generally 52.6%, 15-64 aged 66.3% Registered unemployment rate in Bulgaria 6.3% in 2007 The unemployment rate of youth has been steadily declining from high levels 17.8% High incidence of long-term unemployment at 49.5% Ageing population Assessment of the policy measure Public Employment Services and its active labour market policies are key for the Bulgarian employment policy Special programmes and projects to help young people Dynamic reaction through unemployment programmes to world economic crisis Active measures towards the disabilities of people Assessment of success factors and transferability Building of an Information System monitoring labour supply and demand Positive influence of vocational training on job finding rate Variety of vocational courses to old-aged persons Fight shadow?? and illegal employment Modernising of social protection system Questions Tailor-made training for people with disabilities Relationship between professional training and the educational system Status of training institution s by kind of ownership- state or private Certification of tailor-made training Financial sources 12

REFERENCES Yearbook 2007, Ministry of Labour and Social Policy, National Employment Agency Sofia, 2008 National Employment Action Plan in 2008. For greater flexicurity on the labour market, Sofia, 2008 Updated Employment Strategy of Bulgaria 2008-2015, Sofia, 2008 Statistical Reference book of the Republic of Bulgaria, Sofia, National Statistical Institute, 2008 Bulgaria, Statistical Review, National Statistical institute, Sofia, 2008 R. Bakardjieva, Corporate social responsibility of the Firms in Bulgaria, Economic studies, 2008, No 3 Internet: www.az. governmeng.bg www.mlsp.government.bg www.navet. government.bg www.minedu.government.bg 13