EMCC European Monitoring Centre on Change

Sectoral training and development funds

Netherlands
Phase: Anticipation
Typ:
  • Advice
  • Employment incentive
  • Fostering mobility
  • Training
Zuletzt geändert: 03 August, 2021
Ursprünglicher Name:

O&O-fondsen

Englischer Name:

Sectoral training and development funds

Coverage/Eligibility

Sectoral training and development funds are set up by employer and employee organisations in a given sector or branch. These funds are based on collective labour agreements and cover individuals working in that specific sector.

Main characteristics

O&O funds are set up in connection with a sectoral collective labour market agreement. The collective labour agreements establish the strategic goals for the O&O fund to pursue, specific skills which workers need for instance, skills required to meet future sectoral developments, etc. The goal of these funds is to help improve the sectoral labour market by training and schooling workers in a given sectoral branch. The funds are private initiatives which are managed by sectoral organisations and social partners. Workers can follow education and training via these funds which reimburse or finance different degrees of the training followed.

Once the collective agreement becomes mandatory and binding, all employers within a sector must contribute to the fund. All employees receive training rights and facilities if their training interests fit the objectives formulated by the social partners. During restructuring, additional claims can be made on a fund if agreed by the social partners.

The funds themselves are financed predominantly through contributions from employers and employees (where the exact level of these contributions are established in collective labour market agreements), with some funds receiving financing through the European Social Fund or other social partners. A report in 2017 by the Ministry of Social Affairs and Employment showed that for the 85 collective labour agreements under study, 87% of financing for the O&O funds came from enterprises.

 The O&O funds go by various names, including 'Scholingsfonds' (schooling fund), or 'Sectorfonds' (sector fund). It is important to note that collective labour agreements (CAO) can also establish broader CAO funds; these funds can focus on and support different activities including training and development of workers in the sector, creating jobs and employment, working conditions, social security contributions, and working on collective labour agreement issues. This issue of definition is important as different organisations have slightly different ideas of what constitutes an O&O fund.

For example, one of the main O&O funds, SOOB (Stichting Opleidings- en Ontwikkelingsfonds Beroepsgoederenvervoer, or the Foundation for Education and Development fund in vocational freight transport), an O&O fund for professional freight transport, estimates that there are 140 O&O funds in the Netherlands, relating to 116 different sectors. In total these 116 sectors cover 5.9 million of the 6.9 million employees in the Netherlands, accounting for some 85% of Dutch employees. Alternatively, the knowledge provision website, Opleiding en beroep (education and profession), which partners with the Dutch employment agency, the UWV, and the education inspectorate, estimates there are 89 recognised O&O funds in the Netherlands. This difference demonstrates that given how many different funds there are in place in the Netherlands, across sectors and regions, there does not appear to be a single, universally accepted register of the O&O funds.

In general, employers choose the training course that employees are to complete from a catalogue of different institutions approved by the O&O fund itself. O&O funds cover the training costs (usually between 50-80% of direct costs) and, in some cases, indirect costs, such as travel expenses.

In recent years, the main issue in debates about the funds is that they are still too much restricted to specific sectors, while intersectoral mobility has increased significantly. The Ministry of Social Affairs and Employment considers establishing a national fund. Another issue is the position of different categories of flexworkers and of self-employed as they tend not to be part of sectoral organisations or associations, and as such have less immediate access to the O&O funds compared to individuals in more traditional employment.

There has been further policy discussion in 2017 at the national political level about improving inter-sectoral education by facilitating cooperation between funds. Such inter-sectoral training initiatives aim to make employees and workers more sustainably and transversally skilled in order to improve their mobility on the labour market. The Netherlands sees these O&O funds as important aspects for promoting lifelong learning, which in the context of the pressures on the social welfare state is becoming increasingly relevant. A specific issue within this policy discussion is whether it is reasonable or even realistic to require smaller funds (with reserves of less than €10 million) to contribute to inter-sectoral initiatives in aid of sustainable employability and transversal labour market skills.

Funding

  • National funds
  • European funds
  • European Funds (ESF)
  • Employees
  • Social partners (jointly)
  • Companies

Involved actors

National government
Monitoring; cofunding.
Employer or employee organisations
Based on collective agreement.
Andere
Companies (funding), European Structural Funds (ESF) (funding).

Effectiveness

In 2020, according to some organisations there are around 60 O&O funds, while other organisations (such as the aforementioned SOOB), count some 140 funds. As indicated above, there tends to be a difference in how organisations defin these funds. Some organisations for instance may combine several smaller, sub-sectoral funds under one sectoral fund (hence arrive at 60 organisations, while other organisations such as the SOOB arrive at 140 or so.) It is also worth noting that many are set up within sectors by private organisations such as groups of employers or employer organisations.

In 2015, the labour inspectorate identified 15 sectoral training and development funds (henceforth called O&O funds). Most individual training schemes are 'connected' to a sector collective agreement, in the sense that issues such as its approximate budget and strategic approach can be decided during collective agreement negotiations. 

Around 40% of all workers are covered by a training fund. Small firms (those with fewer than 50 employees) provide a lower level of training than that provided to employees of larger firms.

In 2018, the Ministry of Social Affairs and Employment responded to a series of parliamentary questions about the sectoral training and development funds. The main focus of these questions was about the funds and reserves of the O&O funds and whether enough money was being spent on the right activities, and not 'left accumulating dust'. Questions were also raised about the results of these funds, specifically in terms of how many workers have benefitted from education and training through them. This, however, is difficult to measure as the funds are sectoral organisations which each have their own approach to monitoring education and training. Comprehensive insight into the effectiveness of these funds is therefore difficult to establish on a national scale.

In 2017 and 2018 the policy discussion also started to target the point that some O&O funds have funds which they do not use sufficiently so that workers miss out on learning opportunities. The Minister pointed out that employers in the Netherlands spend around €1.7 billion on average every year for the education and training of workers. Of this amount, some €240 million go to O&O funds. However, the spending O&O funds choose to engage in is something which must be discussed with sectoral social partners and can vary per sector as a result. Due to the multitude of O&O funds in the Netherlands, establishing the effectiveness of these funds can be challenging.

Strengths

The O&O fund system helps to establish collective, sectoral contributions to improving the quality of the labour force for a sector, and in doing so, contribute to the dynamism of sectoral labour markets and the sectors more generally. Through the collective labour agreements, enterprises and social partners come together to establish relevant and necessary developments in the sector and how best to address and pursue these through education and training. The collective financing nature can be seen as a strength of the O&O funds as companies and their employees are implicitly involved with the funds, which helps promote awareness of the funds and what they offer.

Temporary agency workers have access to these training funds (unless this right is abolished by a collective agreement); there is even a separate training fund for temporary agency workers. All employers and employees contribute to funding (irrespective of whether or not they access the training provided). The system exists in parallel to governmental support programmes. Training costs can be deducted from the pre-tax profits and incomes of both employers and individuals. It offers support to companies involved, by helping them to conduct training within statutory limits. The scheme increases awareness, among employers and employees, of the importance of training, and encourages them to participate in training activities. It leads to an improvement in the quality of training courses provided and aligns them with the sector needs. Finally, as a result of this scheme, available training becomes more independent of the economic situation; the system of deducting compulsory contributions from salaries is a stable one.

Weaknesses

The scheme involves no inter-sectoral or interregional perspective and training only focuses on one sector. Despite the fact that all enterprises in a sector contribute to the funds according to the collective labour agreement, in practice not all companies benefit from training activities supported by the O&O funds to the same degree. This is largely due to a lack of information on this training opportunity, poor alignment between training supply and demand (from employers or employees), as well as to practical problems, such as those involved in finding temporary replacements for employees who are on training so that the business processes can continue. In particular, the scheme has encountered difficulties in reaching small and medium enterprises (SMEs), notably micro enterprises (up to 10 employees) which tend to have fewer financial and human resources to implement training compared to larger enterprises. 

Beispiele

Fund for metal and engineering industry (Metalektro). Stichting A&O (Arbeidsmarkt en Opleidingsfonds, Labourmarket and education fund) Metalektro. Fund for the local government (gemeenten). Stichting A&O-fonds gemeenten
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