Employers call for better vocational training

The limited supply of skilled personnel and the gap between the needs of business and educational outcomes is a major cause of concern to business people. This is a major finding from a sociological survey of employers carried out in the period March-June 2005. The survey targeted three main groups: entrepreneurs of micro-companies, owners of small, medium and large enterprises (including exporters and foreign-owned companies) and employers from sectors such as tourism, retail, construction, utilities, food production/agriculture/horticulture, advertising and information technologies. This article focuses on the views of emplyers concerning vocational education and training, lifelong learning, and career development. It also looks at the impact of labour legislation and tax relief in this area. Finally the article highlights the main obstacles faced by employers when trying to develop their workforce.

Lack of appropriately qualified workforce

At the end of 2004, Bulgaria remained the country with the lowest labour productivity within the EU. While an increase in productivity is usually dependent on increased economic growth, the restructuring of employment towards higher productivity sectors can also have a positive impact. Only high technological sectors have the potential for accelerated growth in productivity and the economy is confined to low and medium technological production facilities. Employers are aware of these problems and recognise the relationship between employees’ qualifications and increased productivity.

According to the persons interviewed in the survey, improving the quality of the labour force is primarily the government’s responsibility, and employers have a secondary, complementary role to play. The choice of a profession is an individual’s decision whereas admission to certain university courses is decided by the state which finances the education system. According to employers, there is no regulation of university or college admissions, or of the number of third or second level graduates. Furthermore, employers are not asked their views about the skills required for their sectors. There is no regulation of the education and graduate market. Entrepreneurs question the mismatch between university courses and the skills required in industry. They blame the state and government authorities, particularly since the government has failed to carry out the educational reforms it first promised 14 years ago.

Employers believe that most employees are not adequately qualified. Despite the great supply of workers in the labour market, employers find it difficult to find appropriate personnel. The percentage of students who obtain a university degree is very high: 25.8% of young people attend university and another 3.1% go to college. However, there is a clear need for vocational training to enable people find employment in occupations that do not require such high qualifications.

The educational system as a whole is poor. Many people graduate from secondary school or university lacking in skills and knowledge. Acquiring a university degree has become an end in itself and its usefulness is not questioned. Vocational training is carried out with out-of-date equipment and redundant technology no longer used in enterprises. University education is largely theory-based and has little or no practical application. Employers tell stories of accountancy graduates who are unable to write cheques.

Another problem is the lack of a clear internship and apprenticeship system. Employers believe that traineeships are the best way to select good future workers and specialists. They fully support all initiatives and programmes in this area and those employers who have had any experience with such government measures are very satisfied with the results. Meanwhile, they claim that there are no incentives for employers to accept trainees.

Lifelong learning, motivational courses and on-the-job training

Employers also claim that many people of working age in Bulgaria 'simply do not want to work'. Others 'pick out a job depending on the wages and qualifications'. Such generalisations are symptomatic of a tendency among employers to blame workers and employees for all the ills of a company, thereby justifying low wages. This attitude is as damaging for the future development of market relations, including the labour market, as it is an obstacle to the breaking of the vicious circle of (officially) low wages in the private sector.

Employers also claim that workers have no interest in further qualifications once their second- or third-level education is completed. There is no predisposition to lifelong learning or to career development. It seems that this has become an element of the Bulgarian work culture, which is to the detriment of both the employer and the worker.

Although the issue of motivational courses and in-house training has no direct relation to employee’s qualifications, it falls under this section. This is because of the apparent interest of employers in these issues, inspired by the necessity to cope with a lack of staff motivation. While big companies can afford to pay for 'teambuilding' based on the western model, SMEs are unable to do so and hence tackle the problem in an amateur fashion. In this area, the small and medium-size enterprises in Bulgaria need urgent and effective support.

Need for labour legislation and tax incentives

Employers claim that lack of investment in staff development stems from labour legislation and the lack of support for employers who facilitate employees in obtaining further qualifications, in-house training and lifelong learning. For example, an employer providing training for a worker or employee at his/her expense has no guarantee that the employee will not move to other employment. The Labour Code and other regulations do not stipulate protection for employers who invest in long-term personnel development. In order to protect themselves from 'disloyalty' by workers and employees whose qualification they have invested in, employers use various 'tricks', most often making deductions from the wages and retaining part of employee’s future payments.

Mid-term and long-term investment in staff development in the service sectors e.g. hotels, restaurants, and construction makes little sense because of the great fluctuation of labour. However, in these sectors learning by doing is of great importance. It is worth concentrating government efforts and resources in showcase sectors of the economy like tourism, textile and clothing production, transport services, construction, etc.

It is also not widely known that education expenses are tax-free. Despite this, employers still insist on additional incentives. Such incentives might include making an investment in labour force development tax deductible, or providing tax credits. Government support is urgently needed to improve the qualifications of SME employees since 98% of all companies in Bulgaria, employing 45% of all employees, are classified as small. According to a Eurostat survey ,only 28% of Bulgarian enterprises have conducted any staff training and development. Among the Member States, only Portugal and Romania show lower figures.

The employers think that amendments in the Labour Code and the labour legislation should be linked to changes in the education and vocational training systems, for example development of internship and apprenticeship programs, certification programs and degrees ensuring functional skills. The former refers especially to sectors like hotel management, healthcare, bookkeeping, and logistics management.

Employers are also of the view that you must pay for good qualifications. Several examples were given illustrating how a certificate for a given occupation or specific skills is obtained in Western Europe, where, according to respondents, there are high costs attached to skill attainment. Admittedly, there is government support for those who cannot pay for themselves and this should be the case in Bulgaria. However, the prevailing opinion of people surveyed was that the standards of employees will rise only when they start paying a higher price for education and training.

Conclusion

The limited supply of skilled personnel and the gap between the needs of business and educational outcomes is a major cause of concern to business people. There is a crucial need for middle-level skilled personnel in the labour market. In addition, the quality of employees with a university degree needs to be improved, mainly in terms of acquiring practical skills.

Labour force training is important for the achievement of high economic growth. Businesses recognise the need to act on this matter. Larger companies have the resources and have invested in the mid- and long-term development of their personnel, paying special attention to practical learning and motivation training. SMEs lack resources and blame the state for neglecting their needs, but still hope to get state support for personnel development.

Both large companies and SMEs want tax relief for in return for investment in personnel development. They also want state funding for career development programmes and subsidies to cover part of the wages of apprentices.

There is a prevailing opinion that despite the urgent need of skilled personnel and the awareness of the costs involved, SME employers are not willing to pay for training and re-training courses and certificates. They are only willing to do so in return for tangible benefits (tax relief, subsidies etc.) and if measures are introduced that offer protection against losing retrained employees to competitors. (Balkan Institute for Labour and Social Policy)