Role of intersectoral training funds in boosting skills

A recent study on the intersectoral training funds system in Italy, focusing on the national training fund of the services sector, Fondo For.Te., shows there is considerable room for improvement. The study found that the fund could do more to comply with the 2010 Guidelines for Training, agreed by national and regional governments and social partners. The funds need to operate as key instruments in the training process, not mere intermediaries between companies and workers.

Study on intersectoral training funds

The national joint intersectoral fund for continuing vocational training in the tertiary sector (Fondo For.Te.) recently published a study on the role and recent developments of the intersectoral training funds system in Italy.

The study was carried out by Adapt, a non-profit organisation based in Italy that conducts international and comparative studies on labour law and industrial relations.

For.Te. is one of the most important joint funds for continuing vocational training in Italy, in terms of company and worker membership numbers, as well as being the most representative in the services sector, which includes trade, tourism, services, logistics, shipping and public transport. It also boasts a growing number of companies that operate in other economic sectors.

The study showed that in January 2011, more than 140,000 companies paid into the fund, 90% of them in services, 4% in industry and 3% in the crafts sector.

Within the tertiary sector For.Te. members operate as follows:

• Almost 87% in trade, tourism and services;

• 3% in logistics, shipping and transport;

• 10% in other sectors.

For.Te. members employ more than 1.5 million employees, who are potential recipients of the training activities it supports; about 90% are employed in services and 9% in industry. Members are mainly located in the north of the country (73%), while only 13% are based in the centre and 14% in the south, according to data from the National Institute for Social Security (Inps).

Role of intersectoral funds

In Italy there are 20 joint intersectoral continuing vocational training funds. These joint bodies can be set up only by means of an agreement between unions and employer associations.

Their governance reflects their ‘bilateral’ nature; employers appoint half the members of governing boards, and the other half represents the trade union organisations.

The funds were established by the social partners in 2000, under Law No. 388, and are authorised by the Ministry of Labour (IT0202103F). Employers finance the funds by means of an obligatory contribution, equal to 0.3% of their wage bill, and this mainly covers the costs of local, sectoral, company and individual training plans, selected through a joint evaluation procedure (IT0603019I).

Approximately €2.5 billion was managed by the funds from January 2004–October 2010, according to a 2010 report (in Italian, 1.93Mb PDF) from the public research body, the Italian Institute for the Development of Vocational Training for Workers (Isfol). As a result, these funds play a major role in the national continuing vocational training system (IT0804049Q).

Recent legal developments suggest growing potential for intersectoral training funds in Italy to play a stronger and wider role. First, in the field of social protection legislation, Law No. 2 of 28 January 2009 introduced the possibility of extending the intervention of training funds to temporary and exceptional income-support measures for freelance workers and fixed term workers as well as apprentices.

Secondly, Law No. 183 of 4 November 2010 amended the so-called ‘Biagi Law’ (IT0307204F), or Legislative Decree No. 276 of 10 September 2003, to allow the temporary work agencies’ training fund (Forma.Temp) to use its resources to cofinance income support measures for fixed-term temporary workers.

Guidelines for training

On 17 February 2010, the Italian government, regional administrations, the autonomous provinces and the social partners signed an agreement, 2010 Guidelines for Training (in Italian, 42Kb PDF), laying down criteria and guidelines for the monitoring of both public and private resources for training. The implementation of vocational training programmes lies under the exclusive jurisdiction of the regions.

The guidelines promote an approach to continuing training that is competence-based and geared towards learning outcomes, and its design should always reflect real skill needs. They also state that training should increasingly take place at the workplace, with the support of ex-post validation procedures of non-formal and informal learning.

The effectiveness of the guidelines has been extended to 2011 and 2012 by an agreement between the state and regional administrations (in Italian, 28Kb PDF) on passive and active labour market measures, reached on 20 April 2011. Finally, the 2011 Consolidated Act on Apprenticeship (Legislative Decree No. 167 of 14 September 2011, in Italian) opened up the possibility for continuing vocational training funds to finance company level training for apprentices (IT1108019I).

Main findings

The study examining the role and recent developments of the intersectoral training funds system in Italy released by Fondo For.Te. investigates whether – and to what extent – it is possible to redefine the functions and the functioning of intersectoral joint funds for continuing vocational training in Italy, with particular reference to the tertiary sector, following the above-mentioned changes in the national institutional framework and in light of the 2010 Guidelines for Training.

According to the study, the significant development of For.Te. in recent years, mainly in terms of rising membership, should be promoted with a view to bring it more closely into line with EU level recommendations on continuing vocational training and lifelong learning, as well as from good practices in other Member States.

The study offers a preliminary quantitative analysis of the activity of For.Te.

The service sector accounts for three million active businesses (55% of the total firms in Italy), 15.5 million workers (67% of total employment) and 50% of the aggregate value produced by the economy.

For.Te. accounts for 36% of the total membership of intersectoral continuing vocational training funds in the service sector (with almost 130,000 members) and it holds the largest share of members, compared to all other existing funds in the service sector. However, For.Te. members represent only 5% of all the firms in the sector.

In order to qualitatively assess the training activities designed and funded by For.Te., the study analysed the 483 training projects financed by the fund, in 2009 and 2010.

Almost 80% of the funded training projects were allocated to companies operating in trade, tourism, and services. In the majority of cases, they were company projects (68%), with the rest distributed between intersectoral projects at a local level (21%) and nationwide sectoral projects (11%).

A significant gap has been reported between the projects and the 2010 Guidelines for Training, as training is rarely ‘skill-centred’, and mainly takes place in classrooms rather than workplaces, with scant attention to the assessment and evaluation of learning outcomes. The investigation revealed five areas of concern.

• Skills and training needs analyses were carried out in only about half the projects (53%), whereas such analyses, according to the guidelines, should be the preliminary steps to any training activity.

• Companies tend to apply for funding mainly to update the existing skills of their employees (95% of the cases), which often results in generic teaching programmes, rather than individualised investments in specialisation that can be strategic for company competitiveness and for workers’ personal growth.

• Almost all (98%) of the approved training programmes envisage classroom training, while only 28% contain an element of on-the-job training, and an even smaller number (13%) use e-learning. This seems to confirm an out-of-date approach to training, since the guidelines suggest greater integration between different training methods.

• Assessment and certification procedures are mainly based on attendance at training courses (about 90%) rather than learning outcomes.

• Only a quarter of all training courses provided for individualised training, which shows little attention to the learner-centred training process.

The report also includes a comparative study of continuing vocational training systems in France, Spain, the United Kingdom and the Netherlands. Funds in these countries, despite their differences, not only provide economic resources for training, but aim to actively manage the training processes, tailoring training activities to the needs of workers and companies, and to increase company competitiveness.

In these experiences, especially in France, the interaction between funds and local communities in managing the process is crucial to the understanding and identification of skill needs, which helps businesses to design and manage training, while also facilitating information dissemination and lifelong guidance.

Future perspectives

The study offers insights for the strategic development of the intersectoral continuing vocational training funds in Italy and, in particular, to help redefine their nature, tools and beneficiaries. The report states that social partners are the core actors in the training market, and should therefore act as ‘engines’ of the training process, not mere intermediaries between companies and workers.

The Director of Fondo For.Te., Eleonora Pisicchio, maintains that:

The fund has so far guaranteed important investments in human resources through more than €450 million spent in skill development for more than a million workers. For the future, For.Te. intends to implement an accessible system, with lighter bureaucratic constraints, simplified procedures and [be] open to innovations in training methods and tools, capable of linking professional needs and training outcomes.

Indeed, following the 2010 Guidelines, training fund resources can be allocated not only to training provision, but also to preparatory and subsequent activities like skills needs analysis, learning outcomes assessment and validation.

In addition, funds can redesign their activities at a local level, in cooperation and synergy with regional administrations.

Funds might also co-finance income support measures, through targeted initiatives that combine passive and active employment policies. As a consequence, recipients could include workers who are not employed by firms that pay the 0.3% wage bill contribution. By strengthening the role and scope of the joint funds’ interventions, it will be possible to widen the reach of their activities and make them a key actor in labour market policies.

Lisa Rustico, University of Modena and Reggio Emilia