Report advocates radical overhaul of vocational training system

A report published by the Paris Chamber of Commerce in September 2006 advocates a radical overhaul of the French vocational training system. The report’s authors point to a number of limitations of the system, in particular the poor coordination and inefficient use of funding. The trade unions are, however, opposed to some of the recommendations of the report, in particular the proposal to remove the individual right to training.

The Economic Observation Centre of the Paris Chamber of Commerce (Chambre de commerce et d'industrie de Paris, CCIP) regularly commissions independent experts to compile data on the functioning of the labour market and on possible reforms needed. On 18 September 2006, CCIP published the study on the French vocational training system ‘Adults’ vocational training: A system adrift’ ([La formation professionnelle des adultes: un système à la derive, 524Kb PDF](http://www.droitdelaformation.com/documents/cahuc ccip.pdf)) by professors Pierre Cahuc and André Zylberberg.

Main findings

According to the authors of the report, the French vocational training system shows three main limitations:

• lack of coordination – poor coordination of plans orchestrated by a multitude of actors, including the state, local authorities, trade unions and employer organisations;

• inefficient use of public funding – authors blame a bureaucratic and ineffective system of funding;

• unequal distribution of pooled financial resources – lack of transparency in allocation of funding provided by companies, which results in an ‘insufficient equal sharing of the resources and substantial competitive distortions and, as a consequence, a badly structured offer of vocational training’.

In total, the authors estimated that about €23 billion, or approximately 1.3% of GDP in 2005, was spent on financing vocational training activities. In most cases, these actions proved to have had only a marginal impact on career paths. Short-term training schemes appear to have been particularly ineffective, with at least one year of training being required to lead to a wage increase of between 5% and 15%. Moreover, it was predominantly wage earners who already held a graduate degree who attended long-term training courses.

Recommendations

The report’s authors underline that a more balanced and efficient vocational training system requires sound reforms based on three objectives, namely:

1. Removing the legal obligation to finance vocational training

2. legal obligation, instituted in 1971, appears to weigh heavily on employers. The report recommends that vocational training actions should instead be financed by state subsidies granted to companies or to wage earners ‘on the basis of the incurred expenses’. At the same time, the role of the Joint registered collection agencies (Organismes paritaires collecteurs agréés, OPCA) – in charge of gathering funds for vocational training at company level – should be abandoned.

3. Reorganising the public employment placement and vocational training services for adults

4. could be achieved by establishing a centralised system, which would offer differentiated training opportunities to applicants for employment, given by external and/or private service providers.

5. Removing the individual right to training (droit individuel à la formation, DIF)

6. right stemmed from an interprofessional agreement (FR0311103F), which was transposed into law on 4 May 2004, in order to direct public spending towards long-term and intensive training in the job market, first and foremost targeting people with the least prospects in the labour market. However, the authors consider that the DIF has in effect made ‘all wage earners and all companies pay for the training of workers who are already skilled’.

Reactions of social partners

Overall, the trade union confederations were critical of the report’s proposals. The French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) objected to the social decline that would result from the removal of the legal obligation to finance training – a longstanding ‘social acquis’. Furthermore, they argue that its removal had not even been requested by the employers.

The CFDT and the General Confederation of Labour (Confédération générale du travail, CGT) both disagreed with the opinion expressed in the report with regard to the collecting agencies, which the authors criticise for their ‘outrageous power in the direction of the market of vocational training’. They argue that there is, in fact, a distinction between collecting agencies and training providers, and that the surplus collected is allocated to a single fund and reallocated according to purposes validated by the social partners.

According to the General Confederation of Labour – Force ouvrière (Confédération générale du travail – Force ouvrière, CGT-FO), it is premature to remove the DIF at this point, as it has not produced its full effects yet; a majority of wage earners have yet to accumulate a sizeable proportion of training hours before they can avail of the benefits of such training. Moreover, the CGT-FO contends that the contracts of professionalisation (contrat de professionnalisation), which support the individual right to training particularly among those whose levels of qualifications lag behind technological and organisational developments and which stemmed from the social cohesion law of January 2005, are aimed at low-skilled wage earners, and should thus address some inequalities in relation to certified training (FR0409104F).

The French Confederation of Professional and Managerial Staff – General Confederation of Professional and Managerial Staff (Confédération française de l’encadrement – Confédération générale des cadres, CFE-CGC), for its part, is critical of the idea of implementing a training scheme subsidised by the state to substitute the current principle of pooling funding provided by companies, which is then redistributed between small and big enterprises depending on their training needs.

Finally, all of the trade union confederations are critical of the fact that the report’s authors made no effort to interview any representatives of the trade unions, employer organisations or the different vocational training institutions. Neither the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) nor the government offered any reactions.

Florence Lefresne, Institute for Economic and Social Research (IRES)