Hungary: Continuing vocational training in enterprises

Training at the workplace is of paramount importance, in terms of enhancing economic growth, promoting adjustment to labour market demands, dealing with unemployment and ensuring social security. The primary aim of the study, prepared in 2006 and reflecting the situation in 2005, was to gain a thorough and better understanding of the investment in human resources by enterprises employing more than 10 workers.

The survey, based on a representative sample, provides information about the training policies of almost 30,000 enterprises, as well as their training practices, which may rely on traditional or other forms of training. The first results for Hungary were published in a publication of the Hungarian Central Statistical Office (Központi Statisztikai Hivatal, KSH), the 2007/14 issue of Statisztikai Tükör (in Hungarian, 147Kb PDF). Detailed analysis was made public in the 2008/46 issue (in Hungarian, 165Kb PDF) of the same publication.

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About the survey
Main findings
Commentary
 


About the survey

The survey, carried out by KSH on a regular basis, was conducted from the perspective of enterprises regarding training policies, employee participation, the obstacles to training and costs of training provision. The survey and the methodology of data collection followed the instructions laid down in the European-level Continuing Vocational Training Survey (CVTS) carried out by Eurostat.

Methodology

The survey explored the training practices of enterprises operating in the economic sectors of NACE C–K and O, defined according to the Statistical Classification of Economic Activities in the European Community (Nomenclature statistique des activités économiques dans la Communauté européenne, NACE). The target group of the survey was companies operating at the time of data collection and employing at least 10 people. The list of these enterprises was provided by the Register of Economic Corporations (Gazdasági Szervezetek Regisztere, GSZR). The survey examined all of the enterprises with at least 150 employees, while in the case of smaller ones a stratified sample was used. In total, 6,000 enterprises were surveyed in Hungary.

The contacted companies filled out a self-administered questionnaire electronically or on paper. Paper-based questionnaires were distributed by post but data providers also had the opportunity to download the questionnaire from the internet. In order to aid data provision, respondents were provided a guide with instructions for completing the questionnaire, as well as an explanation of the terms used in the questioning.

At KSH, the so-called GESA system, which is a centralised registering and monitoring system, administered incoming data from the companies involved in the study and monitored the response rate. Those companies that failed to initially return the completed questionnaires were contacted by telephone or sent a letter encouraging them to do so.

The questionnaires received were initially screened for completeness and before data registering they were thoroughly reviewed. Incomplete questionnaires were followed up. The data entry software ‘Blaise’ was used to perform control functions, focusing partly on logical connections between certain questions, and partly on questions of size and categories. Eurostat validated the data through a second stage of correction, with software that allowed meticulous data processing. The dataset was then transferred to Eurostat.



Main findings

Increasing importance of training at work

The results indicate that almost half (49%) of all companies operating in 2005, provided the opportunity for their employees to participate in some kind of training. Compared with the findings from the 1999 survey, this represents an increase of 12 percentage points (Table 1). A large majority (41%) of enterprises chose to support some form of non-traditional training programmes over traditional ones (34%), such as training courses. Compared with 1999, this corresponds to a 10–11 percentage point increase in both forms of training provision.

Table 1: Enterprises supporting employee training, by company size, 1999 and 2005 (%)
No. of employees 1999 2005
10–49 employees 32 43
50–249 employees 51 79
Over 250 employees 79 92
Total 37 49

Source: KSH, 2008

The majority (52%) of enterprises that supported training used both forms of training. Only 17% supported participation in traditional training courses, while one third supported only other types of training programmes.

The average figures hide great differences by company size and industrial sectors. Company size has fundamentally affected the propensity to participate in training: in 2005, almost all large enterprises employing over 250 people supported some kind of vocational training, this was true for 80% of medium-sized companies with 50–249 employees, but only a little over 40% of the small enterprises with 10–49 employees. This shortfall in the case of small companies greatly affects average values, given that a dominant part of enterprises in Hungary are small enterprises.

Differences can be found in the rates of enterprises supporting training, also by economic sector. In 2005, companies supporting training were mostly operating in the domains of financial services, postal services and telecommunications, as well as public utilities such as electricity, gas, steam and water works. As much as 70%–95% of companies in these areas of activity provided some kind of training for their employees. On the other hand, companies in the textiles, clothing and leather industry (27%), as well as those in catering (30%) and the wood and processing industries (32%) lagged behind the average.

Types of training

Enterprises supported the continuing vocational training (CVT) of their employees in the form of training courses in addition to other forms of training if it was deemed relevant for their jobs. In 2005 – similarly to the pattern in 1999 – the majority of companies relied on other forms of training, such as the exchange of experience and know-how at conferences and seminars, rather than supporting participation in traditional training courses (Table 2). Companies chose this alternative form of training despite the fact that an increasing number of the more traditional training courses provide qualifications recognised by the National Qualifications Register (Országos Képzési Jegyzék, OKJ). A 10–11 percentage point increase may be observed in the case of both forms of training (Tables 2 and 3).

Table 2: Companies providing CVT for their employees, by type of training, 1999 and 2005 (%)
Type of training 1999 2005
Traditional training (training course) 24 34
Other form of continuing vocational training 30 41

Source: KSH, 2008

Table 3: Companies providing other, non-traditional forms of training, 1999 and 2005 (%)
  1999 2005
Direct, on-the-job training in a work situation 16 18
Study visits, job rotations 5 3
Training in study groups 4 7
Self-training 6 7
Participation in conferences/seminars 22 32
Total 30 41

Source: KSH, 2008

Internal versus external training provision

A greater proportion of companies providing traditional types of training organised training externally – that is, training was carried out by other training companies. More than 90% of companies supported external training programmes and over a third of them organised training internally. The difference between the rates of the two types of training provision did not change from 1999.

Close to a third of all companies ensured the improvement of their employees’ professional skills in the framework of traditional training. In doing so, typically external professional training was applied. Internally organised training programmes were provided by about two fifths of the enterprises supporting training, which accounts for 13% of all enterprises.

In addition to the choice of whether to support training, company size also significantly affects the company’s choice of external or internal training. More than half of all large companies surveyed carried out training internally, while less than a tenth of small enterprises did so. Among the companies providing traditional training – in the form of a training course – external continuing vocational training dominated, irrespective of company size. More than 80% of companies employing over 250 people and about a quarter of companies with fewer than 50 employees organised external training courses for their employees. By economic sector, companies in telecommunications (55%), the automotive industry (50%), financial services (50%) and public utilities (46%) organised internal training for their employees, while almost all of them equally provided external training too.

Access to training

Providing continuing vocational training for employees is of key importance for employers from the point of view of the development and market participation of the company. The access to training rate represents the proportion of training participants relative to the total number of employees. In 2005, 16% of all employees participated in traditional training courses provided by companies. While this represents a four-percentage point increase compared with the respective data in 1999, the Hungarian level still lags significantly behind that of the EU (40%). In terms of gender, there is no significant difference in the rate of access to training between women and men: the access to training rate among men increased by three percentage points to 16% between 1999 and 2005, while the respective rate among women grew by four percentage points to reach 15% by 2005. Thus, men’s advantage in this respect has declined.

Significant differences can be noted with respect to access to training by company size. While only 7% of employees in small enterprises had access to continuing vocational training in the course of 2005, the respective rate amounted to 25% in the case of companies with over 250 employees (Table 4). In the case of medium-sized companies with 50–249 staff members, a much lower proportion of employees (11%) had the opportunity to participate in training than in the case of larger enterprises. Compared with the results of the 1999 CVTS1 survey, the national average access to training rate has significantly improved, due mainly to the significant increase in the level of training subsidies among companies employing more than 250 employees. The access to training rate of employees in small enterprises has practically remained unchanged, while that of employees in medium-sized companies has increased by only 2 percentage points.

Table 4: Employees’ access to training, by company size, 1999 and 2005 (%)
No. of employees 1999 2005
10–49 employees 7 7
50–249 employees 9 11
Over 250 employees 19 25
Total 12 16

Source: KSH, 2008

Differences in CVT participation by gender

In 2005, access to training among women and men employed in small and medium-sized enterprises (SMEs) stood at 7% and 11%, respectively. In companies with more than 250 employees, the rate of women accessing training programmes also lagged behind that of men (22% against 27%). These findings are similar to those of the 1999 CVTS survey.

Differences in CVT participation by economic sector

In addition to company size, employees’ access to training is also affected to a great extent by the economic sector in which the company operates (Table 5).

Table 5: Employees’ access to training, by economic sector (NACE code), 1999 and 2005 (%)
Sector 1999 2005
Manufacturing (D) 13 12
Wholesale and retail trade; repair of motor vehicles, motor cycles and personal and household goods (G) 8 13
Financial intermediation (J) 45 38
Other service activities, covering real estate, renting and business activities (K) and community, social and personal service activities (O) 10 10
Other sectors 17 25
Total 12 16

Source: KSH, 2008

Despite a seven percentage point decline compared with the previously recorded rate, in 2005 the level of access to training among employees in the financial services sector remained the highest at 38% among all of the economic sectors surveyed – this is more than double the national average access rate to training. In the wholesale and retail trade sector, there was a five percentage point increase in the access rate, due primarily to the more favourable working conditions of employees in companies operating in the automotive, fuel trade (15%) and retail trade sectors. The access to training rate of employees in wholesale stood at 11%, which was five percentage points lower than the national average. Employees had the least opportunities to access training in the textiles, leather and shoe manufacturing industries (4%), as well as in wood processing.

Differences in participation in training courses by age

The level of participation in training and the rate of access to training vary by age groups as well. Typically, employees in the 25–54 age group participated in traditional vocational training such as training courses provided by the company. In 2005, 12% of employees under the age of 25 years, 17% of employees aged 25–54 years and only 9% of employees over the age of 55 years participated in CVT provided by their employers. The participation rate in traditional training courses in the entire workforce amounted to 16% in 2005.

Participation rates

Changes in employees’ participation rates in company-supported CVT are closely related to the growth in the size of enterprises and the growing number of employees partaking in training. Table 6 highlights the participation rate of employees pursuing traditional training courses relative to the number of all employees working in a company in 1999 and 2005.

Table 6: Employee CVT participation rates, by company size, 1999 and 2005 (%)
No. of employees 1999 2005
10–49 employees 32 23
50–249 employees 22 16
Over 250 employees 26 27
Total 26 23

Source: KSH, 2008

In total, 23% of employees in companies organising vocational training for their workforce participated in traditional training courses in 2005. This value was three percentage points lower than in 1999. Thus, despite the fact that in 2005 there was a greater number of enterprises providing training opportunities, in total a lower percentage of employees had the possibility to participate in training. The explanation for the decreasing participation rate is that while in 1999 47% of employees worked in enterprises that supported traditional training, the respective rate in 2005 amounted to 63%. Therefore, the number of employees working in enterprises supporting training increased at a greater pace than the number of employees participating in training.

In 1999, 32% of employees of small enterprises supporting training took part in traditional training courses, while in 2005 only 23% of employees did so. A considerable decline of six percentage points can also be noted in employees’ training participation rate in medium-sized enterprises. However, in large companies that provide training for their employees, the participation rate increased by one percentage point to 27%; it can therefore be concluded that in such companies a greater proportion of employees had access to training provided by the company.

Participation in traditional training courses by gender

In 2005, 24% of male employees participated in vocational training provided by enterprises supporting traditional training courses. The respective rate among female employees stood at 22%. Both of these rates represent a three percentage point decline compared with the results of the 1999 CVTS survey. A considerable difference in the training participation rates of men and women could only be noted in the case of large companies: in 2005, 30% of male employees participated in training courses compared with 25% of female employees.

Paid time off for CVT

One important indicator of vocational training provided by companies is the number of hours offered to employees to participate in such training. By providing time off for employees to take part in training, the enterprise exempts workers from performing economic activity in its effort to fulfil longer term interests. In 2005, employees participating in vocational training provided by companies spent 0.3% of all working hours on training – that is, three hours spent on training out of 1,000 paid hours worked (Table 7). The proportion of paid time off for training therefore remains almost at the same level as in 1999.

Table 7: Time off provided for participation in CVT per 1,000 paid working hours, by company size, 1999 and 2005 (hours)
No. of employees 1999 2005
10–49 employees 2 2
50–249 employees 2 2
Over 250 employees 4 6
Total 3 3

Source: KSH, 2008

In 2005, there continues to be great variation in the number of paid hours that employees spent on vocational training among companies: employees of large enterprises spent more time on training relative to the total number of paid working hours (six hours out of a 1,000 paid hours worked) than employees working in smaller companies. The respective proportion in the case of employees of medium-sized enterprises stood at two hours per 1,000 paid hours worked. It seems reasonable to say that SMEs are less able to afford to exempt their workers from economic activity in the companies’ interest. Comparing with data from previous surveys, a polarisation among companies emerges with respect to the number of hours spent on vocational training out of the total number of paid hours worked: only large companies increased the number of paid hours for their employees to participate in vocational training. As a result, the twofold difference in this respect between companies of various size increased to a threefold one.

In terms of economic sector, the number of hours per 1,000 paid hours worked provided for vocational training increased by three percentage points mainly in companies operating in the financial services sector compared with the situation in 1999. Therefore, by 2005 the number of hours spent on training in the financial services sector had reached a level three times as high as the national average. The respective proportion was even higher in public utility companies with 13 hours spent on training per 1,000 paid hours worked. With the exception of large companies, the proportion of hours spent on vocational training compared with the total number of paid hours worked declined by one hour in 2005 compared with 1999: in 2005, employees were provided 37 hours on average for training, which is one hour less than at the time of the previous CVTS survey in 1999 (Table 8).

In 2005, there was a substantial decrease in the number of hours spent on training by employees of enterprises with 10–49 staff members. In these enterprises, employees were entitled to 10 hours less in paid time off for training in 2005 than in 1999. Employees of medium-sized enterprises with 50 to 249 staff members were also provided fewer hours (-4) for training out of their total hours worked. Only in large enterprises, the proportion of hours provided for training increased by two hours.

Table 8: Number of hours provided for CVT compared with the total number of hours worked, by company size, 1999 and 2005
No. of employees 1999 2005
10–49 employees 45 35
50–249 employees 38 34
Over 250 employees 36 38
Total 38 37

Source: KSH, 2008

Looking at gender, men were able to spend five hours more on training than women out of their total hours worked: 39 hours for male employees compared with 34 hours for female employees. The gender difference was largest in small enterprises where female employees spent an average of 27 hours, compared with 41 hours for men, on training out of the total hours worked. Medium-sized enterprises with 50–249 staff provided the best opportunities for women in this respect: in 2005, female employees of these companies spent 36 hours on training, which was more than the hours spent on training by their male counterparts.

In terms of economic sectors, companies operating in public utilities (69 hours), wholesale (48 hours) and personal services (47 hours) provided for the greatest number of hours for their employees to spend on vocational training. In 2005, the average number of hours spent on training relative to the total number of hours worked in all enterprises stood at six hours; however, there was a threefold difference between the time off provided for vocational training in small and large companies.

In 2005, large companies provided four times as many hours for training for their female employees as small enterprises – eight hours against two hours. The most time off for training (11 hours) out of the total hours worked was provided for male employees in large enterprises. The total number of hours provided for vocational training in relation to the total number of hours worked showed no significant difference compared with the findings of the previous survey in 1999.

In terms of economic sector in which companies operate, public utility companies allotted the greatest number of hours (23) for training provision to their employees; these were followed by postal services companies (17 hours) and financial services companies (between 14–17 hours).

Barriers to participation in CVT

In 2005, 51% of companies failed to support continuing vocational training for their employees in any form. Looking at the reasons for this situation, the survey results revealed that – contrary to what preliminary data suggested – 84% of respondents thought that their employees’ skills are satisfactory to meet the company’s requirements. In addition, the reluctance to provide training was justified by the decision to hire adequately trained workforce instead (40%), high costs (29%) and the shortage of time (33%). There was no significant difference between small enterprises and larger companies with respect to the reasons why they refrained from supporting the training of their employees. Smaller enterprises justified their reluctance to support their employees’ training with a general satisfaction with existing skills and the small size of the enterprise, while large companies referred more often to the fact that their employees were far too busy to take part in training.



Commentary

The second survey confirmed the expectation that, despite the efforts that have been made in Hungary to promote the vocational training of employees in companies, only less than half of the existing enterprises support employees’ CVT. Both the company size and the sector in which the enterprise operates greatly affect the propensity to provide training. The most common form of training continued to be the traditional type in the form of training courses; nonetheless, supporting employees’ participation in conferences and seminars as well as on-the-job training is growing in significance. The majority of enterprises support vocational training that builds on employees’ previous knowledge, as opposed to training providing a certificate of qualification listed in the National Qualifications Register.

Katalin Balogh, Institute for Political Science, Hungarian Academy of Sciences

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