Estonia: New training schemes aim to counter unemployment
Training schemes to prevent unemployment and support employment will be available for Estonian employees from May 2017. The social partners are hopeful that these will help to address the issues of an ageing labour force and skills mismatch.
The labour market situation has steadily improved in Estonia since the economic crisis. The unemployment rate fell from 17.1% in 2010 to 7% in 2016 among 15–64 year-olds, and is below the EU28 average (8.7% in 2016), according to Eurostat. At the same time, the employment rate of this age group has increased from 61.2% to 72.1%, above the EU28 average (66.6%). However, despite the positive trends, the labour market will soon be affected by an ageing and decreasing population, a large number of unskilled workers and a skills mismatch. It is estimated that by 2030 the number of working-age people will have fallen by approximately 100,000 compared to 2010. In addition, around one-third of working-age people aged 25–64 do not have a professional or vocational education and only 15% of working-age people participate in life-long learning (PDF).
For many years, both the Estonian Trade Unions Confederation (EAKL) and Estonian Employers’ Confederation (ETKL) have promoted the importance of developing measures for retraining and lifelong learning to help employees keep their jobs, adjust to the changing labour market and stay competitive. EAKL has stated that the key to Estonian economic development is lifelong learning which must become commonly available for everyone, while ETKL also points out that it is important to concentrate on developing those skills that are actually needed in the labour market. The need for retraining measures is also important in the light of recent and forthcoming reforms in Estonia, which aim at activating those with reduced work ability and bringing them back into the labour market, and encouraging people to stay in the labour market longer by increasing the retirement age.
In March 2015, the tripartite supervisory board of the Estonian Unemployment Insurance Fund (EUIF) tasked its management with developing measures to prevent unemployment. After more than a year of research, exploring the practices of other countries, carrying out data analysis and consulting with relevant stakeholders, EUIF proposed the measures which were approved by the supervisory board in August 2016.
As a result, the measures were included in the new Employment Programme (Tööhõiveprogramm) 2017–2020 approved by the Government in March 2017. The programme allows the EUIF to provide additional labour market services, and provide them under more flexible conditions, than provided for in the Labour Market Services and Benefits Act (Tööturuteenuste – ja toetuste seadus). The programme takes into account the most recent developments, current situation and forecasts in the labour market. It was first adopted in 2012 and has since been renewed every two years.
Details of new measures
Targeting both employees and employers
The programme was introduced in May 2017. It will continue with measures set out in the 2016–2017 programme, but focus more on preventing unemployment. The measures aim to tackle the issue of skills mismatch and respond to the need to help people adjust to the changing labour market by giving employees opportunities for training and studying, and supporting employers to upskill their employees.
In order to ensure that the employees acquire the skills actually needed in the labour market, training opportunities are provided only in areas which have a growing need for employees according to surveys on sectoral needs for labour and skills by the Estonian qualifications authority OSKA. OSKA acts as platform for cooperation between employers and parties ,offering educational services in order to plan the structure, volume, and the content of training. OSKA also collects and analyses information on the trends of the labour market and economy and forecasts labour needs.
The measures especially target employees at risk of losing their jobs due to poor health, lack of skills or outdated skills. There is also an allowance available for employed and unemployed people when they start vocational or professional higher education or study for a degree. The allowance is paid at a flat rate of €130 per month if the person is working or has other sources of income, or €260 if the person has no income. Those eligible for this include those who:
- do not have a professional or vocational education, and who dropped out of basic or general secondary education at least five years ago;
- went through professional or vocational education more than 15 years ago;
- need to change jobs and acquire new skills due to a health condition.
Labour market training has now been extended to cover working people. Under this scheme, a training voucher worth €2,500 can be used over three years by employed people and over two years for those who are unemployed. The scheme's regulations specify who may claim the voucher and the type of course it can be used to pay for.
Special conditions are available for certain groups, as follows:
- Those who need to change jobs due to a health condition are eligible for any suitable training.
- People who lack Estonian language skills and earn less than 1.7 times the national minimum wage (€799 in 2017) are eligible for language courses.
- People who earn less than 1.7 times the national minimum wage, who do not have a vocational or professional education, or who are aged 50 or over, are eligible for ICT training or for training in the areas determined by the OSKA surveys.
There is also money available (up to €500) to help people pay for obtaining evidence of their qualifications, such as a certificate or examination fees. To be eligible, trainees must have completed training arranged by the EUIF or training for which the employer has obtained a EUIF grant.
The EUIF is also supporting employers who need to upskill their employees or recruit those with suitable skills. EUIF will pay for up to 50% of training, transport and wage costs (at national minimum hourly rate) but not more than €1,250 per employee; or up to 80% but not more than €2,000 for those without vocational/professional education, without language skills, with health conditions or who are over the age of 50. Grants are available for two categories of training:
- to help improve the skills of employees or update their qualifications where companies are restructuring or implementing new technologies;
- to train new employees in certain professions determined by the OSKA surveys.
The programme’s target group includes approximately 129,000 employees, about 22% of all employed people. It is expected that around 13,000 people will use the measures by the end of 2020, at an expected cost of €58 million, according to the explanatory note in the draft legislation.
The approval of these measures is very important to the social partners, who have had a major role in developing them, and who have long promoted the need for training and lifelong learning. They have previously expressed their dissatisfaction with the government’s lack of engagement with their proposals, made in the consultation phases of drafting legislation or through their role in the supervisory boards of different organisations (including EUIF). They have pointed out that these processes are rather formal and that there have also been phases where tripartite agreement was reached but later changed unilaterally by state, regardless of the social partners’ opinions.
However, the social partners have initiated the development of these measures and seen them through to implementation, to the satisfaction of all parties.