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The impact of sectoral training and development
funds in the Netherlands on employee-training and
the possible link with payback clauses
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Ecbo

• Centre of expertise on VET
• In partnership with universities, knowledge
  institutes and the field, we organize a knowledge
  infrastructure and develop knowledge of relevance
  to VET- Dutch national consortium coördinator
  for ReferNet

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This presentation uses information from 2 ecbo
studies

• OO monitor (study sector funds for training and
  development, or STDFs)
• Monitor post initial education

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Sectoral funds for training and development
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Sectoral Funds for Training and Development (OO
funds)?

• Funds money. A small percentage (0,5 tot 2) of
  the total wage bill within a branch/sector
  creates a fund.
• Governing board exists of social partners in a
  branch / sector
• Original (and primary) goal is anti poaching
  (investment in training by company A hiring of
  employee by company B)
• Usage of the funds is broadly determined by the
  collective agreement (CAO)
• Funds often have an organisation, sometimes one
  or two persons, sometimes over 40.

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Collective agreements

• The Dutch model of wage setting is often
  centralised in collective agreements.
• These agreements are wider than wages and hours.
• There are 200 sector collective agreements, and
  about 800 (large) company collective agreements.
• About 84 of all employees work within a
  collective agreement.

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Study, STDFs and collective agreements?

• Collective agreements can only be classified by
  the ministry as generaly extended if they also
  provide in agreements on training
• STDFs, deriving from these extended collective
  agreements can only be recognized if they
  operate transparently
• Only recognized STDFs can apply for ESF
  subsidies via the department
• Ergo recognized STDFs are only active when
  collective agreements provide clauses on
  training.

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STDFs
2006 2007 2008 2009
Sectoral Funds connected to collective agreements (CAO) 156 148 132 135
..with the goal of training and development (STF) 88 91 86 92
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Finances STDFs (mil)
Income Expences Reserve
2006 510 451 640
2007 537 490 682
2008 469 522 645
2009 461 571 540
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Expenses

• In 2006 STFs spend around 188 mil on Training
  and development. In 2009 this was 336 mil euro
  almost double.
• One can expect a rise in expenses in 2010 due to
  the measures taken as a reaction to the financial
  crisis.
• In the perspective of life long learning OSA
  studies show that approx 35 of companies use a
  variety of subsidies to fund training. About half
  of them use STFs.

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Primary goals of funds.
Goal mentioned by funds Number
Financing training 32
Employability 11
Labour relations 16
Optimize inflow in sector 2
Advice, research 9
Development of training 4
Improving trade quality 8
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Collective agreements training

• Regardless what goals they have funds need to
  follow the collective agreements
• Researched 105 agreements in 118 branches.
• Training agreements are primary focussed on
  functioning in the company, in the own sector.
• Compared to 2005 the focus did not really change.

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Stipulations on training in 105 collective
agreements
Stipulations Number of agreements
Training in dual system 31
Personal development plan 29
Training leave, one or more days All
Leave to take exams 36
Accreditation of prior learning 15
Training for specific groups (45) 29
Training for union, employee participation 38
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Results of STDFs?

• Theres a lot of critisism towards funds. Are
  they too rich? Do they spend their money
  well?
• Research did not show effects.
• The existance of STDF in particular sectors did
  not show a higher training rate.
• But it is difficult to measure succes
• No clear goals (what is succes?)
• Relative small share in the training market

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Post initial training
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Post initial training in prior 12 months. (n
3061 employees. repres. NL)
2010
Participation total 50,3
1 training course 47,0
2 training courses 30,9
3 training courses 12,0
4 training courses 5,4
5 or more training courses 4,7
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Pay back clauses

• 85 of post initial training is paid by the
  employer
• In 2010 47 employees report a payback clause
• In 1999 this was 10, in 2000 28, in 2005 46.

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Payback clauses by sector
Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation
yes, all yes, some no n/a don't know n
Agriculture / fishery 4 37 11 30 17 46
Industrial sector 19 33 18 11 20 245
Construction 13 20 20 31 16 166
Trade 20 26 17 23 14 230
Transport 17 28 17 21 17 138
Catering industry 5 21 25 23 26 57
Financial 21 45 15 7 12 104
Business services 19 33 17 24 6 264
Education 16 28 27 10 20 218
Health 16 33 22 11 18 609
Culture 5 26 11 47 11 19
ICT 16 42 16 14 12 165
Other 13 30 19 18 21 796
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Payback clauses by level
Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation Q Payback clause in case of training in your company/organisation
yes, all yes, some no n/a don't know n
Low 14 20 20 22 23 649
middle 16 30 20 17 18 1410
high 16 41 17 14 12 973
Low level primary, lower secundary education
(lo, lbo, vmbo) Middle level higher
secundary education (mbo, havo, vwo) High level
tertiary education (hbo, wo)
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Payback clauses

• Grew from 10 in 1999 to 47 in 2010
• Present in all sectors
• most in financial sector (66) and ICT (58)
• least in cultural sector (31) and construction
  (33)
• Almost 1/5 of employees are unaware
• Higher educated are more often aware
• Higher educated employees have a higher chance to
  have to deal with payback clauses, particularly
  for selected trainings.

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STFs and communality with pay back clauses?

• They are both a reaction to the fear that
  investments by company A are used by company B
• They both find their basis in the collective
  agreement
• STDFs originally to prevent free riders by
  sharing risks.
• Pay back to prevent free riding by forcing extra
  loyalty from employees
• STDFs seem to have less influence over the
  years, payback clauses are rising

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What impact?

• Employers also invest without STFs
• The financial incentive to train employees is
  smaller that we think
• The STFs seem large but are not always know (and
  some bureacraty is feared) by employers)
• The role of STFs is changing from banks to
  centres of knowledge
• But funds have to react on collective agreements.
  Hence the enormous growth in spending on training
  and development. These agreements are focussed on
  the own company / sector.

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Finally

• Modern times ask for a more flexible workforce,
  the need for inter sector mobility is more and
  more frequently being discussed.
• This requires flexible and easy accessible
  training.
• Training agreements that are primary company or
  sector oriented (based on companies fear of
  loosing investment through poachers) should be
  adapted to these needs.