Review of Local Job Creation policies in the Czech Republic Action Plan

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OECD Review of Local Job Creation policies in the Czech Republic – Action Plan

The OECD Local Economic and Employment Development Programme (LEED) has developed the Local Job Creation reviews to examine the capacity of local employment services and training providers to contribute to a long-term strategy which strengthens the resiliency of the local economy, increases skills levels and job quality. In the Czech Republic, the review has looked at the range of institutions and bodies involved in employment and skills policies. In-depth work was undertaken in the Usti nad Labem and South Moravian regions.

This Action Plan outlines each recommendation from the OECD review of local job creation policies and next steps for implementation according to the four thematic areas of the review: 1) Better aligning programmes and policies to local economic development, 2) Adding value through skills, 3) Targeting policy to local employment sectors and investing in quality jobs, 4) Being inclusive.

The action planning phase of the local job creation review is designed to be a collaborative exercise between the OECD and the participating government, outlining options for implementation to enhance policies which contribute to job creation at the national and local level.

Better aligning programmes and policies to local economic development

OECD Recommendation

Summary of report findings and potential next steps

1.1 Maintain flexibility in the management of employment programmes and services at the local level within a national system, which articulates strategic objectives and accountability requirements.

The OECD review has highlighted how public employment services in the Czech Republic have been reformed to a more centralised model, where 14 regional employment offices design programmes under the Labour Office and the Ministry of Labour and Social Affairs at the national level.

There is more flexibility for regional employment offices but the 77 former district labour offices (operating at the local level) have experienced reduced flexibility and now mainly administer programmes. Under the previous system, the 77 former district labour offices had a high degree of flexibility to introduce employment programmes and strategies. While some flexibility has moved away from the local level, the reforms were undertaken to ensure equitable standards and services across the Czech Republic.

Next steps for implementation:

(1.1.1) The Ministry of Labour and Social Affairs could develop an employment strategy, which ensures that local actions achieve regional and national objectives. This strategy should be translated into short-term operational action plans for the Labour Office that are periodically evaluated.

(1.1.2) The Labour Office could require the regional branches to develop employment plans. Under this process, the setting of regional performance targets could be carried out as a collaborative exercise between the local and regional offices, resulting in a regional level plan which takes into account the characteristics of the region and its diverse local labour markets. The regional level plan could articulate how its actions will align with objectives articulated at the national level through the Labour Office and the Ministry of Labour and Social Affairs.
(1.1.3) The Labour Office could appoint an individual in each branch regional office to coordinate with the former district offices to ensure that local knowledge, priorities and issues are known to the regional level and that there is sufficient dialogue between local and regional bodies.

1.2 The Labour Office should strengthen the capacity of the regional and local level to deliver programmes while ensuring that private providers complement existing services.

The number of public employment services staff has been reduced through recent reforms, which has negatively impacted frontline workers, such as placement and counselling services at a time of increasing unemployment.

An increasing part of employment and training efforts in the Czech Republic are funded through EU programmes and there is little consideration of sustainability. There have been a high number of employment activities that have had little or no follow-up because of project to project funding. As a result, a number of potentially innovative approaches have not been continued.

Another challenge is that the capacities of local employment services are not effectively complemented by cooperation with private employment agencies. There seems to be no consensus about the role of private providers although discussions are taking place.

Next steps for implementation:

(1.2.1) The Labour Office could strengthen the analytical, methodological and management skills of its frontline employment services staff. It could launch an internal human resource strategy, outlining what competencies are needed to perform tasks effectively. Skills upgrading programmes could be introduced, which aim to further professionalise services. In particular, the capacities to more effectively reach out to employers could be considered.

(1.2.2) The Labour Office could work towards ensuring that its benefit payment functions are not performed to the detriment of placement and counselling services.
(1.2.3) The Ministry of Labour and Social Affairs could establish a expert committee, which would tasked with determing the future role of private employment providers as well as how they work with public providers.
(1.2.4) The Labour Office could consider how to ensure that the outsourcing of services does not place excessive administrative burden on employment service providers.

1.3 Enhance communication and partnerships between local stakeholders in order to promote shared solutions. This could include taking full advantage of existing networks and fora, as well as exploring ways to advance new forms of engagement.

In both Usti nad Labem and South Moravia regions, cooperation between local stakeholders is an issue and there is a quite wide gap between declared cooperation and real day-to-day interaction. Meaningful cooperation requires staff time and also needs local actors to take responsibility beyond their daily agenda. The level of communication between various stakeholders varies but the level of informal communication is not generally reported to be very high.

The Councils for Human Resources Development (HRD) were originally designed to serve as a regional platform on issues relating to skills, education and job creation. In some cases, the Councils for HRD are very effective for bringing together the key decision makers, however there are important disparities between them and it is difficult to assess what impact they have had on the ground.

Next steps for implementation

(1.3.1) Improving the regularity of communication between employment, vocational education, economic development and other stakeholders would help to engage stakeholders in concrete joint actions, taking advantage of synergies between policies and programmes and tackling complex challenges. The Regional Authorities together with the Labour Office could take more active approach in regional networking.

(1.3.2) Operational (projects) and strategic platforms can also be a way to create a more networked approach to employment policy and to bring together different actors. Rewarding officials for collaboration (and specifically for the additional outcomes achieved through this) and providing additional funding to cover the costs involved can also be helpful.
(1.3.3) Regional stakeholders could take full advantage of existing networks and partnership fora such as regional Councils for HRD or exploring the possibilities to advance to new forms such as an employment pact if convenient (based on the Moravian –Silesian experience, for example).
(1.3.4) The regional fora could help to build best practices and provide guidance to regional stakeholders on effective approaches to skills, training or job creation that can be also made available to other regions.

1.4 Support the development of evidence-based tools to make better decisions about employment and training programmes. Develop more rigorous policy evaluations and ensure that evaluation results are fed into policy making

In order to build a strategic approach that is relevant to local conditions, it is essential to have a strong evidence base. Collecting and analysing evidence is a critical step in any policy cycle where local providers look to understand what is working and where efforts could be strengthened.

The limited regional data is partially a consequence of the low evaluation culture in the Czech Republic as well as a lack of evaluation expertise at all administrative levels. Rigorous evaluations that assess the real impact of public actions on the labour market are virtually absent, especially in the area of active labour market programmes and policies.

Next steps for implementation

(1.4.1) National and regional authorities could consider further disaggregating labour market data to support skills analysis at the local level. This can include expanding samples of the national Labour Force Survey (by the Czech Statistical Office), developing better regional surveys (by regional stakeholders) or improving how local labour offices collect labour market data.

(1.4.2) Relevant ministries and government agencies, such as the Technology Agency of the CR, should demand high quality applied reseach and analysis for evidence based decision making. Training programmes to increase evaluation expertise could be introduced at relevant administrative levels, especially for those that produce analyses internally or contract evaluation services.

(1.4.3) Public authorities could develop more rigorous policy evaluations that focus not just on processes and outputs but also on outcomes and impacts. They should ensure that evaluation results are effectively fed into policy making and policy providers are held accountable to outcome-based performance criteria.

(1.4.4) There is a need for more systematic information on labour market trends and a greater focus on anticipating future employment trends at the regional and local level. Information on skill needs should be widely available to local stakeholders to be able to make informed decisions about relevant education/training and careers.

Adding value through skills

OECD Recommendation

Summary of discussion and and next steps for implementation

2.1 Education and training provision would benefit from being more targeted at lower skilled workers. There is also scope to build in a stronger emphasis on generic and soft skills in course curricula.

There is a variety of training opportunities which is flexible, modularised and provision broadly covers a wide range of sectors with an increasing amount becoming certified. However, life-long learning is underdeveloped in the Czech Republic with lower participation rates than the OECD average.

Professional development and career progression for low-qualified workers in employment is not systematically supported. Policies and programmes should continue to focus on providing training for existing employees, particularly those in lower-skilled jobs who will continue to be at risk of redundancy, as well as those in small and medium sized enterprises, who may not have similar access to work-based training opportunities.

Next steps for implementation

(2.1.1) There is scope to continue to develop the National System of Occupations and the National Register of Vocational Education in order to make systemic linkages between skills development opportunities and labour market needs. The Government should consider how to ensure both systems are sustainable over the long-term.

(2.1.2) Initial education as well as continuing education training programmes could be more orientated towards higher level generic and soft skills, rather than being narrowly focused on specific technical skills.

(2.1.3) Entrepreneurship skills could be more and better integrated into vocational education and university curriculum. Innovative and entrepreneurial approaches should be promoted more generally by national and regional authorities.

(2.1.4) Introducing new programmes and incentives for employers to upskill their low-skilled employees could be considered. The Labour Office should ensure that placement services consider also job quality for low-skilled groups.

2.2 Ensure that employers are more fully involved in the design of training programmes to make provision more relevant and responsive to the needs of the local economy.

PES and VET institutions have limited ability to rapidly develop courses that respond to local employers, something which has become more evident with the recent crisis. Employers report that training curricula do not sufficiently meet their needs, particularly SMEs, despite the work of the sector councils in developing labour market strategies.

Next steps for implementation
(2.2.1) Public authorities should encourage cooperation between employers within sector councils. Ministries and sector councils should ensure that the NSO and the NRVQ effectively translates sector labour market needs into school curricula and that certified qualifications are relevant to employers.
(2.2.2) National and regional authorities should ensure that support for innovation does not just focus on high-skilled sectors, but also promotes greater incremental innovation in those sectors which employ a significant number of people regionally. Innovation is likely to increase the demand for skills in those sectors and create new training opportunities.
(2.2.3) The Ministry of Labour and Social Affairs could consider expanding or introducing new specific programms, which would focus on promoting and facilitating workplace training and up-skilling by SMEs. The Skillnets programme in Ireland could provide an excellent model for intiatives in this area.
(2.2.4) The Labour Office could consider how to make the system more responsive to both individual and employer need. Regional offices could work towards being able to provide customised retraining programmes based on regional or local needs.

2.3 The apprenticeship model should be updated to provide better quality and more relevant training opportunities.

There is a concern about the relevance of secondary education and apprenticeships which is reflected in the low employability of graduates and apprentices. The number of graduates with vocational education has been falling due to demographic factors and preferences for pursuing general education track.
Next steps for implementation

(2.3.1) Regional authorities could work more towards optimizing capacities of apprenticeship programmes according to demographic trends and labour market needs. They should also work to make regionally relevant apprenticeships a more attractive option by providing students and their parents with better evidence and information on employability prospects in these occupations.

(2.3.2) Employers could be more allowed to participate more systematically in the development of school curricula and in providing practical work-based training opportunities.

(2.3.3) Employers could be more encouraged to provide internships and practical training for young graduates with lack of practical work experience. The Ministry of Labour and Social Affairs could expand existing programmes or consider introducing new ones.

2.4 Support the development of a career counselling system for youth and adults and promote greater cooperation among career counselling stakeholders.

Career guidance in the Czech Republic is seen as inadequate for both young people and adults. Educational counsellors in schools tend to have no or limited knowledge of current labour market needs and job profiles. Career support for youth in schools needs quality assurance mechanisms, adequate resources and more systematic cooperation with LOs and other institutions in acquiring labour market information. There is fragmented provision of career guidance for adults.

Next steps for implementation

(2.4.1) The Ministry of Education, Youth and Sports should work towards ensuring that students have equal access to career guidance services. This could include developing training programmes for cousellors or teachers about the local labour market, as well as better integrating career guidance into school curricula and providing pedagogical-psychological counselling.

(2.4.2) Schools should be encouraged to cooperate systematically with labour market information providers, preferably the local labour offices. The Labour Office should ensure adequate information services for schools or students.
(2.4.3) The role of the public employment service as key providers of career guidance for jobseekers should be considered. The Labour Office could work more towards building a more effective system of career guidance within the network of local offices. This could include developing new tools like early assesement, profiling, setting adequate client zones and aquiring adequate capacities.
(2.4.4) The Ministry of Labour and Social could further develop an online service for professional guidance which allows users to identify their work interests and match their own profile with job profiles.
(2.4.5) Regional authorities could consider promoting career information centres or guaranteed services that provide free diagnostics and career information about regionally relevant jobs to adults.

Targeting policy to local employment sectors and investing in quality jobs

OECD Recommendation

Summary of discussion and and next steps for implementation

3.1 Place a greater emphasis on emerging growth sectors and ensure the employment and training system is well aligned to these areas.

Employment and training programmes are geared towards a broad range of employment sectors but there are few sector-based approaches to skills. There appears to be less awareness of how these programmes could capitalise on global trends to contribute to future employment growth and no analysis is carried out to identify the potential impact of global trends on the local labour market. Labour market forecasting is not systematic and at the sub-national it is still in the nascent stages of development.

Next steps for implementation

(3.1.1) Ministries, regional authorities and sector councils could consider how to further exploit opportunities in expanding and emerging employment sectors such as the care sector and those related to green growth.

(3.1.2) Based on analysis and forecasting, appropriate training programmes for new and newly expanding industries could be introduced by training providers in initial education as well as continuing education, including retraining programmes provided by the Labour Office.
(3.1.3) The Ministry of Labour and Social Affairs could launch programmes focused on providing work-based training opportunities within the sectors, which traditionally host poor quality jobs.
(3.1.4) Sector councils should not only play a strong role in identifying current demand and articulating training needs but they could also be involved more in anticipation of labour market trends. An articulation of future demand should be outlines in sector council agreements.
(3.1.5) Building on research activities at the national level, a system of monitoring and anticipation of skill needs should be further developed to provide information about labour market needs within regions.

3.2 Put more emphasis on skills utilisation approaches to create and attract better quality jobs and productivity.

The recent economic situation in the Czech Republic has brought about an emphasis on the quantity of job creation and the need for better quality jobs is seen as very much a secondary issue - a trend which can be found in many OECD countries. In many approaches to skills development, there appears to be a conflict between short-term priorities and long-term needs. While flexibility is necessary in times of rapid changes, too much of a short-term focus with a lack of strategic consideration can negatively affect investing in quality jobs in the medium to long-term. The Czech Republic has an outdated skills strategy - the Human Resource Development Strategy 2003.

Next steps for implementation

(3.2.1) Develop a new skills strategy, which could put a greater emphasis on job quality and improved coordination in the skills area at the central, regional and local levels. The strategy should establish a strong vision for skills policies that should be evidence-based and include a clear alignment of broader economic and labour force development.

(3.2.2) National level stakeholders such as the government, ministries, employers' associations, trade unions and other relevant actors could look at opportunities to ensure better alignment in their efforts to promote skills and job quality. Establishment of a representative advisory body that helps to coordinate public policies at the national level and facilitates cooperation between central government and regional authorities could be considered.

(3.2.3) Public authorities could exploit the potential of public procurement for supporting medium-long-term economic, social and environmental goals, such as by awarding contracts to tenderers who offer quality jobs (e.g. for vulnerable groups). Examples from the Ústí nad Labem region demonstrate that value for money may not be only about the lowest cost but also about social, economic and environmental benefits.

(3.2.4) Stakeholders could be made more aware of benefits arising from better skills utilisation – unexploited potential for driving up innovativeness and productivity. More effective skills utilisation by working collaboratively with social partners to build better quality employment and work organisation should be encouraged.


OECD Recommendation

Summary of discussion and and next steps for implementation

4.1 Both private and public sector employers should be encouraged and supported to make their workplaces more suitable to those with family responsibilities.

There is a high gender unemployment rate gap in the Czech Republic, with women less likely than men to participate in the labour market, as well as a significant pay gap. Men are also more likely to complete secondary level education. There is a consensus among stakeholders that the less favourable position of women in the labour market results mainly from the lack of flexible employment opportunities. Very long periods of parental leave for mothers, insufficient childcare capacities, scarce part-time work and the relatively high employment rate of low skill / low wage women without children translates into a relatively high gender wage gap.

Next steps for implementation

(4.1.1) The Ministry of Labour and Social Affairs together with social partners could focus more on support and promotion of flexible forms of work in order to increase the employment of persons caring for other family members. Employers could be encouraged to make their workeplaces more suitable for those with care responsibilities, especially women. Incentives for creating part-time jobs, such as degreasing labour costs and administrative burden for employers, could be introduced.

(4.1.2) Public authorities should continue to eliminate gender and age stereotypes (by awareness campaigns, assistance services to the victims of discrimination etc.) and all forms of discrimination on the labour market in terms of career, access to jobs, etc.
(4.1.3) Public authorities should ensure that sufficient childcare facilities are readily available to respond to demographic trends. In periods of excess demand, alternative forms of childcare, such as Child groups, could complement capacities but equal access to childcare facilities with pre-school education should be guaranteed in all regions.
(4.1.4) Parents could be encouraged to stay on parental leave for shorter periods. The Ministry of Labour and Social Affairs could adjust parental leave allowance but this should take into account the availability of suitable jobs on the labour market.
(4.1.5) The Government could consider launching an Early Years Workforce Strategy, which would seek to build a highly-skilled and capable child care workforce and sector, which would foster high-quality child care services and achieve better outcomes for parents and families.

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