National Audit Office: The Unemployment Insurance Fund must verify which training is useful for finding a job and check the level of training courses

Priit Simson | 8/10/2022 | 9:46 AM

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TALLINN, 10 August 2022 – Although the Unemployment Insurance Fund is offering more and more training courses and the costs are ever increasing, the fund does not have an overview of whether the training is useful for finding a new job. The analysis by the National Audit Office indicates that three quarters of the unemployed have returned to the labour market within a year after training, and less than half have found a job related to what they learned. The Unemployment Insurance Fund cannot simply assume the role of a mediator of training courses but must pay more attention to the quality of what is being offered.

The National Audit Office finds that the objectives of the Unemployment Insurance Fund related to trainings are too general and the effectiveness of training in terms of finding a job should be monitored more closely. “Learning is always good, but it is also important to learn primarily what makes finding a job easier and what skills are lacking in the labour market,” commented Auditor General Janar Holm.

The Unemployment Insurance Fund only monitors whether the person has been employed at all after the training. It is not known, however, how many graduates of professional training have got a job where they can apply the skills they have learned because the Unemployment Insurance Fund does not collect information about the more specific field of work and does not compare it with participation in training courses. If the Unemployment Insurance Fund does not analyse where people go to work after completing the training and whether the job they have found and the skills they have learned are related, it is not clear whether the provided training courses help the unemployed adequately in finding a new job.

Recently, the participation in training courses offered by the Unemployment Insurance Fund has increased significantly: 19,000 participations in 2018 and already 29,000 participations in 2020. The Unemployment Insurance Fund offers opportunities for learning languages, improving digital skills, acquiring business knowledge but the most popular among the unemployed are professional training courses. In three years, the number of graduations of professional training courses has increased by 80% and the number of participants by 75%. During this period the professional training courses have cost 32,7 million euros.

In the period 2018–2020, nearly 28,000 people participated in professional training courses through the Unemployment Insurance Fund. Within a year after completing professional training, nearly 21,100 of them have returned to the labour market, while 6,900 have not. An analysis by the National Audit Office indicates that, expressed in percentages, 74% have returned to the labour market after completing professional training and, on average, 44% have found a job that is related to the skills acquired or improved in training.

According to the National Audit Office, provision of trainings by the Unemployment Insurance Fund needs more precise targeting and evaluating the impact of training courses. Currently, the Unemployment Insurance Fund does not direct the training options available to the unemployed explicitlyand they can choose from very different types of training courses offered by 500 training partners. However, the role of the Unemployment Insurance Fund is not just to mediate self-improvement options chosen by the people themselves, but foremost to support their return to the labour market as efficiently as possible through training. A more thorough analysis of the field of training and subsequent employment would help to increase the likelihood that funds are allocated to where its use is more effective. A more detailed overview of getting a job would also provide an opportunity to better plan training courses and align what is provided more closely with the needs of the labour market.

Training courses offered by the Unemployment Insurance Fund need more thorough quality control, the National Audit Office points out. The Unemployment Insurance Fund provides training through its cooperation partners but does not evaluate the quality of these training courses, as it considers it sufficient if the partner has registered itself as a trainer in the Estonian Education Information System. According to the Adult Education Act adopted in 2015, only the organisers of training for a motor vehicle driver, Estonian language proficiency examination, security guard and locomotive driver need an activity licence. In other fields of training, there is no quality control similar to applying for an activity licence, and the training provider or client must be able to assess whether the training meets the requirements and is of high quality.

The National Audit Office is of the opinion that the financier of training would be able to supervise the quality of training more efficiently and establish clear requirements for the level within the framework of the Adult Education Act. The Unemployment Insurance Fund as a provider of training opportunities and bearer of training costs should not only see itself as a mediator. The Unemployment Insurance Fund is responsible for the quality and effectiveness of the services it provides, and the training service is part of it. The current system does not ensure that only high-quality training is offered.

Background

Since the Unemployment Insurance Fund did not have a more detailed overview of the relationship between professional training and finding a job, the National Audit Office made the comparison itself. The results of the analysis indicated that the unemployed find a new job most often as a driver, builder or sales person and that an average of 44% of those who completed professional training found a job in a field related to training. At the same time, for example, in the curriculum group of transport services with the largest number of participants (more than 12,600 participants), 46% of graduates found a job related to training.

In the field of transport services, there is currently a shortage of category C drivers across Europe. In Estonia, there has been a shortage of category C drivers as well as heavy truck, non-road mobile machinery and bus drivers for years. Thus, it is not difficult to find a job related to the profession in this field. Over the years, professional training courses in the field of transport have also been the most popular, and participation in these training courses accounts for a third of all professional training.

The highest application rate related to the profession was in the curriculum groups of management and administration and accounting and taxation, 62% and 58%, respectively. These are training courses that provide knowledge and skills that are required in many jobs. These curriculum groups are therefore related to many jobs in the ‘education key’ of the labour demand monitoring and forecasting system OSKA, which is why the employment rate is higher.

Curriculum groups with a professional application rate of less than 30% are property and personal protection; hairdressing and beauty services; textile, clothing, footwear manufacturing; and leather processing. The lowest indicator was in the curriculum group of crafts: 14%.

Training courses for hairdressing and beauty services have been some of the most popular in terms of the number of participants (more than 3,000 participants), but employment in this field is rare (only 28% of those who completed professional training). Despite the great interest in participating in courses, the labour market analysis indicated that there are few vacancies in the field and there are already enough specialists with suitable knowledge. However, from March 2021, the Unemployment Insurance Fund is no longer financing training in this curriculum group. The decision to end funding resulted from the emergence of quality problems in training. For example, training promises to provide skills the acquisition of which would require a lot longer and more in-depth study, in the absence of which subsequent provision of services may be dangerous (e.g. administering filler injections, permanent makeup).

To assess the relationship between training and employment, the National Audit Office used the education key established by OSKA in 2021. The education key is used in the OSKA model to predict how many graduates are needed for the labour market in a certain group based on formal education. According to the OSKA team, the education key could also be suitable to assess the relationship between refresher training and employment.

The relationship between training and employment has been created in the education key through the curriculum group of the training and occupational group. Finding related employment after completing professional training can be assessed in those types of employments where a job must be entered in the employment register.

Priit Simson
Head of Communications of the National Audit Office of Estonia
+372 640 0102
+372 5615 0280
priit.simson@riigikontroll.ee
press@riigikontroll.ee
http://www.riigikontroll.ee/

  • Posted: 8/10/2022 9:46 AM
  • Last Update: 8/10/2022 9:46 AM
  • Last Review: 8/10/2022 9:46 AM

The Unemployment Insurance Fund only monitors whether the person has been employed at all after the training. It is not known, however, how many graduates of professional training have got a job where they can apply the skills they have learned.

Priit Simson / Riigikontroll

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