Commission staff working document
: THE ROLE OF THE EUROPEAN SOCIAL FUND
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- 2.1: ADAPTABILITY IN THE ESF OPERATIONAL PROGRAMMES FOR DURING 2007-2013
- 2.2: ESF INTERVENTIONS AT THE DIFFERENT STAGES OF THE RESTRUCTURING AND CHANGE PROCESS
2: THE ROLE OF THE EUROPEAN SOCIAL FUNDThe European Social Fund (ESF)87 has been the EU’s main financial instrument for the anticipation and management of change since its creation in 1957. Under Article 162 of the Treaty on the Functioning of the European Union, the ESF aims ‘to render the employment of workers easier and to increase their geographical and occupational mobility within the Union, and to facilitate their adaptation to industrial changes and to changes in production systems, in particular through vocational training and retraining’. In the context of globalisation, continuous innovation in technology, the occurrence of major change in consumer demand and new business models, anticipating and managing change has become a key issue in the employment strategies of both companies and authorities in the past decade. One of the key challenges for the ESF in 2007-2013 is to reconcile security for workers with the flexibility which companies need (which forms part of the flexicurity debate). Acknowledging and responding to these needs, the ESF for the period 2000-2006 placed the development of employment through improving the adaptability and skills of people among its chief priorities (see box 3.1 below). Box 3.1: The 2000-2006 programming period 23 out of 25 Member States used the ESF for actions supporting the adaptability of their companies and their workers. Between 2000 and 2006, almost € 12 billion in total was invested to support the anticipation, management and mitigation of economic change. The ESF contributed € 5.2 billion, 43 % of the total expenditure in the area of adaptability. More than 7 million people have been supported through ESF-funded actions, mainly in the UK and Italy (1 million participants in each of these countries). Most beneficiaries were people between the ages of 26 and 54 and one in seven beneficiaries was an older worker. This share is almost twice as high as their average involvement in ESF actions. In some Member States, they represent a very significant part, such as in Finland (40 %) and Belgium (35 %). Over 400 000 enterprises have benefited from ESF interventions in this field. ESF has been particularly supportive to actions anticipating economic change. Special attention was given to actions in support of SMEs. ESF support for adaptability has been further enhanced for the 2007-2013 programming period. The ESF is currently supporting adaptability interventions in all 27 EU Member States. It is making major contributions in the anticipation and management of change, providing support for individuals, systems and companies. This contribution is presented in more detail in the following sections of this chapter. 2.1: ADAPTABILITY IN THE ESF OPERATIONAL PROGRAMMES FOR DURING 2007-2013In the programming period 2007-2013, the ESF is supporting interventions under the following six policy fields:
During this period, the ESF budget has been significantly increased, to € 13.5 billion, to co-finance adaptability interventions. This represents 18 % of the total ESF investment across the EU (€ 76 billion), almost one fifth of ESF funds. For an overview of ESF expenditure by category during this period, see figure 3.1 below. Figure 3.1: ESF expenditure by category, 2007-2013 
A detailed mapping of interventions to support the anticipation and management of economic change and restructuring was carried out in 2009.88 This exercise identified 106 operational programmes addressing adaptability out of a total of 117 operational programmes for the entire programming period 2007-2013. In the period 2000-2006 there were no adaptability operational programmes in Cyprus and Latvia. Now interventions are foreseen in all Member States. However, there are considerable differences between Member States, when it comes to the ESF allocations dedicated to adaptability in relation to all ESF subsidies for the period 2007-2013, ranging from 7 % in Portugal to 76 % in Ireland. Table 3.1 below gives an overview of the three main categories of measures that the fund may support and the financial allocation to each of these categories of measures, based on the ESF regulation that was adopted in 2006.89 Table 3.1: ESF allocations aimed at increasing the adaptability of workers and firms, enterprises and entrepreneurs by categories
The improvement of human resources planning and development in companies accounts by far for the largest part of ESF support in this area, with around € 9.4 billion (almost 70 % of the total expenditure). € 2.5 billion (18.6 % of the total expenditure) is more directly linked to sector and company restructuring through the development of systems to effectively anticipate change. Finally, innovative and more productive ways of organising work account for almost € 1.6 billion (12 % of total expenditure). 2.2: ESF INTERVENTIONS AT THE DIFFERENT STAGES OF THE RESTRUCTURING AND CHANGE PROCESSESF interventions can be distinguished according to the different stages of the restructuring and economic change processes:
Anticipation of economic change and skills needs The ESF supports various activities in the context of the anticipation of economic change and skills needs, such as forecasting, analysing skills gaps and future skills requirements and/or early warning diagnosis. These measures mainly focus on enterprises as a main target group, for example by providing information, counselling, and aid with work organisation and working time. However, there are also some targeted actions for workers, for example by providing career development, guidance, counselling, and individual skill development plans, and supporting professional mobility. Box 3.2: National occupational skills needs forecasting (Finland) The national occupational skills needs forecasting project (Valtakunnallinen ammatillisten osaamistarpeiden ennakointi, VOSE) is one of several projects developing anticipation methods in Finland currently underway, many of which receive funding from the ESF. The Finnish National Board of Education initiated the project, focusing on anticipating future competences and skills needs. The VOSE project has a budget of 1 million euros for three years, from 2008 to 2011. The aim of the project is to develop procedures which enable the anticipation of competences and skills needs for the future for post-compulsory education and in all vocational and professional fields. These include methods for anticipating competences and skills needs, anticipation processes and networking of the institutions involved. The procedures will be tested in the social and health care, real estate and construction sectors. The VOSE project also aims to create a web-based tool that works in social media. VOSE is a cooperation project engaging several stakeholders, including the state administration, social partners, vocational education providers, polytechnics, universities, local authorities, research institutes and student organisations. http://www.oph.fi/tietopalvelut/ennakointi/osaamistarpeiden_ennakointi/vose-projekti Managing economic change and promoting adaptability The ESF finances different activities in the context of managing economic change and promoting adaptability. These include measures to help companies to keep pace with modern technologies by developing their research and development capability (through actions such as research grants and pre- and post-doctoral training), activities in the field of innovative and modern types of work organisation to enhance company competitiveness (for example in the area of working time and work-life balance), further training, skills and competence development, targeting addressing managers, entrepreneurs and individual workers. Box 3.3: Devising the Romanian labour market’s response to the economic crisis — enhancing company flexibility and the security of the workforce (Romania) The stated goal of this project is to contribute to the promotion of the core concept of flexicurity in the Romanian economy. The objectives of the project are:
Activities of the project include: studies and analyses of good practices at European level and the likelihood of transferability into national practice, an in-depth analysis of the national context, a preliminary assessment of available anticipation tools, scenario analysis, development of anticipation instruments, activities to devise tailored flexicurity arrangements and set the stage for their subsequent application, training in internal flexibility arrangements for 45 line managers and human resources managers in the two selected enterprises, a number of dissemination activities and the publication of the results of the first test run of the anticipation instrument, based on the outputs of scenario analysis. This project was launched at the end of 2009 and will run until the end of 2011, with a total budget of € 3 million. www.flexicovery.ro (under construction) In 43 operational programmes, the specific needs of small and medium-sized enterprises (SMEs) are addressed explicitly, with actions foreseen to support the development of adequate training and competence development structures and systems such as tailor-made training programmes, job rotation schemes and/or pooling of resources. Box 3.4: The Working Skills for Adults initiative (Wales, UK) A £ 15 million scheme to increase the skills of over 16 000 workers across six counties in south-east Wales was launched in June 2010. Led by Torfaen County Borough Council in collaboration with three other local authorities and three further education colleges, the Working Skills for Adults initiative will help employees gain new qualifications and skills as well as help employers identify training to boost business productivity. Operating across Torfaen, Blaenau Gwent, Bridgend, Caerphilly, Merthyr Tydfil and Rhondda Cynon Taf, it will address the general skills that employees need and that can be transferred between jobs, such as basic skills training, ICT and Welsh language. In addition, specialised support for small- to medium-sized enterprises (SMEs) will help identify specific skills gaps and supply national vocational qualification (NVQ) programmes to address them. Working Skills for Adults is backed by £ 8.8 million from the European Social Fund, with further funding from the local authorities and further education colleges who will deliver the scheme. Training and support will be offered in a wide range of community, college and workplace settings and through a range of channels, including online and face-to-face, to meet individual needs and reduce barriers to learning. Mitigating the effects of economic change and restructuring processes The ESF funds many interventions which accompany restructuring and structural change, both at the enterprise level as well as helping individual employees to cope with the effects of restructuring and change. At the enterprise level, particular activities such as advice and studies are being implemented throughout the European Union to support social dialogue and improve crisis management. Other actions have been focusing more on the consolidation of sectors’ competitiveness or the redeployment of companies in sectors in decline (through actions such as consulting, guidance and re-qualification). Box 3.5: Evolution of organisational culture in times of restructuring: research and information project (Poland) This project was implemented from January 2009 to March 2010 by the social partners in Poland. Its principal objective was to raise awareness of the importance of organisational culture in the process of restructuring and to deliver model solutions of organisational culture in order to improve the competitiveness of companies facing change. The project was based on a diagnosis and has delivered a model of adaptable organisation and standard measures which should be carried out during the process of restructuring. Employers, employees and social partners participated in designing and delivering standards, which were disseminated at conferences and meetings with employers and employees throughout the entire country. It is estimated that 70 % of participating employers and employees raised their awareness of their role in the design of the culture of organisation. Further, representatives of 40 trade unions and at least 10 regional organisations of employers were targeted by the information and promotion campaign, which was one of the elements of the project. The total budget of this project was 807 000 PLN. http://www.fzz.org.pl/index.php?option=com_content&view=article&id=110&Itemid=76 At individual employee level, assistance includes advice, tailored help and training (often through dedicated structures) for individuals who have been made redundant, and promotion of professional mobility, self-employment and start-ups. Box 3.6: Restart — Vysočina / Restart — Highlands (Czech Republic) This project aims to assist 1 000 employees who are under threat of redundancy or who are already under notice, working in companies in sectors undergoing structural changes. The project consists of a mix of activities — from introductory consultancy through to training and re-qualification until individuals find alternative employment — designed to help participants potentially before their employment is terminated. Employers receive partial reimbursement of salary and social and health insurance costs during the period in which the employees participate in the activities (which are free of cost for the employees). The project is implemented by Regional Labour Offices in the Highlands region of the Czech Republic from October 2009 to February 2012. Its total budget is € 2.6 million, with € 2.2 million from the European Social Fund. http://www.esfcr.cz/zakazky/restart-vysocina As the length and significance of each stage varies greatly according to Member States’ characteristics, ESF measures address each stage of the change process in a different way in individual Member States. In some cases, measures are concentrated on one stage only, and in others they cover two or three stages of the process (see box 3.7 below). Box 3.7: Rapid reaction to change, including prevention and crisis intervention measures (Poland) This project was launched in April 2009 and will be terminated in December 2013 with the establishment of the centre of Monitoring of Economic Change. Its budget is 56 million PLN. Based on a comprehensive system of indicators for anticipation of change and through the analysis of sensitive sectors (12 reports), the three sectors that are in most need will be identified. A total of 200 companies (10 micro enterprises, 130 SMEs and 60 large enterprises) will receive support in the framework of individual development plans drawn up on the basis of indexes of early warning. A total of 4 000 workers and employees will receive support: at least 80 % will increase qualifications and/or change jobs; at least 50 % will benefit from outplacement schemes, including 30 % who will find a job after six months. Support for business creation and self-employment The European Social Fund has a long history of supporting people who want to start their own companies and be self-employed. Supporting self-employment and new businesses is one of the priorities of the European Social Fund 2007-2013 programming period. Seventeen Member States have included this priority in their Operational Programmes which set out the employment and social priorities they have selected for ESF funding. Overall, this priority is receiving some € 2.75 billion of ESF funding although the total spend will be higher as matching national funding is added. Much of this funding is devoted to supporting would-be entrepreneurs according to their needs. They can obtain training, advice and mentoring through ESF programmes which will help them set up their companies. Once up and running, training, guidance and consulting can contribute greatly to the new business’ survival through the first months — providing the new entrepreneur with the skills and advice to avoid common pitfalls. As well as providing new entrepreneurs with the skills and advice they need, the ESF also helps them surmount the other main obstacle many face — access to finance. Several Member States deploy ESF funding to support micro-credit lending aimed at raising employment and promoting entrepreneurship. The other main EU-level fund to which actors can turn to help them in their efforts to anticipate and manage change is the European Globalisation Adjustment Fund (EGF), which is discussed in detail in the next part of this chapter. 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