Mutual Learning Programme

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1 Mutual Learning Programme DG Employment, Social Affairs and Inclusion Peer Country Comments Paper - Croatia How efficient are measures for employment and inclusion of long-term unemployed: the case of Croatia? Peer Review on Approaches to integrate long-term unemployed persons Berlin (Germany) October 2016 Written by Predrag Bejaković September 2016

2 EUROPEAN COMMISSION Directorate-General for Employment, Social Affairs and Inclusion Unit A1 Contact: Emilio Castrillejo Web site: European Commission B-1049 Brussels

3 EUROPEAN COMMISSION Mutual Learning Programme DG Employment, Social Affairs and Inclusion Directorate-General for Employment, Social Affairs and Inclusion Peer Review on Approaches to integrate long-term unemployed persons Berlin (Germany) October 2016 September, 2016

4 Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE The information contained in this publication does not necessarily reflect the official position of the European Commission This document has received financial support from the European Union Programme for Employment and Social Innovation EaSI ( ). For further information please consult: European Union, 2016 Reproduction is authorised provided the source is acknowledged.

5 Table of Contents 1 Labour market situation in the peer country Assessment of the policy measure Assessment of the success factors and transferability Questions... 6 Annex 1: Example of relevant practice... 7 Annex 2: Summary table... 8

6 1 Labour market situation in the peer country 1 This paper has been prepared for a Peer Review within the framework of the Mutual Learning Programme. It provides information on Croatia s comments on the policy example of the Host Country for the Peer Review. For information on the policy example, please refer to the Host Country Discussion Paper. Croatia has been suffering from a high unemployment rate (ILO definition, persons above 15 years of age) which reached its peak in 2013/2014 (17.3%) and slightly improved in 2015 (16.3%). The high share of long-term unemployed persons presents a particular problem to the Croatian Employment Service (CES), with around half of all jobseekers having been unemployed for longer than 12 months while around one third having been unemployed for more than two years. The decrease in the share of longterm unemployment persons in 2009 (45.2%), 2010 (46.9), 2011 (44.4%) and 2012 (42.1%) was caused by an increase in the total unemployment rate. The most important reason is that employment opportunities are limited because, so far, growth before the economic crisis has failed to provide enough jobs. Many old jobs have disappeared, and new ones have not been created. Growth has been useful primarily for those who have jobs. For those outside the labour market, the impact has been negligible, and for some even negative. Furthermore, long-term unemployed persons are in a more unfavourable position in using the limited possibilities of employment. Once excluded from the labour market, the long-term unemployed persons and the economically inactive have a low probability of finding a new job. Long-term unemployment particularly affects women; almost half of them have been unemployed for more than two years. Educational qualifications have a significant impact on the possibility of finding employment and on the length of unemployment. For example, the share of long-term unemployed among the total number of unemployed persons is around 75% for those without primary education and 63% for those with only primary education. This can be compared with people with a secondary education (different programmes in duration of three to four years) - 54% and 48%) and third-level education (around 40%). The position of the unemployed is difficult, especially bearing in mind the scarring effect, according to which long-term unemployment usually leaves an indelible mark on a person s chances of employment, professional development and promotion, due to erosion of skills and knowledge becoming obsolete. It is more difficult for long-term unemployed persons to find a job, and even when they do, they are at greater risk of losing it, so that they become unemployed again, or accept work in insecure or poorly paid jobs. The CES is the public institution in charge of employment mediation, vocational guidance and the provision of financial support to unemployed persons, including long-term unemployed. Furthermore, CES organises and provides employment programmes which include training, rehabilitation, education and skills improvement of the unemployed and employed persons with the goal to increase their employability. The Central Office provides guidelines to regional and local offices. Regional offices cooperate closely with public and private actors, including SMEs as well as local governments. Access to benefits/social services is administered by the Centre(s) for Social Welfare (CWS). Given the relatively high share of long-term unemployment in Croatia, efforts to reduce the number of long-term unemployed (LTE) are highly important in the Croatian context. 1 The author will like to express his gratitude to Ms. Dubravka Matić for the valuable opinions and suggestions. September,

7 2 Assessment of the policy measure Long-term unemployed and certain target groups are prioritised by the various measures of active labour market policy (ALMP) provided by CES policies. In contrast to Germany, Croatia has a significantly higher unemployment rate (18.3% in Q according to the LFS Survey, with nearly half of them being long-term unemployed, it decreased to 13% in Q2 2016, however, continuing to display a high share of long-term unemployment. Croatia until relatively recently implemented ALMP measures in a very limited scope and they were very rarely evaluated. In the last few years, the scope of measures has broadened and obligatory evaluations have been conducted on a regular basis. Similar to Germany, the National Employment Promotion Plan in Croatia, CES provides training to unemployed persons to address labour market needs. Long-term unemployed and certain target groups are prioritised, but in Croatia there is almost no secondary labour market, especially for hard-to-place welfare recipients. In 2011, a total of 13,788 individuals participated in trainings, 202% more than in 2010 (4,566 people). This is a significant increase in the number of participants, although it still does not suffice considering the total number of long-term unemployed. The ratio of the number of participants in the training programmes during the course of the year and the number of the unemployed at the beginning of the year increased from 1.6 percent in 2008 to 2.3 percent in 2009, to 3.5 percent in 2010, and to 9.4 percent in 2011, which is still a relatively small number. Similar activities followed also in the period between 2012 to During that period people participated in various ALMP measures (10.9% of all unemployed). While the share of long-term unemployed persons varied from programme to programme, the average share of long-term unemployed was around 60%. Guidelines for the Development and Implementation of the Active Labour Market Policy in the Republic of Croatia have been developed for all institutions implementing ALMPs and are in line with national and European strategies, guidelines and recommendations (with special emphasis on the National Reform Programme and Country Specific Recommendations, as well as the Employment Performance Monitor assessment). Social partners played a very active role in the elaboration of guidelines and the process resulted in a high level of social consensus. The guidelines define an increase in coverage in ALMP interventions with special attention being paid to the most vulnerable groups - youth, long term unemployed and older workers. Mostly due to the shortage of financial resources, until recently the education and training programmes for employees and unemployed jobseekers were carried out on a very small scale. In recent years, activities have increased, and a considerable part of them have been directed toward long-term unemployed and social welfare beneficiaries who have participated in public works programmes. Public works programmes in Croatia have focused on community-level work, such as care for the elderly, cleaning and preparation of land for cultivation, reconstruction, etc. Similar to Germany, the majority of these activities are not profitable and therefore do not raise interest from profitoriented companies. (Unlike Germany, in Croatia there is no one-euro job workfare scheme). The main benefit of public works programmes is not immediate economic gain, but the greater encouragement given to unemployed persons, for whom there is a very low demand in the labour market, to join the labour force. Therefore, the programmes were directed to those unemployed persons who at the time did not have any other employment opportunities. Those were persons over 40 years of age, those with a certain level of disability, and also young, persons with no work experience. A study on this programme 2 concluded that inclusion in the programme does not directly increase the probability of employment of a participant, but it at least does not reduce it. Almost all of the respondents said that the public works programmes helped them in some way. 2 Dorenbos, R., van Winden, P., Walsh, K., Svaljek, S., Milas, G., Evaluation of program of public works in Croatia - Final report, Rotterdam: NEI Labour and Education & T.E.R.N. September,

8 The majority of the participants stated that the programme helped them in improving their financial status. Unfortunately, all other impacts (assistance in making social contacts, strengthening confidence and acquiring knowledge and expertise) were much less stressed. Those results indicate that participation in public works programmes in Croatia may (at least) be partially considered a temporary way of overcoming financial problems. The need for CES restructuring process stems from the fact that the focus on clients requires a holistic approach which should be based on clients needs. Furthermore, the benefits of modern information and communication technologies are planned to be used in this process by introducing new/improved e-services. All of that is addressed in the Croatian Employment Service s Restructuring Action plan. Very similar to the Germanexperience, in Croatia the (re)-organisation of service delivery in the CES is based on the intention to assure more intensified (personalised) services, especially to those hard-to-place, according to the introduced model of differentiated service delivery. This includes promoting services of different levels of support, according to the previously assessed clients needs. For the long-term unemployed (quite similar to the German network approach of intensified counselling) personalised approaches mean introducing different types of specific services, including counselling and consultations sessions. The basic characteristics of the new organisation of service delivery in the CES include: a) personalised service delivery a model of individual services, b) client profiling according to employability, based on statistical and other specialised techniques, including competence assessment establishing business processes based on previous assessment of individual potentials and professional preferences regarding methodology selection, c) employment agreement - individual action plans, d) improved services to employers, e) inclusion of the concepts of life-long vocational guidance, development of career management skills, with the aim of ensuring not only immediate employment, but also future employability, f) preventive activities, including collaboration with schools in delivering vocational guidance services, improving guidance services to the secondary school pupils, and g) continuous and individualised counsellor support in creating and implementing professional plans. September,

9 3 Assessment of the success factors and transferability Germany s initiative for the activation and inclusion of long-term unemployed is praiseworthy and could be applied in Croatia without huge obstacles. Similar to Germany, in Croatia many long-term unemployed persons suffer from health and/or debt problems what further lower their employability. While Croatia has implemented some activation programmes targeted at long-term unemployed persons, there is no institutionalised approach towards offer jobseekers debt counselling services Thus, the possible implementation of the German model of debt counselling, which provide free of charge counselling, could be further explored. This can be particularly useful in Croatian context given that the Ministry of Economy funds four regional Consumer Counselling Centres run by NGOs, but they are located only in bigger cities and not easy accessible to the majority of long-term unemployed persons. Similar to Germany, in Croatia, the restructuring plan introduces the specialisation of counsellors, which means improving their competencies in order to deliver high quality services and target group-specific services. Client segmentation was performed according to the activities and profession in which the unemployed persons and jobseekers were searching for jobs, and the counsellors were primarily specialised in a certain set of activities and professions. CES has introduced a new approach, meaning that the work of the employment counsellors is now focused on providing services to certain target groups, depending on the type of support unemployed persons require from the CES. To achieve the successful delivery of personalised services, the counsellor specialisation model has been implemented in every regional centre and regional office in June 2015 by focusing on changing the portfolio of each counsellor. The employment counsellors are now divided according to their specialisation: counsellors for young people youth counsellors (unemployed young people aged 15 to 29), counsellors for activation activation counsellors (unemployed persons aged 30 to 65, and more than 12 months in CES records), counsellors for employment mediation (unemployed people aged 30 to 65 years in the records shorter than 12 months), counsellors for people with disabilities (all unemployed persons regardless of age with a specific type of disability), self-employment counsellors (self-employed persons at least 12 months from the start of business), EURES counsellors (in five regional centres), other EURES assistants and career guidance counsellor specialists. Activation counsellors are focusing on engagement with hard-to-place persons, including intensive counselling, support services, the provision of ALMPs and networking with other stakeholders. The target group this type of counsellor is dealing with are mostly long-term unemployed, low skilled and older people who require much greater support and preparation for employment. The CES provides information and counselling services to long-term unemployed by establishing the client s individual career plan which aims at promoting active job seeking and improving their employability. This includes the assessment of competencies of the client, which depending on the barrier to employment can involve the application of additional vocational procedures for the purpose of assessing the individual s competences. Individual career counselling with evaluations of professional and personal abilities of the client is performed with the aim of employment, education and referring to vocational rehabilitation. Mentioned activities comprise assistance in assessing the work, professional and personal potential, assistance in drawing up a professional job search/employment plan, target job matching and placement services, feedback on activities carried out and the results achieved; forums/informative meetings on the topic of preparation for employment and active job search, various workshops providing the participants with the opportunity to acquire specific knowledge and skills to facilitate their participation in the labour market; and provision of financial and legal protection of unemployed persons pursuant to the valid laws and regulations. Counselling is provided by employment counsellors specialised in working with people with disabilities, and also by a career guidance multidiscipline team, which include career September,

10 guidance counsellors, employment counsellors, medical doctors (if needed), and experts from other institutions for the purpose of including them in some type of rehabilitation process. 137 activation counsellors are currently working in CES (out of 548 counsellors in total). In Croatia, the situation has changed for better in recent years following the accession to the EU and strategic documents that Croatia prepared before joining the EU, such as the Joint Assessment of the Employment Policy Priorities of the Republic of Croatia. Thus, in the period from 2006 to 2010, measures have begun to focus more intensively on long-term unemployed. This shows the significant positive qualitative step taken in the design and implementation of ALMPs measures. Notwithstanding the heterogeneity of employment policies in the EU, it can be estimated that Croatia mainly follows the activities which have been carried out in Europe. They are characterised by a stronger emphasis on active measures in employment policy in which the unemployment benefits are being more linked to mandatory participation in training and retraining programmes and/or activation. Public works These programmes are developed in cooperation with the local government with the goal to involve long-term unemployed and people with lower employability into community-level work. The work has to be non-profit and noncompetitive to the economic entities of the region. They are based on work initiated by local communities, non-governmental organisations (NGOs) and other entities. An evaluation of active labour market policies carried out in 2009 and 2010 in Croatia 3 analysed the impact of ALMP measures, including measures for long-term unemployed and public works. Results of this quasi-experimental evaluation approach do not indicate that participation bears a particularly strong effect with respect to the observed outcome. Participation in public work programmes was estimated to have increased mid-term unemployment risk for participants, but this has to be understood through both programme effect and selection of the most vulnerable unemployed in public works. According to the later evaluation of various labour market measures implemented in the period it was concluded that they are mostly quite efficient. Among these measures was Public works. Public work programmes have a two-fold role in the range of active policy measures. Their first specific feature is that they are used to increase and maintain a certain level of social inclusion of those unemployed who are long-term unemployed, that is, who have not worked for a prolonged period. Their second task is to "create" jobs that probably would not have been created without this measure, i.e. funds allocated for its implementation, in order to open up space for the activation of these persons, whereby these jobs must necessarily be for the community service. The results show that participants in the measure during the reference period were primarily people who were not particularly active in the labour market before entering the measure, especially when compared with participants in other measures. Participants' pronounced motivation to participate in the measure suggests the same, whereby the vast majority of them stated activation and satisfaction with being given a chance of integration into the labour market and getting "out of home" as their motives for participating in the measure. For the medium term, according to the German model, Croatia should consider activation policies to re-integrate the long term unemployed and social welfare recipients into the labour market. 3 Matković, T. Babić, Z., Vuga, A, 2012., Evaluacija mjera aktivne politike zapošljavanja i godine u Republici Hrvatskoj, Revija za socijalnu politiku, 19 (3): pp Ipsos Puls, 2016, External Evaluation of Active Labour-Market Policy Measures , Summary evaluation report, Zagreb: Hrvatski zavod za zapošljavanje. September,

11 4 Questions Any particular aspects of the policy measure for which Croatia would like further information or clarification Regardless of the ownership, is there any difference in the organisation, obligation and functioning between municipal and co-operating Jobcentres? Where and how are social partners (trade unions and employers associations) included in organisation and functioning of Jobcentres? Would it be possible to provide more details on and/or assess the reason as to the highly fragmented co-operation between municipalities and Jobcentres? September,

12 Annex 1: Example of relevant practice Name of the practice: Lifelong Career Guidance Centres (LLCG) (in Croatian: Centar za informiranje i savjetovanje o karijeri Year of implementation: 2013 Coordinating authority: The Croatian Employment Service (regional offices) Objectives: Providing adequate help and lifelong career guidance services to all citizens based upon their identified needs with the main purpose of (re)-integration into the labour market and to increase the availability and quality of LLCG services to different target groups at local and regional levels. Quality tailor made services of lifelong career guidance are delivered to all citizens, especially young people (pupils and students), which are not traditional clients registered in CES (including NEETs). LLCG provides multiple services to its clients: client coaching, e-guidance, case management services to individuals, self-help services and staff training. Main activities: The work of LLCG is based on the self-help principle (with a counsellor on duty) for those who need assistance. It is possible to use the computer at the Centre to write applications and CVs and to search for vacancies. In order to improve the availability of career guidance services to all citizens of Croatia, the establishment of such centres has been realised outside the premises of the CES. Main features are: a) client-oriented approach, b) creating and planning of services according to the assessed needs of the specific target group, c) recognisable, longterm experience in cooperating with schools, d) establish better cooperation and coordination with organisations in the employment and education sector and social inclusion, e) standardisation of services, f) accessibility/availability of services - WEB info, online portal (e-guidance); group counselling, individual case management services are free of charge, f) career guidance services are delivered to new clients which are not included in services offered by other institutions, g) partnerships in delivering/financing services (new partnerships are being set up continuously), and h) comprehensive ICT support data basis, tools and instruments. Results so far: Very positive and with encouraging support from citizens. Various free of charge trainings and workshops have been organised, for example, Project My ICT job 5 is a project financed by the European Union, which promotes the web programmer or other ICT jobs. Key challenges are: a) to identify specific local/regional needs/target groups, b) to raise public awareness on the importance of LLCG, c) to make services recognisable, and d) to increase the visibility of LLCG services. NEETs activities are realised at two levels: a) national: data exchange on NEETs Agreement on data exchange (between various line ministries and services), and b) regional/local specific measures under Youth Guarantee Implementation plan. Activities aimed at tackling the issue of NEETs include: identification, outreach and activation. 5 More details, in Croatian on September,

13 Annex 2: Summary table Labour market situation in the Peer Country In Croatia there has been a continual rise in the share of long-term unemployed (LTU) persons who have been unemployed for longer than one year. LTU particularly affects women and persons with lower levels of education. The most important reason behind persistent high levels of LTU are limited employment opportunities and overall economic growth has failed to create jobs. LTU persons face greater barriers to re-employment due to their low level of employability, often low educational attainment and obsolete skills and knowledge, weak social networks which hinders them in finding employment, as well as employer recruitment practices that tend to discriminate against longterm unemployed persons. Assessment of the policy measure LTU persons fall under the responsibility of the Croatian Employment Service (CES). In recent years, activities have increased, and a considerable part of them have been directed at tackling long-term unemployment and social welfare beneficiaries who have participated in public works. Public work programmes have been focused on community-level activities. New (re)-organisation of service delivery in the CES is based on the intention to assure the delivery of more intensified (personalised) services, especially to those hard-to-place jobseekers, according to the introduced model of differentiated service delivery. Assessment of success factors and transferability Germany s initiative for activation and inclusion of long-term unemployed is praiseworthy and could be applied in Croatia without huge obstacles. Employment counsellors establish their individual career plans aiming at active job seeking and improving their employability. In Croatia, the situation has changed for better in recent years due to the impact of EU accession and strategic documents that were prepared for EU accession. Evaluation of ALMPs concluded that they are mostly quite efficient, while public works have an important role in the range of activation measures. In Croatia, there is almost no clearly structured system for resolving debt problems of jobseekers, so a possible implementation of the German model of debt counselling could be explored. Questions Regardless of the ownership, is there any difference in the organisation, obligation and functioning between municipal and co-operating Jobcentres? Where and how social partners (trade unions and employers association) included in organisation and functioning of Jobcentres? Would it be possible to provide more details on and/or assess the reason as to the highly fragmented co-operation between municipalities and Jobcentres? September,

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