INVESTIGATING SKILLS AND VOCATIONAL TRAINING DEMAND IN ROMANIA

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INVESTIGATING SKILLS AND VOCATIONAL TRAINING
DEMAND IN ROMANIA

• A presentation by Dr. Catalin GHINARARU
• NATIONAL LABOR RESEARCH INSTITUTE
• (N.L.R.I.)
• R O M A N I A

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THE ROMANIAN TRANSITION FROM PLAN TO MARKET AND
THE EVOLUTION OF THE SKILLS AND TRAINING DEMAND
IDENTIFICATION SYSTEM

• First phase of transition-chaotic restructuring
  and no skills and training identification system
• Second phase of transition introduction of deep
  structural reforms and the emergence of skills
  and training demand identification systems
• End of transition preparation for the EU
  Accession and the beginning of consolidation the
  skills and training demand identification systems

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First phase of the transition1989/90-1996

• Chaotic restructuring of the economy and a sharp
  in output
• Partial liberalization of prices
• High inflation and short-lived, non-sustainable
  growth

• Emergence of private training providers, focusing
  on general skills (IT, foreign languages,
  accounting)
• Dissolution of the state vocational-training
  system
• Exploration of different approaches for the
  establishment of a system for the identification
  of skills and training demand

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FIRST ATTEMPTS TO IDENTIFY THE DEMAND FOR SKILLS
AND TRAINING

• As early as 1994-95, a first version of the new
  Occupational Classification Handbook has been
  elaborated and the Council for Occupational
  Standards established
• Identification of demand for skills based solely
  on macro-models, starting from the labor supply
  side characteristics, with little inputs from the
  demand side
• Identification of training demand, based on
  anecdotal evidence from the market as well as on
  findings of sector based studies
• First attempts made to establish a National Adult
  Training Authority
• No comprehensive overview and no strategic
  perspective Little or no cooperation in between
  the Ministries of Labor and Education

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Early researches and studies on the demand for
skills and training

• In between 1992-93 and subsequently in between
  1995-96, a joint approach has been taken by the
  trade unions and the employers in the
  metallurgical industry to identify the need for
  new skills as well as to trace skills that were
  obsolete and to formulate a strategy for
  vocational training for the sector
• The evaluation was based on a survey undertaken
  in all the major industrial sites of the sector
  at the time. It was based on questionnaires and
  interviews which tried to highlight training
  needs of the workers as well as to trace economic
  perspectives from the point of view of the
  managers. In the end, the research, attempted to
  link in between the findings of the two
  instruments and thus to identify the demand for
  skills as well as the training and re-training
  needs in the sector. Little was made out of this
  initiative as structural reforms that ensued, led
  to a massive restructuring and in certain cases
  to the all-out closure of some of the companies
  surveyed
• Meanwhile, similar approach has been tried by
  the National Labor Research Institute at a mining
  company as a part of preparing social
  restructuring plans

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SECOND PHASE OF THE TRANSITION(1997-2000)

• Implementation of deep structural reforms
• Full price liberalization and massive
  restructuring of state industry
• Consolidation of economic fundamentals,
  attainment of the critical mass of progress in
  transition (1997-98)
• Breakthrough in enterprise and banks
  privatization (1997-2000)
• Formal invitation to start EU Accession talks
  (Dec.1999)

• Gradual-build-up of the institutional framework
  of the labor market (Employment
  Agency-1999,National Adult Training Board-late
  2000)
• First Phare VET project
• Demand identification systems for skills and
  training focus on services for the dislocated
  workers as a result of massive lay offs
• First attempts to evaluate skills and training
  demand on a national base

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EVALUATION OF SKILLS AND TRAINING DEMAND IN THE
SECOND PHASE OF TRANSITION

• Evaluation of skills and training demand for
  active employment measures. Quantitative and
  qualitative analysis employed at local and
  regional level, as a background for the
  implementation of training and assistance for the
  dislocated workers (1997-99)
• Evaluation of the nationwide demand for skills
  and training employing only quantitative methods,
  developed by the National Labor Research
  Institute (1998-99)
• Early phase of restructuring meant that no clear
  perspectives were yet in sight, efforts
  concentrating on macro-economic stabilization and
  mitigating the social effects of mass lay-offs
• First attempt at exploring demand for skills and
  training from the perspective of the private
  training providers, undertaken by Dr. C.
  Ghinararu as part of an active-employment
  measures program (1999)

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Methodology in a nutshell first attempts at
identifying the demand for skills and training

• Nationwide evaluation of the demand for skills
  attempted by the National Labor Research
  Institute. Relying on macro data from the
  national statistics and drawing from the
  tendencies to date, both at macro-economic level
  as well as on the labor market and using
  comparative data from other transition economies,
  it tried to identify future demand for skills and
  vocational training based on the development
  perspectives for different sectors and branches
  of the economy. No training providers or
  employers perspective has been employed in the
  exercise
• The exercise undertaken by Dr. Ghinararu as part
  of an active employment measures program,
  employed by contrast a totally explorative
  approach, trying to immerse itself in the reality
  of the market, as seen by employers, unions and
  training providers. While partial in itself it
  nevertheless revealed the reality of a
  dual-economy with different skills and training
  demands and drew attention upon the rise of
  subsistence farming underemployment

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End of Transition and Preparation for EU
Accession (2001-2004)

• Strong resumption of the economic growth
• Macro stabilization acquired and growth firmly
  entrenched
• Increasing flow of foreign direct investment and
  growth of domestic demand
• Credit boom and appreciation of national
  currency, increase in real incomes for both
  companies and households
• Low unemployment and rather strong migration for
  employment abroad
• NATO Accession (spring 2004), date set for EU
  Accession (1st of Jan.2004)

• Second phase of PHARE-VET
• The NATB becomes fully operational (National
  Adult Training Board) Commissioning of a series
  of studies on both the demand and supply of
  vocational training
• Elaboration of several pre-accession documents
  requiring inputs on the demand for skills and
  training (the JAP, the JAP, the NDP 2007-13)
• Elaboration of the first alternative
  methodological approaches for the identification
  of skills and training demand

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Evaluation of the demand for skills and training
in the EU Pre-Accession period

• The Comprehensive nationwide methodological
  approach Relying on macro-economic data it
  provides forecasts and it attempts to model the
  future evolutions on the labor market, using a
  set of explanatory variables. Modeling results
  are subsequently used to quantify the demand for
  skills and training. It complements the purely
  quantitative approach with a representative
  qualitative research that uses a structured
  questionnaire applied on selected companies.
  Interviews with major employers might come as an
  addition to the approach. Employed by the
  National Labor Research Institute in its
  evaluation of the skills and training demand for
  the West and Centre development regions
• The Explorative approach, employed by different
  organizations, including the NLRI, which relies
  basically only on interviews and questionnaires
  as well as occasionally on focus groups with
  relevant stakeholders and which attempts at
  giving broad directions regarding the demand for
  skills and training rather than precise
  quantitative assessments

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METHODOLOGY IN A NUTSHELL EVALUATION OF THE
DMAND FOR SKILLS via the ASSESSMENT OF THE
TRAINING SUPPLY

• First nationwide study to b undertaken on the
  supply for training and which extracted
  information from interviews with 70 training
  suppliers commissioned by the NATB (2001)
• Gave hints about the demand for skills and
  training via information about the market share
  and the degree of specialization of the training
  providers
• The evaluation of the quality of the services
  provided, which has been assessed using several
  dimensions of the concept, provided information
  on their client base as well as on their clients
  needs and they way these were addressed
• The methodology did not rely on a representative
  sample but made use, extensively, of the
  background macro-economic and labor market data
  against which the results of the questionnaires
  have been interpreted. The interpretation was
  further formalized by a pseudo-quantitative
  approach which revealed correlations in between
  the identified characteristics of the training
  supply and the known or presumed characteristics
  of the demand, thereby validating the research

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METHODOLOGY IN A NUTSHELL NATIONWIDE
COMPREHENSIVE RESEARCH ON THE DEMAND FOR SKILLS

• Employed by the NLRI in its endeavor aimed at
  assessing the demand for skills and Vocational
  Training in the CENTRE and WEST regions of
  Romania (2003-04) commissioned by the Ministry
  of Education
• Analysis of the current economic and labor market
  trends has been undertaken and a model for
  forecasting medium and long term evolutions has
  been applied Subsequently, this has allowed for
  deriving the demand for broad skills based on
  the development trends for different sectors and
  branches
• Further refining came from a questionnaire
  applied on a sample of companies, which has been
  constructed so as to be representative from the
  point of view of the economic structure of the
  region Additional information came from in-depth
  interviews with managers
• Focus groups with stakeholders contributed by
  giving the broad guidelines for development,
  against which both the forecasts as well as the
  results from the explorative research have been
  assessed
• The approach as such has been adopted by the
  Ministry of Education and will be extended
  nationwide.

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METHODOLOGY IN A NUTSHELL EXPLORATIVE APPROACHES
AT SECTOR OR REGIONAL LEVEL

• Explorative research on the demand for skills and
  training undertaken by the NLRI and the
  University of Aarhus (Denmark) commissioned by
  the Ministry of Labor, Social Solidarity and
  Family (spring 2004)
• The study relied on a series of 80 structured
  interviews with managers and trade union
  leaders/employee representatives in a number of
  40 companies, from two fields of activity
  (tourism and construction) an two regions (the
  NORTH-WEST and the SOUTH WEST)
• The number of companies to be surveyed from each
  of the two chosen sectors and from each of the
  two chosen regions, has been established by using
  the shares of the two chosen sectors in the
  combined regional employment and of each of the
  two regions population in their combined
  population
• The study, which has been convergent in its
  conclusions with the analysis undertaken in 2001
  as well as with the conclusions of several other
  labor market analyses has been further
  complemented and confirmed by a research aiming
  at the same topic but targeting as respondents,
  representatives of employers associations from
  the same fields of activity and regions

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CONCLUSIONS

• -Methods of investigating the demand for skills
  and training have evolved apace with the
  transition process
• As this has been drawing to an end and the
  economy has consolidated its stability and growth
  trend, the approaches have become more
  systematic
• The growing domestic demand, expressed by the
  increasing disposable incomes of both households
  and firms gives a further boost to the training
  industry, meanwhile raising its interest in the
  identification of the demand for skills, as a way
  of improving its services and increasing its
  market share
• Currently two alternative approaches have
  emerged, following several endeavors in the
  field, commissioned by relevant stakeholders
  and/or public authorities
• -One that relies on macro-economic modeling with
  its results refined via representative field
  research
• AND
• -Another, which solely bases its results on
  qualitative information, drawn from explorative
  studies.