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European Strategy Report [Czech Republic]

Tackling Replacement Demand in the Manufacturing

Industry

Authors: Zuzana Freibergová and Zdenka Šímová, National Training Fund, August 2018

Context

This country report presents input to EU Strategy suggestions and guidelines for upskilling low-skilled people so they can cover future staff requirements. It is based on REPLAY-VET, a 2-year EU funded ERASMUS+ project led by Prospektiker in Spain with partners across Europe. Europe has a pressing need to tackle future demand to replace workers, caused partly by an ageing workforce and new technologies, and persistent low skill levels among much of the workforce. The project used a network of expert labour market analysts to explore what new policy and practices can assist Europe in tackling replacement demand, by supporting people with low skill levels in various sectors. The work has resulted in a series of reports, events and a Toolkit with ‘How To’ guides.1 In the Czech Republic we have focused on the manufacturing industry - an important segment of the economy, significant carrier for the development of technologies, expertise as well as job opportunities. This report aims to highlight key problems and suggestion appropriate solutions to major skill, recruitment and employment-related issues in the manufacturing industry. Although these issues are from findings in the Czech Republic, key lessons are relevant across much of the EU, and different employment sectors. Challenge: The manufacturing industry has in most of the European countries long tradition and its development has demonstrated the ability to maintain its position in the competitive environment. A high degree of integration and connection to foreign trade, however, also makes the manufacturing industry sensitive to changes in external conditions.2 The largest group of occupations in the manufacturing industry are assemblers, blacksmiths, toolmakers and related trades workers, stationary plant and machine operators and metal, machinery and related trades workers mostly performed by low-skilled men. With predicted falling demand of lower qualifications, the population with only elementary education will face increased competition in the labour market. Not inconsiderable factor of high degree of unemployment among people with low level of education is however the willingness to work influenced by the relationship between the wage offered, the social benefits and the moral - volition individual characteristics, but also various job barriers such as debt, execution, family situation, health, substance abuse, criminal records etc.

1 Main project output are published at the project web pages http://www.replayvet.eu/

2 Panorama of the manufacturing industry of the Czech Republic 2015. Ministry of Industry and Trade.

Prague. 2015. Avalilable at: https://www.businessinfo.cz/app/content/files/engdocs/panorama-manufacturing-industry-2015.pdf

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Policy recommendations at regional/sub-regional levels

1. Widening career guidance services for adults

The vast majority of low-skilled adults have never consulted with a

career counsellor and, if so, only Labour Office job-mediation

consultants who does not have enough time for a thorough

analysis of the client's skills and employability and long term

guidace.

Career guidance is except by the Labour Office provided by various

non-profit organizations which capacity is insufficient as well as the

geographical location. These NGOs are characterized by

considerable instability as they are project-dependent, most of

them quickly emerge and as well disappear.

Another obstacle is the very low awareness of the benefits of

career guidance especially among the low-skilled adults.

Proposals: - Introduce the national system of adult education and

training and as its integral part the national system of career guidance for adults.

- Ensure that everyone can easily access good quality information and advice about learning opportunities throughout their lives.

- Ensure the geographical availability of free career guidance for adults.

- Establish a training system for adult career guidance counsellors and introduce national certification of career guidance counsellors.

- Promote ICT in delivering quality career guidance information.

2. Focussing on activation of skills improvement in low skilled workers by employers

Most of the employers of the low skilled workers simply recruit and release employees. The newcomers are usually trained in the workplace by foreman who also assigns them the work.

The employers usually do not provide low skilled employee with career guidance, do not investigate whether the employee has skills for another job, and do not offer change of working place inside the company.

Proposals: - Staffers and HR managers should be supported in working

with the low skilled workers, in examining their skills. They

can use some external career guidance counsellors or

providers of skills assessment (one example of such skills

assessment is French “bilan de competences”).

- Develop a network of skills assessment centres, promote

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3. Deepening prevention of NEETs - the low-skillled workers in the future

The NEETs are low skilled workers of future. In the Czech Republic there is a relatively increasing number of juveniles (under 18) who, after the end of their primary education, stay at home with their parents. Their parents claim they have no resources to cover the cost of further education for their children without the social benefits they receive. Moreover, most of these young people have a very unrealistic vision of their future or do not think about their future at all.

Proposals: - Every elementary school should be responsible for

monitoring the career path of pupils leaving the school.

The list of pupils and their place of destination after

leaving school should be handed over to the local

employment office and, in the case of NEETs, Labour

Offices should engage with school, local authorities,

parents and pupils.

- The Labour Office today renews and innovates the

activities of its Information and Career Guidance Centres

(IPS) to encourage people of all ages and educational levels

to make the most of their talents, skills and personal

capabilities in the labour market. IPS staff should therefore

be trained to deal with NEETs and help them find and

planning a realistic vision of a future life and career.

- Local communities can also be involved in informal work

with low-skilled young people and lead them to acquire

skills that are applicable at the labour market. One of the

options is to have local "street workers" who can be active

youngsters from the target group with good access to their

peers.

skills assessment, and incorporate skills assessment into

the Labour Code as one of the measures for which an

employee is entitled to receive at least one day paid leave

at every three to five years.

- Employers should more cooperate with Labour Office and

be more open in hiring the low skilled employees and

simplify job application procedures.

- Employers should more cooperate with schools of all levels

and provide trainee programs, internships and brigades.

- To adapt vocational education and training courses to the

learning needs, possibilities and abilities of adults.

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6. Increase the financial literacy in low-skilled workers

Most of low-skilled workers have very little awareness of how to effectively handle their fictitious resources, if any. They often take various loans without consideration and get into a financial trap.

Proposals:

- Introduction of the financial literacy as a compulsory subject in basic education.

- For low-skilled job seekers, the Labour Office should determine the level of their financial literacy, and place job seekers in financial literacy courses or provide them with financial support for the use of consulting some of the financial advisors.

- In the case of low-skilled workers with financial difficulties, companies should be able to pay wages after each week of

4. Promote vocational training and technically oriented study fields and job opportunities

The most demanding professions or branches where manufacturing companies contend with labour shortages are in technical and engineering professions, in particular: machinery operators, locksmiths, lathe operators, CNC plants operators, technicians, joiners, masons and tillers. Teens are losing interest in the careers of the future -- science, technology, mathematics and engineering -- but many are simply saying "I don't know" when it comes to what they want to be when they grow up.

Proposals:

- Provide quality information and career guidance to pupils and students about the technically oriented study fields and job opportunities.

- On local and regional levels should be more supported cooperation between schools of all levels, the Labour Office and NGOs that provide career guidance.

5. Widening opportunities to complete basic education and/or VET

The Labour Office is offering retraining courses but for all of them there is an entrance condition to have at least finished primary education. If the workers do not fulfil this condition the Labour Office is not allowed to pay for their retraining courses. Moreover the Labour Office is not allowed to contribute for completing the primary education.

Proposals:

- The active employment policies should provide financial contribution for completing basic education.

- The retraining courses should be more accessible and open to low-skilled workers.

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work because many of low-skilled workers are unable to expand their expenses and are completely out of money at the end of the month.

Two key lessons relevant to European-wide skills and

employment policies

The policy recommendations above emerged from the meetings we have held with the ‘triple helix’ groups and from the work we have done exploring national and international practices. Lessons identified from the Regional Report findings in Czech Republic, that have particular relevance to skills and employment policy-making at the European level, include the following:

MANUFACTURING, THE NEW IT REVOLUTION AND THE FUTURE SOCIAL CHALLENGES Manufacturing was originally at the vanguard of automation - the application of IT to the factory improved productivity. As more and more factories adopted sophisticated computer-controlled machines, produced goods became relatively cheaper for consumers, leading to rising living standards. Now manufacturing is ready for the next stage of the IT revolution, the application of autonomous robotics, cloud computing, internet of things, 3D print, artificial intelligence, and other related technologies to transform not just production but product design, production preparation, production line management, management of supplier-customer relations etc. as well.

Most manufacturing workers are in low-skilled jobs with manual routine which can be defined in repetitive procedures that are relatively simple to algorithm and are replaceable by robots. As a result, low-skilled jobs are already or expected to decline. Even it is impossible to identify a clear development trend for low-skilled work, it must be assumed that several different development paths exist in a general context of advancing digitalisation of work. The current state of research allows four diverging development paths to be identified for low-skilled industrial work: - Automation of low-skilled work (extensive substitution) - Upgrading of low-skilled industrial work (upskilling) - Digitalised low-skilled work (emergence of new forms) - Structurally conservative stabilisation of low-skilled work (existing staffing

and organisational structures remain unchanged)3

The two first mentioned development paths call for working with the low-skilled workers, motivate them for acquiring new skills, improve their employability, making training more attractive, encouraging enterprises to up-skilling, supporting offer of another kind of job, improving the working conditions, removing barriers to the recruitment and retention, etc.

3 HIRSCH-KREINSEN, H. Digitalisation and low-skilled work. Friedrich Ebert Stiftung. Available at:

https://www.fes-london.org/fileadmin/user_upload/publications/files/12864.pdf

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And, finally, for the future there is an urgent need of preventive measures in order to reduce the risk of young people to become NEETs and then low-skilled persons. There is a need to work more with disadvantaged children, to develop an overall intervention, tailored at every national - even local - level, and counting on the active participation of relevant and committed stakeholders: teaching staff, education and professional counsellors, local, regional and national authorities, companies all with aim to prevent the youngsters to become NEETs.

CAREER GUIDANCE FOR ALL: “HELP TOWARDS SELF-HELP” Not only low-skilled but many other persons do not rely on themselves but on someone else. Many people have simply lost the ability, motivation, and responsibility for problems they created. The problem our society faces today is that we stopped teaching people how to create their own success and to nurture and maintain the careers they have.

As a new world evolves with increased competition, a persistent dose of uncertainty, and complexity running rampant, the easy road to success has collapsed. Many people are finding themselves overwhelmed and under-skilled to deal with the uncertainty, complexity, and ambiguity of today’s business environment. Technical job skill training won’t fix our broken employment system if all workers — employed and unemployed — don’t learn some basic career management skills with help of career guidance.4

We have to have in mind that career guidance is a process where a highly professional service is provided on bases “guidance is assistance to self-help”, and aims to educate the client career management skills. It is important that career guidance counsellor assist the clients in understanding of their situation, strengths, weaknesses, opportunities as well as limitations, provide them with up-to-date and adequate information, guide them to an independent, active and creative way to deal with the situation and develop their abilities so that they would be able to seek an independent effective solution to their situation. It is essential that the career guidance counsellor behaves impartial, does not impose the client with a solution but rather outlines several possible ways, does not express his/her own opinions, does not assume responsibility for client decisions etc.

It is desirable that the system of lifelong career guidance be stabilized and professionalized so that its services are locally and financially accessible. Not only tools and methods of lifelong career guidance should be developed, but also the lifelong learning of the career guidance counsellors should be further developed and professionalized.

4 WOLF, I. Why Many Unemployed Workers Will Never Get Jobs. Available at:

https://www.huffingtonpost.com/ira-wolfe/why-many-unemployment_b_5273611.html?guccounter=1

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Summary

Technical development in all fields including manufacturing creates new products and services and boost job growth in at least three distinct ways. Directly, for workers who develop the new tools, products, and services; indirectly, for workers who leverage the new tools; and through economic growth, as rising productivity unlocks scarce resources to invest in new projects and spend on other consumer goods. In all of this the most important factor is human capital and policies must therefore focus on empowering people, enable them to be aware of their skills as well as skills shortages, offer accessible locally and financially available further professional education and lifelong career guidance.5

Replacement and/or successful return of low-skilled workers to the labour market is a very demanding process that must be preceded by long-lasting systematic work with them as most of low-skilled workers face various social, financial, health and other problems that need to be resolved first in order to pursue their own personal growth and development. A person with executions, an alcoholic or dependent on addictive substance is in fact not employable. Motivation to gain employment is increased by stable social background and self-awareness of own skills applicable in the labour market. The skills assessment (in French “bilan de compétences”) is an specific career guidance program designed to support professional development. It aims to enable workers to analyze their professional and personal skills and motivations to define a professional and possibly a training project. The assessment of skills is thus an opportunity to take stock of its professional trajectory to improve motivation, efficiency and job satisfaction, as well as health (preventing stress and fatigue) and work-life balance.

One of the barriers to higher participation of low-skilled group in training is a narrow offer of training courses adapted to low-skilled workers. Further education and training of low-skilled must be designed taking into account their reduced ability to acquire new knowledge, work with less adaptability and flexibility and offer longer time for understanding.

The existing Czech national system for the recognition of skills acquired through informal and non-formal learning is used only for certain professions in which the professional examination is required by law. Greater use prevents the price of the professional examination.

The European Commission support for the production of this publication does not constitute an

endorsement of the contents which reflects the views only of the authors, and the Commission cannot be

held responsible for any use which may be made of the information contained therein.

5 MANDEL, M., SWANSON, B. The coming productivity boom. Transforming the physical ekonomi with

informatik. Available at: http://www.techceocouncil.org/clientuploads/reports/TCC%20Productivity%20Boom%20FINAL.pdf