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Youth employment projects endThe employers call for changes to education
27 Jan 2014 Radka Minarechová Business
A 23.6-YEAR-OLD registered with the labour office for approximately 13.7 months with a professional secondary school or university education: this is the most typical example of someone who found work through the national youth employment projects, according to data from the Central Office of Labour, Social Affairs and Family (ÚPSVaR).
Between November 2012 and December 2013, employers created 11,605 jobs for unemployed people aged 29 or under through these projects. Observers however believe the projects will not permanently reduce youth joblessness, and call for more systematic changes.
Employers who participated in the projects were able to receive a maximum contribution of about €457 per month for each new position. The first project targeted the private sector, focusing on creating jobs in the transport sector and in small and medium-sized firms. The second focused on community-based jobs in municipalities.
The Labour Ministry views the projects, for which it allocated €70 million, as successful. Due to the high level of interest among employers, this form of employment might be the way to fight youth joblessness, said ministry spokesperson Michal Stuška.
The youth unemployment rate stood at 34 percent in 2012, according to the Strategies of the Slovak Republic for Youth for 2014-2020, authored by the Education Ministry.
“There are signs that the well-targeted support for employment is motivating to employers,” Stuška told The Slovak Spectator.
Employers say that though the projects have some benefits, they cannot solve high youth unemployment over the long term.
“These national projects help young people gain [their] first work experience and remove their handicap in the labour market,” Branislav Masár, executive director of the Federation of Employers’ Associations (AZZZ), told The Slovak Spectator, adding that it will be easier for young people to find work in the future.
Martin Hošták, secretary of the National Union of Employers (RÚZ), agrees with such benefits, but still considers them “costly, non-systemic projects with a short-term effect”.
Most jobs at micro-sized firms
According to the scheme, employers could receive a contribution for each new job created. Successful applicants received the money for six to 12 months, with the condition that they had to maintain the job for together 18 to 21 months, depending on their sphere of business.
The salaries within the scheme were supposed to exceed the minimum wage. The state covered the employees’ pay up to the minimum price of labour, while employers paid for the rest. The exact amount depended primarily on the qualifications of the employee.
ÚPSVaR statistics showed that in the private sector the projects helped create 1,402 new jobs in micro-sized companies, 427 positions in small companies, followed by 174 jobs in medium-sized firms. Most of the jobs were in wholesale and retail sales, industrial production, accommodation and catering services.
As for municipal projects, villages created 301 jobs for young unemployed, while towns found work for 100 people. Budgetary organisations created altogether 169 jobs and allowance organisations added 46 positions, according to ÚPSVaR.
Changes in other sectors necessary
The Labour Ministry says it plans to continue in similar projects in the future.
Luboš Sirota, head of the McROY Group recruitment company, does not share the Labour Ministry’s optimism, and believes that grant projects like these cannot solve the problem of young people with inappropriate qualifications, and that they only partially removed the consequences. Though firms pay less for the new employees, which makes their re-qualification cheaper, it would be good if these programmes were accompanied by reforms in the education system, he told The Slovak Spectator.
Moreover, the state should also make the Labour Code more flexible, Hošták said. Masár added that the state should adopt measures that motivate employers to create new jobs, like a flat decrease in taxes and payroll taxes for young employees, or make it easier to lay off working pensioners.
Regarding job sustainability, Sirota said that some of the jobs will certainly end after the companies stop receiving the state subsidy. Yet, firms that planned to create the jobs regardless of the subsidy might keep employees who prove to be good, he added.
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