Promoting new skills for jobless

Economists and employment experts have given a tentative thumbs up to new European Union subsidies to tackle unemployment in the Czech Republic, but warn that other factors are needed to get locals back into the work force.

They believe the subsidies are an important first step, but the crucial factor remains the outlook for the Czech economy, economic growth and, most importantly, labor demand.

"Its impact could be limited. It is only one way to tackle the problem," said Patria Finance economist David Marek. "It's not the main factor [for eradicating unemployment], but it can help. The main factor is demand [for labor], but it is one thing we can do."

Ondřej Rak, an account manager-consultant with Czech consulting and training company ImageLab, is positive that the funds will have a positive effect.

"I think the economic situation is getting better, and from January 2011, firms will be hiring new people, and there will be new jobs," he said.

He added that the project could find success if it was long-term and tackled not just teaching new technical skills, but helped with overall professional skills as well.

"I think it can be [successful] in two ways. One way is to increase competencies like professional competencies and hard skills, such as teaching people how to operate machinery," he said. "The second is through developing soft skills, like how to succeed in job interviews and how to communicate effectively."

Next Finance Chief Economist Vladimír Pikora is also slightly cautious on the measures, saying he's afraid the program won't do a thing to get people back into jobs.

"It can only solve part of the problem," he said. "But it depends on whether companies are hiring."

Under the proposals, the EU has given the Labor and Social Affairs Ministry a total of 4.3 billion Kč ($215.8 million) for retraining, the funding of community works and the creation of new jobs. From the EU subsidy, 450 million Kč will be annually earmarked for retraining, or 1.4 billion Kč over a three-year period.

The ministry says the 1.4 billion Kč is planned to be used as follows: 1.2 billion Kč for retraining, 200 million Kč for consultancy fees and 50 million Kč for supporting activities.

"The retraining and counseling activities are being implemented within this project under a service purchase from external suppliers on a public procurement basis, which is then implemented by each employment office according to the law on public procurement and in accordance with the appropriate methodology for public procurement in the Operational HR and Employment Program," it said.

Pikora believes the way in which the money is allocated is a crucial factor.

"If it is used for re-qualification and re-educating people with necessary skills, such as using a computer or driving a car, then it makes sense because it increases a person's chances of getting a job," he said. "But if there is no work, then any increase in qualifications won't help. Companies have to be offering new jobs. It depends on the business cycle."

Statistics from the ministry showed a total of 39,831 applicants in 2009, an increase of 622 on the 2008 level. Within a year of finishing retraining programs, 32.3 percent of people found new jobs.

In terms of the economic outlook, the Finance Ministry is forecasting a jump in unemployment to 7.6 percent this year before falling to 7.3 percent in fiscal 2011 and 6.8 percent in fiscal 2012. In terms of economic growth, the outlook is positive, with the ministry forecasting GDP growth of 1.6 percent this fiscal year, and 2.3 percent, 3.2 percent and 3.9 percent for fiscal 2011-13, respectively.

Pikora warns, however, that in many similar programs "the money is wasted." He points to an example of an EU project where Spanish workers were sent to the Czech Republic for a period of three months.

"They couldn't get good jobs in this time period," he said. "It takes many, many months for a worker to get acclimatized to a new job and learn the systems such as the intranet and so on. And many things in Brussels and proposed by EU bureaucrats are the same way. You can't always say they are bad, but you can't always say they are good."

- Klára Jiřičná contributed to this report.

Gabriella Hold can be reached at
ghold@praguepost.com