Italy should boost investment in training for the future of work

This article is brought to you in association with OECD.

---

The government, business and workers in Italy will need to invest substantially more in training to prepare for the future world of work, according to a new OECD report. Adult Learning in Italy: what role for training funds? says that the skills needed by workers for successful careers are changing rapidly in response to digitalisation and globalisation. As a result of the introduction of new technologies, 15.2% of jobs have a high risk of automation, and a further 35.5% may experience significant changes to how they are performed. Italian adults will need better opportunities over increasingly longer careers to develop their skills to keep their jobs or switch to new ones. To address these challenges, investing more in adult learning should become a policy priority for Italy. Today only 20% of adults in Italy participate in job-related training, half the OECD average. This percentage drops to 9.5% for low-skilled adults, who are arguably those who need training the most. Italy’s Training Funds have the potential to equip adults with the skills needed to thrive in the labour market and society. Funds are associations run by social partners that finance workers’ training, using resources collected through a training levy paid by employers (0.3% of payroll). They are intended to encourage firms to train their workers and improve access to training. However, there is little awareness of these funds, which mirrors a low demand for skills and a lack of a learning culture relative to other OECD countries, especially among SMEs. On top of that, red tape and training costs remain burdensome for many SMEs. Moreover, training is not always aligned with labour market needs. Compulsory Occupational Health and Safety (OHS) training represents over 30% of all training activities supported by the Funds, while ICT training accounts for just over 3%. The Funds often work in silos, with no formal coordination efforts taking place among them or with institutions and other actors involved in adult learning (e.g. regions, public employment services). More structured coordination mechanisms should be put in place to avoid duplication of efforts and create synergies between training programmes developed by different actors. Finally, the Training Funds require adequate and sustainable funding to function well. In recent years, they have been the object of significant budget cuts by the government, which in 2017 absorbed over 40% of the funds that were collected through the training levy. In addition to reducing resources for training, budget cuts may also affect the credibility of the Training Funds and undermine overall trust in the system. To ensure that the Training Funds are used more effectively, the OECD recommends that action should be taken to:

• Increase training participation among SMEs and vulnerable workers by, for example, fostering a learning culture among SMEs, training entrepreneurs, further reducing red tape and training costs for SMEs, and putting in place targeted initiatives to ensure that training reaches disadvantaged groups.
• Align training to the skills needed in the labour market by, for example, strengthening the involvement of social partners in training decisions, making better use of skills assessment and anticipation exercises, and forbidding the use of Training Funds for compulsory training.
• Enhance coordination among different actors by, for example, setting up a National Observatory on Adult Learning that coordinates the activities of the different actors involved in adult learning.
• Ensure that Training Funds receive adequate and sustainable funding, by minimising governments’ withdrawals for purposes other than training.