Essay
Tomorrow's Economy

The future of work: a new deal for skills in France?

21st November 2017
Authors
Samuel Sigere
Author

Facing the challenges of digitisation, automation, an increasingly globalised economy, and high levels of unemployment, President Macron was elected on the promise to ignite an economic revival in France. His government’s first step was the publication of five decrees in September to reform the regulation of labour, increasing security and flexibility to negotiation work conditions. His next move – the mid-November publication of a document presenting the main axes for discussion with social partners – aims to equip the French workforce with the skills it needs to navigate this new world of work, turning the political debate to training and education in the country. The reform outlined in the document is, for the most part, administrative – far from the revolution Muriel Pénicaud, the minister of Labour, had suggested was on the way, and completely misses the mark in term of digital training.

France’s skills problems

Macron’s reform of vocational training is much-needed. Looking at the skills of the French workforce, the picture is gloomy. According to the Survey of Adult Skills (PIAAC) data, of the 24 participating countries, France is among those with the lowest numeracy and literacy skills. 21.6 per cent of French adults obtained literacy scores lower than the average for other participating OECD countries (OECD 2015). Looking at digital skills, the picture is no better. According to Eurostat, in 2015, 35 per cent of the French workforce does not have the basic digital skills required from most jobs with 8 per cent having no digital skills at all (compared with just 3 per cent of the UK workforce). Generally, older workers struggle to acquire digital skills (see figure 1), suggesting more needs to be done to support workers developing their skills throughout their careers, through high quality adult learning and vocational training.

Figure 1.

A complex, inefficient system

In a bid to improve the situation, Macron’s government is betting on its ability to significantly reform skills education in France. Each year, the country spends €32 bn (around 1.5% of GDP) on vocational training. But both workers and businesses fail to reap the full rewards of their investment, due to the system’s administrative complexity, the low quality of training, and the negative perception of apprenticeship programmes.

Successive attempts to reform apprenticeships have rendered the system hard to navigate for both companies and apprentices themselves. Myriad tax breaks and fiscal exemptions make it difficult to calculate the cost of taking on an apprentice and, socially, apprenticeships are perceived as a second-class route for those students who failed to succeed in the mainstream French education system. This perception is in spite of the fact apprenticeships actually deliver relatively good job prospects (CAE 2014), with apprentices usually finding a job within six months of completing their scheme, as they are generally favoured over other candidates because of their work experience (OECD 2015). However, the system also suffers a high rate of failure; about 30 per cent of apprenticeship contracts are interrupted before completion (compared with 25 per cent in Germany). In the hospitality sector, the rate of failure is even higher, at close to 50 per cent (Dares 2017).

The picture is no better looking at professional training in France. Each year about 42 per cent of the workforce receives some professional training. Much like the apprenticeship system, vocational education suffers from complex administration, as OPACs (associations of trade unions and organisations of employers) from different sectors, at both the national and regional level, collect revenue from various business taxes to finance training for workers. Access to training is unequal. Employees with management responsibilities are more likely to participate in training than manual workers (68 compared with 36 per cent), and those in employment over those that are unemployed (60 compared with 40 per cent). There is little regulation of the system, with around 90,000 training providers in France. Thus, the quality of schemes is low and their impact on wages and job prospects mixed (OECD 2015).

An administrative reform

Recently, Macron’s government presented a plan to discuss potential reform of the system with key stakeholders. However, what we have seen in the outline of the proposal is more of an administrative change than anything else, and fails to address some of the most pressing issues in the vocational training system.

To enhance perceptions of apprenticeships, the government proposes simplifying the system by:

  • Creating one unique, flexible training contract, open to all ages – to replace the current system of two different apprenticeships (the professional contract and the apprenticeship contract, both of which have restricted access).
  • Creating a new national standard of minimum remuneration based on age and qualification. This would replace the current unfair system in which pay varies based on the type of contract, age and experience, so a young person on a professional contract earns more than someone of similar age and qualification on an apprentice contract.
  • Simplifying the systems of fiscal exemptions and tax credits granted to businesses by the national and regional governments for taking on apprentices into a single financial intervention managed by one organisation.
  • Allowing a greater role for industry in the design of vocational education programmes. Currently, the formal education given to apprentices is administered by several organisations, making it hard to innovate and create curricula that meet the needs of business.

These proposals will certainly solve the administrative issues of the apprenticeship system, making it more flexible and easier for businesses and young people to navigate. But they fail to address other problems within the system, providing no incentives to create more training schemes for digital skills and offering no solutions to improve the rate of apprentices completing their training.

To achieve that, Macron’s government would need to improve support for apprentices by ensuring, for instance, better communication between businesses and those in training. 36 per cent of apprentices and 18 per cent of businesses point to poor communication as one of the main reasons for terminating an apprenticeship. This breakdown in communication also goes some way to explaining the mismatch of the needs of businesses and the wants of apprentices, with 24 per cent of businesses complaining that their apprentices’ skills are poorly matched to their needs, and many young people feeling their work is undervalued.

To improve professional development, the government wants to simplify and regulate the provision of training in France by:

  • Instituting a business-led certification of the schemes in an attempt to improve the quality of the programmes and provide clear expectations to users.
  • Improving access to training by removing the intermediary role of the OPAC, which currently collects the training tax, finances training for workers and advises small businesses and workers what training plan would be most appropriate.
  • Crediting the Personal Training Account (PTA) in euros and not in hours to ensure prices.
  • Diverting all revenues from the training tax to finance the CPF and opening the list of training that can be accessed with the PTA to include both competence-based certification and qualifications.
  • Providing better, more tailored professional development support to workers from the National Professional Development Council.

These changes would make the professional training market easier to navigate for business and workers and provide workers with direct access to training providers and better quality schemes. However, the reforms fail to address problems like the digital skills gap, with no incentive for the training market to provide more digital skills training. According to a recent report by the General Inspection of Social affairs (2017) 52 per cent of private training providers do not offer digital skills training for remote learners. If the market fails to adapt to this critical need and promote digital training, the workforce is in danger of being unable to acquire the skills it needs to navigate the increasingly digital environment of the workplace.

Waiting the awaited revolution

We are still in the early days of Macron’s reforms. The government has only just started discussion with stakeholders and much could change. In its current form, the government’s reform addresses most of the administrative issues with vocational training in France, but misses an opportunity to provide more structural incentives for the workforce to acquire the skills it needs to navigate an increasingly digital world of work. Different stakeholders and social partners have until early next year to help the government improve their draft before the proposed law is debated in parliament in late spring 2018. Let’s hope they don’t let this chance pass them by.

References

OECD 2015 – Brandt, N. (2015), Vocational training and adult learning for better skills in France, OECD Economics Department Working Papers, No. 1260, OECD Publishing, Paris. http://dx.doi.org/10.1787/5jrw21kjthln-en

CAE 2014 – http://www.cae-eco.fr/IMG/pdf/cae-note019v5.pdf

Dares 2017 – http://dares.travail-emploi.gouv.fr/dares-etudes-et-statistiques/etudes-et-syntheses/dares-analyses-dares-indicateurs-dares-resultats/article/l-apprentissage-en-2016

Image credit: Frederic Legrand / COMEO / Shutterstock

 

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