HRDA Scheme for Job Placement and Training of Tertiary-Education Graduates
Note: Another version of the Instrument had been in operation long before 2009. During 2009-2012 it had undergone modifications. It is still running today in a slightly different/ modified version.
This is an HRDA scheme that was initially introduced in the eighties. It has undergone modifications on several occasions. 2009-2012 was an implementation period, where certain modifications took place in order to respond to the lessons learned from the prevailing economic conditions. The scheme is still running in a form not very different from the 2009-12 version (the core principles are the same).
HRDA contributes towards minimising the effects of the economic crisis on the Cyprus labour market by tackling the unemployment issue among tertiary-education graduates.
To reduce unemployment amongst tertiary-education graduates by helping them find productive and suitable employment through acquiring work experience and specialised additional knowledge suitable to market needs. At the same time help businesses/organisations to improve their productivity and competitiveness by employing highly educated young graduates. The programme focused on the integration of highly qualified young people into the labour market by providing practical on-the-job experience in a company for a maximum period of 12 months.
This programme does not directly target skills mismatch. However, in the individual training programmes set for each candidate, there is in-company practical training and acquisition of work experience and participation in selected seminars on various subjects.
Decision taken by the Human Resource Development Authority of Cyprus (HRDA).
Main responsible body
Human Resource Development Authority of Cyprus (HDRA)
The Social Partners are actively involved in all the HRDA initiatives. Employers’ and workers’ organisations are directly involved in policy and strategy formulation through their representation on HRDA’s Board of Governors. In direct partnership, they also implement training activities that satisfy specialised needs, within the framework set by HRDA. As part of the Board, they receive reports about the scheme's progress and, if necessary, they carry out modifications to bring the scheme up-to-date. They also influence policy decisions.
The budget for 2012 amounted to €5.7 million with actual expenditure for 2012 reaching the amount of €6,227,934.
The Scheme is funded solely by the HRDA through its Human Resource Development Fund. The source of the Fund is a levy that is imposed by law on the payroll of all the employers in Cyprus, irrespective of size or sector of the economy.
1. Tertiary-education unemployed graduates who
- Completed at least a 3 -year academic course of any discipline
- Have no more than 12 months relevant work experience
- Have completed academic studies up to 3 years before employment
The scheme/programme helps them find employment, by encouraging reluctant employers to participate in the scheme by subsidising the graduates wages for the duration of training.
- From any economic sector
- Have a need for recruiting and training a graduate to a position requiring higher qualifications
- Suitable in-house trainer/coach
- Appropriate company structure for the training and employment of the graduate
The employers benefit by recruiting highly educated young graduates while their remuneration is subsidised by HRDA.
Use of labour market intelligence
HRDA, through its Research and Planning Directorate, studies the economy and the labour market needs and decides where to place emphasis for meeting the identified urgent needs. High unemployment among tertiary-education graduates was and still is a serious issue that requires HRDA to intervene with appropriate measures to combat it.
The employer receives subsidy from the HRDA that covers part of the graduate's salary and part of the employer's time for supervising, guiding and training the graduate during a fixed period of approved training.
Frequency of updates
Just like all other schemes of the HRDA, this particular instrument is reviewed on an annual basis in order to report its progress to the Board of Governors for approval of its continuation and of the required funds. In addition, HRDA, undertakes a scheme evaluation of its impact on the graduates (in 2012 for the 2009-2011 implementation) either separately or together with other HRDA schemes.
During the implementation period of the scheme (2009-12), in order to combat the effects of the economic crisis and the steady increase in graduate unemployment, the subsidy to the employers increased from €1,100 to €1,600 euros month in order to encourage increased participation in the scheme.
The basic barrier was the effects of the economic crisis, which caused businesses to shrink in overall numbers and size, and as a consequence the labour market to follow suit. Instead of recruiting more people, businesses were letting people go and the interest in the scheme diminished.
Generous compulsory minimum salary for the graduates (€1,100 per month for the 6-month version and €1,150 per month for the 12-month version of the scheme).
Generous subsidy level for the employer (up to €1,600 per month) for the whole period of training (either 6 or 12 months). The subsidy took into account the graduate's salary and the employer's cost of providing the training.
The Human Resource Development Agency (HRDA) carries out evaluation studies focusing on the impact on the participants of the scheme to whom a subsidy was granted with regular follow-ups. Within this policy, the HRDA designed and developed an integrated evaluation system on the impacts in general on the national economy of HRDA’s social interventions and activities/schemes. The specific objectives of this exercise are as follows:
• Assessment of the achievement of the objectives of each action
• Evaluation of the mechanisms for implementing the actions
• Evaluation of the contribution of the actions in the economy and the labour market of Cyprus
• Record the basic characteristics of the beneficiaries that participated in actions of HRDA
• Assessment of the impact of human resources participation in the actions
• Assessment of the degree of satisfaction of individuals from participation
The specific policy is innovative, because it caters for the needs of two important stakeholders of the economy at the same time - the unemployed graduates and the employers. By subsidising the employment of graduates, employers benefit by having highly educated employees with fresh ideas that can improve the status and performance of their business, while at the same time the university graduates through the scheme can improve their skills at a suitable employment post. Through the training element of the scheme the graduates entertain the opportunity of a "smooth" entry into the labour market and upgrading their skills.
Evidence of effectiveness
In 2012, the Human Resource Development Authority (HRDA) completed an evaluation study regarding the impact on the participants of the Scheme to whom a subsidy was granted during the period 2009-2011, which revealed that 90% of scheme participants were employed, while 77% of them were employed by the initial enterprise. A second evaluation study was carried out in 2013.
Impact of the instrument is high. While the target for 2012 was to have 670 participants, the actual participants reached 709 persons. The success of this measure has led to its inclusion as an active labour market policy in the Special Prevention-Action Plan that was introduced by HRDA in close cooperation with the Ministry of Labour and Social Insurance in 2009, for combating unemployment.
The scheme, over the years, has been well received by employers. Since its first introduction, it has undergone several modifications in order to adjust it to the prevailing market conditions. The graduate trainees are also very content with the scheme, because it enables them a "smooth" entry into the labour market and it gives them the opportunity for further development. No unexpected benefits have been observed.
Engagement of stakeholders
The main stakeholders, the employers, the trade unions and the social partners are represented on the Board of Governors of the Human Resource Development Authority. The Board is frequently notified of the scheme's progress so that, if necessary, adjustments are made to cater for the prevailing needs of the economy.
All the basic features of the scheme could easily be transferred to another country. E.g. Unemployed university graduates. Employers willing to employ university educated labour force and train them on the understanding that they would receive a subsidy for a specific training-period to upgrade graduates' performance and cover their overhead cost of training. By doing so the employers benefit from the services of a highly qualified young person. Also most employers foresee continuation of employment of graduates at their organisations.
Over the years, the specific scheme has proved to be very successful and very useful for both employers and tertiary-education graduates. The scheme, which is currently in use, has undergone over the years modifications to reflect the prevailing market and economic conditions. There are no plans of discontinuing it.