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Teach people new skills with the right incentives

20/09/19

The government wants to keep the employment market strong, now and in the future. To ensure that people remain healthy, flexible and sustainably employable under the influence of technology, the government is focusing on Lifelong Development (LLO). Workers and employers must take control and invest in development throughout their career.

By Bastiaan Starink, partner People and Organisation

First, let’s debunk a fable. In the media you always read that technological skills are crucial for a job in the future. In fact, you have to be a data scientist by now to earn a living later. Our study The tectonics of skills - measuring the evolution of our skills landscape shows that this is not true. Obviously, we must all have certain basic technology skills, because technology has been introduced into many professions. But - whether you work in health care, in education, in construction or anywhere else - it is mainly about whether you can use the technology that is required for your position. Not everyone needs to become a data scientist for that.

Bright Dutch employment market

A second finding of the study is that it is especially the skills with which people complement technology that are important. We are talking about interpersonal skills and issues such as creativity and adaptability. The great thing is that these are typically skills where the Dutch workforce already scores very well. Precisely because we have a large service sector in the Netherlands and so many people already have those service-oriented skills. To put it bluntly, the position of the Dutch employment market - when it comes to future-proofing - is actually very bright.

Embrace emerging technologies

But if we want to stay ahead, then we must ensure that all those service people can embrace emerging technologies. We are seeing an increasing trend towards user-friendly tools; programmers are getting better and better at designing very nice interfaces, which all those service providers can use without in-depth technical knowledge. We do not yet know exactly what we can use VR glasses for. The point is that we do have people who find the applications to get started with such glasses in healthcare or construction.

Employers, employees and government

Developing relevant, future-proof skills is a shared responsibility. An employer has an interest in this, but that also applies to an employee. The government also has a role. Whereas the large business sector is often able to train or retrain, there is also the small and medium-sized businesses - sixty per cent of our economy - who cannot do that themselves. Their scale is too small for that upskilling to be organised entirely by themselves.

Train people structurally and cost-effectively

Because the upskilling of these companies serves a social interest, there is a role for the government. It must not only provide primary and secondary education, but later also - via a lifelong learning process - an offer that allows people to continue to train themselves structurally and cost-effectively. The government is currently working on a public learning and development budget that will replace the tax training deduction. This budget will be available to everyone up to state pension age, both for workers and for job seekers without a job. A lifelong learning process sounds huge but does not have to be so because it involves limited extra skill at set times. A good example is the Luxembourg Digital Skills Bridge, where the Luxembourg government organises and facilitates digital upskilling also for smaller companies. That could also be done at a regional level in the Netherlands.

Financial incentives always work

If you want to help people change, you have to encourage them. Financial incentives always work. But it’s not just that. There are individual, economic and social reasons to change. In the long term, the employee is better off himself: he can work out that his income will increase faster if he up-skills. For the business sector, the retention becomes higher as the employee up-skills, and the productivity and competitiveness of the company increase. And for society there is an external effect: if the Netherlands is upskilled, the Netherlands is more productive, people on average have a higher income and everyone can enjoy better prosperity. So there is a reason at all three levels to encourage upskilling.

Cross-sectoral training and development budget

The government is working on a subsidy scheme to stimulate LLO in small and medium-sized businesses and in the agricultural, hospitality and leisure sectors. A subsidy is a possibility, but a lifelong learning contribution to get people trained or retrained could also be simply arranged through taxes. If some of the general resources from the tax revenue were to be used to set up a lifelong learning programme, people could be allowed to enjoy tax benefits on their payroll and income tax if they obtain a diploma or if certain diplomas are recognised.

Available training and development funds

There are also hundreds of millions available in training and development funds in the Netherlands. Every employer deposits money into this per employee. It would be nice if those funds became available for a broader training need. In the current situation, if you work in construction and you want to claim such a training and development contribution - this is allowed if that benefits your function in construction. It must therefore be training that fits within the sector and the training perspective within that sector. You cannot claim money from that fund if you work in construction and you want to be retrained for healthcare because you expect to no longer have any work in construction. As far as we are concerned, all those training and development funds should make 10% of their budget available for upskilling, for example to finance training and development aimed at making employees future-proof, even when this is outside the sector.

Contact us

Bastiaan Starink

Bastiaan Starink

Partner, PwC Netherlands

Tel: +31 (0)65 375 58 28

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