Optimizing Spain’s Labor Market: Flexibility & Vocational Training
Labor Flexibility Policies in Spain
Addressing the flexibility rigidities of labor relations between employers and employees is crucial. A crucial balance must be struck between protecting workers and providing flexibility for businesses. This means ensuring worker protection without discouraging employers, especially concerning the rigidities of permanent contracts, high firing costs, and difficulties in modifying working conditions in response to changes in the economic situation.
Spain faces significant obstacles to job creation, experiencing substantial job losses during crises but slow recovery during economic expansions. These policies are categorized into:
1. Internal Flexibility
This approach aims to reduce rigidities in hiring, particularly concerning temporary and part-time contracts. This approach is intended to foster job creation. In a system with strong worker protection via permanent contracts, temporary contracts often serve as an alternative for employers. However, this can lead to precarious job creation, characterized by high turnover and job insecurity, disproportionately affecting young people and women. There have also been instances of misuse and poor application of these contracts.
2. External Flexibility
This policy aims to remove rigidities related to job termination. The goal is to make permanent contracts more attractive to employers. A reduction in dismissal costs makes the initial permanent contract more appealing, counteracting the previous excessive reliance on temporary contracts. Historically, compensation for unfair dismissal under an indefinite contract was 45 days per year of service (with a maximum of 42 months). This was later reduced to 33 days per year (with a maximum of 24 months).
Vocational Training and Skill Development
Vocational training aims to facilitate employment for the unemployed and support job retention by providing new knowledge, retraining (refresher training), and enhancing the quality of the labor supply. It seeks to adapt the skills of the labor force to the evolving needs of the productive sector.
Key types of vocational training include:
1. Occupational Training
Aimed at individuals seeking their first job or who are unemployed. Its function is to complement training acquired within the formal education system, facilitate entry or re-employment, and leverage services offered by Public Employment Services (PES). Specific measures include:
- Training and Employability Plans: Courses combining theoretical and practical components.
- School-Workshop and Craft Workshop Programs: Designed for unemployed individuals under 25 years of age.
- Employment Workshop Programs: Targeted at unemployed individuals aged 25 or older.
2. Continuing Training
Aimed at employed individuals who wish to enhance their skills or undergo retraining. This often involves agreements between trade unions and business organizations to provide training. Training can be provided within companies, often funded by a contingency fund for continuing education, or through individual training leave for workers. Companies can organize courses for their employees, or allow workers to attend external training courses and examinations. Policies also support worker training plans at sectoral or cross-sectoral levels. Business organizations and unions receive grants to facilitate these training courses at a cross-sectoral level.
Vocational Training Contracts:
Vocational training also involves contracts that combine work and training:
- 1. Practical Training Contracts: Designed for individuals with advanced degrees or mid-level vocational training (FP Medio) to apply their theoretical knowledge in a practical business setting. Practical knowledge is gained directly within the company.
- 2. Work-Study Contracts: Aimed at individuals without formal qualifications, providing them with both technical and practical knowledge. Theoretical knowledge is acquired in a training center (outside the company but within working hours), while practical experience is gained within the company.