1. Evaluation of Measures Targeting the Improvement of Employment Károly Mike Hétfa Research Institute 30 April 2013

2. Goals of the evaluation I.Comprehensive assessment of SROP Priority 1. and Priority 2. II.Exploration of characteristics and efficiency of non- profit organisations in the field of employment policy III.Recommendations for the 2014-2020 period

3. Methodologies of the evaluation Document analysis Expert interviews Analysis of SMIS (Standardised Monitoring Information System) data International good practices Online survey (population of employment-related non-profits, 655 organizations) 4 territorial case studies (with the collaboration of Revita Foundation): – Low skilled and disadvantaged people – Local actors: non-profits, municipalities, employment service, enterprises 3 case studies with a target group focus (with the collaboration of Revita Foundation): – People with reduced capacity to work – People returning from parental leave – People above 50 Experience of end-beneficiaries – Interviews with clients of non-profits – Exploration of internet visibility

4. What actions have been implemented? Contracted funds up to January 2013: HUF 233 billion in SROP Priority 1. and HUF 126 billion SROP Priority 2. Allocation of funds according to the dominant element of the constructions

5. Who were the implementers? Data are available about the direct beneficiaries, the lead applicants – SROP 1: 155 non-profits, 31 for-profits, 34 governmental lead applicants – SROP 2: 373 non-profits, 3200 for-profits, 102 governmental lead applicants Nearly half of the beneficiaries are returning partners of development policy (non-profits – SROP 5, for-profits EDOP, ROPs) Distribution of funds among different types of beneficiaries SROP 1SROP 2

6. What are the most important results? The National Employment Service has taken steps towards becoming a service network rather than a state authority: – IT system – monitoring of individual career paths – Foundations of a profiling system – System of employer contacts Stabilising, competent core of non-profits organisations Shift towards accompanying unemployed clients into actual employment and beyond Responding to the economic crisis (e.g. broadening of target groups, targeted programmes)

7. Fragmentation of the institutional setup: – Parallel systems of PES programmes and SROP grant schemes for nonprofits – Inclusion of civil sector in employment policy vs. outsourcing of services – „Lack of sponsor”, weakness of outsourcing capacities Handling of „services and sanctions” in an integrated framework was missing – Target groups for projects vs. transfers for target groups + service with sanction – General (1.1.2, 1.1.4; 1.4.1, 1.4.3) vs. target group focused programmes (rehabilitation allowance -1.1.1, unemployment benefits 1.1.3) Benefits of direct employment? – Temporarily supported vs. real transit jobs at non-profits – Social cooperatives vs. job creating corporations What were the main problems of the constructions?

8. Accountability of ESF indicators – Policy vs. contractual indicators: information vs. incentives – 180 day employment indicator – minimum value: Minimizing the risks: skimming (target group members, locations) Disregarding long-term effects – There is no unified data register at individual level for PES and nonprofit programmes – 180 day employment indicator: Non-profits: self-assessment NES: inquiry of contracted partners

9. What are the characteristics and activities of non-profits? Very heterogeneous pool of applicants: – 40% established between 2007-2012 – Only half of them conducted employment activity in 2012 Weak „civil aspect”: – Personal income tax 1% for non-profits is only 1,8% of the average income Stabilising, competent core – by the index of professional competence and institutional professionalism: approx. 80 outstanding organizations additional 150 good organizations – Importance of regular governmental budgetary support, entrepreneurial activities, connections with employment services Importance of local cooperation: strongest ties with municipalities, local employment offices

10. What are the distinctive features of organizations who received SROP funds? Factors contributing to successful application: – Institutional professionalism – Professional competence – Previous experience with employment programs – Municipality as founder – (unrelated factors: reputation of expertise, expert community, church body among the founders) Geographical location: – East, South-West – 60% of organizations, 43% of projects are in big cities – The projects are not taken to the peripheries

11. What are the non-profits’ experiences with SROP projects? Shift towards helping actual employment (and beyond) rather than just support of employability Lack of target group focus: in 60% of the projects there were at least 5 target groups Inclusion of Roma and elderly people are limited They are able to reach the non-registered, permanently unemployed people only to a limited extent (18%) The duration of the actual service phase is significantly shorter than the duration of the project (1 vs. 2 years) – On average, it would be necessary to provide service to an involved person for 6 months longer

12. Recommendations for 2014-2020 1.Abolition of divided institutional structure (NES, NDA/ESZA) – Strengthening of the services procurement capacities of NES (at county-level) – Inclusion of competent non-profits as external providers at county-level 2. NES as a provider and outsourcer institution – Development of management-system (MEV) Data supply Internal incentives (instead of direct performance contracts)

13. Recommendations for 2014-2020 3. Finding the role of municipalities in employment policy – Making the employment pacts operational Joint strategy making and local institutional framework for continuous cooperation With the lead and professional support of the ministry 3-4 years long contracts for the participating municipalities or their associations Synchronization of nationally funded public employment and EU funding: – National funding as block grants, with freer usage

14. Recommendations for 2014-2020 4. Rethinking the use of indicators in contracts – Contractual indicators: Differentiation of contract types – NES: Leave the incentives and monitoring for the internal management-system – Make performance contracts with the external providers and municipalities Adjustments of the employment result indicator – Incentive for permanent employment: 360 days – Differentiation between target groups and local labour markets – Reasonable risk sharing: multistage, motivating remuneration

15. Thank you for your attention! Hétfa Research Institute H-1051 Budapest Október 6. utca 19. www.hetfa.hu