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Parragh: govt should make sure firms have stake in employing trainees

Thousands of trainees will join the new vocational education system in Hungary this year. László Parragh, President of business chamber MKIK and one of the creators of the new system talked to the BBJ about how he envisions it in practice.

How many children will be affected by the new trainee system?

New system from September

As a result of a half-year long negotiation between the government and the Hungarian Chamber of Commerce and Industry (MKIK), Hungary introduces a new skilled worker trainee system in 2011 September. The program is to contribute to Fidesz’s election promise of creating one million new workplaces by the end of the period and aims to strengthen young skilled workers’ job market opportunities by providing them with more practical knowledge. The training period will be reduced from the current 4 years to 3 and the children will fulfill their traineeship at companies instead of the schools.

The implementation of the new trainee system is voluntary this year, therefore it is hard to estimate how many schools will join the program. We think, approximately 6,000-7,000 trainees will join the new system this year, which translates to one fourth of all children at secondary education. This proportion will reach up to 35% by 2012, when all technical high schools will be obliged to implement the new system.

Are the schools willing to cooperate?

It is a mixed picture. The opposition we have experienced at some institutions can mainly be led back to the fact that technical high schools already run with a 25% capacity surplus, which will be only increased by the new system, which reduces the training period from 4 to 3 years. Placing the trainees from the schools to companies further enlarges the capacity surplus. However, some schools have realized the necessity of change and have joined the program. As a matter of fact, well-functioning schools that understand how things should to work did not hesitate at all.

How are businesses receiving the changes?

Businesses obviously see the huge opportunities in the trainee system. Some big companies such as Mercedes or Bosch already employ 80% of the trainees in a particular profession.

According to a recent MKIK statement, 9,000 businesses are participating in the program at the moment, which has to be increased to 20,000 in order for the system to run smoothly. How will you gain the remaining 11,000 companies?

Well, it is easy to see that businesses run a risk by letting inexperienced people work with machines that are often worth hundreds of thousands of forints. If we want them to give trainees a try, the state has to make sure they have a stake in doing so.

What benefits can you offer them?

They already get expedited amortization allowances for certain instruments, and can apply for grants for tools used especially by the trainees. The companies also receive some money after each trainee, which basically covers their wage. However, there is no doubt that the circle of these benefits has to be extended. We have to find the path which works for both for the state and the business sector.

How fast will the business sector react to the new opportunity?

The system works with 3-year cycle. By the time the first class taking up secondary studies in the new system leaves school, we will have the necessary 20,000 companies.

Although the skilled workers of some particular professions can already reach relatively high salaries, especially in the western region, the prestige of manual work is still very low. Will the new trainee system be able to change this?

The prestige of a profession is primarily the question of wages. A good turner or a mason already earns more than a teacher but, at the same time, vocational work has been devaluated in the past decades. This trend, however, already seems to have come turned around. The Prime Minister declares in his speeches how important he finds it to revive the recognition of manual work and people have started to realize that human hands are always needed in order to create real value.

The number of practical lessons will be increased at the expense of the general knowledge lessons. How does it affect children’s future opportunities to retrain? If the workforce demand changes in the future, will these workers be able to react?

The system that Hungary is now implementing is still very far from the German or the French scheme. In these countries, the amount of practical lessons is about 2,400 a year, which is far above our plans of 1,900. And I am quite sure that any Hungarian skilled worker would be happy to live at a German or French living standards. Also, the fundaments of retrainability have to be laid down in elementary schools, not the technical high schools. German pupils, for example, learn polytechnics and basic economics. They learn about compound interest at elementary school. Such an approach should be emphasized in the Hungarian education system, too.

Could the reduction of general knowledge lessons widen the gap between technical high schools and secondary schools?

If someone has a thirst for knowledge and is ready for lifelong learning, they would get along in a modular education system. It is also an aim to connect skilled worker education with the higher education system. A skilled mason can later become an engineering technician and, after graduating from university, the doors are open to becoming an engineer. At the same time, the current technical education is full of repetitions that increase the risk of dropping out. Students think that they have come to such a school in order to take up a profession and earn money as soon as possible, and not to learn about Hungarian history, which they have already studied at elementary school. This is why currently a whopping 30% of the trainees drop out. These children could be kept in the system or even if they decide to leave school before time, with more practical knowledge taken up in the first year, they can at least become unskilled workers instead of being unemployed.