3. Encouraging workers in SMEs to train

Abstract

Adult learning is important to help workers in SMEs to be ready for the structural changes that lie ahead. However, in Korea, workers in SMEs lag considerably behind workers in larger companies when it comes to access to training. On top of receiving less training from their employers, workers in SMEs also face additional barriers, including lack of time, limited information on training options, and lack of financial resources. This chapter highlights the specific training obstacles that SME workers face.

    

In Brief

Adult learning is key for SME workers

On top of receiving less training from their employers, SME workers also face additional obstacles to training compared to workers in large firms, such as lack of time, limited information on training options, and lack of financial resources. This chapter analyses the barriers to training that SME workers face. The key findings of the chapter can be summarised as follows:

• Lack of time is the number one training barrier for SME workers. Among SME workers who wanted to participate (more) in training but did not, 63% cited lack of time (for work or family responsibilities) as a key barrier – by far the highest share in the OECD area. Education and training leave, distance learning, modular learning, and recognition of prior learning, are all policy tools that can help (SME) workers to overcome time-related barriers to training. Korea already have these policies in place, but take-up by (SME) workers is rather limited.

• Low-wages put SME workers at a significant disadvantage when it comes to attending training. Some 15% of SME workers who wanted to participate in (more) training did not, because training was too expensive for them, compared to only 6% of workers in larger firms. Korea already provides various financial incentives for SME workers to reduce training costs. One key challenge is that SME workers – compared to workers in large firms – are less likely to benefit from public financial support for training, partly because they are often not eligible (e.g. they are not covered by Employment Insurance).

• Limited information is another key reason for not training, and particularly so for SME workers who cannot rely on the support for their employers for guidance and advice on learning options. Career guidance in Korea is mainly focussed on young students, older people, and the unemployed, while services for incumbent workers are piecemeal and generally less developed. Online career guidance options exist but are scattered across different websites and data sources.

Introduction

Despite the potential benefits of training, Korean SME workers lag considerably behind workers in larger companies when it comes to access to adult learning. Not only SME workers receive less training by their employers (see Chapter 2), they also face additional barriers to training participation. While these barriers are shared by all workers, they can be particularly burdensome for SME workers. The next sections discuss the most important barriers that prevent many SME workers from training, including lack of time, little financial resources, and limited information on training options. This chapter is structured as follows. Section 3.1 highlights how lack of time represent a key barrier to training for many SME workers. Section 3.2 looks at the financial barriers to training they are facing. Section 3.3 analyses lack of information on the available learning options as an additional barrier to training.

3.1. Lack of time

In Korea, one of the key reasons why SMEs workers do not participate in formal or non-formal training is because they lack time – be it for work or family/childcare responsibilities. Stakeholders interviewed in the context of this project reported that lack of time is probably the number one training barrier for SME workers. Existing evidence also corroborates these arguments. Indeed, elaborations of PIAAC data show that in Korea, among SME workers who wanted to participate (more) in training but did not, 52% cited being too busy at work as a key barrier to training – well above the OECD average of 32% and above any other OECD country. Another 11% cited lack of time because of childcare or family responsibilities as a key barrier to training (more) – against an OECD average of 13% (Figure 3.1).

Figure 3.1. Lack of time as a key barrier for training among SME workers

Percentage of SME workers who wanted to participate (more) in training, but did not because of lack of time

Note: Data refers only to workers in SMEs (250 employees or less).

Source: OECD Secretariat calculations based on the Survey of Adult Skills, PIAAC (2012, 2015).

Lack of time to train reflects a combination of factors. To some extent, it reflects the fact that SMEs often lack staff and experience great difficulties in freeing up time for their employees to undertake training (see Chapter 2). It also reflects traditionally long working hours in SMEs and existing regulation on working time (see Chapter 2). On top of policy measures that tackle SMEs’ personnel shortages and balance working hours, there are other policy measures that can help SME workers to combine more effectively their work and family responsibilities with education and training. These include education and training leave, flexible learning provision (e.g. distance learning), as well as modular learning and recognition of prior learning. These policies are discussed in the following sections.

3.1.1. Education and training leave

Education and training leave, i.e. a regulatory instrument which sets out the conditions under which employees may be granted time away from work for learning purposes, is a key policy to mitigate the time-related barriers to employees’ training.

Like in many other OECD countries, in Korea workers are allowed to take education and training leave, upon the employer’s approval. Korea provides financial compensation for employers that grant paid education and training leave to their workers and meet certain eligibility requirements. In line with best practices found in some OECD countries, subsidies cover not only direct training costs, but also indirect costs (i.e. workers and replacements’ wages). Moreover, SMEs benefit from more flexible eligibility criteria and more generous subsidies compared to large firms (see Chapter 2).1

Empirical evidence suggests that the education and training leave can improve SME workers’ productivity and help firms cover training costs. For example, Lee (2010[1]) finds that SME workers in Korea show higher job satisfaction, organisational commitment, skill level, job performance and cooperation skills after completing paid training leave programmes.

Despite the generous subsidies provided to SMEs, and the positive results associated with their use, education and training leave remains rather under-used in Korea. In 2017, only around 18 800 workers used the leave,2 accounting for roughly 6% of the employed population.

Low take-up of education and training leave is a challenge that other OECD countries are also facing. In Japan, only 10% of the employers have introduced the education and training leave system.3 In European Union countries, the take-up of training leave is as high as 2% and as low 0.01% of total employment in Spain (OECD, 2019[2]; CEDEFOP, 2012[3]; Stone, 2010[4]).

There are several reasons as to why the education and training leave is rarely used by Korean (SME) workers. First of all, sometimes workers are simply not aware of its existence. Those who know about the scheme may feel reluctant to request it – conscious that their employers would struggle to secure a replacement worker and that their leave could put excessive burdens on colleagues. Another related challenge is the duration of the leave: in order for SMEs to receive the public subsidy, training should last at least 5 days (20 hours) but often SMEs are unable to free up workers’ time for such long periods of time. Low up-take may also reflect the fact that SMEs can reject the request, e.g. if training is not directly relevant to the firm.

One policy option worth considering is to make approval of education and training leave requests compulsory for employers, either by law or through collective agreements. In this way, SME workers would not have to rely upon the goodwill of their employer to use the scheme. Some OECD countries have already started to bound firms to grant education and training leave to their employees (Italy; United Kingdom; Portugal; France) (see Box 3.1).

In Korea, there have already been attempts to make the paid educational and training leave a legal right for workers. In 2007, the Korean National Assembly submitted a ‘Draft of the Lifelong Education Act’ mandating that employers should allow their workers to take up to 10 days of paid education leave per year. Employers opposed this proposal for fear of increased labour costs, and the draft was never adopted (Oh, Park and Jo, 2016[5]). Since then, discussions on the rights to learn for workers have been continuously conducted. For example, the revision of the Equal Employment Opportunity and Work-Family Balance Assistance Act (on August 2019) institutionalised the right to claim the reduction of working hours on the ground of learning. This is a step in the right direction and Korea may further consider making paid education and training leave a legal right for workers, or at least start re-opening the debate while seeking buy-in from social partners.

To increase the take-up of education and training leave, Korea should:

• Raise awareness on the existence of education and training leave options among SMEs and SME workers.

• Make paid educational and training leave a legal right for workers or at least re-open the debate on this issue while seeking buy-in from the social partners. This measure should be combined with job rotation schemes to help SMEs to find replacement workers (see Chapter 2).

Box 3.1. Statutory rights to education and training leave across OECD countries

• In the United Kingdom, workers (in firms with more than 250 employees)4 have a statutory right to request education and training leave (i.e. Right to Request Time to Train), if training improves the employee’s effectiveness in the employer’s business, and the performance of the employer’s business. Employers are required to give due consideration to such requests and to respond in writing within certain time limits (28 days), and can refuse requests only for a number of recognised business reasons (gov.UK, n.a.[6]).5

• In Italy, according to a recent collective agreement, since January 2017 all firms in the metalwork industry have to provide 24 hours of training to each worker, every three years. In the absence of training, the worker has the right to participate to external training activities, for which two-thirds of the cost should be borne by the firm up to a maximum of EUR 300 (OECD, 2019[7]).

• In 2009, Portugal introduced legislation requiring employers to provide a minimum amount of professional training to their employees annually. Every employee is entitled to a yearly minimum of 35 hours of education and training, which may be postponed for up to two years. Cumulatively, employers are required to give training to a minimum of 10% of their workforce annually. The cost of training is mostly borne by employers (OECD, 2018[8]).

• In France, the Individual Training Account for job transitions (CPF de transition) allows workers to take time to participate to training with a view to find a new job. Training does not need to be linked to the workers’ current job. Workers need to request the CPF de transition to the firm, and the employer has 30 days to give a reply. The leave can be delayed for a maximum of 9 months. The delay should be claimed only under certain circumstances, e.g. if the workers’ absence undermines the firm’s ability to maintain business activities, or in case the number of workers requesting leave at the same time is above a critical threshold set by law: 2% of workers for larger firms (100 workers or more) and 1 worker at a time in smaller firms (100 firms or less). The level of wages paid during the leave depends on various factors, including previous wages, and in some cases (if the wage base is twice the minimum wage or more) the length of the training leave (French Ministry of Labour, 2019[9]). It is worth mentioning that even though employers cannot deny the request for training leave, many requests are rejected by the institutions financing the training, due to limited resources. In 2016, the acceptance rate was 58.5%.

3.1.2. Distance learning

Distance learning is another policy tool to tackle time-related barriers to training and as such it offers growing opportunities for SME workers to close the training gap with workers in large firms. By allowing workers to train at any time and in any place, distance learning could help SME workers to fit training into their busy schedules,6 while making it possible to take better account of SMEs organisational problems and barriers for training (see Chapter 2) (OECD, 2019[2]; OECD, 2018[10]).

In Korea, the distance learning system is already quite developed. Today a variety of distance education courses are offered by the Korea National Open University (KNOU), cyber universities, traditional universities7 (Zawacki-Richter and Qayyum, 2019[11]) as well as private training providers. These training programmes target both youth and adult learners. For example, around 70% of the KNOU’s students are workers (Yang and Yorozu, 2015[12]).

Distance learning is widely used in Korea (OECD, 2019[13]). According to PIAAC data, 37% of SME workers in Korea state that one of their (non-formal) education and training activities in the past 12 months was organised as distance learning, the highest value in the OECD after Lithuania and Poland, and well above the OECD average of 19% (Figure 3.2).

Figure 3.2. Distance learning, by firm size

Percentage of workers who state that one of their (non-formal) education and training activities in the past 12 months was organised as distance learning

Source: OECD Secretariat calculations based on the Survey of Adult Skills, PIAAC (2012, 2015).

The wide use of distance learning in Korea reflects the plethora of e-learning options available, as well as other factors such as high internet penetration,8 and a modular learning system that allows individuals to obtain full degrees through online courses. 9

Despite this positive picture, there is still room for SMEs to catch up with distance learning practices already adopted in larger companies. Indeed, PIAAC data shows that while in OECD countries there is a small variation between larger and smaller firms in the extent to which workers use distance learning, in Korea this gap is very large (19 percentage points) (Figure 3.2).

Other Korean national surveys confirm that e-learning remains much less used in SMEs than in larger firms. For example, elaborations from the Human Capital Corporate Panel Survey show that, in 2016, only around 20% of workers in SMEs participated to e-learning, three times less than workers in firms with 1 000 or more employees (Figure 3.3). It is likely that e-learning is even less widespread in smaller firms (with less than 100 employees), who are not covered by this survey.

Figure 3.3. Types of training programme attended by workers, Korea

Percentage of workers who participated in training by method, by firm size, 2016

Note: Multiple answers possible.

Source: KRIVET elaborations of the Human Capital Corporate Panel Survey (7^th wave, 2017).

While Korea has already paved the way for the development and expansion of e-learning, some key challenges lie ahead. One issue is that workers with low digital skills – such as older workers, or the low-skilled – often struggle to use distance learning options. These workers are often over-represented in smaller firms (see Chapter 1 and 4) so improving their basic digital skills will be key to favour a greater use of distance learning in SMEs.

Another issue is that SME workers can struggle to navigate the plethora of distance learning options available. They often cannot rely on the support of their employer for advice and guidance, and have to look for this type of courses independently. Several online platforms allow individuals to access high-quality e-learning options, but without assistance, SME workers can easily get lost between platforms that are exclusively dedicated to distance learning (K-MOOC; Smart Tech Education Platform), and websites that provide information on both traditional training and e-learning (HRD-net, Neulbaeum) (see Section 3.3).

Further expand access to distance learning to SME workers. This should be done by encouraging SMEs to provide further e-learning opportunities to workers and improving the basic digital skills of vulnerable groups – older workers, or the low-skilled – who are over-represented in SMEs. This would favour a greater use of distance learning among all SME workers, including the most disadvantaged.

3.1.3. Modular learning and recognition of prior learning

Modular approaches are helpful in providing adult learners with greater flexibility on their learning path and can be combined with processes for the recognition of prior learning. They permit learners to combine more easily work with training outside of work – and as such they can help workers tackle time-related barriers to learning. These measures are particularly relevant for SME workers, who often have lower qualifications but may have acquired skills through work experience.

Many universities in Korea today have lifelong learning centres that allow individuals to gain credits little by little until they receive the full qualification. Maister Schools also already apply modular training options. However, there is still a long way to go to improve modular adult learning across the board and increase its usage. While the Ministry of Education recognises this challenge, there is still not any concrete formal plans to expand the modular learning system further.

On the other hand, recent efforts are being taken to develop a system of recognition of prior learning – including in national strategies and in the legal framework. The Lifelong Education Promotion Strategy encourages educational institutions to provide credits for any previous training and work experience undergone by an individual based on a National Qualification Framework.

Recognition of Prior Learning was also made institutionary possible through the revision of the law in 2017. To encourage the use of Recognition of Prior Learning practices, the fourth National Lifelong Learning Promotion Plan (2018-2022) launched a trial operation of Match Up, a programme targeted to students, job seekers, and employees that allow them to have their job skills certified from companies in their relevant fields. Match Up aims to operate 50 programmes by 2022 (NILE, 2018[14]).

Despite these positive efforts, the Korean Recognition of Prior Learning System is still in its early stages of development. Korea could learn from the experience of OECD countries, such as France (see Box 3.2), that have a longer history of Recognition of Prior Learning.

Expand modular learning options in formal education and strengthen the Recognition of Prior Learning system. These options permit learners to combine more easily work with training outside of work – and as such they can help SME workers tackle time-related barriers to learning.

Box 3.2. The Recognition of Prior Learning System in France

In 2001, France has started developing a tool for recognition of prior learning (Validation des Acquis de l’Expérience, VAE). VAE allows individuals to obtain qualifications that are registered in the National directory of professional certificates (RNCP), by showing they have acquired the necessary skills through work experience.

The VAE can lead to a full or partial recognition. In the latter case, additional training or work experience is needed to obtain the full qualification. Individuals can receive help in preparing their file and in preparing for the jury evaluation. The VAE procedure can be done within the framework of existing training policies, such as the Individual Learning Account (CPF). Additionally, employees can request specific VAE leave (congé de VAE).

In 2015 about 42 000 individuals participated in a VAE process to acquire a public qualification, of which almost 60% obtained a full qualification.10 Among certifying ministries, the Ministry of Education had the highest number of VAE applicants (53% of all applicants), followed by the Ministry of Health and Social Affairs (20%).

Source: OECD (2017[15]), Getting Skills Right: France, OECD Publishing, Paris, https://doi.org/10.1787/9789264284456-en.

3.2. Lack of financial resources

Like in other OECD countries, many workers in Korea decide not to train because they cannot afford it. The direct costs of learning, such as tuition fees and learning materials, may be unaffordable for workers. Attending training may also imply additional indirect costs, including costs for transportation, accommodation, or expenses for the care of children or any other dependants. On top of direct and indirect training costs, workers may also face opportunity costs (e.g. foregone wages during learning periods), which can further discourage training participation.

This situation is exacerbated in SMEs. Analysis of PIAAC data shows that in Korea cost was a barrier to participation for 15% of SME workers (more), compared to only 6% of workers in larger firms (Figure 3.4). These shares are slightly lower than the OECD average, yet Korea lags behind the best performing countries such as Norway, Germany and Finland.

Figure 3.4. Lack of financial resources as a barrier for training, by firm size

Percentage of workers who wanted to participate (more) in training, but did not because too expensive

Source: OECD Secretariat calculations based on the Survey of Adult Skills, PIAAC (2012, 2015).

There are several reasons as to why many SME workers perceive training costs as a barrier to learning – much more than workers in large companies. Training costs may be unaffordable for SME workers who on average earn lower wages and have fewer savings. In this context, even moderate course fees and indirect costs to learning can pose a barrier to participation.

Another challenge is that SME workers privately pay for training more often, because they are less often beneficiary of employer-provided training, compared to large firms’ workers. Different data sources corroborates these insights. The Korean Labor and Income Panel Survey (19^th wave) data shows that in micro-firms, 19% of training workers paid for training themselves, a rate that drops to 8% in small firms and further down to 6% and 1% in medium-sized and large firms respectively.

Similarly, PIAAC data shows that, in Korea, SME workers are less likely to receive financial support for learning activities when compared to Korean workers in larger firms, as well as compared to SME workers in other OECD countries (Figure 3.5). In micro-firms only 56% of training participants have received funding from their employer for (formal or non-formal) learning activities (the 4^th lowest value in the OECD), compared to 58% in small firms (OECD average 87%), 70% in medium-sized firms (OECD average 89%), and 75% in large firms (OECD average 91%). Interestingly, in Korea the extent of employer support varies greatly with firm size, a pattern that is not commonly found in the OECD area. The gap between workers in micro- and large firms is 19 percentage points, against an OECD average of 8 percentage points and indeed the highest gap in the OECD after Greece (22 percentage points), at par with Chile and Turkey.

Figure 3.5. Employer-sponsored training, by firm size

Percentage of training participants who have received funding by their employer for (formal or non-formal) learning activities

Note: data exclude those who had no employer or prospective employer at that time; and those for whom there were no such costs.

Source: OECD Secretariat calculations based on the Survey of Adult Skills, PIAAC (2012, 2015).

To address these challenges and ensure that lack of money is not a barrier to training for SME workers, Korea has put in place several financial incentives for workers – such as the My Work Learning Card System for workers and loans for living costs (see Annex 3.A). These financial incentives often provide preferential treatment for SME workers.

However, not all SME workers are able to use these schemes. One key challenge is that many SME workers are not covered by Employment Insurance and therefore are not eligible to access subsidised training programmes (Yoo, 2011[16]).11 In 2018, 94.3% of regular workers and 68.5% of non-regular workers in SMEs (less than 300 employees) were covered by Employment Insurance, against respectively 95.9% and 96% in larger firms (300 employees or more) (Figure 3.6).

Other SME workers may be unable to benefit from financial incentives/publicly funded training programmes because they do not meet eligibility criteria, notably on minimum training hours. For example, the Loan for living costs during vocational training (see Annex 2.A) gives higher priority to individuals who plan to participate in long training programmes: the longer the training, the higher the scores given to candidates, with full scores given to training that lasts over six months. While it is reasonable to give higher scores to individuals who have no earnings for long periods due to long-term training, this rule obviously penalises many SME workers who are unable to train for such a long time while keeping their job (see Chapter 2).

Another possible explanation is that there are not enough subsidised valuable learning options (Chapter 4). According to stakeholders interviewed in the context of this project, some publicly subsidised training programmes in high demand (e.g. coding) have long waiting lists, and workers have to decide whether to pay out of pocket or wait for a free spot to become available.

Korea has put in place policy measures to address these challenges. For example, in January 2019, the government expanded the coverage of subsidised vocational training to workers who are not enrolled in Employment Insurance, including many workers in SMEs (OECD, 2019[17]). This measure is financed through general account public resources.

Figure 3.6. Workers’ coverage of employment insurance

Share of workers covered by employment insurance by firm size and type of employment, 2006-18

Note: Data on non-regular workers exclude independent contract workers.

Source: Ministry of Employment and Labor (MOEL), Survey on Labor Conditions by employment type, 2006-18.

As another example, in March of 2019, the government announced plans to reform the My Work Learning Card System. As of 2020, the existing training account systems for the unemployed and the employed will be integrated into one card system, the National Learning Card System. All individuals will be able to enrol in the lifelong learning card and develop their vocational skills regardless of their employment status and whether they have enrolled in the Employment Insurance or not. The card validity period will be increased from 1-3 years (in existing systems) to 5 years, and the amount of support will be increased from KRW 2-3 million per person (approximately EUR 1500-2300) to KRW 3-5 million (approximately EUR 2300-3800). This reform is expected to increase the participation in vocational training among vulnerable people including non-standard workers, who are overrepresented in SMEs, as well as the self-employed.

Similarly to Korea, France has also put in place individual learning accounts (ILAs) targeted to all adults regardless of employment status. These schemes aim to empower individuals to train irrespective of their employment status and attachment. However, a recent OECD study on ILAs shows that careful design is key to obtain high take-up, increase training participation of vulnerable groups, and minimise deadweight losses (i.e. financing training that would have taken place even in the absence of the subsidy).12

Good practices for successful design of ILAs include: i) provide high-quality career guidance to help individuals make informed training decisions; (ii) strengthen quality assurance of training providers; (iii) foster the support of employers and a learning culture; (iv) provide financial support that is generous enough to encourage training participation; and (v) keep governance and processes simple (e.g. through well-designed and well-functioning web apps) (OECD, 2019[18]).

To ensure that lack of money is not a key barrier to training for SME workers, Korea should:

• Continue expanding the coverage of Employment Insurance to all SME workers. This would allow all SME workers to benefit from the financial incentives to train that are available conditional on EI coverage.

• Facilitate take-up of the National Learning Card System and closely monitor its implementation. To ensure high up-take, Korea should: i) provide high-quality career guidance to help individuals make informed training decisions; (ii) strengthen quality assurance of training providers; (iii) foster the support of employers and a learning culture; (iv) provide financial support that is generous enough to encourage training participation; and (v) keep governance and processes simple (e.g. through well-designed and well-functioning web apps). The results of this programme should be also closely monitored.

3.3. Lack of information

One of the reasons why many SME workers do not train is that they lack information. They may be unaware of the benefits of training, may not know what training options are available, or be unsure about what training programmes are of good quality and bring best results. This may be a challenge particularly for SME workers, who cannot rely on the support of their employers for career advice and information on training options.

Partially as a result of this lack of information, Korean SMEs workers seem to have low motivation and willingness to train – in line with patterns observed in other OECD countries. According to PIAAC data, 35% of SME workers in Korea did not participate (further) in training but reported that, over the previous 12 months, there were learning activities that they would have wanted to participate in. Although this is share higher than the OECD average of 25% (Figure 3.7), the majority of SME workers in Korea are still not willing to train (further) – pointing to the need to invest in policies to increase their engagement in learning.13

Figure 3.7. Willingness to train by group, by firm size

Percentage of workers who did not participate in (further) training but would have liked to

Note: Share of adults who did not participate (further) in training but report that, over the previous 12 months, there were learning activities that they would have wanted to participate in.

Source: OECD Secretariat calculations based on the Survey of Adult Skills, PIAAC (2012, 2015).

Career guidance services could potentially help SME workers to better understand their training needs and navigate the plethora of training opportunities available to them. These services are particularly important for SME workers who often cannot count on the guidance typically provided by HR departments in larger firms, nor can they afford private counselling. Moreover, career guidance is particularly useful for SME workers who tend to change jobs more frequently (see Chapter 1) and may need advice during job transitions.

Career guidance in Korea is mainly focussed on young students, older people, and the unemployed, while services for incumbent workers are piecemeal and generally less developed (Hooley, 2019[19]).

Career guidance for incumbent workers can in theory be provided by public employment services (PES). However, PES career guidance services face several limitations:

• First, there is a shortage of PES counsellors. With a caseload of more than 600 registered jobseekers per staff, PES counsellors are often overloaded and unable to deliver adequate career guidance to workers (Yang, 2015[20]; OECD, 2018[10]).

• The Korean PES administration is seriously under-resourced by international standards: public expenditures on PES administration (e.g. delivering services, dealing with clients) account for 0.04% of GDP, the fourth lowest share in the OECD area and well below the OECD average of 0.13%.

• The bulk of the PES counsellors’ work revolves around the unemployed and jobseekers, rather than incumbent workers. Data on PES career guidance services delivered to unemployed/workers is not available, but anecdotal evidence suggests that incumbent workers are given less priority.

• Existing rules oblige the unemployed to consult with PES counsellors for training advice, while these obligations do not apply to workers. As a result, it is likely that workers rely much less on PES counselling services than the unemployed. For example, the unemployed are required to consult with PES counsellors to make use of the Individual Training Account (ITA), while employees can apply for the ITA online without having to consult a PES counsellor first (see Section 3.2).

• PES counsellors are not always well-placed to guide workers in their training decisions. They focus on minimising moral hazard and promoting training provided by the government, but they are not trained to understand the rapid changes that are taking place in the labour market and to advice workers accordingly.

Beyond the PES, other public institutions in Korea provide career guidance to workers. However, these organisations are often targeted at disadvantaged workers. For example, Job Hope Centres are mainly targeted at older workers approaching retirement age and willing to prepare for a second career. Similarly, the Korea Job World – an institution designed to help people obtain a realistic view about possible professional choices and prospects, and to give career advice based on individual interests and aptitude – is open to all, but is mainly focussed on youth.14

Public career guidance aside, companies could also play a key role in providing training counselling services to their employees. They could advise workers on career progression opportunities within the firm, and guide them through available training options that would help them seize such opportunities. However, Korean firms – and SMEs in particular – are rarely involved in career guidance. According to the Workplace Panel Survey data, only 2.1% of small firms (1-49 employees) implemented career counselling15 as a programme for career development, compared to 19.8% of medium-sized firms (50-249) and 28.1% of large firms (250+) in 2015. Korea could learn from the experience of France, where employers have to set up, every two years, a professional meeting (entretien professionnel) to discuss the career progression and training opportunities with their employees (Box 3.4).

Beyond face-to-face career guidance services, online career guidance platforms can also help workers to make informed training decisions. Korea counts numerous online career guidance platforms that provide information on training programmes. These include HRD-net, Neulbaeum, regional lifelong learning portals, and Q-Net. Two online career guidance platforms are specifically designed to provide access to, and information on, e-learning programmes: K-MOOC and Smart Training Education Platform (see Box 3.3 for a description of these websites).

Box 3.3. Online platforms on training programmes: Korea

HRD-net

In Korea, the most notable example of online platforms on training programmes is HRD-net, a website launched in 2002 by the MoEL that provides a wealth of information on subsidised training programmes available, including on the duration of the course, training costs, as well as training quality information (OECD, 2019[13]; OECD, 2017[21]). HRD-net is a successful example of an online database on adult learning: it counts over 11 million members (as of May 2018) and around 160 000 visits per day, and it acquired the Web Accessibility Quality Mark in 2018.16

Neulbaeum

Neulbaeum, established in 2014, provides online (and offline) lifelong education information, including learning opportunities, learning outcomes and information on training centres. It collects and consolidates data from 17 regional lifelong learning centres on a single platform. 67 institutions and 830 000 courses are registered on the platform in Korea.

Q-Net

Q-net provides general information on the qualification system and how it has changed. It also provides basic information on how to obtain qualifications. Q-net provides a customised service for users by recommending qualifications he/she might be interested in and providing information on benefits people enjoy after obtaining qualifications and careers related to the qualification.

Regional lifelong learning portals

Similar to the “Neulbaeum” at the national level, each region operates regional lifelong learning portals, which provide lifelong learning information and courses. For example, Seoul lifelong learning portal provides information on lectures related to employment/qualification, foreign languages, family/health, hobbies/culture, and ICT.

K-MOOC

K-MOOC is a national platform developed in 2015 and operated by the National Institute for Lifelong Education (NILE), where universities can offer their distance learning courses (Bandalaria, 2018[22]). It has 357 000 registered users, and offers 776 000 courses. In the future, there are plans to introduce paid services, favor exchange with other international MOOC courses, and completion of the courses are to be consolidated into the Academic Credit Bank System. There is also a willingness to expand the training offer further: one of the goals of the ‘fourth National Lifelong Learning Promotion Plan (2018-22)’ is to develop 30 new courses each year after 2019 (NILE, 2018[14]).

Smart Training Education Platform (STEP)

Smart Training Education Platform (STEP) is a platform launched in October 2019 by the Ministry of Employment and Labour (MoEL) which provides comprehensive information on e-learning programmes and supports the infrastructure to facilitate the operation of training programmes that integrated on/offline courses. Starting from 2020, more than 200 training contents will be newly added every year.

Although they play an important role in disseminating information on adult learning and facilitating access to training, these platforms face several challenges. For example, Neulbaeum has a user-friendly interface, but its usage is limited. In 2018, the annual number of visitors in Neulbaeum was 175 578 people (MoE/NILE, 2019[23]). K-MOOC provides high-quality distance learning lectures, but completion rate remains low, at 8.8% (Soo-jin, 2017[24]).

Also HRD-net, which is considered a case of best practice and was awarded the Web Accessibility Quality Mark in 2018, faces several limitations. First, HRD-net does not include information on all training programmes available. For example, it includes only programmes provided under the aegis of certain ministries (mainly MoEL) and excludes training programmes provided by local governments. Secondly, HRD-net can be difficult to navigate for workers and could be made more user-friendly.17

Another key challenge is that workers may struggle to navigate the numerous competing online career guidance platforms available. There is a plethora of Skills Assessment and Anticipation (SAA) information – conducted by different institutions, but this information is scattered across different sources (see Chapter 5). This fragmentation is symptomatic of a coordination failure in adult learning, and is partly due to the fact that career guidance is under the supervision of different ministries, including the Ministry of Education and the Ministry of Employment and Labor, while regional authorities also have a role to play (Chapter 5).

Going forward, Korea should adopt a one-stop shop solution that brings these platforms together. This would avoid duplication, minimise overlaps, and help users navigate training options in an easy way. A one-stop shop solution would also help the government develop an administrative information system on adult learning, which could track individuals’ history of participation in different training programmes.18 Korea could learn from the experience of OECD countries that have already taken steps in this direction (see Box 3.5).

The Korean government is already taking action to improve career guidance. For example, as of 2019, the MoEL is developing the next generation Work-net and HRD-net to be more user-friendly, to enhance their linkages with other databases (e.g. Employment Insurance Database), and to offer more comprehensive information on training programmes (including training programmes of ministries other than MoEL).

Going forward, further efforts will be needed in Korea to provide better career guidance to workers. Strengthening career guidance will become all the more important in the future, as Korea is progressively trying to shift the responsibility to train away from firms and towards workers, notably through the implementation of the National Learning Card System, a training subsidy that is given to all workers regardless of employment status (see Annex 3.A and section 3.2). The international experience shows that to be successful, schemes of this type need to be combined with efforts to support workers in their training decisions through quality career guidance (OECD, 2019[25]; OECD, 2019[18]).

Improving career guidance to (SME) workers will require efforts to:

• Expand public career guidance services beyond traditional target groups (jobseekers; the unemployed) and towards incumbent workers. This includes better preparing the PES to provide career guidance to workers, as well as putting in place public career guidance services dedicated to all workers.

• Encourage company career guidance provision, particularly in smaller firms. Firms could advise workers on career progression opportunities within the firm, and guide them through available training options that would help them seize such opportunities. Public authorities together with employer representative bodies should collaborate in providing information to SMEs and their workers on the availability of career guidance services.

• Create a one-stop-shop online career guidance platform. Existing Skills Assessment and Anticipation (SAA) information should be put together in one place. This would avoid duplication, minimise overlaps, and help users navigate learning options in an easy way.

Box 3.4. Career guidance for workers in selected OECD countries

Public career guidance

• In France, the Advice for Professional Development (Conseil en Évolution Professionnelle, CEP) was launched in 2014, offering free and personalised career advice to assist individuals in their professional development. Individuals who decide to pursue a career change are offered support to develop their career. More specifically, individuals can benefit from a one-to-one meeting to analyse their professional situation; they can get advice to define their career objectives and they can receive support on implementing their career plans. The CEP is available for all employed and unemployed individuals. In principle, workers can access the CEP outside of working hours, although collective agreements can allow the CEP to take place during working hours. All employees can participate at their own initiative in CEP without having to inform their employer. Employers need to inform their employees of the existence of the CEP, for instance in the context of the professional interview (entretien professionnel) (The Adecco Group, 2019[26]; OECD, 2017[27]).19

• In Luxembourg, the House of Guidance (Maison de l’Orientation) opened in 2012 following the collective effort of five departments across the Ministries of Education, Labour and Higher Education. The house provides a one-stop shop for education and labour market orientation. Previously targeted at a younger age group, there has been a greater focus on adult learners since 2017.

Private / company career guidance

• In France, employers have to set up a professional meeting (entretien professionnel) every two years, in which they discuss career progression opportunities with their employees and the training that can advance these opportunities (OECD, 2017[27]). Every six years, the meeting needs to include a review of the professional pathway of the employee, to show whether the employee has benefitted from the professional meetings in the last six years. When the six-year review shows that an employer did not organise the required bi-annual meetings, or when no sufficient career progression options were provided to the employee, medium-sized and large firms can be sanctioned. Work councils (Comité d’entreprise), individual employees and labour inspectors all play a role in detecting infringements. Sufficient career progression options are defined as having benefited from at least two out of three career progression actions: i) participation in at least one training course, ii) acquisition of at least one professional certificate, either through training or through Recognition of Prior Learning (called VAE), and iii) salary or professional progression. Sanctions take the form of additional contributions to the employee’s Individual Learning Account (CPF) that need to be paid by the employer to the relevant training fund. However, smaller firms are less likely to provide professional interviews than larger companies: 25% of workers in micro-firms (less than 10 employees), less than 50% of workers in small firms (10-49 employees), and 75% of workers in large firms (250 or more employees) benefit from professional interviews in France.

Box 3.5. One-stop-shop online career guidance platform: good practices from OECD countries

Australia

The Australian myskills website (www.myskills.gov.au) allows users to consult available vocational training courses and providers within the proximity of a certain location. For each course the average course fee is provided, as well as information on whether or not subsidies or VET student loans are available. Details are also provided on the average duration of the course, students’ satisfaction and the availability of online learning options. In addition, for each course the percentage of graduates in employment or further training is provided, as well as the percentage of graduates who improved their employment status and the median salary of graduates.

Canada

The Canadian Job Bank website (http://www.jobbank.gc.ca/home) allows users to search for occupations in specific regions or nation-wide. Key facts and figures about the occupations are provided in the following areas: wages, outlook, jobs, requirements and skills. For example, the detailed wage information shows median, high and low wages for the occupation in the selected region, province and Canada. The “jobs” part of the occupational profile allows users to consult available vacancies for the selected occupation and region. The job requirements section describes the education and training pathways. Finally, the website provides information on the skills and knowledge usually required in the occupation, and the degree to which nine essential skills (e.g. reading, digital technology) are used.

Denmark

The Danish website UddannelsesGuiden (www.ug.dk) brings together information on general education, higher education and adult/continuing education. It further includes information on the structure of the Danish labour market, the role of industries and businesses and descriptions of the most common occupations and jobs in the Danish labour market. Users can access further information and guidance via chat, phone or email.

New Zealand

The Ministry of Business, Innovation and Employment in New Zealand provides detailed information about labour supply and demand on its Occupation Outlook website (https://occupationoutlook.mbie.govt.nz/) (and mobile app). The list of occupations provides an attractive and easy-to-understand synthesis of the labour market and training information, showing an indication of wages in the occupation, training fees and job prospects. The website outlines how to enter each occupation, how many individuals are studying in related fields, how many are employed, and what the average incomes are. It also shows the prospects of getting a job in that occupation after completing the required qualification. In terms of income and employment prospects, information is provided about average wages, but also about past, current and prospective employment levels in the occupation. The outcomes of graduates for the qualification associated with the occupation are also provided, showing the share of graduates that are in employment, in further study, receiving benefits or are oversees (three years after completion).

Norway

The Norwegian Utdanning website (www.utdanning.no) provides information about occupations in the country. For each occupation, information is available on tasks, typical workplaces and soft skills (or personal characteristics) requirements. Interviews with workers in the occupation are presented to give a better understanding of what the job is like. The website also provides information about the qualification(s) associated with the occupation, data on the occupations in which individuals with the associated qualification are employed, and data on the educational profile of workers in the occupation. Additionally, the website shows information about average wages in the occupation, by gender and working time (fulltime or part-time). A useful feature of the website is that the number of firms that employ workers in a specific occupation and related occupations is shown (as well as the number of workers), and users can easily access information about the employers by region.

Scotland (United Kingdom)

The Scottish My World of Work website (http://www.myworldofwork.co.uk/) brings together information on careers, education and training programmes and job vacancies. For example, the website describes the types of tasks usually done in each occupation, the working conditions, entry requirements and skill requirements. The website has information to help individuals assess their own skills.

Sweden

The Yrkeskompassen website (https://arbetsformedlingen.se/) in Sweden allows users to browse occupations and learn about their labour market needs. For each occupation the degree of competition in the labour market is provided within one year and within the next five years. Occupations that are defined as having low competition have higher labour demand than labour supply, which means that it is easy for people with the right skills to find employment in that occupation. In addition, the website provides comprehensive descriptions of occupations, including the associated education and training options, as well as links to available vacancies on the PES website.

Source: OECD (forthcoming[28]), Skills for Jobs in South Africa: Labour market imbalances by occupations, industries and skills, OECD Publishing, Paris.

References

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[26] The Adecco Group (2019), S’orienter aujourd’hui, The Adecco Group.

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[11] Zawacki-Richter, O. and A. Qayyum (2019), Open and distance education in Asia, Africa and the Middle-East: National perspectives in a digital age, SpringerBriefs in Education.

Annex 3.A. Financial incentives for workers

My Work Learning Card System for workers

From 2007 to 2019, the Korean government implemented a training account system named ‘My Work Learning Card System for workers’. Financial support was provided to vulnerable workers in the form of a voucher, including: SME workers, non-regular workers, soon-to-be retirees, workers in unpaid leave, workers aged 45 years or older in large firms, workers with an average monthly wage of less than KRW 2.5 million in large firms, and those who have not received employer-provided training for three years. The support subsidises 60% to 100% of training costs, depending on the training courses and characteristics of participants, within the limit of KRW 2 million (about EUR 1 564) per year (KRW 3 million – about EUR 2 347 – for 5 years) (Annex Table 3.A.1). Participants in the programme increased rapidly from 7 638 in 2007 to 311 401 in 2018. SME workers accounted for 62.8% of the total beneficiaries in 2016 (KEIS, 2017[29]).

Annex Table 3.A.1. Scale of subsidies in My Work Learning Card System
Training Course	Training cost
	Workers eligible to My work learning card system	Workers with preferential treatment
Collective training (all courses except food service)	80%	100%
Foreign language course and food service	60%	60%
Internet course	100%	100%
Note: Workers with preferential treatment refer to non-regular workers, soon-to-be retirees in SMEs and workers in unpaid leave.
Source: HRD-net, Guide on the government-supported training programmes.

My Work Learning Card System has contributed to increasing opportunities for SME workers to participate in the training of their own choice. Indeed, workers in SMEs have used My Work Learning Card System much more often than workers in large firms. For example, during the period 2006 to 2015, 32% of the total trainees in smaller firms (1-4 employees) received only employee-directed training against 7% of trainees in large firms (Annex Figure 3.A.1). This may be because all workers in SMEs can apply for this programme while only some qualified workers in large firms can.

Annex Figure 3.A.1. Share of employer- and/or employee-led training by firm size (2006-15)

Note: Employee-directed training refers to the training by My Work Learning Card system for workers. ‘Both training’ means the case where employees received both employer-provided training and employee-directed training.

Source: KEIS (2017[29]), “Performance evaluation of In-service training”.

Although My Work Learning Card System was an innovative programme to increase training participation for SME workers, the training account system was divided into a system for the unemployed20 and one for the employed. This made it difficult for vulnerable workers to select suitable training courses, especially if they changed employment status.

To address this challenge, in 2020 the Korean government has reformed My Work Learning Card System and merged the two systems into one: the National Learning Card System. Under the new system, all individuals can be issued a National Learning Card and develop their vocational skills irrespective of their employment status and whether they are enrolled in the Employment Insurance or not. The card validation period is increased from 1-3 years to 5 years and the amount of support is increased from KRW 2-3 million (about EUR 1 564-2 347) to KRW 3-5 million (about EUR 2 347-3 911).

Loans for living costs during vocational training

This loan programme is available to vulnerable people, such as the unemployed and non-regular workers, to cover their living costs while on training. The loan limit is KRW 2 million (about EUR 1 564) per month and the annual interest rate is 1%. The loan amount is capped at a total of KRW 10 million – about EUR 7 822). Exceptionally, the total ceiling of the loan is up to KRW 20 million (about EUR 15 645) for people who work in the Special Employment Support sectors (see Chapter 5)or live in the employment crisis areas designated by the Ministry of Employment and Labor. A trainee can defer the loan up to three years and then pay back the money in instalments over a maximum of five years.

The number of loans increased in the period 2014-17, but decreased significantly in 2018. Most of the beneficiaries are the unemployed and the up-take of non-regular workers was only 3.4% of all beneficiaries in 2017 (Annex Table 3.A.2).

Annex Table 3.A.2. Trend in Loans for living costs during vocational training
		2014	2015	2016	2017	2018
Number of trainees	Total	9 892	9 830	9 090	10 476	7 309
	Unemployed	9 612	9 341	8 677	10 125	N.A
	Non-regular workers	280	489	413	351	N.A
Amount of Support Fund (KRW, MN)		23 992	27 754	27 326	40 982	41 133
Source: Administrative data provided by the Ministry of Employment and Labor.

Notes

← 1. In SMEs (with less than 150 full-time employees), part of training costs and workers’ wages are subsidised when employers grant paid leave for at least 20 training hours for 5 continuous days. Since 2011, there is an additional financial support covering the wage of the replacement worker, when SMEs grant paid leave for at least 120 training hours for 30 continuous days and hire a replacement worker. Conversely, for larger firms (more than 150 employees), training must last at least 180 training hours for 60 continuous days and must be provided to workers with at least 1 year tenure. Moreover, the level of the wage subsidy is lower and does not cover replacement workers’ wages.

← 2. Source: OECD 2018 Policy Questionnaire: Readiness of Adult Learning Systems to Address Changing Skills Needs.

← 3. Source: OECD 2018 Policy Questionnaire: Readiness of Adult Learning Systems to Address Changing Skills Needs.

← 4. In recent years there have been several discussions in the United Kingdom on whether to extend the right to employees of SMEs (with fewer than 250 employees). A consultation process was launched in 2010 among businesses of different sizes. The consultation results showed that smaller businesses felt an extension would affect them negatively and disproportionately, largely because of short-term administrative impact of missing staff and the cost of temporarily replacing them: 70% of small employers did not want the extension of the right to SMEs. The government decided to take no immediate action and to collect more evidence before making any changes to the right (Institute for Employment Studies, 2017[32]; Department for Business Innovation & Skills, 2011[31]).

← 5. These reasons include: training does not benefit firms’ business; firms would run up extra costs for the business and would not be able to meet customer demands; impossibility to re-organise the work among other members of staff; impossibility to recruit extra staff; damage to quality and business performance; not enough work for the employee to do at the times they intend to work; conflicts with planned structural changes.

← 6. Of course, there is only so much that can be achieved through distance learning, as not all training programmes can be delivered on-line. Technical training that require a more practical component may be difficult to be delivered online. For instance, Korean Polytechnics do not offer any distance learning programmes reflecting the practical nature of the training programmes they deliver.

← 7. 20% of university lectures can be taught online.

← 8. As of December 2018, in Korea there were 41.1 fixed broadband subscriptions per 100 inhabitants, the 6^th highest rate in the OECD. Source: OECD Broadband statistics http://www.oecd.org/sti/broadband/broadband-statistics.

← 9. Through Academic Credit Bank System. The “Academic Credit Bank System” allows recognising various experiences and learning outside a formal education setting and converting them as credits. Those who have accumulated certain amounts of credits through the Academic Credit Bank System can be granted with a bachelor’s degree, or an associate degree. As of 2018, 435 education institutions have participated in the Academic Credit Bank System, through which 51 611 people were able to get a degree.

← 10. Participation in VAE for non-public qualifications is not registered.

← 11. As discussed in Chapter 5, workers who are not covered by Employment Insurance are not eligible to receive financial incentives for training, or reimbursements for training costs. While EI in principle covers all employees on a mandatory basis, certain groups of workers are legally excluded. These include: a) employees who work less than 60 hours per month or 15 hours per week; b) businesses with less than five employees in the agricultural, forestry and hunting industries; c) most foreign workers; and d) workers aged 65 and over. Moreover, even employees not explicitly excluded are often not insured, and non-compliance is particularly acute among workers in smallest firms, low-wage, and non-regular workers. Many smaller firms – which operate with very small profit margins – may find it unaffordable to pay for insurance premiums. Low-wage and non-regular workers may also try to avoid paying insurance premiums to increase net wages (OECD, 2013[34]; OECD, 2018[33]).

← 12. The most known example of this scheme is the Compte personnel de formation (CPF) in France. However, only around 6% of individuals have used the CPF in one year, mainly among the unemployed or the high-skilled. Studies have pointed to the importance of raising awareness about this scheme and providing high-quality career guidance to help individuals make informed training decisions (The Adecco Group, 2019[26]).

← 13. Interestingly, SME workers in Korea are also more motivated and willing to train compared to workers in larger firms, whereas the opposite is true in the vast majority of OECD countries. There may be several reasons as to why SME workers are more willing to train than workers in larger companies. First of all, in Korean SMEs, learning is totally up to individual willingness, while large companies typically make interventions if an employee experiences skill gaps relative to his/her job (Jeong, McLean and Park, 2018[30]). Further, and perhaps more importantly, SME workers’ motivation to train may reflect their willingness to find a better quality job in a larger firm or in the public sector (Jeong, McLean and Park, 2018[30]). This is not surprising in a context of labour market duality where SMEs typically offer low-quality, low-pay, and less-protected jobs while larger firms offer employment stability and high wages (see Chapter 1). Different wage-setting practices adopted across firms of different sizes may also explain these patterns. Larger firms often adopt seniority wages – a wage system that rewards seniority rather than performance (see Chapter 1) – while SMEs often do not implement any pre-defined wage tables. In the view of several observers interviewed in the context of this review, seniority wages generate very predictable career pathways and could potentially reduce workers’ motivation to train and upskill in large companies.

← 14. The Korea Job World is an interactive vocational experience centre providing career guidance to the public in general, and young people in particular. It consists of an 80 000 square metre, six-story building, offering visitors a unique opportunity to explore and experience various occupations and career opportunities in an interactive way. It is designed to help people obtain a realistic view about possible professional choices and prospects, and to give career advice based on individual interests and aptitude.

← 15. In the WPS, career counselling is defined as an activity that helps workers identify career plans and provides appropriate advice.

← 16. Web Accessibility Quality Mark is a certification system designated by the Ministry of Science, ICT and Future Planning that recognises the level of web accessibility of excellent sites that comply with the Korean Web Content Accessibility Guidelines so that the disabled and the elderly can use the website with ease.

← 17. This is particularly true for disadvantaged workers – over-represented in SMEs, such as the low-skilled and older workers – who often lack the basic ICT skills needed to use online services.

← 18. At the time of writing, HRD-net does not collect information on the life history of trainees and is not able to follow workers through different training programmes, jobs and employment statuses – which limits its ability to provide tailored advice to individuals.

← 19. Between 2015 and July 2018, around 5.8 million individuals used the CEP. However, in 2019 only less than 7% of active people (either employed or unemployed) knew about the CEP and how it works. Although the CEP is supposed to benefit all individuals, the vast majority of users are the unemployed, and the Public Employment Service seems to be the actor more often engaged in the delivery of the CEP. The use of the CEP among workers is much less substantial.

← 20. My Work Learning Card System for job seekers is a voucher system that provides job seekers a certain amount of money (KRW 2-3 million (about EUR 1 564-2 347) per year depending on the level of household income), which allows them to choose training programmes and institutions within the given financial limit.