Pillar 3: Adaptability

SMEs: continuing training and growth
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Investment in continuing training is what enables companies to work efficiently and to change when they need to, in other words to become, and to remain, competitive. This text is concerned with investment in continuing training from the point of view of the interests of SMEs. In another text, lifelong learning is dealt with more from the point of view of the career interests of the individual learner. This text concerns itself with the problems SMEs have in locating appropriate training, the support they need in acquiring and making use of it and some particular priorities in SME training. 

Two important approaches to promoting continuing training and supporting SME investment in it have been advanced significantly through ADAPT projects. The first is that of self-supporting groups of SMEs, or SMEs in partnerships with larger companies, social partners and training providers establishing learning companies and learning regions. The second is the job rotation approach. 

Learning company and learning region projects originated in Germany and Austria, and ADAPT transnational partnerships have drawn in other Member States. The concepts behind the learning company and the learning region are reflected in all Member States. There are many ADAPT projects designed to embed a culture of learning within companies, and structured so as to encourage maximum co-operation between companies themselves and the organisations and institutions which design and deliver the training they use. 

ADAPT is one of a number of European programmes and initiatives through which the original Danish job rotation idea has been developed and refined. Close to 30 job rotation projects in ADAPT are of significance because they have been used to test the cultural and legal circumstances under which job rotation can be transferred from one working culture to another. ADAPT projects have experimented with job rotation in Denmark itself, Austria, Belgium, Germany, Finland, Greece, Italy, Netherlands, Portugal, Sweden, and the UK. 

Key messages
•	Continuing training for small firms needs to be demand driven and SMEs need to be able to exercise autonomy in their relations with their training and other consultants and suppliers. 
•	SMEs require support to design and deliver continuing training. Sectoral bodies, large companies and public agencies all have important parts to play. ICTs allow SMEs to take on more of this support role by networking between themselves. 
•	Job rotation can help to resource continuing training in companies. It is particularly appropriate to larger firms and to consortia or groups of small firms. Job rotation is more successful when it starts from the needs of retraining for employees (pull strategy) rather than focusing first on the unemployed (push strategy).
•	Management training is a high priority, especially in SMEs where individual attitudes of managers generally determine whether or not any change takes place. Also, their attitudes to learning do much to condition those of other members of staff. For managers, peer learning is highly effective. 
•	Low-skilled workers require particular attention in a labour market increasingly dominated by ICTs. 
•	The jobs of in-company trainers are changing rapidly and radically. They need to be prepared to design and deliver training as a part of the solution to practical business problems. Their job profiles and their training need to be modernised to suit them for this new role.

POLICY BACKGROUND

The importance of continuing training is recognised in all Member States’ NAPs, and has been the subject of repeated policy initiatives at national and EU levels. It is at the heart of the objectives and priorities of the European Social Fund. Other programmes, especially Leonardo da Vinci have concentrated on the content of continuing training for companies of all sizes. ADAPT’s focus is on the special needs of SMEs, and the problems associated with encouraging them to invest time and effort in continuing training as and when it is needed to help them react to industrial change. 
The concept of job rotation was conceived in order to meet two major challenges of the labour market. On the one hand, the skills gap of the European labour market will become wider in the years to come. On the other hand, fighting unemployment remains one of the greatest social challenges. A higher employment rate is also needed because of the ever-smaller labour force resulting from the general ageing of the population.
 
Both these challenges can be faced with job rotation. An unemployed person is trained to become a substitute in a company for an employed person who is released for further training. Job rotation in different forms has been used for many years in the Scandinavian countries, especially Denmark. The method has shown that financial resources, formerly used for passive labour market measures, can be invested in activities, which enhance the employability of the employed and the unemployed. Denmark, Finland and Sweden cite job rotation as an active labour market measure in their 1999 NAPs. 

STRATEGIC LESSONS

Project numbers indicated in the following sections refer to the European project database. 

Training responding to demands from business

•	Continuing training provided for SMEs should be demand-led and based on problem solving if it is to be of value. Training which provides solutions to concrete problems motivates both the workforce and the management. Projects like the Danish PORTADAPT (A-1995-DK-011) and the Irish Waterford Crystal (A-1995-IRL-016) confirm the importance of closely linking working and learning processes. This problem-solving approach to training makes training providers work in new ways. Training needs to be precisely tailored to the needs of individual SMEs. One-size-fits-all solutions are increasingly seen as inappropriate and ineffective. The German project Betriebliche Qualifizierung in Kleinstunternehmen (A-1997-F-760) has surveyed the needs of craft firms and created tailor-made training modules for clients who are mostly self-employed craftsmen. 

•	For SMEs to be in a position to acquire training to answer their real needs, they must become much more autonomous in their relations with their training providers and consultants. They must see themselves as responsible for their own future. External consultants and service providers must be used as facilitators, bringing in expertise and helping clients to overcome structural deficiencies impeding them from coping with change. An example of this has been seen in the work of the German Weiterbildung und Beratung zur Einführung von TQM in KMU project (A-1995-D-072). Small companies involved in this and other parallel ADAPT projects have responded well to strategies that enable them to take more control over the process of adaptation. They have compared favourably to experiences with "normal" consultants, which have frequently made their firms more dependent on further services from the same providers.

Networks to support continuing training in SMEs

•	SMEs need direct encouragement from public authorities, employer bodies and social partners to form learning networks. Strategic partnerships between social partners at a sectoral level can anticipate market developments, define new job profiles and relevant training programmes, and do a lot to interpret the probable impact of the Information Society on many types of jobs. This approach has been consistently used in Belgium, and redundancies have been avoided. Projects in Spain, Greece and Germany (SIDEPROF: A-1995-ESP-158; Business Networking: A-1997-GR-511; Strukturwandel in der Druckindustrie: A-1995-D-029) have supported this experience. The UK project Investors in Technology – Learning for Competitiveness (A-1997-Ukgb-717) has set a new standard called Investors in Technology. This encourages SMEs to integrate their investments in people and their investment in technology, and is placing learning materials in a quality-assured and benchmarked context. The results are likely to influence initial vocational training and further formal and informal learning. 

•	ICTs offer SMEs the opportunity to structure learning networks of companies in new ways. The German project VKN Virtuelle KMU Network-Management (A-1997-D-505) has structured a training for trainers course in a virtual network. Networks of this kind can either be organised by sector, or on a regional basis. They enable companies to maximise their potential to benefit from problem-related learning. Experience does, however, show that face-to-face contact is generally required to supplement technology-assisted contact in building user confidence that is so essential if networks are to take off. Also, experienced animators are needed to help launch networks and support their management during the first two years, as is the case with TEVANAKE (A-1995-FIN-023), which is a new network providing vocational education for the textile and clothing branch. In Italy, the Global Fair project in Verona ((A-11997-IT-599) has integrated customer service and marketing training into company support materials which have been developed as a part of a prototype virtual fair on Internet and Intranet. 

Job rotation

•	Job rotation can assist in overcoming the problems of resourcing continuing training in companies of all sizes, by providing suitably skilled replacement workers for in-company trainees. Evaluations have concluded that in order to guarantee the success of job rotation, it should focus on the needs of enterprises and their employees. This helps to ensure the genuine participation of companies and a demand for a substitute labour force based upon real needs. Improving the employability of the unemployed should be seen as a positive side effect. This side effect can, however, be significant. Ten of the partners in the EU-Job rotation partnership, who had between them placed more that 1,000 unemployed people in companies, found that more than 70% of them retained their employment after the substitution period. Eight partners found that just over 50% of the substitutes who obtained permanent employment remained in the company in which they had been placed.

•	The job rotation approach sounds simple but it is, in practice, quite complex. Job rotation projects are always different from each other. Every programme has to be tailored to the needs of the parties involved – the company, the employees and the substitutes. Flexibility is the strength of job rotation, but achieving it requires close co-operation between public employment services, companies, unemployment insurance funds and training institutions. Many people are likely to be involved, finance will come from a variety of sources, and projects require a relatively long preparation, making job rotation unsuitable for short-term or emergency needs.

•	The main barriers to job rotation appear to be legal and financial, and these differ from country to country. Some projects have been financially vulnerable because they have had to depend, for both employed and unemployed participants, on national, regional and EU funding. Ideally companies and social partners should finance the training of the employed participants, while state funding should cover the costs related to the unemployed. There is evidence to suggest that because of the financial issues and the fact that the idea itself is complex, and large organisations are more disposed to job rotation than SMEs. However, joint job rotation projects between a number of SMEs appear to be more feasible. 

Strategy and management training 

•	Owners and managers of SMEs are the only people who can instil a culture of training in their companies. But most seem still to be unaware that the future development and even the survival, of their companies require continuous investment in human capital. A number of ADAPT promoters have conducted awareness campaigns with SME managers as the key target group. The support of regional authorities and SME organisations or Chambers of Commerce and Industry makes information campaigns more credible and visible, and also more effective. But this is only part of the answer. Managers’ own training needs need to be acknowledged and addressed since, in small firms, no changes can be introduced without the direct support and collaboration of managers. Projects like the Belgian ECOMANAGEMENT (A-1995-Bnl-001) have recognised that managers are so submerged in day-to-day business that they often lack time to attend courses. The delivery of training has to be very flexible, and ICTs present a range of new opportunities. Training modules need to be specific and well focused. In some cases, projects have condensed their normal training courses into light versions for managers. 

•	Peer learning has also proved to an efficient, problem-oriented form of learning for managers. In the German project Innovation-network between small and middle-sized companies (A-1995-D-163) company managers have been enabled to visit other enterprises where training and re-organisation have proved economically successful. With the help of organisational development experts who accompanied them, they have been able to start a benchmarking exercise. Managers from different companies can learn with and from each other so long as the risk of confidential business material being passed on can be avoided. This presents little difficulty when managers are from companies belonging to different sectors. The Developnet Veneto (A-1995-IT-176) project has successfully launched group training, analysing and solving problems for managers from different companies. This peer learning approach can be combined with the importation of knowledge and experience from large companies. The PLATO network (A-1995-NL-027) involves trainees being mentored by one or two other managers from large firms, during a two-year development programme. The commitment of the large companies offers a great deal to SMEs, but also appears to provide efficient management training for the mentors themselves.

Low-skilled workers

•	Low-skilled workers have particular problems in a labour market increasingly dominated by ICTs and higher skills. An ADAPT project Human Resource Management also for operators (A-1997-Bnl-539) has been co-operating with SMEs from different sectors to develop a consultancy package to help SMEs adapt their recruitment policy, work organisation and training. The idea is that in each qualified job there are a number of tasks that can be performed by a lower qualified person. The project has developed a series of tools for task splitting, the design of new job profiles, the development of new learning plans and guidance for the new workers and coherent training and coaching of team leaders. Experience has shown that new jobs for long-term unemployed low-skilled people can be created in this way in a variety of companies working in normal market conditions. Together with its transnational partners in HRM 2000 (Career 2000, A-1997-IRL-503 and Maieutica, A-1997-FR-658) this project has demonstrated the importance of employee involvement in further qualification of low skilled people. Similarly, in developing assessment systems in the course of integration pathways, certain EMPLOYMENT partnerships have worked closely with employers to match their assessment criteria to those of recruiting personnel in enterprises of a particular sector (YOUTHSTART Multimedia Y-1995-IT-042). 

•	It is clear that ICTs present special challenges to people with low skills, and two UK projects, PLEIAD (A-1997-Ukgb-558) and 45+ A Strategy for Positive Change (A-1997-Ukgb-621) are demonstrating that two groups, women returners and older workers, can have their fears allayed through participation in properly structured courses.

CONTRIBUTIONS TO POLICY AND PRACTICE

Continuing training

•	The evaluation of ADAPT in Germany shows that the second round projects, in particular, have had a real impact on the provision of continuing training in SMEs. Against a background where traditional training activities tended to be centralised and delivered largely through seminars, some 15,000 companies will have been reached. Approximately 95% of them were SMEs, and the training delivered has been largely tailored to their specific needs. Some 90% of the SMEs taking part claim to have benefited, and some 37% can show that they have created jobs.

•	At a regional level, the Land of Nordrhein-Westfalen in Germany, has used a comprehensive approach to both Objective 4 and ADAPT, making the concrete demands of companies and learners become the motor of change. They have increasingly encouraged business consultants to replace training providers as project promoters, and have seen the consultants incorporate the project results and the tools they have developed into their normal business, thereby ensuring wide dissemination. The regional support structure for ADAPT and Objective 4 has also widely distributed project results using CD-ROMs with low-cost updates.

•	In Greece, a new Centre for the Certification of Trainers has been set up, and a new profile for trainers established, ensuring that they operate closer to the workplace.

•	In the UK, there is evidence that National Training Organisations in a number of sectors are recognising the value of project results, which show that small firms and the workers in them want training to be provided and accredited in discrete, manageable modules. The PLEIAD project (A-1997-UKgb-558) is contributing to a Government debate on the need for qualifications and accreditation in the childcare sector. 

Job rotation

•	The Berlin job rotation programme has met with great interest in the whole of Germany and by February 1999, job rotation projects had been initiated in all federal states. Meanwhile, legislation has been modified in the Land Berlin, enabling job rotation to become a mainstream labour market strategy, no longer dependent on EU-funding.
•	The increased interest in job rotation in Portugal has meant that legislation on this subject was approved in February 1999 and this has already encouraged almost 100 companies, in many different sectors, to start job rotation projects.
•	In the UK, job rotation projects are operating in conjunction with the Government’s New Deal, designed to get a higher proportion of unemployed people into training and back to work.
•	In Ireland, the only job rotation project is being conducted under NOW, and a number of presentations on its results are being made to companies and public agencies.
•	In Austria, job rotation has been included in the general regulations for the ESF Objective 4, and will be in Objective 3 for the next Structural Fund planning period, 2000-2006. 

SELECTED REFERENCES

Training responding to demands from business

PORT ADAPT: A-1995-DK-011
KTCEP: A-1995-IRL-016 
Betriebliche Qualifizierung in KMU: A-1997-D-760
Weiterbildung und Beratung zur Einführung von TQM in KMU: A-1995-D-072 

Networks to support continuing training in SMEs

SIDEPROF: A-1995-ESP-158
Business Networking: A-1997-GR-511
Strukturwandel in der Druckindustrie: A-1995-D-029 
Transnational partnership "New Book Economy": A-1995-D-013, IT-006, NL-060 
Investors in Technology – Learning for competitiveness: A-1997-Ukgb-717 
VKN - Virtuelle KMU Network-Management: A-1997-D-505
DEVELOPNET: A-1995-IT-176
TEVANAKE: A-1995-FIN-023 
Global Fair: A-1997-IT-599 

Job rotation

Transnational partnership "EU-Job rotation": A-1995-A-026; D-030; 045 & 171; DK-026; FIN-006; GR-076; IT-168; NL-067; P-050; S-015; Ukgb-029 & 045
Transnational partnership "EU-Job rotation II": A-1997-D-052 & 724; DK-528; F-765; GR-597; IT-834; P-512; Ukgb-512 & 635 
Transnational partnership "FUTURA": A-1997-D-729; DK-536; F-843; NL-642 
Transnational partnership "JOB ROTATION": A-1997-Bfr-542; D-643; F-820

Strategy and management training
 
ECOMANAGEMENT: A-1995-Bnl-001
EUROMANAGER: A-1995-DK-539
Innovation-Network between SMEs: A-1995-D-163
DEVELOPNET: A-1995-IT-176
PLATO: A-1995-NL-027

Low-skilled workers

Human Resource Management also for operators: A-1997-Bnl-539
YOUTHSTART MULTIMEDIA:  Y-1995-IT-042
PLEIAD: A-1997-Ukgb-558 
45+ A Strategy for Positive Change: A-1997-Ukgb-621 
Career 2000: A-1997-IRL-503
Maieutica: A-1997-F-658