STAFF RETRAINING AS A FORM OF LIFELONG PROFESSIONAL EDUCATION AND AN IMPORTANT AREA IN WHICH HUMAN RESOURCES IN THE ECONOMY CAN BE UPGRADED

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1 STAFF RETRAINING AS A FORM OF LIFELONG PROFESSIONAL EDUCATION AND AN IMPORTANT AREA IN WHICH HUMAN RESOURCES IN THE ECONOMY CAN BE UPGRADED N. E. Kolesnikov Modernization and the innovative transformation of business and industry involve a corresponding upgrading and development of professional retraining. The current economic downturn and the postfinancial crisis, innovation-based modernization of the Russian economy require a qualitatively new approach to defining the scale, content and role of retraining existing human resources in terms of its focus and forms. This structure is designed to maintain consistency between the technical and human components of the professional education system that is subject to constant disturbances in the course of product development. Today, as these components are about to undergo profound transformations, professional retraining becomes one of the most important preconditions and factors for the upgrading of human resources, and hence the economy as a whole. This process is not only continuing but accelerating and, what is more, becoming more complicated as new technical means of production, technology and hence production and labor management increasingly rely on deeper, intrinsic regularities in the mastering of the world around us, aiming to satisfy the growing needs of society year after year. Let us discuss some aspects of this problem. First of all, let us refer to state and regional programs for employment support being implemented under the current conditions of economic downturn and the anti-unemployment campaign. One of the important measures envisaged by these programs includes retraining of people who are unemployed or at risk of redundancy. These issues have always been in the focus of corporate HR functions on the one hand, and professional education institutions, centers for staff training on the factory floor, etc., on the other. Whereas the former create the demand for an improvement in the professional and qualification structure of employed persons, the latter solve the issues associated with satisfying this demand. The enduring importance of these activities is determined not only by the objective regularity that demand for qualified personnel outstrips the available supply, which is in many respects a result of the development of production, technology, organization, etc., but also by other, less objective factors that cause a continuing imbalance between the demand of the real economy for specific professions on the one hand, and the supply of real workers and 229

2 specialists who can practice these professions on the other. The mismatch between demand and supply is particularly large for the blue collar professions, but it also exists in other fields of professional employment. For example, a shortage of engineering professionals has become increasingly pronounced in recent years. Although there is currently a notable demand for engineers, very few of them work in their specialized field because many are satisfied with neither the remuneration nor the work conditions in that field. All these and similar divergences between the desired situation and the real situation (as perceived by the employee on the one hand, and the employer on the other) have been, are and, supposedly, will be present since they reflect deficiencies and omissions not only in the field of career guidance, mainly for young people, but also in the development of the labor market, its content and the attractiveness of different occupations. These problems become particularly acute under the conditions of an economic downturn, with production dropping, the number of jobs decreasing and unemployment growing, which makes the issue of upgrading of the structure of production, jobs and employment to the new demands of the labor market particularly relevant as a radical solution to the problems of the domestic economy (in particular low labor productivity). Retraining and skills upgrading among the existing labor force are one of the important anti-crisis measures aimed at boosting employment and lessening stress on the labor markets in all regions of this country. Labor and employment services rely on the monitoring of the labor market, unemployment scales and structure, and expected redundancies to develop a policy for training and retraining of workers who are being made redundant. Whereas before the economic crisis, retraining was provided to unemployed persons only, now regional businesses have the opportunity to enhance the professional and qualification potential of their employees (in order to improve the stability of personnel) using government funds under budget-financed programs for employment support. Many businesses currently benefit from this source. Training is provided at corporate training centers or in professional education institutions. Unemployed persons not only do not have to pay for training but also receive scholarships to the amount of the unemployment allowance. Owing to this arrangement, retrained employees get new jobs and stay with their companies. In St. Petersburg, for instance, retraining of the unemployed and forward-looking training of persons exposed to the risk of being dismissed is one of the priority areas in the implementation of the action plan for lessening the stress on the labor market. This has enabled some to improve their 230

3 qualifications or acquire another profession and thereby find new jobs, and helped others to maintain their current jobs. In 2009, more than 10,000 unemployed persons and about 6,000 employees at risk of dismissal were retrained in St. Petersburg. The city's employment service implements the retraining program for the unemployed in 110 occupations that are in demand on the regional labor market. Eighty percent of those trained were then re-employed immediately. In 2010, a program of additional measures to lessen the stress on the labor market provides for the forward-looking professional training of at least 2,250 employees within the employed-butat-risk category. The plan has a separate budget for retraining aviation specialists, such as navigators and flight engineers, who are dismissed in connection with the reorganization of civil aviation or the deployment of modern aircraft. The scale and structure of retraining are mainly determined by the situation on the labor market. Whereas during the first six months of 2009, the scale of different forms of training for unemployed persons or at-risk employees grew due to high unemployment rates and the high level of expected redundancies, in late 2009 and early 2010, when regional labor markets became significantly more stable, the scale of retraining decreased. The process of professional change, skills upgrading, etc., are not that widespread and acute any more, which allows for the maintenance of the needs of businesses to enhance their employees' capabilities at a constantly high level. Unfortunately, plans for training the unemployed and at-risk employees often fail to be geared to the rate of the creation of new jobs or modernization and diversification of production, which impairs the efficiency of the efforts toward employment development. Many businesses have started cutting back on the training and retraining of their personnel. Even more so given that, as mentioned above, the government allocates budgets for retraining of both the unemployed and at-risk employees as part of its unemployment-reduction program. However, in 2010, the government plans to cut back on such anti-crisis measures. Notwithstanding that in 2010 the annualized average unemployment rate (according to forecasts by the Federal Labor and Employment Service) is expected to be equal to the 2009 level (the 2010 projection of the number of the registered unemployed is 2.2 million people. The initial 2009 projection of the number of the unemployed provided by this Agency was 2.2 million people; but during the year the actual figures have been somewhat higher, reaching 2.84 million people in December 2009), many regions significantly cut allocations for the retraining of the unemployed and at-risk employed. For example, in 2009, forward-looking 231

4 training was provided to 2,081 at-risk employed people in Kaliningrad, whereas in 2010 training for only 400 people is planned. This shows not only the stabilization of the employment situation and a reduction in the number of employees being made redundant in the region, but also to some extent (as it seems to us) that the responsibility for the cost of staff retraining is gradually being returned back to businesses. As the economic crisis is overcome and the problems of post-crisis rehabilitation and development of the economy are solved, training and retraining of a wide range of employed individuals who will be made redundant as a result of the modernization of key economic sectors become especially relevant. The timely and efficient retraining of redundant workers is one of the decisive factors contributing to the provision of employment within the upgraded employment system on an urgent basis. As opposed to technical facilities of an enterprise, which, if funds are available, can be quickly renewed by replacing old equipment and technology with new ones, human resources are not so easily replaced. Therefore, creating new or improving existing regional and industry-specific centers for staff retraining is the right thing to do. For example, a staff training and retraining center for the automotive industry was recently opened at the Information Technology College in Kaluga. This is the first center of its kind in the industry. The center is designed to provide skilled workers to leading investors in the Kaluga Region (such as Volkswagen, Peugeot-Citroen and Mitsubishi).The new center covers almost the entire range of occupations in demand by the car-making and automotive component industry. Costs associated with these and other similar efforts should be shared by both government and business. Further improvement of qualifications among the regional labor forces that could contribute to their effective employment under the current unemployment conditions is hampered by the poor quality of many jobs and job vacancies. The majority of vacancies are those for low-skilled or unskilled (i.e. low paid) jobs. According to the Federal Labor and Employment Service, the unskilled labor force accounts for 10 percent of the Russian labor force. Therefore, an immediate task for the modernization of the field of labor and employment is to ensure a radical improvement of the entire pool of such jobs by means of engineering and technological, substantive and functional, and organizational optimization. This has to contribute to solving, gradually but steadily, the problem of reducing the number of primitive, unskilled and often physically exhausting and unhealthy jobs. This is one of the most important areas in the development of the labor force for the new innovative economy. 232

5 The increasing number of people opening their own businesses, in particular from among the unemployed, as a form of self-employment, gives relevance to the professional training of such persons in the entire range of knowledge, skills and abilities as related to small business. More than 127,000 Russians opened their own businesses in The number of jobs created in the small and medium-sized business sector during the year exceeded by five times those registered in the pre-crisis period. Provision of committed entrepreneurs with the necessary knowledge is a key to success, continuity in this area of employment, and the subsequent development of the middle class. All these involve the development of relevant professional business training facilities in professional education institutions and various government-sponsored staff training centers. Retraining the labor force involves not only upgrading profession- and qualification-specific knowledge and skills but also developing a new operational culture among employees, and equally among entrepreneurs. Operational and business ethics and professional responsibility for products produced should play a prominent role in this new operational culture. Since modernization of the manufacturing sector is a priority area and a key strategic goal for the development of the Russian economy, it is expected that employees with sector-specific professions and qualifications will account for the majority of redundant employees. Therefore, relevant employment centers and faculties of professional education institutions should be prepared to provide them with the necessary retraining. This means that this system should have a clear and specific idea of the new profession- and qualification-specific knowledge, skills and abilities that workers of modernized, innovative enterprises and industries will be expected to have. Today, the main subject in the focus and under the control of both the government and the business community is training and continuing retraining of managerial staff to build a cadre of top managers. At the same time, very little attention is paid to the creation of brand new human resources who would be directly engaged in the design, development and production of competitive products to the standards of the modern world market, not to mention the ones that will be applied in the future. 233