OECD Skills Strategy Slovak Republic

Assessment and Recommendations

Report

OECD Skills Studies

10 April 2020

5. Strengthening the use of skills in workplaces

Abstract

The effective use of skills in workplaces has potential benefits for employers, employees and society as it can raise productivity, wages and job satisfaction. Public policy makers can work with employers to help create the conditions or provide direct support for strengthening skills use in workplaces. This chapter explains the importance of the effective use of skills for the Slovak Republic and provides an overview of current practices and performance. Three opportunities are discussed to improve skills utilisation: creating the conditions to facilitate the adoption of high‑performance workplace practices (HPWP) in Slovak firms, providing incentives and support to Slovak firms for the adoption of HPWP, and enhancing the governance of policies and strategies affecting skills use.

The importance of the effective use of skills for the Slovak Republic

Skills policies tend to focus primarily on the development of skills in education and training, and the link between these skills and the labour market (see chapters 2, 3 and 4). Recently there has been a growing awareness that how well employers use skills in the workplace may be just as important as the skills their workers possess. To take full advantage of the initial investment in skills development, and to limit the depreciation and obsolescence of unused skills, countries should strive to use the skills of the population as intensively as possible in the economy, workplaces and society (Guest, 2006[1]).

Putting skills to better use in the workplace (see Box 5.1 for definitions) is important for workers, employers and the broader economy. Studies using data from the Survey of Adult Skills, a product of the Programme for the International Assessment of Adult Competencies (PIAAC), demonstrate the positive impacts of the effective use of skills on performance in both the economy – including on employment, wages and productivity (see Figure 5.1) – and society – including health, trust and political efficacy (OECD, 2016[2]). A number of megatrends reinforce the importance of the effective use of skills in the workplace to ensure the long-term sustainability of Slovakia’s economy (OECD, 2019[3]).

Figure 5.1. Reading at work and productivity in terms of GDP per hour worked

Skills use matters in the context of demographic change. The Slovak Republic has one of the fastest ageing populations in the OECD: for every 10 adults aged 15 to 64 (working-age population), there are two adults aged 65 and older; however, in 2060 this number will increase to 6 adults aged 65 and older for every 10 of working age (OECD, 2019[6]). Following this trend, the growth in population will contribute less to gross domestic product (GDP) growth, making productivity growth an increasingly important driver for the economy. In this context, the more effective use of skills in workplaces could play an important role in driving future productivity growth.

Using skills more effectively also matters in the context of technological change. Slovakia has the highest share of jobs at risk of automation across the OECD, and technological change and digitalisation are major challenges (Nedelkoska and Quintini, 2018[7]). To ensure competitiveness it becomes increasingly essential to adopt innovation and technological change; however, current innovative activities in Slovak firms could be expanded (OECD, 2019[6]). The more effective use of skills could support this expansion as not only does the more effective use of skills stimulate innovation, but more innovative firms tend to better utilise the skills of their employees.

Better skills utilisation could help to overcome the challenges resulting from globalisation. The enhanced competition caused by a globalised and interconnected world creates the need for firms to be internationally competitive. While some labour intensive segments of the economy (e.g. car assembly) already benefitted from joining global value chains, for future competitiveness and economic progress it will be essential to move beyond this approach (OECD, 2019[6]). Slovakia’s production still focuses mainly on low-value-added downstream activities, and it will be essential that a broad range of sectors move up the value chain – a trend which has slowed in the past decade (OECD, 2017[8]). The more effective use of skills in workplaces could support firms to move up value chains through increased innovation and stronger productivity growth.

Despite the positive outcomes of better skills use for workers, employers and the broader economy, as well as the increased importance of how skills are used in the context of megatrends, many firms in Slovakia and other OECD countries are still not optimally using the skills of their employees. This is partly because they are not organising workplaces in a way that supports effective skills use. The main determinants of effective skills use are a variety of organisational and management practices that shape how and why skills are used in the workplace. Practices known to positively affect the performance of employees and firms are often referred to as high-performance workplace practices (HPWP) (see Box 5.1). These include work flexibility and autonomy; teamwork and information sharing; training and development; and benefits, career progression and performance management. The Survey of Adult Skills (PIAAC) demonstrates that there is a strong link between the adoption of these HPWP and the intensive use of skills (see Figure 5.2).

Box 5.1. Definitions and measurements of skills use and HPWP

Skills use

The OECD Skills Strategy Framework (OECD, 2019[3]) and its pillar on “using skills effectively” describes skills utilisation in both the labour market (also referred to as “activation”) and in workplaces. This chapter will solely address the latter interpretation of skills use because it is less intensively covered in other studies and is very relevant for the productivity, demographic and innovation challenges in Slovakia.

The Survey of Adult Skills (PIAAC) is one of the main sources used to analyse the use of information processing skills in workplaces, which include reading, writing, numeracy, information and communication technology (ICT), and problem solving. The approach used in the Survey of Adult Skills (PIAAC) follows the job requirements approach (JRA), whereby the survey enquires about the frequency with which tasks relevant to each skill are carried out. For example, the survey measures the frequency (from 1 “never carried out” to 5 “carried out every day”) for ICT-related tasks such as the use of email, spreadsheets and programming languages, which result in a composite variable for the use of ICT skills. To assess the “effectiveness” of skills use, these frequency indicators need to be analysed in combination with actual skill levels. The method has some limitations, including that 1) the measures are developed on self-reported data and could be affected by workers’ skills and perceptions; and 2) the measures are based on task frequency and thereby possibly do not capture the full list and complexity of tasks for skill types (OECD, 2016[2]).

High-performance workplace practices (HPWP)

Despite considerable literature on HPWP, there is no consensus on the exact definition (Posthuma et al., 2013[9]; UKCES, 2009[10]).There is no universal list of HPWP that can be applied to any organisation, since their effect can depend heavily on organisational context. Organisations should implement a system of practices that complement and reinforce each other and that fit the specific organisation. A number of authors have tried to identify specific practices and different categories of HPWP, for example Posthuma et al (2013[9]) and Sung and Ashton (2006[11]), and a definition of HPWP has been developed based on analysis of data from the Survey of Adult Skills (PIAAC) (OECD, 2016[2]). These taxonomies differ in both depth and breadth.

This report applies a pragmatic approach, where broad categories of workplace practices are selected based on existing taxonomies and driven by available data on underlying indicators. The following broad categories of HPWP have been selected:

Flexibility and autonomy: including flexibility in working time and tasks, involvement in setting tasks, planning activities, and applying own ideas.
Teamwork and information sharing: including receiving support from colleagues, working in a team, and sharing work-related information with colleagues.
Training and development: including participation in continuing vocational training and on‑the‑job training.
Benefits, career progression and performance management: including bonuses, career advancement, performance appraisal and competency profiles.

Source: OECD (2019[3]), OECD Skills Strategy 2019: Skills to Shape a Better Future, https://dx.doi.org/10.1787/9789264313835-en; OECD (2016[2]), Skills Matter: Further Results from the Survey of Adult Skills, https://dx.doi.org/10.1787/9789264258051-en; UKCES (2009[10]), High Performance Working: A Synthesis of Key Literature, www.ukces.org.uk; Posthuma et al. (2013[9]), A High Performance Work Practices Taxonomy: Integrating the Literature and Directing Future Research, https://dx.doi.org/10.1177/0149206313478184; Sung J. and D. Ashton (2006[11]), High Performance Work Practices: Linking Strategy and Skills to Performance Outcomes, www.longwoods.com/articles/images/High%20Performance%20Work%20Practices_UKReport2011.pdf.

Figure 5.2. Relationship between using reading skills at work and HPWP adoption

A number of positive developments in Slovakia have created a momentum for policies and reforms to improve skills utilisation in workplaces. First, several initiatives that directly or indirectly affect skills use have been introduced in recent years. For instance, the Slovak Business Agency (SBA), a subordinated agency of the Ministry of Economy, currently runs a broad range of programmes to support small and medium-sized enterprises (SMEs) (see overview of current arrangements section for more information). Slovakia should use these initiatives as a foundation for future actions, and new policies and programmes should be informed by lessons learned from these initiatives to build on and expand good practices. Second, based on conversations and discussions with government and stakeholder representatives (participants) consulted during this project, recent developments appear to have resulted in changing attitudes towards skills use and HPWP in Slovakia. Enhanced competition between firms and labour shortages in various sectors has forced employers to remain competitive through productivity growth, including by adopting HPWP, and has put pressure on employers to attract talent, including by improving working conditions. For Slovakia, this context should be considered a great opportunity to further promote and support skills use and HPWP, and thereby secure future economic and social prosperity.

Overview and performance of skills use in the Slovak Republic

Overview of current arrangements for skills use in the Slovak Republic

Slovakia is already taking active action to address most of the described challenges caused by megatrends. Directly and indirectly these actions are affecting the use of skills in workplaces. Policies that affect skills use can be very diverse due to the variety in types of HPWP – from work flexibility to performance management – and the (often external) factors affecting the adoption of HPWP, including management skills, engagement of employees and overall economic context (e.g. the broader value chain and industrial clusters (OECD, 2016[12]; OECD/ILO, 2017[13])). Relevant policies for skills use could therefore include policy fields such as industry, innovation, economic development, and human and social capital.

A large number of Slovak ministries are currently developing such policies – most notably the Ministry of Economy; the Ministry of Labour, Social Affairs and Family; the Ministry of Finance; the Office of the Deputy Prime Minister of the Slovak Republic for Investments and Informatisation (Úrad podpredsedu vlády pre investície a informatizáciu, ÚPVII); and the Ministry of Education, Science, Research and Sports. Multiple other public and private organisations, institutions and agencies are involved in activities that indirectly affect skills utilisation in workplaces, including the Slovak Chamber of Commerce and Industry (Slovenská obchodná a priemyselná komora, SOPK), the Central Office of Labour, Social Affairs and Family (Ústredie práce, sociálnych vecí a rodiny, ÚPSVAR), employee organisations (e.g. the Confederation of Trade Unions of the Slovak Republic), employer organisations (e.g. the Entrepreneurs Association of Slovakia), and tripartite bodies (e.g. the Economic and Social Council). However, few organisations directly target practices in workplaces.

The most important government agency at the national level for providing support to employers and entrepreneurs in SMEs is the Slovak Business Agency (SBA). Founded in 1993 as the National Agency for Development of SMEs (renamed SBA in 2014), it is Slovakia’s oldest specialised non-profit organisation, and a unique platform for public and private sectors. The mission of the SBA is to support SMEs at all levels, and to improve their international competitiveness through measures aimed at raising the survival rates of enterprises, enhancing innovation and stimulating entrepreneurial behaviour. Support can be either financial or non-financial, and can target specific groups such as start-ups and marginalised groups. The SBA also provides analyses of the business environment, including yearly reports on the state of SMEs in the Slovak Republic that include an extensive assessment of support instruments and identify problems and recommendations. Since 2017, seven National Business Centres in every regional capital function as a one-stop-shop for information and services to all businesses on SBA programmes and activities. As part of the SBA, the Better Regulation Centre was created to reduce the regulatory burden on businesses and improve the business environment in Slovakia.

As part of the Ministry of Economy, the Slovak Investment and Trade Development Agency (Slovenská agentúra pre rozvoj investícií a obchodu, SARIO), and the Slovak Innovation and Energy Agency (Slovenská inovačná a energetická agentúra, SIEA) also run programmes that indirectly affect workplaces and skills utilisation. SARIO aims to increase the inflow of foreign investment and supports the high‑performance of businesses. It works towards a competitive investment and business friendly environment in Slovakia by providing information and consultancy services, and organising trade missions, trade fairs and knowledge events. SIEA implements, monitors and evaluates public support measures aimed at energy efficiency and the development of innovations. It has established regional consultation centres to provide information to entrepreneurs, and organises seminars, workshops and conferences.

The future ambitions of Slovakia, as expressed in a number of strategies, emphasise directly or indirectly the need to promote change in workplaces. The Strategy of the Digital Transformation of Slovakia 2030, created by ÚPVII, is an inter-departmental, long-term vision that defines policy priorities for Slovakia. It covers the period 2019-2030 and was created in the framework of digitisation processes, the digital single market agenda of the European Union, and global digital transformation priorities. It will be the basis for the development of specific measures, for instance the Action Plan of the Digital Transformation of Slovakia 2019-2022, and puts emphasis on the business sector and the transformation to Industry 4.0. In this context, it addresses the need for innovation in companies, the enabling of new business models and the adoption of technology.

Performance of the Slovak Republic

The use of skills in workplaces

Overall, the skills of adults are not used to their full potential in the workplace. The use of most types of information processing, job-specific and generic skills of employees in Slovakia could be intensified. As one of the few countries in the OECD, the use of reading skills at work in Slovakia is well below the OECD average, while the literacy proficiency of adults is above the average (see Figure 5.3) (OECD, 2016[2]). This indicates a large waste of initial investment in skills. The use of ICT skills could be strengthened (OECD, 2016[2]), and Slovak firms could do more to adopt technologies. While many new ICT technologies such as cloud computing and big data are widely available, they have been adopted and used by only a comparatively small share of firms in Slovakia – 21% of enterprises used cloud services in 2018 (26% in the EU) and 9% analysed big data (12% in the EU) (Eurostat, 2019[14]).

Some types of skill are used more intensively than others in Slovak workplaces, most notably numeracy and problem-solving skills. For numeracy, this performance is in line with the strong numeracy skills of the adult population (OECD, 2016[2]). However, various countries with comparable numeracy skills proficiency manage to utilise these skills even more intensively, especially the Czech Republic, which is one of the top performers in this regard.

The skills of some workers are particularly underutilised in Slovakia, largely driven by whether they possess these skills – i.e. the use of skills is naturally restricted by the skills that adults possess. Consequently, low-skilled adults are using their skills less intensively than those with higher skills (OECD, 2016[2]). As low skill levels are especially prevalent among low-educated and older adults, these groups are particularly lagging behind in Slovakia.

Figure 5.3. Literacy proficiency and reading at work indicators, The Survey of Adult Skills (PIAAC), 2012, 2015

As to be expected, there is large variation in the use of information processing skills between different firms and sectors – for example, ICT skills are likely to be less needed in construction than in the financial sector. Skills use is also correlated with firm size – larger firms, for instance, use the skills of employees more intensively, on average, than medium-sized firms. As a consequence, the aggregated use of skills in workplaces is largely shaped by the sectoral composition and distribution of firm sizes in a country.

The specific structure of the Slovak economy is characterised by a large manufacturing sector, which has a pronounced effect on average skills use in Slovak workplaces. Almost 25% of the workforce is employed in manufacturing, a share significantly above the OECD average of 14%, while sectors known for their average high-skill levels (e.g. ICT, financial and insurance activities) represent a share of jobs slightly below the OECD average. This is also reflected in the large share of jobs characterised by medium-level educational requirements in Slovakia, and the comparatively high use of physical skills (Quintini, 2014[15]).

The adoption of HPWP in the Slovak Republic

Slovakia’s employers are adopting HPWP at a lower rate than their counterparts in most other countries: about 17% of jobs adopted these practices, compared with 26% in the OECD, and only Italy, Turkey and Greece have a lower share across the OECD. However, this hides differences in the adoption of different workplace practices, since HPWP captures a diverse range of practices that cover 1) flexibility and autonomy in the workplace; 2) teamwork and information sharing; 3) training and development; and 4) benefits, career progression and performance management (see Box 5.1).

Flexibility and autonomy at work

Flexibility at work and autonomy in performing tasks in the workplace are among the most relevant types of HPWP. For instance, employee control over aspects of their job is considered the job characteristic with the most significant benefits for firms and employees in various theoretical frameworks for job design (Morrison et al., 2005[16]). Moreover, the introduction of various new technologies enhances momentum for more flexibility and autonomy by making software (e.g. for teleworking) more accessible and reliable.

There are indications that flexibility in Slovak workplaces can be enhanced. In 2015, 27% of employees had influence on their working time, with only Lithuania having a lower share across the EU (see Figure 5.4), and only 8% of workers were able to adapt working hours to some extent (19% in EU) (Eurofound, 2019[17]). However, an EU survey from 2013 shows slightly better performance in work flexibility – 69% of establishments appeared to be offering working time flexibility, a share above the EU average of 66% (Eurofound, 2015[18]). Part-time work is relatively uncommon: in 2013, 45% of firms offered these contracts, compared with almost 70% across the EU (Eurofound, 2015[18]), and only 10% of employees worked less than 35 hours per week, compared with 28% in the EU.

Figure 5.4. Adoption of practices that enhance the work flexibility and autonomy of employees

Performance can also be improved regarding work autonomy. A relatively small share (43%) of employees feel that they can apply their own ideas at work in Slovakia, compared with 54% in the EU, and employees have comparatively little control over the tasks they need to perform, the speed of their work and the methods applied (see Figure 5.4) (Eurofound, 2019[17]). Slovakia is at the bottom of the EU ranking in terms of employees having a say in the choice of working partners. There is also limited involvement of employees in their work – 34% of workers feel that they can influence decisions important for their work, the lowest share across the EU (Eurofound, 2019[17]).

Different sectors of the economy are adopting these work practices to different extents, which is largely the result of the type of jobs they offer. For example, it can be expected that opportunities for work flexibility are more limited for workers on an assembly line than for office employees. For Slovakia, this is particularly relevant given the strong manufacturing sector and the large share of routine jobs (Marcolin, Miroudot and Squicciarini, 2016[19]). The sectoral composition therefore does have an effect on the weak performance in flexibility and autonomy in Slovakia. For skilled occupations in Slovakia, the share of workers with flexibility in work hours to a (very) high extent is comparable with the OECD average (calculations based on Survey of Adult Skills (PIAAC) (OECD, 2019[4])). For elementary, semi-skilled blue collar and semi‑skilled white-collar occupations, work flexibility is much less prevalent in Slovakia than in most OECD countries.

Teamwork and information sharing

Teamwork supports the intensive use of skills. Employees that co-operate with co-workers to some or a very high extent are using their skills more intensively than employees that do not (OECD, 2016[2]). Furthermore, workplaces where information is freely shared and where colleagues instruct and train each other reflect a working culture that supports the optimal use of skills. In Slovakia, such a working culture should be stimulated, and there are indications that there is significant room to improve the current culture of teamwork and information sharing.

In 2015, a comparatively low share of workers in Slovakia (66%) had colleagues who help and support them, with only Italy and Poland having lower shares in the EU (see Figure 5.5) (Eurofound, 2019[17]). In addition, the share of workers involved in teamwork with a certain degree of autonomy is low in Slovakia: more than half of workers indicate not working in a team at all, compared with 45% in the EU. However, the Survey of Adult Skills (PIAAC) results suggest better performance – with the share of workers who regularly co-operate with co-workers and who share work-related information slightly above the OECD averages (calculations based on the Survey of Adult Skills (PIAAC) (OECD, 2019[4]).

Figure 5.5. Co-operation between colleagues and teamwork in firms

The composition of the economy in terms of sectors and occupations affects teamwork and information sharing activities. However, Slovakia’s large manufacturing sector does not appear to significantly distort the average for teamwork and information sharing practices, with a large share of workers, compared to the EU average, saying that they do not work in teams across all sectors of the economy (from between 44% in public administration, education and health, to 62% in financial and other services) (Eurofound, 2019[17]).

Training and development

For the different categories of HPWP, Slovakia shows the strongest performance in training and development. Various surveys demonstrate strong performance in a range of learning and training activities at work. In 2015, 51% of employees participated in on-the-job training, with only the United Kingdom and Finland having a higher share in the EU (see Figure 5.6) (Eurofound, 2019[17]). Furthermore, over 57% of workers participated in continuing vocational training (Eurostat, 2018[20]), which is one of the highest shares in the EU.

However, a below average share of firms provide training to employees (70% vs. 77% in the EU) (Eurostat, 2018[20]), which indicates that the high participation rates for training are largely explained by strong performance of the largest firms in Slovakia. In the context of automation, it is crucial that SMEs do more to raise training in their firms. Training in Slovak firms also tends to be firm specific, and there are indications that it often includes mandatory courses (e.g. safety training).

Figure 5.6. Participation in continuing vocational and on-the-job training

High participation rates in workplace training contrasts with the low overall performance of Slovakia in adult learning (as explained in Chapter 4). This can partly be explained by the predominant non-formal and informal character of learning in Slovak firms. Participation in job-related non-formal education and training was relatively high in 2016 (41.8% vs. 35.8% in the EU), and employed adults engaged often in informal learning (79.8% vs. 62.5% in the EU) (Eurostat, 2016[21]), especially through “learning by doing” (calculations based on the Survey of Adult Skills (PIAAC) (OECD, 2019[4]).

Benefits, career progression and performance management

Various studies provide evidence on the positive effects of incentive pay on skills use and productivity, with both individual and group performance-based bonuses having a positive effect on productivity (Bloom et al., 2010[22]). In Slovakia, the share of employees receiving yearly bonuses is low: 35% compared to the OECD-PIAAC average of 45%.

There are also signs that the adoption of other types of performance management and career progression practices could be improved. A relatively small share of firms have performance appraisal systems for all employees (35% vs. 45% in the EU), and a small share of workers signal good prospects for career advancement (30% vs. 39% in the EU) (see Figure 5.7) (Eurofound, 2015[18]). Jobs appear to be relatively static in Slovakia – a small share of firms restructured or reorganised the workplace in recent years, and a small share of workers experience yearly changes in elements of their job, such as working hours, salary, influence over work or tasks and duties (Eurofound, 2019[17]).

Figure 5.7. Career advancement prospects and performance appraisal systems

Opportunities to improve the effective use of skills

Better skills utilisation could play an important role in Slovakia’s response to the current challenges reinforced by megatrends, and it will be crucial for Slovakia to expand efforts to raise skills use and adopt HPWP in firms. This chapter describes three possible opportunities to improve this performance. The selection is based on input from literature, discussions with the National Project Team, discussions in the two workshops, and several bilateral and focus group meetings. As a result, the following opportunities are considered to be the most relevant for the specific context in Slovakia.

1. Creating the conditions to facilitate the adoption of HPWP in Slovak firms.

2. Providing incentives and support to Slovak firms for the adoption of HPWP.

3. Enhancing the governance of policies and strategies that affect skills use.

The opportunities present a broad perspective on improving skills use by emphasising the following: 1) policies that indirectly affect the adoption of HPWP by improving the conditions that facilitate this adoption (Opportunity 1), for instance through strong management and an engaged and motivated workforce; 2) policies that more directly affect the adoption of HPWP in firms (Opportunity 2), for example financial incentives, support measures to firms, information and awareness campaigns; and 3) the overall governance of these policies that affect skills use (see Opportunity 3), including a whole-of-government approach and the efficiency and effectiveness of the public sector.

Opportunity 1: Creating the conditions to facilitate the adoption of HPWP in Slovak firms

Skills use can be improved by creating a culture in firms where innovation and entrepreneurship flourish. To develop such a culture, it is essential that employees, management staff, employers and entrepreneurs have the skills and motivation to make changes in the organisation. In Slovakia, there are indications that such a working culture, as well as the required skills and motivations, can be strengthened.

The low adoption of HPWP in Slovakia, despite various programmes and measures, shows that for many firms there are other factors contributing to the limited adoption. It is likely that systemic barriers within firms play a role, i.e. the enabling conditions in workplaces that facilitate the adoption of HPWP are not well developed. For instance, having engaged employees and skilled managers could strongly contribute to the successful implementation of innovative workplace practices, and open attitudes are needed to facilitate change in workplaces. Stakeholders in workshops and meetings indicated that such a culture needs to be improved in many firms, especially SMEs, and that many employers and entrepreneurs lack the willingness to grow and innovate. This is also reflected in the low innovativeness of many Slovak enterprises, for example, business enterprise research and development (BERD) expenditure is among the lowest in the EU (OECD, 2019[6]).

This opportunity will further explore how these supporting factors in Slovak firms can be improved to facilitate the successful adoption of HPWP. It could be argued that these conditions (e.g. engaged employees) are the outcome of well-implemented HPWP; for example, having HPWP arrangements such as flexible work and good career opportunities would contribute to overall job satisfaction and engagement with the workplace. In light of this, Opportunity 1 will primarily focus on external factors, in addition to HPWP affecting these conditions (e.g. employee representative structures and their positive effect on employee engagement).

This opportunity will start by analysing the working environment and culture for employees in Slovakia to strengthen their attitudes towards changes in the workplace. The skills and motivation of current entrepreneurs and management staff will then be explored, followed by an assessment of how entrepreneurial attitudes and skills can be improved by developing them from early on in the education system.

Creating a supportive working environment for employees

Various studies show that employee engagement is one of the main determinants of skills use and productivity. Employee engagement reflects the willingness to invest effort in work and the enjoyment of work by employees, and could be enabled through various practices, including clear leadership, listening to the voice of the employee and organisational integrity (UKCES, 2014[23]). Strengthening the participation of workers in company decisions on the modernisation of work organisation and management practices could be considered a viable option to encourage a better use of skills in the workplace (OECD/ILO, 2017[13]). The importance of engaging and involving employees in Slovak firms was also mentioned by various participants in workshops during this project.

Various surveys demonstrate the relatively weak overall performance in engaging employees in Slovak firms. Only 29% of employees (49% in the EU) feel that they are (always or most of the time) involved in improving the work of their organisation or the work processes of their department or organisation, the lowest share across EU countries (see Figure 5.8) (Eurofound, 2019[17]). Slovak firms are also characterised by top-down decision making: in 72% of firms, decisions on daily tasks are made at the top of the organisation, compared with 62% on average in the EU (Eurofound, 2015[18]). However, despite the low overall engagement, almost 6 out of 10 workers have regular meetings where they can express their views on what is happening in the organisation, a share comparable with the EU average.

Slovak employers should aim for “high road strategies”, where employees and the skills that they possess are viewed as an integral part of a business’s competitive advantage, rather than “low road” strategies, where labour is considered a commodity and workers are seen as a cost to be minimised. High road strategies also entail higher quality jobs, and many dimensions of jobs quality are proven to be positively associated with the better performance of employees, including skills use and productivity (OECD/ILO, 2017[13]). Many Slovak firms have not yet embraced high road strategies. Participants in workshops and meetings expressed that the majority of firms in Slovakia tend to focus primarily on production and less on their employees.

Figure 5.8. Involvement of employees in the improvement of work, 2015

Distribution of answers to question “Are you involved in improving the work organisation or work processes of the department or organisation?”, OECD-EU countries

Surveys point to an unsupportive work environment and low job satisfaction in many Slovak firms. Help and support from colleagues is low in Slovakia, only Italy and Poland perform worse, and 1 in 5 workers are very satisfied with their working conditions, compared with 1 in 4 across EU countries (Eurofound, 2019[17]). Related to this low job satisfaction is the large share of Slovak workers not feeling that they receive the recognition they deserve for their work: with 42% of employees expressing that they receive enough recognition, Slovakia has the lowest share in the EU. Worryingly, 1 in 4 workers feels that their work is generally not useful, only Poland and Turkey have a higher share in the EU (Eurofound, 2019[17]). A potential driver behind this dissatisfaction could be the small share of workers indicating that they have good prospects for career advancement (30% vs. 39% in the EU) (Eurofound, 2015[18]).

Employee representative structures could support better employee engagement and a more supportive working environment. Data from the Survey of Adult Skills (PIAAC) show, for instance, that institutions with strong collective bargaining and unionisation are associated with a higher utilisation of workers’ skills in the workplace (OECD, 2016[12]). Furthermore, for works councils, which are worker representative bodies that typically complement trade unions in a number of European countries, empirical research shows the positive effects of the exchange of information, consultation and participation of employees (CESifo, 2015[24]) (see Box 5.2 for an international example).

In Slovakia, 2 out of 5 workers indicate having a trade union, works council or similar committee to represent employees in their organisation, a share lower than the EU, where 1 in 2 workers, on average, indicate having such a body in their organisation (Eurofound, 2019[17]). Since 2002, employees in Slovakia can be represented either by trade unions, works councils or employee trustees. Trade unions are united in the various confederations. The Confederation of Trade Unions of the Slovak Republic is the largest in Slovakia, with 26 sectoral trade union associations representing 231 000 members (Eurofound, 2017[25]). Only trade unions are entitled to enter into collective bargaining, and while works councils can conclude agreements with management on employment and working conditions, these do not have the same value as collective agreements.

Participants in workshops and meetings indicated that the overall role of employee representative structures in skills development and workplace practices could be expanded. Trade union density has declined in recent decades, from 36% of employees in 1998 to 11% in 2015 (OECD, 2019[26]), and there is a widespread reliance on the labour code for protecting individual and some collective employment conditions, which limits the scope of collective bargaining (Drahokoupil and Kahancova, 2017[27]). Furthermore, the relevance of works councils and other participation forms remains marginal in Slovakia, despite some exceptions, for instance in the public sector, and there are examples of situations where the presence of both trade union and works councils results in competition rather than co-operation (Drahokoupil and Kahancova, 2017[27]).

Better quality jobs could support better employee engagement and a more supportive working environment (see Box 5.3 for a national example of a programme to improve job quality). Slovakia is performing relatively well on several measures of job quality. For instance, wages are on the rise and problems relating to work-life balance are relatively less common in Slovakia than in other EU countries (Eurofound, 2019[17]). New amendments to the Labour Code address extra compensation for working at night, during holidays and at weekends Introduced in 2019, “recreational vouchers” give employees (in firms with more than 50 employees) the opportunity to reimburse vacations spent in Slovakia by up to 55% of authorised costs (with a maximum of EUR 275). However, participants in workshops and meetings mentioned that the lack of employment protection and the large share of temporary contracts are obstacles to employee development and job satisfaction; although aggregate indicators on the strictness of employment protection show only slightly less strict protection in Slovakia than in the OECD (OECD, 2019[28]), and temporary employment as a share of dependent employment in Slovakia is relatively low (8.3% vs. 11.7% across the OECD in 2018) (OECD, 2019[29]).

Box 5.2. Relevant international example: Employee representative structures in firms

Works councils in Germany

In Germany, the most important employee representative body is the works council (Betriebsrat), which can be elected in establishments with more than five regularly employed employees who are eligible to vote. The size of the works council depends on the size of the firm. The formation of a works council is not mandatory for employees, and the initiative must come from the employees or the unions, with the employer bearing the costs of the works council to perform its duties. Works councils are set up especially in medium-sized and big enterprises, and more rarely in small enterprises: they are organised in 97.5% of firms with more than 1 000 workers and in 4.2% of firms with 5 to 20 employees. The works council has general information and consultation rights under the Works Constitution Act. To perform its duties it must have an established dialogue with the employer, and together they can agree on works agreements, which are binding for all employees. These work agreements are a special type of contract regarding the working conditions of the individual employees, with the same direct and binding effect on the individual employment relationships as statutory law.

Source: DICE Database (2015[30]), Workplace Representation – Legal Basis and Thresholds, www.ifo.de.

Box 5.3. Relevant national example: Private initiative to improve working culture

Own the Way You Work – Swiss Re

Swiss Re in Slovakia has introduced a comprehensive programme named “Own The Way You Work” (OTWYW) to promote agile working. An integral part of the working culture at Swiss Re, and in alignment with the needs of clients and colleagues, is that employees are largely free to organise their day as they choose. By focusing on outcome and results, the initiative recognises that individuals can be more effective when choosing where and when they work. Flexibility is enabled by technological solutions that ensure employees can remain in contact and collaborate on projects even when not physically together in the office. The scheme is based on trust and is about creating an environment where responsibility, empowerment and autonomy are valued within the company. The scheme has been recognised by numerous awards. The introduction of OTWYW resulted in a 2017 Via Bona award in the category of Family, Gender Equality, and Equal Opportunities Friendly Employer 2017; and Glassdoor cited OTWYW as a reason for ranking Swiss Re amongst the top 20 global companies for employee benefits and perks in 2017.

Source: Swiss Re (2019[31]), Own the Way You Work, www.swissre.com/Library/own-the-way-you-work.html.

Recommendations for creating a supportive working environment for employees:

Raise the job satisfaction of Slovak workers by promoting a working environment where workers’ contributions are recognised, valued and rewarded. To address the low job satisfaction of workers in Slovak firms, the government should promote firms to move towards “high road strategies” where employees’ skills are considered an integral part of a business’s competitive advantage. In order to do this, the Slovak government and stakeholders (including employer organisations and trade unions) should promote a culture in firms that gives employees more ownership and responsibility over their work, and where their contributions are recognised, valued and rewarded through career advancement. Soft regulations should also be applied (see Opportunity 2), such as raising awareness of the issue by including it in government strategies and information campaigns, as well as publicly awarding good performers (see Box 5.3 for a relevant example).
Raise employee engagement by strengthening employee representative structures in Slovak firms. To raise the involvement of employees in firms, the Slovak government should expand and strengthen the role of employee representative structures, most notably works councils. The government could consider making legislative changes to ensure that works councils become more active and effective, and raise awareness of the benefits of works councils. Trade unions should aim for a more active role in setting standards and agreements on skills development and workplace practices.

Strengthening the skills and motivation of management staff

It is important that the individuals responsible for the implementation of workplace practices have the skills, motivation and expertise to implement them. In many SMEs this individual is often the employer or entrepreneur, but for larger firms it is often the management level. For the successful adoption of HPWP in organisations, it is crucial to have all management staff on board and equipped with the right skills.

Strong and effective management has various benefits for firms, and is associated with higher levels of employee engagement, willingness to invest effort in work and enjoyment of work. Furthermore, there is evidence that managers with more advanced management skills are more likely to innovate, launch new products and services, adopt higher quality-based product market strategies, and be aware of what kind of practices are needed to improve firm performance (UKCES, 2014[23]).

In consultations with stakeholders, the limited capacity and knowledge at the managerial level was frequently identified as a barrier to the implementation of HPWP in Slovakia. The share of firms with professional management, defined as professional managers chosen for merit and qualifications, is comparatively low in Slovakia (see Figure 5.9). An aggregate management quality index based on input from workers gives Slovakia one of the lowest scores in the EU, and shows that employees are not satisfied with their management (Eurofound, 2019[17]). Moreover, 17% of managers appear to be low skilled, as measured by the Survey of Adult Skills (PIAAC) (OECD, 2019[4]). Consequently, many Slovak firms are not yet implementing management practices that are considered to have strong workplace outcomes, with a small share of employers adopting management practices that are demonstrated to result in high well‑being in workplaces (practices referred to as “systematic and involving” and “interactive and involving”) (Eurofound, 2015[18]). The OECD Skills for Jobs database shows large shortages in “businesses and management” knowledge in Slovakia (OECD, 2018[32]), and the SBA (2017[33]) acknowledges that there is a shortage of experienced managers, especially for SMEs. It is projected that current shortages in management will deepen, as managers are the occupation with the largest projected increase in employment between 2016 and 2030 (Cedefop, 2019[34]).

Figure 5.9. Reliance on professional management

Despite the comparative weak performance across the different measures of quality and skills of management staff, there appears to be limited awareness of the need to address the issue, which is reflected in the absence of the topic of management quality in all major related strategies, including the Strategy of the Digital Transformation of Slovakia 2030. To raise management quality, a starting point could be to put the topic on the policy agenda by including it in these strategies (see also Opportunity 3 on strengthening these strategies). Moreover, Slovakia should aim to build awareness of managerial quality and skills through soft regulation. This could be a campaign where the benefits of good management practices are presented or where success stories are shared. Additionally, a central platform (e.g. database/website) with information on practices specifically for management, as well as practical information on implementation, could help to raise awareness and support change in workplaces.

A decentralised approach that leverages employer networks and sectoral strategies is often most successful in supporting change in workplaces (see Opportunity 2). For management practices, these networks could play a role in spreading know-how, expertise, and sharing good practices between managers. Various organisations with large networks of employers and managers could contribute to this, including chambers of commerce, business clusters, employer organisations and entrepreneurial associations. Some of these organisations already appear to be active in spreading knowledge. For instance, the Young Entrepreneurs Association of Slovakia has a management club where young entrepreneurs can gain experience about modern principles of management.

Like all adults in Slovakia (as discussed in Chapter 4), management staff from start-ups to large firms should have sufficient opportunities to upskill through targeted training and education (see Box 5.4 for international examples). However, surveys show that managers are currently not yet actively participating in training and development. PIAAC-data indicate that managers do participate more in adult education and training than employees not in management positions, but the share is low compared to the OECD average (64% in Slovakia and 71% on average across the OECD) (calculations based on the Survey of Adult Skills (PIAAC) (OECD, 2019[4]). Participants in workshops and meetings indicated that managers are increasingly aware of the need to upskill, and that management training is becoming more popular. Management training in Slovakia appears to be characterised by a large number of private providers. A Slovak study on the lifelong learning of managers, with an emphasis on self-education, shows that 73% are involved in self-education activities on a regular basis, but that a considerable 92% are not satisfied with the offer of educational courses provided by their employer (Fulková and Bošanský, 2009[36]). For many managers, insufficient time is the main barrier for participating in training, leading to 50% studying in the evening.

Box 5.4. Relevant international examples: Supporting upskilling for management staff

Manager programmes by the Polish Agency for Enterprise Development (PARP)

PARP has a number of programmes targeting managers. For instance, the SME Manager Academy finances training and advisory support for managerial staff in SMEs in the area of business management, including human resources. The academy aims to: 1) diagnose the needs of SMEs and skills gaps of owners and managers; and 2) train managers of enterprises from the SME sector. Financial support covers up to 80% of the project, while the remaining 20% is covered by the SME. PARP has also introduced the PARP Academy, which is an e-learning platform that offers 50‑free‑of‑charge online training sessions tailored to the needs of SME sector. The sessions are in four thematic areas related to setting up and running a business (e.g. managerial and personal skills”). Since 2006, over 180 000 participants have benefited from PARP Academy training.

Skillnet Ireland

In Ireland, the national agency, Skillnet Ireland, promotes training and upskilling for Irish companies. It designs tailored training programmes for companies and is overseen by a board consisting of representatives from the Department of Education and Skills and key industry stakeholders. Accessed through networks that link companies based on areas of interest and business needs, it facilitates networking, the sharing of best practices and the delivery of upskilling programmes for employees. A core part of the programme is aimed at upskilling managers. The “management development programme” offers courses for a wide variety of managerial needs. Managers can improve their leadership and communication skills, foundational skills, and techniques necessary for managing teams, as well as learn specific skills required in sectors such as retail. Courses are subsidised, and in 2018, 56 182 people were trained from 16 462 member companies.

Source: PARP (2019[37]), Polish Agency for Enterprise Development website, https://en.parp.gov.pl/; Skillnet Ireland (2019[38]), Skillnet Ireland website, www.skillnetireland.ie/.

Recommendations to strengthen the skills and motivation of management staff:

Raise awareness of the need to improve the quality of management staff and share knowledge and examples of strong management practices. Raise awareness by putting management quality on the policy agenda through its inclusion in strategies of the Slovak government and related institutions (see also Opportunity 3 on strengthening strategies). Introduce targeted campaigns where concrete benefits and good examples of good management practices are shared, and aim to utilise current networks of employers and businesses. Launch a central platform (e.g. database/website) with information on practices specifically for management, as well as practical information on implementation.
Raise the participation of management staff in education and training by improving and expanding the overall training offer that is relevant for management. To raise the skills of management staff, the Slovak government should aim to expand and strengthen the current (mainly private) training offer for managers to meet the demand for management training and to ensure that there are sufficient, relevant training opportunities. To expand the current offer, the Slovak Business Agency could play a role in introducing new programmes targeted at managers (see examples of programmes in Box 5.4), especially in SMEs. The Slovak government could consider raising financial support to existing training providers, and introducing related quality standards. Since insufficient time is a main barrier to participation for many managers, the government should promote flexibility of the training offer, for instance by introducing and/or supporting e-learning platforms.

Developing entrepreneurial attitudes from early on in the education system

Entrepreneurial attitudes are needed in firms to stimulate changes in working culture, adopt innovation and support future growth. These entrepreneurial attitudes appear to be strong and have shown improvement in Slovakia in recent years, with the number of new business increasing and the start-up ecosystem expanding (Institute for Entrepreneurship, 2018[39]; European Commission, 2018[40]). Slovakia has improved legislation to start businesses and moved up the Global Entrepreneurship Index from 41st in the world in 2015 to 36th in 2018. Slovakia is also a good example of female entrepreneurship, which is reflected by the share of female founders (23.5% compared to EU average of 15.6%). Furthermore, the SBA has a number of programmes to support start-ups, including the Start-up Sharks programme, the Incubation Programme and the Internships Programme.

Despite these positive signals, there are still areas related to entrepreneurship that can be improved, for instance, both the number of start-ups and the success rate of young companies remain low in general, and Slovakia is not successfully implementing several European Commission recommendations to strengthen the start-up ecosystem (European Commission, 2018[40]). One of the most important areas to improve is attitudes to entrepreneurship. Several stakeholders in workshops and meetings during this project expressed their concern for the lack of an entrepreneurial drive in Slovakia. The share of the population seeing entrepreneurship as a desirable career choice is below the EU average and shows a downward trend, and entrepreneurial intentions have been declining since 2011, despite a small increase between 2017 and 2018 (European Commission, 2018[40]).

To improve entrepreneurial attitudes, it is most effective to start developing entrepreneurial talent and skills early on in the education system. These entrepreneurial skills include general skills such as the ability to build teams, motivate, communicate, mentor, and develop, as well as engage in entrepreneurial activities (OECD, 2011[41]). In workshops and meetings, participants stressed the importance of starting early in developing these skills, and the OECD supports this approach (OECD, 2011[41]). Early exposure is essential for the development of entrepreneurial skills, and there is evidence of a strong correlation between perceived entrepreneurial skills and total early stage entrepreneurial activity (OECD, 2011[41]), as well as positive effects on job creation, economic success and innovation (OECD, 2015[42]). As a result, in the EU and other OECD countries, developing and promoting entrepreneurship in education has become a key policy objective, with several Nordic countries even developing specific entrepreneurship education strategies (European Commission/EACEA/Eurydice, 2016[43]).

For Slovakia, participation in entrepreneurship education appears to be above average – in 2012, 29% of survey respondents said that they had taken part in a course or activity at school related to entrepreneurship, defined as turning ideas into action and developing own project, compared with 27% across OECD-EU countries (European Commission/EACEA/Eurydice, 2016[43]). An example of entrepreneurship education in Slovakia is the Training Firms programme run by the Slovak Centre for Training Firms. Students, primarily at secondary vocational education and training (VET) schools, simulate the activities of firms by running a fictional training company, thereby expanding their entrepreneurial knowledge, developing transversal skills, and preparing them for the realities of the labour market.

However, the teaching of entrepreneurial skills in education can still be improved. Entrepreneurship education in Slovakia is cross-curricular – only part of the curriculum as a topic within other compulsory subjects – in primary and secondary education, and not a separate subject (compulsory or optional) as in Finland, Spain, Latvia and Estonia, for example (see Box 5.5). Slovakia does not have a specific national strategy for entrepreneurship education, like in a number of (mainly Nordic) countries, despite it being addressed extensively in the National Youth Strategy 2014-2020, and to a lesser extent in other education strategies (e.g. the concept of the “school firm” in the 2017 document National Programme for the Development of Education [“Learning Slovakia”]). Moreover, some schools and organisations find that entrepreneurial skills are insufficiently addressed in the regular curriculum and have too little emphasis on practical experiences. This has led to a number of private initiatives being launched in Slovakia, such as Junior Achievement Slovakia, which is a non-profit educational organisation that provides programmes to support entrepreneurial thinking (see Box 5.6).

Slovakia recently took steps to improve entrepreneurial education. A scheme and programme for supporting entrepreneurship education, prepared by the Ministry of Economy and the SBA, is currently in the approval process. This scheme will provide financial support to providers of entrepreneurship education and direct support to activities organised by the SBA. The initiatives have a broad target group, from kindergarten to primary and secondary education, as well as parents and adults. The Ministry of Economy has also included the topic of entrepreneurship education in current plans for a new agreement for the programme period 2021-2027, with the intention of having systemic support for entrepreneurship education at the national level.

Box 5.5. Relevant international example: Entrepreneurship education curricula and strategy

Estonian Entrepreneurship Education Development Plan: Be Enterprising! (2010)

The Estonian strategy for entrepreneurship education aims to raise awareness of entrepreneurship education, train teachers, provide teaching materials and allocate resources. Concrete actions include awareness raising activities via events and social networks, the development of materials and instructions for courses (both students and teachers), and an evaluation system. The strategy includes a map of entrepreneurial learning outcomes and focuses on integrating these into curricula. Entrepreneurship education is explicitly referred to in the curricula as a general skill, is a cross-curricular objective in ISCED 1-3, and is taught in several optional and compulsory subjects.

Source: European Commission/EACEA/Eurydice (2016[43]), Entrepreneurship Education at School in Europe, https://doi.org/10.2797/875134.

Box 5.6. Relevant national examples: Programmes and initiatives for the development and promotion of entrepreneurial skills of young Slovaks

Junior Achievement (JA) Slovakia

JA Slovakia has been implementing practical training programmes in elementary and secondary schools more than 25 years. As a non-profit educational organisation, JA Slovakia is supported by a long list of partners from the private sector, as well as Slovak government. The mission of the organisation is to provide young people in Slovakia with above standard education through practical programmes, to support entrepreneurial and economic thinking and offer preventive solutions for youth employment. The programmes are in entrepreneurial, economic and financial education, and range from JA Business Basics where pupils in elementary school get practical information on how businesses operate, to JA Applied Economy where secondary school student set up their own businesses. JA Slovakia also trains teachers in a variety of modern methods of education, providing them with didactic tools, textbooks and methodological manuals. JA Slovakia also organises short-term projects that often complement or are an extension of regular curricula, such as the Innovation Camp, where students test their ability to work on real practical problems in one day.

Duke of Edinburgh's International Award

The Duke of Edinburgh's International Award is an international youth achievement award that aims to equip young people for life and work. The awards enables young people aged 14 to 24 to actively use their free time to develop life skills that will make a difference to themselves, their communities and the world. Worldwide, millions of young people have participated in the award, and in 2007 it was introduced in Slovakia by the British International School in Bratislava. Since late 2014, a team of educators, with strong support from business leaders, has been working on the opening of the national office of the award in Slovakia. The main goal of the national office will be to spread the award in Slovakia.

Source: Junior Achievement Slovakia (2019[44]), Junior Achievement Slovakia website, www.jaslovensko.sk/en/; Duke of Edinburgh's International Award (2019[45]), Duke of Edinburgh's International Award website www.dofe.sk/en/about-award/.

Recommendation for developing entrepreneurial attitudes from early on in the education system:

Improve attitudes towards entrepreneurship by expanding and strengthening public and private programmes in the education system that develop entrepreneurial skills. The Slovak government should give entrepreneurship education a more prominent position in the curricula, as well as continue and potentially expand support for entrepreneurship education, building on the recently proposed scheme and programme for supporting entrepreneurship education by the Ministry of Economy and the Slovak Business Agency. Furthermore, the government should more actively involve representatives of enterprises in the teaching and design of courses, and potentially develop a strategy for entrepreneurship education (see Box 5.5 for an international example).

Opportunity 2: Providing incentives and support to Slovak firms for the adoption of HPWP

Strong productivity growth and the success of the Slovak economy in recent years has largely been driven by joining global value chains and supported by large foreign investment inflows. This has created a competitive export-led manufacturing industry with specific specialisation in automotive and electronics sectors (OECD, 2019[6]). As a result, economic success in Slovakia is based on a narrow range of industries and driven by a small number of large, international firms; for example, the ten largest exporters, all of which are foreign, account for 40% of total exports (OECD, 2017[46]). The overall strong average economic performance therefore hides large disparities.

SMEs in particular, which are predominantly domestically owned, are increasingly falling behind, thereby creating a “two speed economy”. Despite the comparatively large share of SMEs in the Slovak economy – they employ three-quarters of the active labour force – these firms have benefited less from recent growth. Since 2009, there has been a particularly pronounced divergence in productivity performance between the mainly foreign large companies and the mainly local SMEs. This divergence is especially evident in the services sector, where the productivity of SMEs has dropped since 2009 (see Figure 5.10) (OECD, 2019[6]).

Figure 5.10. Productivity growth by firm size and sector

Real value added per person employed, average annual change, percentage, 2009-14 or latest available year

The divergence in productivity is reflected in the adoption of HPWP. Strengthening the adoption of HPWP in SMEs and local firms could help to reduce the gap and counter the trend of divergence, and would support broader, more sustainable economic growth in Slovakia. Encouraging local firms to modernise their workplaces could have significant returns in efficiency and productivity (OECD, 2019[6]).

Slovakia needs to introduce targeted measures and initiatives that directly support the adoption of HPWP in Slovak firms, in addition to improving the conditions that facilitate adoption (as discussed in Opportunity 1). This opportunity will explore how current support measures to firms could be strengthened and expanded to raise the adoption of HPWP. It will also explore how a decentralised approach, supported by employer groups, business clusters and sectoral associations, could facilitate spillovers of knowledge to the local SMEs that are left behind.

Raising awareness of skills use, workplace practices and support programmes

The low priority given to skills utilisation in workplaces by policy makers is partly due to the fact that there is little precedent for public intervention at the level of the workplace, and insufficient clarity for policy makers about their role and what levers to use to influence workplace change (OECD/ILO, 2017[13]). For governments to improve the work environment and engagement of employees in Slovak firms, a different policy approach is needed that includes all stakeholders and has a significant role for soft regulation, i.e. non-binding persuasive policy intervention, such as publicly recognising strong performers and awareness raising campaigns (Alasoini, 2016[47]).

Policies that aim to raise awareness of the relevance of effective skills use and HPWP could be a relevant first step to strengthen skills use performance in Slovakia. In workshops and meetings during this project, the lack of awareness of the need and relevance of workplace innovation in many SMEs was considered a major issue, and participants indicated that a large number of firms are not aware of the benefits. To raise the awareness and motivation of employers and entrepreneurs to adopt these practices, the benefits of HPWP should be made tangible and clear, especially given that they are not always directly visible. For instance, results from implementation, such as a rise in productivity, are not immediate and do take time (OECD/ILO, 2017[13]). Workplace practices should also be explained in a practical and clear manner, including by showing examples of good and bad practices.

In Slovakia, there are already several campaigns that can be considered good examples of how to raise awareness about innovation and entrepreneurship. For instance, the Slovak government introduced the Campaign to Increase the Innovation Performance of the Slovak Economy (see Box 5.7), and the SBA organises several campaigns for entrepreneurship and doing business, such as Businesswoman of Slovakia, an award for successful women in business and their ability to establish companies firmly in the market, and the European Enterprise Promotion Award (EEPA), which aims to recognise innovation and rewards successful public bodies and public-private partnerships in promoting entrepreneurship and doing business. Various other organisations have comparable competitions, for instance, the Young Entrepreneurs Association of Slovakia introduced the Business Idea of the Year, a campaign with a EUR 300 000 price and supported by 400 TV commercials, and the Junior Chamber International launched the Student Business Awards and Creative Young Entrepreneur Award. While these are all good examples of campaigns, the competitions primarily focus on entrepreneurship, and could possibly be expanded with competitions that have a more direct link to workplace practices and innovation (see Box 5.8 for an international example).

Awareness could also be raised through the dissemination and centralisation of information. In Slovakia, employers can obtain access to information on SBA activities through National Business Centres. The front offices of these centres aim to provide information on all financial and non-financial services and products to their clients. However, stakeholders in workshops and meetings expressed the fact that information on support is still often dispersed. While there are currently many support programmes for SMEs, many employers are not aware of them; even some participants in workshops and meetings were not fully aware of the activities of the SBA, indicating that the organisation could do more to promote its work. Many participants expressed support for a centralised portal or database with relevant information for employers and entrepreneurs. There is already a website in Slovakia, www.slovensko.sk, which provides an overview of available support measures by the SBA and other organisations, as well as guidelines and information on application and procedures. However, this portal does not include, for instance, more general relevant information on workplace innovations, and it might be helpful for employers and entrepreneurs to present examples of good practices and successful projects.

Box 5.7. Relevant national example: Awareness raising campaign for innovation

Campaign to Increase the Innovation Performance of the Slovak Economy (Zvýšenie inovačnej výkonnosti slovenskej ekonomiky)

To increase the innovation performance of the Slovak economy, a set of targeted activities in all Slovak regions was introduced as a part of a national project and implemented by the Slovak Innovation and Energy Agency (SIEA). These include a media campaign, innovation workshops, competitions, a hackathon and seminars at universities. In addition to raising innovation performance, the campaign aims to increase the amount of pending patents, the longevity of SMEs and innovation culture within SMEs, while bolstering the interest of students in sciences and entrepreneurship. Given the limited awareness of the importance of innovation in Slovakia, activities also aim to strengthen creativity and innovative spirit while fostering a pro-innovation climate in society. Regional consultation centres providing specialised innovation and technological guidance services have been set up, and a number of quantifiable indicators will be analysed to evaluate the project.

Source: SIEA (2019[48]), Increasing the Innovation Performance of the Slovak Economy, https://kamidueurofondy.sk/projekty/362.

Box 5.8. Relevant international example: International awareness raising campaigns

European Workplace Innovation Network (EUWIN)

The European Commission created EUWIN in 2013 to stimulate awareness of workplace innovation and to share knowledge and experience between enterprises, researchers, social partners and policy makers across the EU. The aim of EUWIN as a learning network (accessible at http://portal.ukwon.eu/) is to sustainably improve the performance of organisations and the quality of jobs. The network distributes evidence on the benefits of modernising the workplace and working conditions, and focuses on awareness raising via dedicated regional workshops and social media. It also provides a valuable resource for managers and employee representatives through its Knowledge Bank.

Source: OECD/ILO (2017[13]), Better Use of Skills in the Workplace: Why It Matters for Productivity and local Jobs, https://dx.doi.org/10.1787/9789264281394-en.

Recommendations for raising awareness of skills use, workplace practices and support measures:

Promote the benefits of skills use and workplace innovations through campaigns and by introducing a centralised portal with relevant information. To raise awareness of the relevance of skills use and HPWP, the Slovak government and related stakeholders should expand existing campaigns (e.g. the European Enterprise Promotion Award) and/or introduce new ones that more directly emphasise the need for workplace innovation (potentially based on or an extension of activities by EUWIN – see Box 5.8). The Slovak government could also expand the flow of information on workplace practices in general, for instance by introducing a centralised portal or website that clearly and practically summarises all relevant information on workplace innovations, as well as shows examples of good practices and descriptions of successful projects. Possibly, such a portal could be combined with, or an extension of, the centralised portal for management practices, as recommended in Opportunity 1.
Expand awareness of existing support measures for firms, especially among SMEs. The SBA and other organisations providing support to firms should introduce targeted campaigns (e.g. through social media) to raise awareness among SMEs of their support programmes. Existing online platforms, including www.slovensko.sk and the SBA website, should be better promoted to raise awareness of available support measures and the required applications and procedures.

Strengthening and expanding support measures to firms

For many firms, it is not the lack of awareness, but the lack of resources and know-how that prevents them from adopting HPWP (OECD/ILO, 2017[13]). While promoting HPWP through soft regulation is important, it may not be sufficient. In all countries, it is primarily SMEs that have difficulties in adopting HPWP, often due to a lack of a human resources (HR) function. For change to occur in workplaces, employers must have significant buy-in and investment in the benefits of prioritising and developing HR. An additional complication is the need for firms to implement a bundle of HPWP, given that partial implementation of HPWP may not result in significant performance gains (OECD/ILO, 2017[13]). Public interventions can help to incentivise actions by employers, especially SMEs, including through direct interventions, expert consultation and business coaching programmes (see Box 5.9 for international examples).

Slovakia has expanded support to SMEs in recent years, and many of these changes are part of, or based on, principles presented in the Small Business Act. The act is an overarching framework for EU policy on SMEs that aims to improve entrepreneurship, simplify the regulatory and policy environment for SMEs, and remove barriers to their development. In Slovakia, implementation of the act is overseen by a working group under the patronage of the Ministry of Economy, and with representation from the SBA and nine ministries. The SME business community is involved and consulted on implementation through SME Envoy, a group of representatives of Slovak SMEs.

Slovakia’s performance across different elements of the Small Business Act has been mixed (European Commission, 2018[40]). Since 2008 it has made significant progress in access to finance for SMEs, which now have access to finance from a variety of sources, including ministries, non-profit organisations (including microloans and risk capital schemes by the SBA), private banks, and development banks such as the European Bank for Reconstruction and Development and the European Investment Bank. However, as already discussed, performance in various measures of entrepreneurship, skills and innovation has deteriorated since 2008 (SBA, 2017[33]).

The SBA is the main organisation providing support to SMEs in Slovakia. In addition to financial support and various projects aimed at promoting clusters, innovations, and start-ups, the SBA has a number of active non-financial support programmes for SMEs. For example, it runs a programme for education, training and consulting to selected groups of people interested in doing business. The programmes involve consultation services, the development and formulation of business plans for future businesspersons, and short-term education, all free of charge. National Business Centres offer co-working areas, creative points, and a number of projects to support firms throughout their life cycle. The Acceleration Programme offers professional counselling, training courses and activities to develop business potential, increase awareness about entrepreneurship, and present success stories and good business practices; the Incubation Programme is designed for starting entrepreneurs; the Internship Programme is where starting entrepreneurs can apply for participation in professional events, fairs and shows in the EU; and the Growth programme supports the growth of SMEs in Slovak and/or foreign markets. The SBA also implements a number of European initiatives. For instance, it is involved in the Enterprise Europe Network that brings together almost 600 business support organisations from more than 50 countries. The network is linked through databases, shares knowledge and sources technologies and business partners across all network countries.

As discussed in the section on current arrangements, the activities of other organisations, such as the Slovak Innovation and Energy Agency (SIEA) and the Slovak Investment and Trade Development Agency (Slovenská agentúra pre rozvoj investícií a obchodu, SARIO), indirectly affect skills use and workplaces practices. Many of these organisations’ programmes are part of the Operational Programme “Research and Innovation”, and activities vary from running regional consultation centres for entrepreneurs (SIEA), to activities stimulating the internationalisation of SMEs through co-operation and advisory services to SMEs (SARIO).

While many of these programmes are effective in promoting and supporting change in workplaces, they can be improved in several ways. First, the complex administrative procedures for support measures are considered a major barrier for many firms, especially SMEs (SBA, 2017[33]), and within the framework of the Small Business Act there is a push to tackle complex administrative procedures (European Commission, 2018[40]). Participants in workshops ranked the recommendation to reduce the administrative burden for support measures second highest in a survey, and stakeholders consulted during the project indicated that the current administrative burden reduces the motivation of potential applicants to apply for support. The general business environment is also suffering from the negative impact of administration, including starting a business and obtaining permits and licenses (World Bank Group, 2019[49]). Criticism of Slovak bureaucracy appears to be widespread, and the Entrepreneurs Association of Slovakia even organises a competition for Bureaucratic Absurdity of the Year.

The Slovak government has launched various initiatives to decrease administrative burden and bureaucracy. The Ministry of Economy is currently preparing the fourth “anti-bureaucratic package” of measurements that should help to improve the business environment and decrease the administrative burden for companies and entrepreneurs. In this process, companies and the public can post their ideas and participate in the preparation of the package (Ministry of Economy, 2019[50]). In addition, the Slovak government has adopted the RIA2020-Strategy for Better Regulation (OECD, 2019[6]). This long-term strategy includes a comprehensive approach to whole-of-government regulatory policy, including by focusing on improving both ex ante and ex post evaluation of regulations.

Slovakia is not the only country that faces the challenge of growing perceptions that regulatory and legislative inflation stifles economic activity, and almost all OECD countries aim to reduce the administrative burden for businesses. For instance, the European Commission launched the Action Programme for Reducing Administrative Burdens in 2007, which describes a method to quantify administrative burdens and sets specific targets to reduce them (the so-called Standard Cost Model). Many countries have applied related models and methods to reduce administrative burdens (see Box 5.10 for an example) (OECD, 2018[51]).

Given that a large share of support programmes in Slovakia are funded by the EU, with related administrative requirements for transparency of funding, some participants in workshops and meetings consider EU legislation a main driver behind the administrative burden. Representatives of Slovak SMEs are generally critical of EU legislation, primarily referring to the bureaucracy and costs of administrative processes for companies. In the EU, only the Czech Republic and Austria have a more negative view of the bureaucratic burden related to the application of EU legislation (SBA, 2017[33]). However, requirements based on EU legislation are often less stringent than Slovak legal standards (the so-called gold-plating effect), and Slovakia should aim to review and minimise the occurrence of these situations where legal standards are unnecessary stringent (SBA, 2017[33]).

Participants and stakeholders in workshops and meetings during the project indicated that there is room to consolidate and align support measures, which would contribute to a reduction in administrative burden (SBA, 2017[33]). For example, the fragmentation of initiatives and instruments limits the growth of start-ups (European Commission, 2018[40]). There is sufficient room to further unify and simplify obligations for SMEs, and a centralised portal where obligations are explained in a clear and understandable form to SMEs could support accessibility.

Furthermore, there are signs that the quality of current support programmes could be improved and the scope could be expanded. Mentoring and coaching programmes are often successful in changing organisational practices, especially in co-operation with the business environment. However, since these work practices are often sector specific, the number of organisations and consultants with the required expertise is often limited (OECD/ILO, 2017[13]). Moreover, due to a strong reliance on European funding, many programmes focus on regional development and thereby exclude comparatively strong performing regions such as the Bratislava region. Participants in workshops and meetings also expressed that as a result of many programmes targeting start-ups and innovative SMEs, more conventional SMEs are regularly excluded from programmes. To expand support to firms, a number of stakeholders proposed adding the adoption of workplace practices (or at least related expenditures) to an existing measure to support innovation in Slovak firms, where research and development (R&D) expenditure can be deducted from taxes. However, the implementation of this measure has been limited so far, partly due to complicated application procedures for SMEs (Baláž, Frank and Ojala, 2018[52]).

Box 5.9. Relevant international examples: Supporting firms in the adoption of HPWP

High-Performance Working Initiative (HPWI) New Zealand

New Zealand has centred its pursuit of workplace innovation on improving productivity performance, and has singled out the poor utilisation of skills in the workplace as a key policy issue. The High‑Performance Working Initiative (HPWI) provides business coaching through consultants for SMEs to help streamline work practices to improve performance and productivity, while also increasing employee engagement and satisfaction. Public funding is provided, but the firm contributes half the funding.

Initiatives to support the adoption of HPWP in Singapore

In Singapore, interventions to support the adoption of HPWP involve funding and other types of support for employers to reshape their workplaces and move towards higher-value-added production. These can include strengthening HR systems to better link skills acquisition to career trajectories, hiring consultants to review compensation structures to retain skilled workers, or hiring consultants to assess the organisation’s training needs and to adapt available training to these specific needs. An example of such a programme is the Enterprise Training Support scheme, introduced in 2013, which aims to 1) raise employees’ productivity and skills levels; 2) attract and retain employees by developing good human resource management systems and practices tied to training; and 3) attract and retain valued employees by benchmarking compensation and benefits.

Source: OECD/ILO (2017[13]), Better Use of Skills in the Workplace: Why It Matters for Productivity and Local Jobs, https://dx.doi.org/10.1787/9789264281394-en.

Box 5.10. Relevant international example: Reducing administrative burden for businesses

Regulatory reform in Germany to reduce the costs of regulation

Following regulatory reform, Germany is one of the few countries where business perceptions of the burden to comply with regulatory requirements have improved in the last ten years. Germany has put a strong emphasis on the reduction of the costs of regulation, including by introducing the “One-In, One‑Out” rule in 2015, and has made several improvements to its regulatory policy system, especially regarding ex ante impact assessments. Institutionally, all regulations are subject to quality control by the independent National Regulatory Control Council (NKR), and there is a central co-ordinating and monitoring body (the Better Regulation Unit in the Federal Chancellery) that implements the programme on better regulation and bureaucracy reduction. Overall, regulatory reform has achieved various reductions in compliance costs for businesses, citizens and the administration. For instance, by simplifying electronic invoicing, the administrative burden for business was reduced by circa EUR 3.3 billion per year. Additional key elements of the regulatory reform include the shortening of retention periods under commercial, tax and social legislation, e-government activities, the harmonisation of requirements for financial and payroll accounting, and advanced electronic signatures for businesses.

Source: OECD (2018[51]), OECD Regulatory Policy Outlook 2018 https://dx.doi.org/10.1787/9789264303072-en.

Recommendations for strengthening and expanding support measures to firms:

Improve the accessibility of support programmes for SMEs by reducing the administrative burden. The Slovak government, in collaboration with the Slovak Business Agency, employer organisations and other stakeholders, should build on existing initiatives and strategies, such as the “anti-bureaucratic packages” by the Ministry of Economy and the RIA2020-Strategy for Better Regulation, to reduce the administrative burden for companies. The Slovak government should ensure that legislation for support measures is not unnecessarily strict, i.e. stricter than EU legislation, regular audits should be performed to remove any unnecessary bureaucracy, and the Slovak government should actively work towards further simplification of administrative procedures.
Strengthen support to firms by consolidating and aligning support measures and by offering programmes to all firms. The accessibility of support programmes can be improved by ensuring that the many initiatives currently available are well aligned and consolidated. There is sufficient room to further unify and simplify obligations for SMEs. A centralised portal where support measures are presented and where obligations are explained in a clear, understandable and interactive form to SMEs would support accessibility. This portal could be combined with, or an extension of, the centralised portal with relevant information on workplace innovations, good practices and descriptions of successful projects, as described earlier. Moreover, support should be accessible for firms in all regions, not just the most innovative firms and start-ups.

Leveraging employer groups, clusters and sectoral associations for the adoption of HPWP and to facilitate knowledge spillovers

To support the adoption of workplace practices in Slovak firms, the government should aim for a decentralised approach at the level of employers and sectors. Evidence suggests that approaches that leverage employer networks or collaboration at the sector level are cost-efficient and potentially more effective at catalysing change than centralised approaches (OECD/ILO, 2017[13]). These networks and clusters can take a number of forms, ranging from informal networking to formal networks with a central hub organisation and membership structure, fees and formal governance arrangements. In workshops and related meetings during this project, several participants, including employers, stressed the importance of these networks and associations in Slovakia (OECD/ILO, 2017[13]).

Responding to the challenge of a two-speed economy in Slovakia, these networks and organisations could not only support the sector-specific adoption of HPWP, but could also be utilised to facilitate knowledge spillovers between large international and smaller local firms. There is evidence of the positive relationship between a country’s openness to multinational production and economic growth, and often this relationship is attributed to knowledge spillovers – i.e. the foreign multinational creates positive productivity externalities to domestic firms. These spillovers appear in different forms, including direct knowledge transfers through partnerships, opportunities to observe and learn the technologies of foreign firms, as well as interaction and movement in the labour market (Alfaro and Chen, 2013[53]). Slovakia could make better use of the presence of large foreign enterprises to strengthen the extension of technological knowledge and management expertise to local businesses (OECD, 2019[6]) (see Box 5.11 or international examples of policies that stimulate knowledge spillovers).

In Slovakia, chambers of commerce are very active in bringing together employers on a regular basis. The main public body representing Slovak businesses is the Slovak Chamber of Commerce and Industry (SOPK). The SOPK co-operates with national and regional authorities, unions and sectoral associations to promote favourable working conditions and environment for Slovak businesses. The SOPK brings together its members in specialised seminars and events aimed at raising awareness and sharing information, as well as in training sessions and business meetings. The American Chamber of Commerce (AmCham) in Slovakia is another very active chamber, and with 330 international and local firms it is one of the largest chambers of commerce in Slovakia. In addition to informing its members and advocating for their businesses, AmCham organises numerous events every year, where local and foreign business partners, clients, Slovak and American politicians can meet. Events vary from business breakfasts to workshops on specific topics.

Several organisations and associations, in addition to the SBA, support the exchange of information and practices among employees. For instance, the Entrepreneurs Association of Slovakia (Združenie podnikateľov Slovenska, ZPS) has represented the private business sector since 1989. Its members are mainly SMEs, as well as other associations. The ZPS focuses on issues related to the development of a favourable business environment, and many member associations are active in bringing together employers. For example, the Young Entrepreneurs Association of Slovakia brings together entrepreneurs under the age of 40 in formal and non-formal networking meetings, and the Slovak Franchising Association is a platform for networking and best practice exchange through seminars, workshops and discussions for aspiring or active entrepreneurs in franchising.

The EAS is one of the founding members of the National Union of Employers of the Slovak Republic, which is an umbrella organisation that unites employers and participates in national level tripartite consultations. Other main employer organisations are the Federation of Employers Association of the Slovak Republic (Asociácia zamestnávateľských zväzov a združení, AZZZ), the Association of Towns and Communities (Združenie miest a obcí Slovenska, ZMOS), and the Association of Industrial Unions (Asociácia priemyselných zväzov, APZ). There are also employer collaborations in specific sectors, for instance the IT Association of Slovakia (ITAS) unites all national and international firms in the private IT/ICT sector, the Association of Digital Marketing Agencies brings together primarily professional agencies active in the Slovak digital marketing field, and the Košice IT Valley is a cluster in the Košice region that unites and enforces co-operation between members in the area of ICT. Košice IT Valley is one of the 11 members of the Union of Slovak Clusters, which since 2010 has promoted the creation and development of cluster policy in Slovakia, and aimed to strengthen research, product development, innovation and technology transfer, education, and the exchange of information related to clusters.

Despite these many good initiatives, these networks can be further improved. Like most countries, the companies most in need of enhanced adoption of HPWP are not the firms most actively participating in these initiatives. Under-represented and disadvantaged groups of entrepreneurs typically have more limited networks, often because of their reliance on friends and family who typically face similar disadvantages (OECD/European Commission, 2015[54]). This is a challenge in Slovakia; for instance, chambers appear to primarily target international and large firms, and many of the associations described above focus on entrepreneurial firms and competitive sectors. Based on this, it is likely that local SMEs experiencing negative productivity growth are under-represented in these networks. Moreover, participants in workshops and meetings during this project indicated that a culture of sharing information could be strengthened. Currently, a competitive economy with labour shortages in various sectors is hampering co‑operation between firms due to fear of loss of talent (OECD, 2019[6]). While the current economic situation is especially challenging, facilitating collaboration between competitors will always be complex, and Slovakia should actively respond to this challenge.

Policy makers should aim to develop high-quality, inclusive networks with clear and tangible benefits for all participating firms. This could be achieved by ensuring a high degree of interaction between members of the network and the broader business community, thereby creating a greater pool of resources for its members. Slovakia could consider introducing measures to promote participation in networks, for example by linking networks with training and access to financing, and by supporting the use of low cost and easily accessible online networks. Networks could also be strengthened by developing clearly defined objectives, and by designing them in a way that ensures ownership by the members to build trust in the network (OECD/European Commission, 2015[54]).

Box 5.11. Relevant international examples: Programmes facilitating knowledge spillovers

J-Good Tech - Japan

In Japan, SME Support Japan, a government run organisation overseen by the Ministry of Economy, Trade and Industry, promotes SMEs in Japan and abroad. SME Support Japan runs the initiative J‑Good Tech, an online business matching site that connects SMEs with larger domestic and foreign companies. The overall aim is to support the creation of strategic partnerships between businesses and facilitate the exchange of information and ideas. The service is free to use, and companies are screened before they are listed on the site. Currently 18 100 companies in Japan and abroad use the service, resulting in hundreds of SMEs and large companies exchanging ideas and collaborating on products.

Competitiveness clusters - France

France has sought to facilitate knowledge spillovers between large and small firms in the same sector by creating competitiveness clusters (pôles de compétitivité) in the regions of France identified with a particular specialisation. The aim of grouping companies together is to realise partnerships between different actors with complementary skills and knowledge, develop collaborative R&D projects, and enable targeted support to clusters on issues such as access to private financing and skills management. The clusters also intend to attract companies and to avoid business relocation to other countries. As part of the clusters, a wide number of services are offered to SMEs to promote their participation.

Source: J-Good Tech (2019[55]), J-Good Tech website, https://jgoodtech.jp/pub/ja/; French Ministry for the Economy and Finance (2019[56]), Competitiveness clusters, https://competitivite.gouv.fr.

Recommendations for leveraging employer groups, clusters and sectoral associations for the adoption of HPWP and to facilitate knowledge spillovers:

Strengthen current employer networks, clusters and associations, including by stimulating the participation of local SMEs. The Slovak government should build on the strong existing employer networks, clusters and associations, and stimulate the participation of firms most in need of workplace innovation (especially local SMEs). In order to do this it should aim to develop high‑quality, inclusive networks with clear and tangible benefits for all participating firms. This can be achieved by ensuring a high degree of interaction in networks, introducing measures to promote participation in networks (e.g. by linking networks with training and access to financing), developing clearly defined objectives for these networks, supporting the use of online networks, and designing networks in a way that ensures ownership by the members to build trust in the network. The Slovak government could also consider introducing campaigns targeted at local SMEs that present the benefits of networks to stimulate participation.
Introduce programmes that facilitate and promote the exchange of knowledge between large international firms and local SMEs. To make better use of the presence of foreign enterprises, the Slovak government should aim to enhance knowledge spillovers to local businesses. Slovakia could consider introducing tools to connect SMEs with larger domestic and foreign companies to develop strategic partnerships and to facilitate the exchange of technological know-how and/or management experience (see international example in Box 5.11).

Opportunity 3: Enhancing the governance of policies and strategies that affect skills use

Implementing reforms is challenging for governments, especially when policies involve a wide range of actors and entities, such as different levels of government and stakeholders, and cut across multiple policy sectors. Across the spectrum of policy sectors, policies aimed at improving skills outcomes – in both the development and use of skills – are a prominent example of complexity. In all OECD Skills Strategy projects so far, the inherent difficulty of co-ordinating and aligning different policy sectors and actors has been one of the main challenges impeding more the effective and efficient implementation of skills policies. For Slovakia, as in all OECD countries, these governance arrangements can always be strengthened, with performance across different measures of sustainable governance below OECD averages (see Figure 5.11).

Figure 5.11. Sustainable Governance Indicators, executive capacity, 2018

This opportunity will expand on the role of visions, strategies and action plans to raise Slovakia’s performance in skills use and workplace practices. It will also explore the need for continuity, consistency and better implementation of these initiatives. The relevance of the whole-of-government approach and stakeholder engagement for the Slovak skills use policy context will be discussed, and the role of Slovakia’s public sector, especially its effectiveness and efficiency, will be assessed.

Strengthening visions, strategies and action plans for the growth and innovation of firms and workplaces

To bolster future economic and social prosperity, Slovakia should aim to move a broad range of sectors up the value chain and raise productivity growth, especially in SMEs and local firms (OECD, 2019[6]). This should be supported by the more effective use of skills and the adoption of HPWP. To enforce such an economic transformation, visions, strategies and action plans are essential for setting goals and clarifying roles for government and stakeholders. However, many stakeholders expressed their concerns about existing strategies. In a small survey among participants in workshops, one of the most important recommendations was to ensure that strategies and policies on skills use, workplace practices and related industrial policies have a long-term vision, continuity and focus on implementation.

In Slovakia, there are several national, regional and sectoral strategies related to economic development, human and social capital, industry, and innovation (see overview in Chapter 1). These strategies could be utilised to put the topics of skills use and workplace practices on the policy agenda and to create momentum for reform. However, like in many OECD countries, these topics have not been a focus of policy makers, and are only addressed indirectly in some strategies. Arguably, the Strategy of the Digital Transformation of Slovakia 2030 is the strategy most directly related to the topic of skills use and workplace practices. Other strategies that address these topics indirectly include the Strategy for Smart Specialisation that is currently being developed, and co-ordinated by the Smart Industry Platform, a working group of multidisciplinary experts from industry, academia and government. In 2018, the latest Action Plan for Smart Industry (Industry 4.0), which targets five areas ranging from “research and innovation” to “information and promotion”, was approved by the Slovak government. The action plan touches on workplace innovation, managerial skills and employee engagement, but does not appear to propose any specific measures that affect workplace practices (Vantuch and Jelínková, 2019[58]).

These strategies, visions and actions plans, among others, show the determination of the Slovak government to transform the economy, but a number of conditions could improve their effectiveness. First, stakeholders in workshops and meetings during this project considered the implementation of strategies and programmes a major issue. In Slovakia, strategies tend to be well developed and comprehensive, but their implementation is often comparatively weak. This finding is supported by data from the 2018 Sustainable Governance Indicators (SGI), which scored Slovakia 5.3 (on a scale of 10) in terms of “implementation” as a category of executive capacity, compared with 6.8 on average across OECD countries (see Figure 5.11) (Bertelsmann Stiftung, 2019[57]). According to stakeholders, this is partly the result of limited continuity and a lack of long-term vision, which is often the consequence of dynamics related to the policy cycle. As will be discussed in the next section, the OECD Skills Strategy considers broad, early and extensive engagement of all levels of government and all relevant stakeholders key to improving the continuity of strategies.

Second, consistency and alignment of the large number of existing action plans and strategies in Slovakia should be enforced. Stakeholders expressed that strategies are sometimes even contradictory. There are, however, already various initiatives that aim to improve the consistency and co-ordination of policies and reforms. The Strategy of the Digital Transformation of Slovakia 2030 is a good example of a long-term vision that aims to align future strategies and programmes; and the Department for Agenda 2030 Co‑ordination of the ÚPVII – tasked with implementing the UN Agenda 2030 – intends to strengthen elements of strategic planning and enhance coherence among economic, social, and environmental policies. The Slovak government also approved the Proposal of a Methodology and Institutional Framework for the Creation of Public Strategies by ÚPVII, which aims to introduce an adequate and applicable system to guide and unify the process of preparation, design and implementation of strategic documents. Potentially, such a system would contribute to the better alignment of existing policies.

Third, outcomes of strategies could be improved through better evaluation and monitoring. The European Semester of the European Commission, which aims to co-ordinate the economic policies of EU countries, expressed concerns about the sporadic use of evaluation and in-depth ex post assessment of policies, as well as the limited use of evidence-based analysis in policy making in Slovakia. For instance, policy decisions in Slovakia are only rarely supported by cost-benefit analyses (European Commission, 2018[59]). These findings are aligned with perceptions of participants in workshops and meetings, who expressed that there is no culture of evaluation driven design, and a comparatively low score for “evidence-based instruments” by SGI (see Figure 5.11). Moreover, to raise the chance of successful implementation, strategies could be supported by the inclusion of quantitative and measurable targets (see Box 5.12 for international example of a vision with quantifiable targets). For skills use and related HPWP, performance indicators that are understood and supported by all stakeholders would support implementation and strengthen the monitoring and evaluation of the strategy. The European Semester expressed that quantifiable policy targets are only rarely established when policies are being adopted by the Slovak government, and while the use of performance indicators varies across ministries, they often focus on inputs rather than outputs (European Commission, 2018[59]).

Box 5.12. Relevant international example: Vision for innovation and growth in businesses

Canada’s Innovation and Skills Plan

In 2017, Canada initiated the Innovation and Skills Plan, a blueprint to foster a culture of innovation in firms and workplaces, create well-paying highly skilled jobs, and help provide better services for entrepreneurs and businesses. The vision is broken down into four key areas: 1) people and skills; 2) research, technology and commercialisation; 3) investment, scale-up and clean growth; and 4) programme simplification. The programme targets many areas of Canadian society and brings together different initiatives from different government departments to create one coherent strategy. Some of the aims include increasing digital skills and literacy; increasing the number of professional, science and tech-related jobs in the Canadian economy; growing business investment in research and development; doubling the number of SMEs majority owned by women; and doubling the number of high-growth firms in Canada. Each target has a quantifiable goal that should be completed by 2025 (the end date of the plan), and information on the progress of these objectives is provided to the public in a clear manner. On its dedicated website, progress bars visually track how close each target is to being achieved. The public is also able to see which government initiatives have been created to pursue each objective. This helps create accountability and transparency in the implementation of the Innovation and Skills Plan.

Source: Government of Canada (2019[60]), The Innovation and Skills Plan, www.ic.gc.ca/eic/site/062.nsf/eng/h_00083.html.

Recommendation for strengthening the visions, strategies and action plans for the growth and innovation of firms and workplaces:

Develop a long-term vision for skills use and HPWP by including them more explicitly in existing visions, strategies and action plans, and ensure their continuity, consistency and implementation. Support Slovakia’s move up the value chain by putting skills use and HPWP on the policy agenda, and aim to improve the impact of relevant strategies. Ensure continuity by strengthening the engagement of all levels of government and all relevant stakeholders from early on in the development of strategies (see also next section). Slovakia should build on recent initiatives to consolidate and co-ordinate the large number of strategies, such as the Strategy of the Digital Transformation of Slovakia 2030 and the updated Lifelong Learning Strategy (see Chapter 4), to improve consistency across strategies. It could improve implementation by stimulating a culture of policy evaluation and monitoring, for instance by including measureable targets and indicators (see Box 5.12 for an international example).

Applying a whole-of-government approach and engaging stakeholders in policies that affect skills use

The OECD Skills Strategy recommends a whole-of-government approach to skills policies. A wide range of actors have roles and responsibilities in the skills system, and it is essential that their efforts are co‑ordinated and well aligned. Government engagement with non-government stakeholders (employers, trade unions, education and training providers, civil society organisations, etc.) on skills policy is also important. Engaging stakeholders throughout the policy cycle can help policy makers tap into on‑the‑ground expertise and foster support for policy reform and implementation. To successfully introduce and implement policies related to skills use and workplace practices, Slovakia should therefore ensure that the efforts of all those involved are effectively co-ordinated.

In Slovakia, the whole-of-government approach for skills use policies could be strengthened (as discussed in Chapter 4 on adult learning). Despite various initiatives in recent years to reform the public administration and to promote a whole-of-government approach, there are signs that there is still limited co-operation between the various ministries and government organisations on innovation, labour market and education topics (OECD, 2014[61]). The SGI scored Slovakia 5.3 (out of 10) for “inter-ministerial co-ordination”, compared with 7.2 on average in the OECD (see Figure 5.11) (Bertelsmann Stiftung, 2019[57]). Participants in workshops and meetings commented that ministries often do not work together, and that it is often difficult to have the collaborative involvement of all relevant ministries and government organisations in skills policies.

Political differences at the ministerial level are a barrier to co-operation. While it could be argued that this is the case in all OECD countries, in Slovakia, the effect of political differences on inter-governmental collaboration is comparatively strong and is exacerbated by the large share of civil servants replaced with every new government. These findings are supported by the European Commission, which sees fragmentation of policy design and rigid departmentalism in Slovakia’s public administration as a major barrier to the implementation of policies and collaboration between ministries (European Commission, 2018[59]). Furthermore, the large number of municipalities complicates co-ordination between central and local government. On some topics, such as innovation policies, the limited co-operation and co-ordination is partly due to dependence on EU structural funds, where organisations end up competing rather than co‑operating over access to R&D funding (OECD, 2019[6]).

Participants in workshops and meetings expressed support for the establishment of a skills council at the national level as a way of responding to the challenge of limited co-operation between ministries on policies affecting the use of skills, including economic development, human and social capital, industry and innovation. Several OECD countries have a dedicated body for skills policies oversight (see Box 5.13 for an international example) that aims to enhance the whole-of-government approach. Such bodies could appear in different forms, including as specific structures such as inter-ministerial committees and commissions, or as fully-fledged ministries with broad responsibilities and powers that encompass traditionally separate sectors.

Within the Slovak government, there are already efforts to improve co-ordination between ministries. The Central Co-ordination Authority of the Office of the Deputy Prime Minister of the Slovak Republic for Investments and Informatisation (ÚPVII) is tasked with the management, co-ordination and supervision of government policy, especially that which is linked to European Structural and Investment Funds (ESIF). This primarily concerns policies linked to the use of EU funds related to the digitalisation of society and investments, with some policies affecting skills use and workplaces. The OECD recommended in 2015 to strengthen the role of the government office in leading co-ordination by allowing it to steer a whole‑of‑government strategy, policy setting and steering exercises effectively (OECD, 2015[62]). Nevertheless, despite some examples where the government office has played a role in fostering better co-ordination (e.g. in the 2017 project, Safeguarding and Co-ordinating the Protection of the EU’s Financial Interests), the OECD could not find evidence of an expansion of co-ordination efforts by the government office in recent years.

Slovakia’s Centre of Government (CoG) is focusing on ways to strengthen its capacity to co-ordinate government actions more effectively. To start, the Slovak administration should aim for a broad definition of CoG to highlight the need to strengthen co-ordination among CoG institutions and with line ministries and government agencies. In addition to the Government Office, CoG institutions include the Ministry of Finance, the Ministry of Foreign and European Affairs and the Ministry of the Interior (OECD, 2015[62]). In 2015, the OECD concluded that co-operation between CoG institutions was not sufficiently institutionalised, and that strategic direction, as well as a common understanding and willingness to engage collectively, were lacking (OECD, 2015[62]). Reinforcing co-operation and co-ordination among these institutions and the public administration could help to overcome the silo-based approach in Slovakia.

Slovakia appears to perform much better in terms of co-operation and co-ordination with stakeholders. Participants in workshops and related meetings expressed that the Slovak government has a good relationship with employer associations and trade unions. Moreover, stakeholder engagement is well embedded in the regulatory processes in Slovakia, for example, public consultations are required for every legislative proposal submitted to government, including legislative intents (OECD, 2017[63]). This is reflected in the fact that Slovakia has among the highest scores in the 2015 OECD Indicators of Regulatory Policy and Governance (iREG) on stakeholder engagement. In addition to a number of sectoral bodies, social dialogue at the national level between the government and social partners takes place in the Economic and Social Council, a tripartite body that covers all relevant issues affecting economic and social policy in the country, including employment conditions and wages (Eurofound, 2017[25]).

Despite these outcomes, it is still relevant for Slovakia to continue and potentially expand stakeholder engagement in skills use policies. According to a survey among workshop participants, a recommendation on ensuring that the government has a good relationship with firms, employer associations and sectoral organisations was given the highest overall rank, with almost 1 in 3 respondents indicating it as essential. The SBA continues to emphasise the need for a co-ordinated approach among all stakeholders to ensure systematic, comprehensive and sustainable support of the business environment in general, and particularly of the SME sector (SBA, 2017[33]). Furthermore, stakeholders during the project expressed that some stakeholders, especially employers with strong negotiating positions, manage to push their own agenda more than other stakeholders. As mentioned in Opportunity 2 on strengthening the working culture in Slovak firms, the role of trade unions in the development of skills development and use policies could be strengthened.

Box 5.13. Relevant international example: Dedicated body for the oversight of skills policies

Norway’s Skills Policy Council

Norway established a Skills Policy Council to oversee the implementation of its National Skills Strategy for 2017-21. The council is composed of members from the government, the eight main social partners, a representative from the regional authorities, and a representative from the voluntary sector and adult learning associations. The Minister of Education and Integration heads the council. The council also discusses deliverables from the Future Skills Needs Committee and provides input on new policy initiatives. Norway has also established a directorate for lifelong learning, Skills Norway, which is housed in the Norwegian Ministry of Education and Research. Its role is to co-ordinate the priority areas highlighted in the National Skills Strategy.

Source: OECD (2019[3]), Skills Strategy 2019: Skills to Shape a Better Future, https://dx.doi.org/10.1787/9789264313835-en.

Recommendation for applying a whole-of-government approach and engaging stakeholders in policies that affect skills use:

Strengthen co-operation and co-ordination between all ministries, government organisations and stakeholders in the development of policies that affect skills use and workplace practices. Strengthen a whole-of-government approach by introducing new mechanisms (e.g. a dedicated oversight body such as a Skills Policy Council, see Box 5.13 for an example) or by expanding existing mechanisms (e.g. the Central Co-ordination Authority of ÚPVII) that enforce co-operation on policies for innovation, labour market and education. Aim for more continuity by establishing relationships and promoting co-operation between ministries at levels and positions less affected by the political cycle. Promote the continued relevance of the strong culture of stakeholder engagement and ensure that equal importance is given to the views of all stakeholders.

Enhancing the adoption of HPWP in the public sector to raise effectiveness and efficiency

For the successful adoption and implementation of policies and programmes affecting skills use and workplace practices, the public sector should function effectively and efficiently. For Slovakia, increasing public sector efficiency is a crucial policy challenge, and current inefficiencies to some extent undermine the current business environment (OECD, 2019[6]). For example, in Slovakia it takes an average of 300 days to obtain a building permit for a warehouse, compared with 153 days on average across the OECD (World Bank Group, 2019[49]). Partly as result of this administrative inefficiency, the confidence of Slovak citizens in their government and the public sector remains below the OECD average (OECD, 2017[63]).

The public sector should aim to become a leader in the adoption of new technologies and workplace practices. Increased adoption of HPWP within government could improve the effectiveness, quality and efficiency of government. Furthermore, practices in the public sector could display strong leadership and strategic direction, and the public sector could set a good example and potentially spread and promote good practices by adopting them.

Data show that the use of skills and the adoption of HPWP in the public sector could be improved. Skills are better utilised in the private sector than in the public sector, with an especially large gap in the use of numeracy skills (based on the Survey of Adult Skills (PIAAC) calculations (OECD, 2019[4])). For HPWP such as working time flexibility, the public sector also appears to be less flexible than the private sector – for 8 out of 10 civil servants, working hours are entirely set by the organisation, while in the financial sector this is the case for only 5 out of 10 workers (Eurofound, 2019[17]). Workshop and meeting participants from government indicated that workplace practices such as teleworking are not a regular practice across ministries and strongly depend on the ministry or government organisation, as well as the relationship with management staff. However, the use of performance-related pay in the Slovak government is relatively common (OECD, 2017[63]).

Management of the civil service is relatively decentralised (European Commission, 2018[59]). Across OECD countries, Slovakia scores the highest in the extent of delegation of Human Resource Management (HRM) practices to line ministries (OECD, 2017[63]). The OECD states that with appropriate framework conditions and minimum standards, a decentralised approach that delegates HRM to line ministries enables managers to better direct staff and is more targeted to the organisation’s unique requirements. However, some level of common HRM standards and central oversight are needed to avoid uneven pay scales, improve opportunities for government-wide strategic HR planning, and reduce potential nepotism and political interference in staffing. Slovakia is one of the few OECD countries with no central HRM unit to oversee minimum standards.

A number of strategies in Slovakia cover the topic of public administration modernisation. Since 2012, the public administration reform programme, Effective, Reliable and Open Public Administration (ESO), has underscored the need to strengthen the quality and performance of the central civil service through an HRM reform agenda (OECD, 2014[61]). The National Reform Agenda for Slovakia also stresses the importance of modernising public administration, strengthening capacities and improving government efficiency (Ministry of Finance of the Slovak Republic, 2018[64]), and there is an action plan for digitising the public administration for 2017-2020. Finally, Slovakia’s long-term vision, the Strategy of the Digital Transformation of Slovakia 2030, has a separate section for public administration that emphasises innovations (e.g. eGovernment) and the capacity and culture of invention, as well as the role of data and artificial intelligence (AI).

The development of the right skills of civil servants is crucial to improve effectiveness and efficiency; however, skill levels among public employees show room for improvement. The average skills of public sector employees are significantly lower than those of private sector employees, with the disparity one of the highest in the OECD for male civil servants (see Figure 5.12) (based on the Survey of Adult Skills (PIAAC) calculations (OECD, 2019[4])). Several stakeholders in workshops and meetings also identified a large mismatch problem, with many employees not matched to the activities that require resources.

Figure 5.12. The skills gap between public and private sectors, by gender, 2012/2015

Slovakia could take actions to ensure that civil servants have the right skills (see Box 5.14 international example). First, the better recruitment of civil servants could help to reduce skills gaps with the private sector (OECD, 2019[6]), including by expanding the recruitment of people with strong analytical capabilities – skills that are currently in shortage in the Slovak public sector and that impact effective policy making. A strong recruitment system is especially important for the Slovak public sector, partly because the political cycle has a high impact on staff turnover, and also because the European Commission concludes that the recruitment system for civil servants is often based on patronage (European Commission, 2018[59]). Participants in workshops indicated that there is a competency framework listing the required competencies to support the recruitment process for civil servants, but that it is not widely used. Second, the development of performance indicators to help individuals and departments assess their progress can support upskilling in the public sector (OECD, 2019[6]), but Slovakia is near the bottom of the ranking of OECD countries in the adoption of performance assessment in HR decisions by central government (OECD, 2017[63]). Third, better pay could help to reduce the gap with the private sector. A positive development in this regard is that government and unions signed an agreement in 2018 to raise salaries by 10% in both 2019 and 2020.

Finally, training is crucial to raise skills in the public sector. Slovak civil servants must dedicate at least five days a year to their training and are obliged to enhance skills and qualifications based on requirements agreed at the beginning of each year (European Commission, 2018[59]). Despite these regulations, only a relatively small share of civil servants actually participate in education and training. The participation rate in the Slovak public sector is very low, and near the bottom of EU country rankings: in 2018, 6.9% of civil servants participated in education and training in the last four weeks, compared with 16.8% across EU countries and between 40% and 50% in top-performing countries such as Finland and Estonia (Eurostat, 2019[66]). One driver behind this low participation rate is that training tends to be under-resourced, and Slovakia does not have an overarching strategy or co-ordination system for training policy in the public service (OECD, 2015[62]). Participants in workshops also expressed concerns about the quality of courses offered, as well as the limited availability of training opportunities for junior officials. There are, however, some good recent initiatives. For instance, an act from 2017, which came into force in 2019, introduces an individual plan of education for every employee in the public administration, with two days of leave for studying each year and the freedom to choose courses. This HR plan, facilitated by the Ministry of Finance, looks promising, but participants indicated that limited funding is a challenge.

Box 5.14. Relevant international example: Skills initiatives in the public sector

UK civil service skills initiatives

The UK civil service has been taking steps to align its skills strategy with its strategic vision. The 2012 Civil Service Reform Plan identified skills gaps that must be addressed in order to meet the objectives of reducing public expenditure while meeting the growing service expectations of citizens. In 2013, the UK civil service published a capabilities plan for the whole civil service that identified four priority skills gaps central to support the 2012 reform: 1) leading and managing change; 2) commercial skills and behaviours; 3) delivering successful projects and programmes; and 4) redesigning services and delivering them digitally.

The 2013 plan lays out ways to build internal capabilities through learning and development, buy them through contracting and/or recruiting, and borrow them through loans between departments and secondments with the private sector. These strategies are reinforced in the UK’s Civil Service Workforce Plan 2016-2020, which sets out five areas for action: 1) opening up recruitment across the civil service to attract and retain people of talent; 2) building career paths through skills mapping and professional development; 3) developing leadership skills by introducing a Leadership Academy; 4) ensuring inclusion with a goal to become the most inclusive employer in the UK; and 5) look at pay and rewards with a view to increased flexibility to attract scarce skills.

Source: UK Cabinet Office (2016[67]), Civil Service Workforce Plan 2016-2020, www.gov.uk/government/uploads/system/uploads/attachment_data/file/536961/civil_service_workforce_strategy_final.pdf.

Recommendations for enhancing the adoption of HPWP in the public sector to raise effectiveness and efficiency:

Strengthen the adoption of HPWP in the public sector by setting government-wide standards and requirements. The highly decentralised HR structure in Slovakia is likely to negatively affect the overall adoption of HPWP, and government-wide standards, potentially supported by a long-term strategic plan for government, could contribute to better performance. Centralised standards could for instance contribute to a stronger recruitment system. Moreover, the government should ensure that actions to promote the modernisation of public administration, as addressed in strategies (e.g. National Reform Agenda, Strategy of the Digital Transformation of Slovakia 2030), are effectively and efficiently implemented.
Ensure that civil servants have the right skills for their work by improving learning opportunities and strengthening the recruitment system. To respond to low participation rates in education and training among civil servants, Slovakia’s government should build on existing legislation and initiatives (e.g. the plan for study leave and training), as well as expand and raise the quality of training opportunities. It should also strengthen the recruitment system in the civil service supported by a well-developed and widely used competency framework that lists the required competencies, as well as the development of performance indicators to support the development of individuals and departments.

Overview of recommendations

Opportunity 1: Creating the conditions to facilitate the adoption of HPWP in Slovak firms

Creating a supportive working environment for employees	Raise the job satisfaction of Slovak workers by promoting a working environment where workers’ contributions are recognised, valued and rewarded. Raise employee engagement by strengthening employee representative structures in Slovak firms.
Strengthening the skills and motivation of management staff	Raise awareness of the need to improve the quality of management staff and share knowledge and examples of strong management practices. Raise the participation of management staff in education and training by improving and expanding the overall training offer that is relevant for management.
Developing entrepreneurial attitudes from early on in the education system	Improve attitudes towards entrepreneurship by expanding and strengthening public and private programmes in the education system that develop entrepreneurial skills.
Opportunity 2: Providing incentives and support to Slovak firms for the adoption of HPWP
Raising awareness of skills use, workplace practices and support measures	Promote the benefits of skills use and workplace innovations through campaigns and by introducing a centralised portal with relevant information. Expand awareness of existing support measures for firms, especially among SMEs.
Strengthening and expanding support measures to firms	Improve the accessibility of support programmes for SMEs by reducing the administrative burden. Strengthen support to firms by consolidating and aligning support measures and by offering programmes to all firms.
Leveraging employer groups, clusters and sectoral associations for the adoption of HPWP and to facilitate knowledge spillovers	Strengthen current employer networks, clusters and associations, including by stimulating the participation of local SMEs. Introduce programmes that facilitate and promote the exchange of knowledge between large international firms and local SMEs.
Opportunity 3: Enhancing the governance of policies and strategies that affect skills use
Strengthening visions, strategies and action plans for the growth and innovation of firms and workplaces	Develop a long-term vision for skills use and HPWP by including them more explicitly in existing visions, strategies and action plans, and ensure their continuity, consistency and implementation.
Applying a whole-of-government approach and engaging stakeholders in policies that affect skills use	Strengthen co-operation and co-ordination between all ministries, government organisations and stakeholders in the development of policies that affect skills use and workplace practices.
Enhancing the adoption of HPWP in the public sector to raise effectiveness and efficiency	Strengthen the adoption of HPWP in the public sector by setting government-wide standards and requirements. Ensure that civil servants have the right skills for their work by improving learning opportunities and strengthening the recruitment system.

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