Investor - Invest in your people!
There are two ways to become a skilled worker: Gain experience or participate in training. Both give employees the opportunity to achieve the necessary qualifications, abilities and skills. Since experience usually accompanies each employee's personal development, we should focus on the latter, which is a quick route to enhancing staff qualifications. To some extent, all training boosts skills development, and raises qualifications and abilities of employees. Not every entrepreneur attaches importance to training, claiming that it just drains time and money. Now, when it is possible for entrepreneurs to obtain financial support for human resources development (i.e. personnel training), all companies should seize this opportunity.
This article focuses on the opportunities of obtaining financial support for training by entrepreneurs. While other entities can also apply for grants under various programmes, a complete survey is outside the scope of this article.
Limits of support
Entrepreneurs planning to apply for training grants will note that the funds are treated as public aid (i.e. horizontal aid) and, as such, must comply with the Act of July 27, 2002 on Conditions for the Admissibility and Supervision of Public Aid for Entrepreneurs [Dz.U.02.141.1177]. The act and its implementing regulations limit the maximum amount of public aid that can be obtained for human resources development in proportion to the training expenditures. According to the public aid limits, entrepreneurs are eligible to receive financial support for training up to 25 percent or 50 percent of the qualifying training costs (for specialized and general training respectively). Financial support can cover the direct cost of training as well as salaries, accommodation and transport costs (for both trainers and trainees).
These ceilings can be increased if the applicant is a small- or medium-sized company (SME) or when training is offered to a specific group of trainees. The main advantage of training programmes is the wide rage of qualifying expenditures.
Incentive programmes
There are many sources of financial support for human resources development. Here we discuss only examples of programmes which provide direct training support for entrepreneurs from the EU structural funds, European Community Programmes and national sources: Sectoral Operational Programme Human Resources Development (SOP HRD), Leonardo da Vinci and the National Cash Grants Programme. As each has different criteria and rules, they are discussed separately below. In this article, we focusing on aid available for both SMEs and large enterprises. Nevertheless, there are also specific funds which are available only for SMEs.
The SOP HRD has been set up to support the development of human resources and active employment policy. The SOP HRD aims at preventing and combating unemployment, promoting equal access to the labour market as well as promoting education, training and advisory systems (as part of the policy of continuous education). The SOP HRD funds will be allocated, among other things, to the following activities for company employees: Training courses (both general and specialized), post-graduate studies, training internships at R & D institutions and at businesses, training internships at businesses for students in their final years of education, training and consultancy for management staff of companies and IT training and consultancy for business management and staff. The funds are treated as public aid and, as such, all rules concerning public aid apply. One important condition is that the investor cannot apply on his own. The application must be submitted by a company, which will organize the training programme. The projects should be prepared by the investor in co-operation with the direct beneficiary of the funding, i.e. public or private adult education centres, school or university (public or private), R&D centres or employers' organizations.
The National Cash Grants Programme is financed from the Polish national budget (based on the Act of March 20, 2002 on the Financial Support for Investments [Dz.U.02.41.363]). This programme is intended for providing support for investors and grants for investment, the creation of new workplaces and, under the current legislation, training opportunities. The maximum incentive for training is up to E1150 per trainee. However, support cannot exceed the admissible level of public aid. The programme combines two different types of public aid (grants for new investment and for new hires are treated as regional aid while grants for training are considered horizontal aid). As Poland is preparing for accession, the rules governing public aid are being harmonized with those of the EU. It will soon be impossible to obtain grants under one programme for different types of public aid (i.e. regional and horizontal). The Ministry of Economy, Labour and Social Policy is currently working on harmonizing the National Cash Grants Programme rules with the EU regulations by removing, among other things, the training incentive from the programme benefits. Unfortunately, it is hard to predict when these amendments will come into force. Most likely, the next session in February of 2004 will be the last chance to apply for training incentives under this programme.
The third programme, Leonardo da Vinci, is a European Community Programme. Under this programme, entrepreneurs may receive financial support for various activities concerning human resources development. The programme offers incentive schemes for activities connected with employment policy, such as improving vocational skills at all levels, improving the quality of and access to continuing education and vocational training, life-long professional development, promotion of innovation in vocational education as well as activities designed to stimulate competitiveness and entrepreneurship. The programme makes it possible to carry out six types of projects: Mobility actions (placements and exchanges), pilot projects, language competence projects, transnational networks of institutions, reference material (studies and analyses) and joint actions. The entrepreneur cannot apply by himself under this programme. The applicant and the direct beneficiary can only be an international consortium which organizes an innovative training programme (comprising of the entrepreneur, training company and other institutions).
Conclusions
As one can see, both EU and national funds give entrepreneurs the opportunity to apply for financial support for human resources development under various programmes. Since investors may obtain funds for training, there is no excuse not to invest in employee development. The only thing stopping some employers from so doing may be their limited awareness of the available opportunities. Often it will be enough to take the first step - decide that you will invest in the development of your people.
Magdalena Kosewska, Consultant, EU Advisory Services at Ernst & Young
This article focuses on the opportunities of obtaining financial support for training by entrepreneurs. While other entities can also apply for grants under various programmes, a complete survey is outside the scope of this article.
Limits of support
Entrepreneurs planning to apply for training grants will note that the funds are treated as public aid (i.e. horizontal aid) and, as such, must comply with the Act of July 27, 2002 on Conditions for the Admissibility and Supervision of Public Aid for Entrepreneurs [Dz.U.02.141.1177]. The act and its implementing regulations limit the maximum amount of public aid that can be obtained for human resources development in proportion to the training expenditures. According to the public aid limits, entrepreneurs are eligible to receive financial support for training up to 25 percent or 50 percent of the qualifying training costs (for specialized and general training respectively). Financial support can cover the direct cost of training as well as salaries, accommodation and transport costs (for both trainers and trainees).
These ceilings can be increased if the applicant is a small- or medium-sized company (SME) or when training is offered to a specific group of trainees. The main advantage of training programmes is the wide rage of qualifying expenditures.
Incentive programmes
There are many sources of financial support for human resources development. Here we discuss only examples of programmes which provide direct training support for entrepreneurs from the EU structural funds, European Community Programmes and national sources: Sectoral Operational Programme Human Resources Development (SOP HRD), Leonardo da Vinci and the National Cash Grants Programme. As each has different criteria and rules, they are discussed separately below. In this article, we focusing on aid available for both SMEs and large enterprises. Nevertheless, there are also specific funds which are available only for SMEs.
The SOP HRD has been set up to support the development of human resources and active employment policy. The SOP HRD aims at preventing and combating unemployment, promoting equal access to the labour market as well as promoting education, training and advisory systems (as part of the policy of continuous education). The SOP HRD funds will be allocated, among other things, to the following activities for company employees: Training courses (both general and specialized), post-graduate studies, training internships at R & D institutions and at businesses, training internships at businesses for students in their final years of education, training and consultancy for management staff of companies and IT training and consultancy for business management and staff. The funds are treated as public aid and, as such, all rules concerning public aid apply. One important condition is that the investor cannot apply on his own. The application must be submitted by a company, which will organize the training programme. The projects should be prepared by the investor in co-operation with the direct beneficiary of the funding, i.e. public or private adult education centres, school or university (public or private), R&D centres or employers' organizations.
The National Cash Grants Programme is financed from the Polish national budget (based on the Act of March 20, 2002 on the Financial Support for Investments [Dz.U.02.41.363]). This programme is intended for providing support for investors and grants for investment, the creation of new workplaces and, under the current legislation, training opportunities. The maximum incentive for training is up to E1150 per trainee. However, support cannot exceed the admissible level of public aid. The programme combines two different types of public aid (grants for new investment and for new hires are treated as regional aid while grants for training are considered horizontal aid). As Poland is preparing for accession, the rules governing public aid are being harmonized with those of the EU. It will soon be impossible to obtain grants under one programme for different types of public aid (i.e. regional and horizontal). The Ministry of Economy, Labour and Social Policy is currently working on harmonizing the National Cash Grants Programme rules with the EU regulations by removing, among other things, the training incentive from the programme benefits. Unfortunately, it is hard to predict when these amendments will come into force. Most likely, the next session in February of 2004 will be the last chance to apply for training incentives under this programme.
The third programme, Leonardo da Vinci, is a European Community Programme. Under this programme, entrepreneurs may receive financial support for various activities concerning human resources development. The programme offers incentive schemes for activities connected with employment policy, such as improving vocational skills at all levels, improving the quality of and access to continuing education and vocational training, life-long professional development, promotion of innovation in vocational education as well as activities designed to stimulate competitiveness and entrepreneurship. The programme makes it possible to carry out six types of projects: Mobility actions (placements and exchanges), pilot projects, language competence projects, transnational networks of institutions, reference material (studies and analyses) and joint actions. The entrepreneur cannot apply by himself under this programme. The applicant and the direct beneficiary can only be an international consortium which organizes an innovative training programme (comprising of the entrepreneur, training company and other institutions).
Conclusions
As one can see, both EU and national funds give entrepreneurs the opportunity to apply for financial support for human resources development under various programmes. Since investors may obtain funds for training, there is no excuse not to invest in employee development. The only thing stopping some employers from so doing may be their limited awareness of the available opportunities. Often it will be enough to take the first step - decide that you will invest in the development of your people.
Magdalena Kosewska, Consultant, EU Advisory Services at Ernst & Young
