HICKEY European Government Incentives & State Aid Update - March 2022
Hickey’s European Government Incentives & State Aid Update - March 2022
The following is an update on government incentives and state aid across the dynamic European region for the month of March 2022. Information and intelligence have been assembled by Hickey’s European Location Strategy and Incentives team.
Training Aid - Not Just for New Jobs
Upskilling your existing workforce is becoming a key tool in the war for talent and not only does it improve staff retention, but can also be more cost-effective than recruiting a higher skilled worker in the same location. But, retaining the workforce does have a cost and government support could be available to support your plans depending on the scale and impact of the upskilling involved.
The Benefits of Re-Training
The skills shortage in the digital sector has been a key concern for many companies across Europe, and the rest of the world, for a number of years, and this has been exacerbated by the pandemic as companies across all industries switched to using more digital platforms and increased automation. This squeeze on the labour market, however, is not isolated to the tech sector and the increased pressure on manufacturing, the supply chain, and logistics has made headlines globally in the last year.
The feedback we receive from recruitment companies across Europe confirms that unemployment levels in these sectors are very low and wage inflation in these sectors is higher than the average for the labour market as a whole.
The pace of change has meant that many companies face a mismatch in the existing skills profile of their employees compared to their needs – automation and technological advanced are making existing roles redundant across multiple industries. According to the World Economic Forum, the financial service sector, mining, and automotive industries are particularly hard hit by redundant skill sets.
[1] World Economic Forum ‘The Future of Jobs Report 2020’
Faced with this skills gap companies can either try to recruit new staff or retain and reskill their existing workforce. Traditionally the cost of training has been seen as a hurdle for many employers, but the pandemic has increased the use and acceptance of virtual training and lowered some of the costs associated with upskilling the workforce. In fact, a recent report by the Financial Services Skills Commission and PwC highlighted that reskilling an existing employee in the financial service sector would cost £31,800, which is less than half the cost associated with redundancy and rehiring (£80,900) a new employee with the required skills in the same location.
Successful upskilling programmes will often combine off-site training in collages etc., augmented with hands-on experience. With increasing competition in the labour market, one of the advantages for employers investing in their existing staff has been improved retention rates as employee development and career progression are key motivating factors for employees.
Support to Reskill / How Hickey Can Help
The cost of training and upskilling can be a significant cost to the business, especially if the training needs to be rolled out across a large proportion of the workforce. Government support could potentially help companies with these costs. Training support from governments is traditionally seen as an aid to support new jobs and head count growth – but it can also support up-skilling of existing staff. New training programmes can, in some cases, support up to 50% of the training costs and this can be boosted further if the training includes support for under-represented groups. Local authorities and governments across Europe are starting to realise the importance of offering training support to projects that upskill and protect existing workers and some governments are adapting their training grant to help companies tackle the skills gap. The Levelling Up White Paper announced by the UK Government last month is an example of the importance being placed on training and has skills and training as one of the 12 key missions for levelling up and recognises the need for lifetime access to training.
For more information on these critical updates on European government incentives and state aid and/or to determine if your project is eligible, please connect with a Hickey EMEA Location Strategy & Incentives expert today: