Purpose – to assess of the program "Road Map of Employment-2020" effectiveness in the system of state controlling

Purpose – to assess of the program "Road Map of Employment-2020" effectiveness in the system of state controlling

Methodology – synthesis, content-analyze of data, functional classification

Originality / Value – it is carried out the assessment of the effectiveness of the program "Road Map of employment-2020", which includes the assessment of dynamics of main labor market indicators in Kazakhstan as a result of the realization of the directions of the program "Road Map of employment-2020", it is researched the dynamics of the program financing volume and scope by program of employment, as well as the assessment of the results of the program "Road Map of employment-2020", including the comparative characteristics of the unit cost per participant in the directions of the program.

Findings – assessing the effeciency of directions of the program "Road Map of employment – 2020"  (on the basis of unit costs) it is identified a number of problems. At the same time, it should be noted that the program is aimed at creating conditions for obtaining permanent employment by participants program and the signing of employment contracts for at least one year. However, the assessment of the program shouldn’t only include the assessment of the process and program products, but also its economic and social effectiveness, assessment of the impact of the program on the society based on its resulting effects. 

The system of initial perceptions of the state program assessment, developed in the world of science and practice of management, defines it as a systematic analysis of the content, the activity’s types within the program and their management, as well as its results [1]. In the most general sense, “program” is defined as an order or a preliminary description of the upcoming activities that are performed for achievement of set goal. The program realization is associated with selected algorithm of actions [2].

Current tendencies of global and domestic economy’s development put forward some requirements for labor market regulation and promotion of employment and decrease of unemployment [3]. So, one of adapting method of state regulation for the implementation of these requirements is the state program "Road Map of employment-2020" (further – RME-2020 program), which is a logical continuation of the pilot Road maps of 2009 and 2010, Employment Programs of 2020 and Road employment map 2020 realized in 2013-2014.

The mission of the program is promotion of productive employment through professional training, subsidizing jobs for target groups (youth and the disabled), providing jobs for infrastructure objects, micro crediting to engage own business [4]. From point of view of employment forms it can be said that the program aims at creating conditions for obtaining permanent employment by program participants and the signing of employment contracts for at least one year. Now the program is actualized taking into account the President’s orders given at the enlarged session of the Republic of Kazakhstan Government from February 11, 2015 [5].

To assess the effectiveness of realization of this program in the state controlling system, we were based on:

• methodological support of activity of employment Centers, including the development of key indicators of effectiveness [6].
• reports on the realization of the activities of the current year of strategic plan of the Ministry of Health and Social Development (state body) [7, 8, 9].
• method of assessing the effectiveness of management by budget funds of state authority of the Republic of Kazakhstan [10].

It should be noted that the use of these methodic is difficult and in the final reports the indicators of the effectiveness assessment are absent. Thus, the methodological support of activity of the Employment Centers, which should include the development of key indicators of effectiveness, only mentioned in the paragraph "Information and methodological support" in the program "Road Map of employment-2020", but the indicators of effectiveness aren’t presented.

Making reports on the realization of the program "Road Map of employment-2020" only the absolute indicators are used, for example, the indicators of the resources’ performance allocated for the realization of this or that direction of the program. Indicators of the effectiveness aren’t calculated and analyzed [11].

Existing methodology of assessing the effectiveness of management by budget funds of state authority of the Republic of Kazakhstan doesn’t allow evaluating the effectiveness of the program "Road Map of employment-2020". According to this methodology the analysis of the effectiveness activity of the central government / local executive body is carried out according to the following assessment criteria:

• development of the allocated funds for the corresponding financial year;
• the lack of violations of budgetary and other legislation on results of audit by bodies of the state financial control;
• adopted (realized) measures on implementation of introduced acts of reaction of bodies of state financial control;
• activity of internal control services of the state body on budget management and measures on implementation their recommendations;
• the volume of reallocated funds of budget programs administrator to the approved volume of expenditures;
• organizational measures for the implementation of the budget;
• the achievement of direct results of the budget program;
• the dynamics of direct result of budget programs;
• the quality of planning of budget programs effectiveness’ indicators;
• the effectiveness of budget program’s performance;
• the lack of accounts receivable;
• the lack of accounts payable.

The proposed criteria don’t allow to assess the effectiveness of work of such body as the center of employment, and, accordingly, the effectiveness of the program "Road Map of employment-2020".

Criterion “The effectiveness of the execution of the budget program” includes the ratio of the received direct result of budget program to application of the funds allocated for the financial year.

In the research the assessment of the effectiveness of the program "Road Map of employment-2020" will include:

• assessment of the dynamics of the main labor market indicators of the Republic of Kazakhstan as a result of the realization of the directions of the "Road Map of employment-2020";
• research of the dynamics of funding program volume and outreach by program of employment;
• assessment of the results of the program "Road Map of employment-2020", including the comparative characteristic of unit cost per participant in the directions of the program.

1. The assessment of dynamics of the main indicators of the labor market in Kazakhstan.

Measures of promotion to employment realized within program "Road Map of employment-2020" have had a positive impact on the situation on the labor market in general and the decrease in the number of unemployed people in the country, as evidenced the data in table 1. 

Table 1 – Main labor market indicators in the Republic of Kazakhstan for 2010-2015 

So, according to the Committee on Statistics of the Republic of Kazakhstan the number of unemployed in 2015 is 451.1 thousand people, or 5.0% of the economically active population. Compared with 2010 the number of unemployed decreased in absolute expression to 45.4 thousand people. The number of economically active population compared to 2010 increased to 464.2 thousand people, consisting in 2015 9074.9 thousand people. Regarding the program, the ratio of number of employed on permanent job after participating in the program and the number of unemployed population reveals that the number of unemployed people would be

in case of absence of the program more than 15.6% in 2013, on 33.5% in 2014 and on 31.5% in 2015.

At the same time, a more accurate assessment of the impact requires the calculation of other economic indicators, including the assessment of program effectiveness.

2.  Dynamics of financing program volume and the scope by employment program.

On the realization of the program from the republican budget for 2013-2015 years it is allocated 197.45 billion tenge [13] (table 2).

According to table 2, the number of participants in the program in the period from 2013 to 2015 increases. So, if in 2013 106397 people became participants of the program, then in 2014 – 194417 people, which is on 82.73% more than in 2013, in 2015 136009 participants, which is on 27.8% more than in 2013.

It is clear that in 2015 the volume of financing on all destinations have been reduced due to the economic crisis in the first direction in 3.8 times, in 2.3 times in the second direction, and in the third in 3.3 times.

In total for the mentioned period, 436 823 people became participants of the program, for each of them it is 452.01 thousand tenge of budget costs.

Table 2 – The volume of financing and scope by employment program for 20132015 years, billion tenge and people 

The structure of participants of the program shows a clear priority of the first direction, through which passed 56% of all participants. Shares of participants of the second and third directions amounted 27% and 17%, accordingly.

3. Assessment of the process and results of the program "Road Map of employment-2020".

For assessment of the process and results of the program "Road Map of employment-2020" we made analyze separately for each direction.

First direction "Providing employment through the development of infrastructure and housing and communal services" is aimed at providing employment through the realization of infrastructure projects in rural territories, with an average or high potential for socio-economic development and towns. In this direction for the period 2013-2015 years realized 4258 projects on the development of rural infrastructure, during which created more than 55969 work jobs (table 3).

Table 3 – Economic indicators of the first direction “Providing employment through the development of infrastructure and housing and communal services” for the years 2013-2015 

In these places it employed 29641 participant of the program, the share of which is 52.9% of the total number of workers at a construction object. On average, on one project are arranged 7 people. This trend is an interdepartmental, because the initiative of projects realization comes from other ministries and allows creating work jobs at the construction objects of infrastructure projects of health, culture, education, etc.

Assessment of the effectiveness of these costs is difficult due to the fact that the effect of the construction and launch of such objects is observed not only in employment sphere but also in other spheres (culture, education, etc.). On the other hand, it is clear that the employment effect is temporary and after the construction period ends the employment of its employees. In fact, all these employees have a contract for a certain period or a certain volume of work.

From point of view of the employment effect, the costs for one of the employed during the construction period on average for the period are determined in the volume of 4 million tenge. In the period it is observed the dynamics of reducing unit costs. In the materials of the official report on the direction this indicator isn’t represented.

We consider that the additional effectiveness indicator, which would characterize the employment of program participants at the object after its launch in the continuing operation would allow to assess the effect of permanent employment.

Second direction "Job creation through enterprise development and supporting village" is aimed at increasing the economic activity of citizens through their own business. Program participants may be citizens who want and have the opportunity to organize their own business. Priority is given to those who wish to do business in rural territories. In this direction the measures of support include:

• consulting services;
• training the basics of entrepreneurship;
• provision of equipping of the missing engineering and communication infrastructure.

Microcredit is the effective measure to reduce the unproductive self-employed persons and to reduce the number of unemployed in rural terrritories. The loan is provided on a return basis, for a period of not more than 5 years in the amount of up to 3 million tenge. The rules and regulations of loans within the program ensure their accessibility to financial loans with low interest rate for the socially vulnerable strata of the population from the village and for such citizens is a unique opportunity to start a business. Through the program the loans became available to residents from remote villages that spark interest among the population.

Thanks for funds provided by the program it is learned the basics of entrepreneurship more than 20000 people (table 4). 

Table 4 – Economic indicators of the second direction “Job creation through enterprise development and supporting village” for the years 2013-2015 

In 2015, by the recipients of microcredit created 6134 additional work jobs (excluding of microcredit recipient itself). The main spheres of the development of entrepreneurship on the Program as a whole in the republic are animal husbandry and crop production (mainly the production of meat products, the cultivation of vegetables and melons), conversion of animal and crop production, which is more than 80% of all loans. About 20% of the projects there are consisted the opening up of own business in the service sector and the provision of services (opening of sewing and repair shops, bathhouses, barbershops) and processing (baking bread, meat and milk conversion). From point of view of the effect on employment, the costs for one employed workplace on the direction are determined in the volume of 2.14 million tenge. In the dynamics for the years 2013-2015 it is a positive tendency to reduce costs. It should be noted that this indicator on the direction isn’t present in the materials of the official report, as well as doesn’t provide the information that shows:

• proportion of the number of completed training from number of its inception and has successfully realized received education in the form of making by their business;
• share of extinguish and began the planned repayment of loans from a number of end-borrowers;
• the number of business projects, operating at least one

In other words, in this direction isn’t the assessment of indicators of final results from the ongoing activities and the assessment of the "cost-benefit".

Third direction "Promoting employment through training and relocation within the employer's needs" is aimed at ensuring a sustainable and productive employment of citizens through the promotion of employment in the place of living, and will cover the self-employed, unemployed and low-income citizens.

Priorities for the possibility of participation in the program are provided to rural youth. To the participants of the third direction it is offered these types of state support, such as:

• the direction to the free courses of professional training, retraining and advanced training;
• subsidies for transportation to the place of training and accommodation;
• search of suitable jobs and promoting employment, including social jobs;
• passing youth practice (wage subsidies for graduates of educational organizations), relocation subsidies;
• providing a typical rental

On the organization of professional training from the republican budget in 2013-2015 it is allocated more than 23 billion tenge (table 5). We have calculated a number of indicators that aren’t in official reports, but should be used as a effectiveness measurement indicators of the program. 

Table 5 – Economic indicators of the direction of “Education and promotion in employment” in the years 2013-2015 

According to the calculations from the number of people covered by the professional training in the three years of the program, it is completed training 58.8 thousand people (59.8%), of which 79.1% or 46.5 thousand people were employed, and in with respect to the participants involved in the program a percentage of employment was 47.3%.

Characterizing the dynamics of relative indicators over the years, it may be noted that the indicators of completion of training and employment improved, and the rate of unit costs decreases. These tendencies, of course, talking about improving the effectiveness and efficiency of the program. On average over the period from 2013 to 2015, the employment rate from the number of covered by the program, remains below 50%, while the share of completed the training is 59.8%, i.e. 40.2% drop out of the program in process of training.

The reasons that can be divided into objective and subjective, exit of 40% of the participants of program in training stage are:

• 1) subjective reasons:
• incompatibility studies with self-employment, and as a result of the loss of the usual level of income of self-employed;
• low base level of knowledge of participants of the program, making it difficult to
• objective reasons: lack of choice of educational institution of the program’s participant (because the choice made the employer, on the basis of its interests, which sometimes gives the possibility of collusion between him and the institution).

Concerning the costs for one employed after the training, they averaged 501.1 thousand tenge.

It should be noted that the fact of employment after training isn’t assessed from the position of the type of the signed after the preparation of the labour contract (temporary / permanent, full / part-time). Monitoring of post-program employment isn’t conducted.

Additional opportunities of temporary employment were created and through the opening of social work places (further SWP) (table 6). 

Table 6 – The organization of social jobs within the program "Road Map of employment-2020" 

As the table shows, for the organization of social jobs within the program annually allocates funds from

3.7 billion tenge in 2013 to 1.3 billion tenge in 2015. Concerning the costs of one employed on permanent jobs after SWP, in 2013 they amounted 200 thousand tenge, in 2015 – 160 thousand tenge.

If the participant before determining the social workplace passed professional training, the costs increase (table 7).

Table 7 – The costs of employment through SWP after professional training, thousand tenge 

Total costs increased from 200 thousand tenge to 1173.3 thousand tenge in 2013, and in 2015 from 160.0 to 468.4 thousand tenge per person. Despite the decrease in unit costs, the amount of financing employment through proffesional training and employment for permanent workplace remains significant.

Youth practice.

To solve the problem of graduates of educational organizations to obtain the initial experience, there are actively used the possibilities of youth practice (further – YP). In its format over the past three years it is 21.7 thousand people were employed in fact (table 8). 

Table 8 – The organization of youth practice within the program "Road Map of employment-2020" 

On the organization of youth practice in 2013-2015 it is allocated 7.1 billion tenge, and employed 51.3 thousand people. Because the percentage of permanent employment after the passage of youth practice is low enough, the unit costs in the actual employment on permanent job on the program amounted 484 thousand per person in 2013, in 2015 246.2 thousand tenge. Thus, the end result is the costs for one employed young person on the program are on average 327 200 thousand tenge. Due to the fact that the intersection option of training and young practice on practice takes place, costs on permanent employment through of such combination are presented in table 9. 

Table 9 – The costs of employment by youth practice after professional training (thousand tenge) 

Comparing unit costs of employment on permanent job in three versions, it can be noted that the highest unit costs are added on the program “Professional Training” and “Youth practice”.

The most significant unit costs are added when a combination of two types of support, i.e., combining professional training with the youth practice.

Thus, the analysis of the realization of the program "Road Map of employment-2020", and similar programs preceding it leads to the following conclusions.

If we stick to the terminology used in methodology of results-based management, the program produced the following "products":

• employment on all types of jobs is around 457056 people, of which 367650 people were sent to the permanent jobs;
• more than 20 thousand people trained in the basics of entrepreneurship;
• more than 25 thousand people have received micro-loans and additionally opened more than 26.0 thousand new jobs;
• realized 4258 projects for the development of rural infrastructure, during which created more than 55.0 thousand jobs;.
• underwent training 58899 people;
• get the opportunity to gain experience within the youth practice 51322 people;
• had the opportunity to work on a social workplace 53484 person.
• more than 9 thousand people get the opportunity to leave economically disadvantaged villages provided with accommodation at the new place of living.

Assessment of the productivity of program directions. Ratio of directions on its productivity, i.e. the possibility to pass through itself the participants is presented in table 10. 

Table 10 – The ratio of directions’ program on the productivity, million tenge per participant 

The high level of costs on first direction, as we mentioned above, due to the fact that, within this direction it is financed the building of objects.

The second direction microcredit also has a higher level of costs, because the expansion or start of own business, of course, is more capital-intensive employment than wage subsidies or professional training on the third direction.

Assessment of the effectiveness of the program directions.

In assessing the effectiveness of the program directions (on the basis of unit costs) revealed a number of problems.

The problems of the program, have identified on the basis of its quantitative assessments and expert opinions, are the following its characteristics:

1. On the direction of employment promotion (direction 3):

• Low share of completing professional training (average for the period – 8%). This reduces the level of employment in relation to the total number of involved in the direction "Professional Training". In 2015 is 75.9%, on average for the period 47.3%. As a result, the costs of professional training of the employed cost ultimately around 308 400 thousand tenge in 2015 and 501.1 thousand tenge on average over the period.
• As subjective reasons, which cause the exit of member from the program at the stage of study, the experts referred to: the low starting level of knowledge, making it difficult to retraining, and the incompatibility of education with self-employment, which determines the loss of the usual level of income for the self-employed.
• Costs on social jobs on average during the period amount 6 thousand tenge, and on youth practice
• 3 thousand tenge. At the same time if we summarize these unit costs to the costs of professional training, the average for the period was 785.8 thousand tenge within the program SWP and 810.4 thousand tenge on youth practice.

Analysis of unit costs made us without taking into account of costs on the functioning of the employment Centers, because the necessary information isn’t absent. The calculation of the total costs on providing public services and comparing them with the opportunity costs (for example, on education in university or college) is an essential part of the assessment program. [15]

1. On the direction of micro-credit (direction 2) it should be noted that the problem identified in the poll of experts, is the lack of entrepreneurial skills of some who want to take a loan needed to complete the project. Also, information of the report on this direction doesn’t show:
   • how many people have completed training on the basics of entrepreneurship and successfully realized received education in the form of making of own business;
   • the proportion who started repayment of loans among the end-borrowers;
   • the number of operating projects at least one

Direction 1 "Construction of infrastructure objects" the problem, in our opinion, is the lack of monitoring data on the employment of members on permanent jobs after release of the objects in the functional field. It is not possible to assess the sustainability of the results of the direction in the employment context.

The analysis of the final results in the relative form, the unit cost (cost-effectiveness) and satisfaction of beneficiaries (social efficiency) isn’t carried out and isn’t represented in the official reports.

There is no monitoring of the quality results of the program, including monitoring the contract type (permanent, temporary, part-time employment, etc.), which is signed with a member of the program after its completion. Monitoring captures only the fact of signing of employment contract after the end of subsidizing of social workplace or workplace of youth practice.

Concerning one more type of assessment, which is also absent in the report of assessment of the impact on society, it can be carried out on the basis of the ratio in the results of the program of the temporary and permanent employment programs, because the latter is a stable result of the program for society. Within this type of assessment it is also advisable to assess the impact on different social groups: unemployed, selfemployed, people with incomes below the poverty line. In world practice, when assessing the impact, also used a comparative assessment of the living results of individuals having similar socio-economic parameters that have passed through the program and not take advantage of its services.

One of the most important reasons for the lack in official reporting of these types of assessment is the lack of official methodology for monitoring of post-program employment and assessment of program results.

Assessment of the program should include not only the assessment of the process and program products, but also its economic and social efficiency (satisfaction of beneficiaries – participants of the program by their personal results), assessment of the impact on society on the basis of the final results.

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