Background information

This measure is intended for employers who, due to changes in production processes, the transition to new technologies or the lack of skilled labour, need additional education and training for their employees.

During the implementation of the measure a particular attention has been given to improve the employability and competitiveness of participants. That means that participants are trained for work on various jobs and working processes deemed to have a high demand for that type of skills and knowledge in the nearly future.

Classification of undertakings according to Annex I of Commission Regulation (EU) no. 651/2014 of 17 June 2014 is following: a) Large enterprises are those with more than 250 employees, and annual turnover more than €50 million or annual balance sheet more than €43 million; b) Medium enterprises are those with less than 250 employees, and annual turnover less than €50 million or annual balance sheet less than €43 million; c) Small enterprises are those with less than 50 employees, and annual turnover less than €10 million or annual balance sheet less than €10, and d) Micro enterprises are those with more than 10 employees, and annual turnover less than €2 million or annual balance sheet less than €2 million.

Content of measure

This measure aims at covering justifiable costs involved in providing training for employees, particularly with improvements and investments in production process change, technological modernisation, or internationalisation. The training can be general or specific. General training benefits workers and current and prospective employers, while job–specific training benefits workers and their current employers only. In special cases, when it is difficult to differentiate between general and specific training, the maximum grant awarded is calculated for specific training. Regardless of the type of training received, the maximum grant awarded, combined with grants approved for investment, cannot exceed 50% of justifiable costs of investment. However, the grant can be increased to up to 70% of eligible costs under certain circumstances. Points can increase by 10% if the training is carried out with workers with disabilities and by another 10% points if the grant is given to medium-sized enterprises. It can be increased by 20% points if the grant is given to small and micro–entrepreneurs.

The grant is provided to companies that finance staff training related to investments in technological modernisation or production process change, business enlargement, and business internationalisation. The training eligible costs may include trainers’ personnel costs, for the hours during which the trainers participate in the training; trainers’ and trainees’ operating costs directly relating to the training project such as travel expenses, materials, and supplies directly related to the project, depreciation of tools and equipment, to the extent that they are used exclusively for the training project. Accommodation costs are excluded. Costs of advisory services linked to the training project; trainees’ personnel costs and general indirect costs (administrative costs, rent, overheads) for the hours during which the trainees participate in the training.

Incentives include among others grants for eligible training costs related to investment projects. The amount cannot exceed the maximum intensities as follows: up to 50% of eligible training costs + 10% for the training of workers with disabilities + 10% if the aid is granted to a medium-sized enterprise + 20% if the aid is granted to a small and micro entrepreneur. Eligible training costs are the costs for the lecturer, for the hours spent by lecturers in training, operating costs related to lecturers and trainees, and directly related to the training project, such as travel costs, costs of materials and consumables directly related to the project, depreciation of tools and equipment, if used exclusively for the training project. Accommodation costs are excluded.

Use of measure

The number of employees who have participated in the measure has varied from 350 to 600 per year with a tendency to decrease. The figures can only be estimated because all participants are registered as one group and are not specified per particular forms of education and training.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public employment service	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Any other form of consultation, institutionalised (as stable working groups or committees) or informal	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

The representatives of social partners - from representative trade unions, primarily two biggest TU confederations - the Union of Autonomous Trade Union of Croatia (Savez samostalnih sindikata Hrvatske) and Independent Trade Unions of Croatia (Nezavisni hrvatski sindikati) from workers' side and representatives of Croatian Employers’ Association, from employers' side, are members of the Governing board of the Croatian Employment Service. Therefore, in that way they participate in the design, implementation and monitoring of the measure.

Views and reactions

Some employers deem that this measure fosters specific training, but according to the institutions which organise adult education programmes it is more often used to provide general rather than specific training. Moreover, the decision on the type of training received is entrusted to employers and not to employees themselves. The measure has been criticised by some trade union organisations for encouraging the employment of people with no experience or adequate qualifications, and yet subsequently subsidising their general rather than specific education. There are also significant challenges in terms of regulation as employers may have preference for employing suboptimal workers to receive the subsidy.

Sources

• 25 September 2015: Zakon o poticanju ulaganja (The Act on Investment Promotion), OG 102/15 (narodne-novine.nn.hr)
• 08 January 2018: Hrvatski zavod za zapošljavanje (Croatian Employment Service), Godišnjak za 2017 (Yearly Report for 20174) (www.hzz.hr)
• 08 March 2018: Izmjene i dopune Zakona o poticanju ulaganja (Amendments to the Act on Investment Promotion OG 25/18) (narodne-novine.nn.hr)
• 03 May 2018: Godišnji izvještaj Hrvatskog zavoda za zapošljavanje (Yearly report by the Croatian Employment Service) 2017 (www.hzz.hr)
• 01 January 2019: Croatian Official Gazette 114/18, Amendments to the Act on Investment Promotion (narodne-novine.nn.hr)
• 04 January 2019: The Decree on Investment Incentives OG 02/19 (narodne-novine.nn.hr)
• 19 March 2020: Zakon o dopunama i izmjenama Zakona o poticanju ulaganja (Amendments to the Act on Investment Promotion - OG 32/20) (narodne-novine.nn.hr)
• 05 May 2020: Croatian Employment Service, Yearbook 2019 (www.hzz.hr)
• 25 May 2021: Potpora za usavrsavanje (Support for training and specialization) (mjere.hr)
• 07 June 2021: Godisnjak Hrvatskog zavoda za zaposljavanje (Yearly Report by the Croatian Employment Service), 2020 (www.hzz.hr)
• 13 June 2021: Costs of education (Troškovi edukacije i obrazovanja radnika) (brojevi.hr)
• 27 May 2022: Zakon o poticanju ulaganja (The Act on Investment Promotion)..OG 63/22 (narodne-novine.nn.hr)
• 30 December 2022: Regulation on investment promotion and investment support in the Republic of Croatia (Uredba o poticanju ulaganja) (narodne-novine.nn.hr)
• 30 December 2023: The Yearly Report on State Subsidies for 2022 (Godišnje izvještće o državnim potporama za 2022.) (vlada.gov.hr)