Background information

This is an available option for counties, cities with county rights, and other territorial units (mostly districts). There are more than 150 pacts at present in Hungary. 

The main purpose of the pacts is to increase employment, particularly to mobilise and to train disadvantaged and inactive jobseekers. Educational institutions, civil organisations, sub-regional associations participate.

In the framework of the Territorial and Settlement Development Operational Programme (TOP) nearly HUF 100 billion (approximately €30 million) has been provided by the European Social Fund and the national government for the programming period of 2014-2020 in order to create and operate Territorial Employment Pacts in Hungary. Counties, cities with county rights and other territorial units (mostly districts) can apply for the grants.

Content of measure

The project relies on two pillars:

1. Establishing cooperation at regional or local level in order to deal with employment problems and to improve matching between local labour demand and supply. This consists of a widespread partnership including local governments, government offices, chambers, trainers, employers and other actors which is coordinated by the local governments.

2. After creating the pact, the partnership should cooperate in the preparation of territorial employment strategies and in initiating territorial employment programmes and policies – trainings, wage subsidies, and personalised labour market services for the unemployed, the inactive and for public workers – tailored for the specific needs of local employers and the local workforce.

Use of measure

Currently, more than 150 of these pacts are in place throughout the country. The funding instrument specifies ways to measure the effectiveness of the employment pact, such as the number of jobseekers engaged in labour market initiatives brought about (output indicator), the number of people employed through pacts, or those retaining such jobs over 6 months (outcome indicators). Published data are, however, limited as yet, as the programme concludes in 2023. The engagement rate was recorded at 867 people in July 2018, already surpassing the year-end goal of 750.

An important advantage of these pacts is that they rely on local level cooperation. It is also positive that the prominent role of coordinators is given to local governments, which are key figures for local economic development.

In 2018, the government took charge of the technical coordination of projects under the Territorial and Settlement Development Operational Programme (TOP) through the Employment Service Department – Foglalkoztatási Szolgálat Főosztály , FSZF – of the State Secreteriat for Employment Policy, operating first at the Ministry of Finance, but since 2020 at the Ministry for Innovation and Technology. Their services include operating a small information hub (Q&A, good practices, etc.) on the internet for stakeholders.

The applied methods of improving employment are not sufficiently innovative. Due to the pressure from the central government, the territorial government offices – the main movers within the partnership – tend to focus on mechanically meeting the target indicators linked to the funds received from the relevant Operational Programme. This stifles the willingness to seek new methods.

Furthermore, the county-level and local-level pacts are not coordinated: the counties and the cities/districts focus on the same employers and jobseekers. So the same entrepreneurs, local associations and NGOs are requested to participate in several pacts which causes confusion. According to a late 2018 study, due to the strict financial structure of the Operative Programme funding the pacts did not encourage counties and towns with county rights to harmonise and integrate their development objectives and activities. The agglomerations of larger towns, being in the action scope of the county authorities, were not treated as part of a functional urban area.

Trainings can only be provided by the government offices through a centralised system which is not the best option to serve the changing needs of the entrepreneurs in a flexible way.

Some early implementations were in Barcs (South-west Hungary), Tatabánya (W), and Miskolc (NE). The Csongrád county pact held successful events presenting local social economy entities to the community. Hajdú-Bihar county has excelled at the umbrella role county pacts are supposed to take, by personally introducing interested entrepreneurs to district-level pact offices. The pact office of Salgótarján (a city with county rights) motivated job fare visitors to interact more by raffling off presents pooled by participant organisations, based on the number of their visits.

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 Local / regional government Public employment service	European Funds National funds

Social partners

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

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

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

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown

Views and reactions

Unknown

Sources

• 29 January 2017: Komádi, Mónika (2017): Hogyan mérhető a foglalkoztatási paktumok hatása? (How to measure the impact of employment pacts?) Part 1-2 (csongradmegyeipaktum.hu)
• 22 February 2017: The territorial employment pact of Tatabánya (www.kormanyhivatal.hu)
• 10 April 2017: Janza, Frigyes (2017): Jól csináljuk? (Are we doing it well?)
• 10 April 2017: The territorial employment pact of Miskolc (miskolc.hu)
• 18 May 2017: The territorial employment pact of Csongrád county (csongradmegyeipaktum.hu)
• 02 July 2017: Hungary, Territorial and Settlement Development Operational Programme
• 29 January 2018: The territorial employment pact of Hajdú-Bihar county
• 14 February 2018: The territorial employment pact of Barcs
• 31 July 2018: Paktum Kisokos (Pact Guide) (nfsz.munka.hu)
• 30 November 2018: Az Integrált Területi Programok értékelése (Assessment of Integrated Territorial Programmes) (www.palyazat.gov.hu)
• 05 February 2019: Jó gyakorlatok a TOP programokban (Good practices in TOP programmes) (nfsz.munka.hu)