The measure has direct relevance to Employment Guidelines under the European Employment Strategy and its targets of developing a skilled workforce able of responding to labour market needs, increasing the labour market participation of men and women and reducing structural unemployment.

The scheme is in line with the flagship initiatives “Youth on the Move” and “An agenda for new skills and new jobs”. It supports the transition from education to work in line with the wider EU target of achieving a 75% employment rate for the working-age population.

Traditionally, Cyprus has enjoyed conditions of almost full employment, but the global economic crisis had a severe impact on the economy of the country. The unemployment rate rose from 3.7% to 6.3% between 2008 and 2010. Further increases in unemployment meant the rate continued to rise, from 7.9% in 2011 to 11.9% in 2012, while in the second quarter of 2013 it rose to 15.5%. In recent years the labour market conditions of young people have worsened and Cyprus is now experiencing high levels of unemployment amongst tertiary-education graduates. Unemployment for this group has been steadily increasing, from 5.7% between 2008 and 2010 to 7.2% in 2011 and 10.2% in 2012, while in the second quarter of 2013 it rose to 12.9%.

Cyprus has always ranked amongst the top five countries in the world for the number of tertiary education students per thousand of population, with a high proportion of secondary school graduates enrolling in higher education (80%). However, the economy failed to create an adequate demand of high-skilled jobs, leading to a situation where an estimated 20% of students studying abroad do not return back home after completion of their studies..

Despite the enhancement of vocational guidance services by the Ministry of Education and Culture and the improvement of forecasts on future skills needs by HRDA, there remains a mismatch between the demand and supply of skills.

Although the country has a well-developed and flexible framework for training provision, the small size of the labour market, the limited internal mobility of the labour force and the highly diversified economy means that the education and training system struggle to meet the wide range of skills needed in the labour market, thus limiting the provision of adequate and cost effective training options. The diverse nature of the labour market has led to restructuring of the education system, to respond more effectively to the changing work environment and associated skills needs.

This scheme aimed at strengthening the management capacity of enterprises and organisations through the employment and training of young tertiary education graduates (with less than 12 months relevant work experience who have completed their education not longer than 3 years prior to the date of employment).

The overarching goals of the scheme were to:

• Combat unemployment among tertiary-education graduates, helping them to find productive and suitable employment through acquiring work experience and specialised knowledge;
• Maximize the utilisation of valuable human resources and make better use of acquired skills;
• Modernise the economy and support businesses to improve their competitive position by employing qualified people.

The measure provides incentives to enterprises to provide practical training and work experience to young graduates. HRDA subsidises employers for the delivery of in-house training programmes to young graduates. The in-house training lasts for 6 months and it was enhanced by the participation of graduates in seminars of minimum duration 20 hours, for further specialisation and additional knowledge.

The subsidies helped employers to reduce the costs of the initial period of training of new recruits, particularly important in the case of small and medium sized enterprises (SMEs).

Since 2011 which HRDA declared as Year for Green Skills, the scheme is promoted as one of the main training measures offered to support the transition towards a greener economy through the adaptation of the products, services and processes.

• The HRDA has in place a comprehensive system for evaluating the impact of its activities which was designed by independent external consultants. In 2013, the HRDA completed the latest evaluation study on the impact of the measure on participants during the period 2009-2012. The evaluation found positive outcomes in terms of access to employment and enhanced employability of participants.
• After the scheme 81.9% of participants were in employment;
• 73.4% of those employed were working with the firm in which they completed their practical training;
• 62.5% of participants believed that the scheme provided a concrete contribution to their employment.