The Transition to Formality Programme (KIGEP) successful in formalizing informal employment and creating new jobs

460 enterprises and over 3,500 workers benefited from the Programme. Enterprises that received KIGEP support had a 16% greater employment increase than those that did not. The KIGEP support contributed five times of its volume to the national income, and two times of its volume to the State’s social security premium revenues. A total of 13 million TRY was delivered to enterprises under the Programme. Business costs decreased, no worker was laid off, and debts were paid.

News | 07 December 2020
Programme (KIGEP) Phase I implemented by the International Labour Organization (ILO), the Directorate-General for International Labour Force (DG-ILF) of the Ministry of Family, Labour and Social Services, and the Strategy Development Department of Social Security Institution (SSI).

To date, 460 enterprises and 3,501 workers serving in different sectors and particularly textile, manufacturing, construction, and service sectors in Istanbul, Bursa, Adana, Konya, and Hatay provinces have benefited from the Programme. Between April 2019 and January 2020, a total of 13 million TRY was delivered to the enterprises under KIGEP.

According to the study, conducted by Prof. Dr. Fuat Oğuz, Dr. Koray Göksal, Dr. Serpil Oğuz and Dr. Muhiddin Şahin, which aimed to analyse KIGEP’s impacts on the beneficiaries and evaluate its contribution to the transition to formal employment of Turkish and Syrian workers living in Konya, Adana, Hatay, Bursa and Istanbul where the Programme was implemented, the financial support provided under KIGEP led to an increase of approximately 70 million TRY in the national income in the short term; tax revenues increased by 8 million TRY, and premium revenues by 26 million TRY. The KIGEP support contributed five times of its volume to the national income, and two times of its volume to the State’s social security premium revenues. In the long term, it is projected that each 1 TRY spent under KIGEP will have an approximate contribution of 45 TRY to the national income and 16 TRY to the SSI premium revenues.

Employment increase was 16% greater in the enterprises that received KIGEP support than those that did not

According to the study, the overall employment increase in the sectors in which the beneficiary enterprises operated was below the increase rate for the enterprises that received support. While the number of workers at the enterprises in the same sector increased by 4.5% before COVID-19, the number of workers at the enterprises receiving support from KIGEP increased by 20.5%.

While the number of Turkish workers at all enterprises benefiting from KIGEP was 19,931 in March 2019, it increased by 12% to 22,342 in the same month of 2020. As of the said period, the increase was 4% in the number of Turkish workers on the basis of all enterprises in 5 provinces under KIGEP. After the implementation ended in January 2020, 97% of the enterprises continued to employ all or some of the Syrian workers.

Number of female workers increased

According to the report, the average numbers of female workers in all enterprises increased in March 2020 compared to the same month of the previous year. The greatest increase, which was 56%, occurred in the average number of female workers in micro and small enterprises.

The Programme successfully formalized the informal employment of Syrians

85% of Syrian workers stated that they either never worked before (51%) or they worked without social security (34%) before starting at their current workplace. While 85% of Syrian workers who responded to the survey started their first job with social security through their current jobs under KIGEP, 97% stated that working with social security was beneficial for various reasons.

By March 2020, the rate of Syrian workers in all KIGEP beneficiary enterprises which was 5% before the Programme increased up to approximately 12%. During the period of the Programme, these enterprises employed an additional 983 workers outside of the support.

97% of the enterprises continued to employ all (61%) or some (36%) of Syrian workers after KIGEP ended.

KIGEP also contributed to employment retention of Turkish workers in the shrinking economy. When examining the period in which enterprises had not yet started to receive support under KIGEP and the end of the period in which they benefited from the support, the report demonstrated an increase varying between 22 to 25% in the number of Turkish workers outside of micro-enterprises.

Business costs decreased, no worker was laid off, and debts were paid

According to the report, the primary advantage provided by KIGEP is the reduction of business costs for all business sizes. While most of the enterprises stating that they gave up the intention of laying off workers were micro-enterprises, the ratio of enterprises indicating that they gained an advantage in this regard gradually decreased in small and medium enterprises. Similarly, micro-enterprises stated that they paid their debts thanks to KIGEP. On the other hand, large enterprises benefited the most from KIGEP’s advantage of supporting new investments.

According to the study, the cost advantage provided to enterprises through the KIGEP support led to an increase of approximately 2 million TRY in the enterprises’ sales revenues for 2019.

Contribution to social cohesion

According to the report, while 41% of Turkish workers indicated that after starting to work with Syrians, their opinion about working together changed for the better, 24% stated that they realized that cohesion would take a long time. Additionally, enterprises stated that Syrian workers showed significant progress in the areas of language, professional knowledge, work discipline and performance.

About KIGEP

The “Transition to Formality Programme KIGEP” Phase I was implemented under the “Job Creation and Entrepreneurship Opportunities for Syrians under Temporary Protection and Host Communities in Turkey - Opportunities for Lives” project implemented in cooperation with the Directorate-General for International Labour Force (DG-ILF) of the Ministry of Family, Labour and Social Services (MoFLSS) and the International Labour Organization (ILO); and the “Decent Work Opportunities for Refugees and Host Communities in Turkey” project implemented in partnership with the Strategy Development Department of Social Security Institution (SSI). It was financed by the EU Regional Trust Fund (MADAD) and the US Department of State, Bureau of Population, Refugees and Migration (USPRM) under the Refugee Response Programme created by the ILO Office in Turkey.

The Programme aimed to economically empower Syrians under Temporary Protection (SuTP) and Turkish citizens living the regions where they migrated and foster a “formal labour culture” for employers and workers through an employment support method.

Under KIGEP, employers who employed Turkish or SuTP workers were paid 950 TRY for up to 6 months for each worker in return for their monthly social security premium fees. Work permit application expenses (work permit fees for 2019 and valuable paper amount totalling to 372.20 TRY) of the workers were covered from KIGEP’s budget.

The enterprises under KIGEP were delivered a total of 13,254,056 TRY between April 2019 and January 2020.

To date, a total of 3,501 workers, 1,856 of whom are Syrian and 1,645 are Turkish workers have benefited from the Programme. Furthermore, work permit fees for 1,681 Syrian workers were paid under the Programme. To date, 460 enterprises serving in different sectors and particularly in textile, manufacturing, construction, and service sectors have benefited from the programme.

With additional financing from the Development Bank of Germany (KfW) and the US Department of State, Bureau of Population, Refugees and Migration (USPRM), the implementation of the KIGEP Programme is continued under the name KIGEP Plus in Ankara, Aydın, Bursa, Gaziantep, Istanbul, Izmir, Kayseri, Konya, Manisa, Mersin and Şanlıurfa provinces.