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Ahti Avikainen Ministry of Employment and the Economy Employment and Entrepreneurship Department

MISEP Meeting, Paris, 3.-4.11.2008 Achieving activation of job seekers: successful strategies for case management Workshop 2a: Shaping individual commitment and intervention – what works? PES Reform in Finland 2004-2007: Labour Force Service Centres. Ahti Avikainen

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Ahti Avikainen Ministry of Employment and the Economy Employment and Entrepreneurship Department

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  1. MISEP Meeting, Paris, 3.-4.11.2008Achieving activation of job seekers: successful strategies for case managementWorkshop 2a: Shaping individual commitment and intervention – what works?PES Reform in Finland 2004-2007: Labour Force Service Centres Ahti Avikainen Ministry of Employment and the Economy Employment and Entrepreneurship Department Group for Employment and Enterprise Services 3.11.2008

  2. Structural Reform of PES 2004-2007 • Starting points: main challenges in the Finnish labour market • To decrease and prevent structural long term unemployment • To ensure the availability of qualified labour for companies • Aim was to build up a separated service model to face the challenges • Main Employment Office: focus on the open labour market • Labour Force Service Centre (LAFOS): focus on the services for the difficult groups

  3. Structural Reform of PES • To strengthen amulti-channel service model and increase the use of e-services and call centres • To develop market orientated services in the employment office • To ensure enough support to the most disadvantaged groups Main Targets

  4. Structural Reform of PES Self Service, e-Services Individual Services Special Services • EMPLOYMENT OFFICE • Services for jobseekers • placement • career guidance • labour market training • Services for employers • special units • wide range of services e-services e-services Job seeking centre Labour Force Service Centre

  5. Structural Reform of PES

  6. Two strands of the reform: • Renewal of the services at the employment offices, special attention to strong start / early intervention; quick response to customer needs. • In order to decrease structural unemployment, a new joint-service between PES, social and health services of municipalities and the Social Insurance Institution (SII) was set up. Each partner devoted personnel to this new service, while retaining their basic services. This joint service is called Labour Force Service Centre (LAFOS). • Where the PES focus on job-brokerage and open markets, the LAFOS are intended as a special multi-professional service for people facing multiple problems in entering or re-entering the labour market. • In this sense, the reform has had two “strands”, an open market strand and a structural unemployment strand.

  7. Figure 1. Unemployment in different groups 1993-2007 (1993=100)

  8. Table 1. Activation and job-search plans of long-term unemployed and disadvantaged and number of Labour Force Service Centre clients

  9. Evaluation of the PES reform • It seems that right kind of operations have been made and the changes in the service processes have led to the intended direction • At the employment offices, especially the early intervention and developing of internet based services have had a clear causal connection to the prevention of unemployment • The reform has been moderately well succeeded in the reduction of structural unemployment • However, there is still a challenge how to activate and place the most difficultly employable persons • The availability of skilled labour is still problem and the solving it requires new types of methods

  10. Evaluation of the Labour Force Service Centres • According to the objectives set for the reform, The Labour Force Service Centres (LAFOS) have focused on the services of disabled unemployed and those applicants that are employed with difficulty. • However, as the LAFOS have operated for a relatively short time and their customer volumes have been small in relation to the number of disabled and with difficulty employed, it is premature to estimate their effects for example on the structural unemployment • Furthermore, the evaluation has been complicated because the follow-up and statistical data is incomplete of the effects concerning reaching of the labour policy and social policy objectives • Anyway, the results show that there has been created division of labour in services and measures between the LAFOS and their parent employment offices

  11. Evaluation of the Labour Force Service Centres • The rehabilitation and activation of the most difficulty employed persons have intensified when concentrated to the LAFOS, likewise the employment offices have been able to concentrate on their job brokerage (labour exchange) task more strongly than before. • The differentiation of services, which is in accordance with the service reform, looks like a strategically suitable procedure - especially in the new situation in which, on the one hand, the management of the hard core of the unemployment requires special measures and, on the other hand, securing of the supply of skilled labour requires focused and tailored education and employer services.

  12. Evaluation of the Labour Force Service Centres • However, the differentiation of the customers and services has led to the fact that interchange (mobility of clients) does not necessarily take place between the Labour Force Service Centres and the employment offices. Some barriers complicating customer service could have been created. • The threat is that the service centres may remain “the far end” apart from the functions of the employment offices and from the basic tasks of the employment services. • The development dynamics of the Finnish public employment service reform include the fact that the ways of action do not change instantly but that they develop gradually and at different times in different offices.

  13. Evaluation of the Labour Force Service Centres • The LAFOS orientate intensive services and activation of the clients. Most of the clients need several measures. Before actual labour market measures, it is often necessary to examine and remove the physical, mental, social and economical obstacles of the employment. This means usually long and discontinuous process. • The results indicate that the clients have found solutions especially through activation measures like rehabilitative work experience. The cooperation between labour administration and municipalities has improved. The number of the clients that started rehabilitative working activity has doubled from 2004 (2.100 clients) to 2006 (over 4.200 clients).

  14. Evaluation of the Labour Force Service Centres • At the same time the responsibility of the arrangements has moved from the employment offices to the LAFOS. The share of the LAFOS based decisions increased from 30% in 2004 to 80% in 2006. • Activity rate has increased: the role of the LAFOS has strengthened remarkable after the starting year. Number of activation plans by LAFOS rise from 3.200 in 2004 to 10.600 in 2006. At the same time the labour market support was under reform, which has increased activation rate simultaneously as well.

  15. Evaluation of the Labour Force Service Centres • The public employment service reform must be understood as one of the sequential reforms of employment services going on continuously, the impacts of which are often seen after several years. That is why the observations of the impacts of the reforms and of the significance of the differentiation of services must be understood as intermediate evaluation of ongoing processes rather than final results concerning the broader impacts of the reforms. • The reorganizing of the ministry level administration by creating Ministry of Employment and the Economy in January 2008, started also the next reform: the creation of the new Employment and Enterprise Offices. These new offices will replace the present employment offices. • The focus will be in the labour exchange and integration of the job seekers services and the employer services. According to the current plans this reform will take place in 2009.

  16. Sources: Publications of the Ministry of Employment and the Economy: • Employment and entrepreneurship 18/2008: Towards Working-life Oriented Services – Evaluation on the Finnish Public Employment Service Reform; Robert Arnkil, Vappu Karjalainen, Peppi Saikku, Timo Spangar, Sari Pitkänen • Employment and entrepreneurship 19/2008: Impacts of the Public Employment Service Reform; Mikko Valtakari, Hannele Syrjä, Pertti Kiuru SYSDEM Spring Review 2008: • The renewal of public administration and new activation measures of long term unemployed (in Finland); article by Hannu Kaseva

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