Public Employment Service Reform in Finland in a Nordic/Transnational Perspective Robert Arnkil, Work Research Centre, Tampere robert.arnkil@armas.fi together with research team: Vappu Karjalainen, Peppi Saikku, STAKES Timo Spangar, Spangar Negotiations Sari Pitkänen, Social Development, Ltd.
Evaluation of the Finnish PES-reform Two evaluation teams & tasks: Organisational impact: Work Resarch Centre + Stakes + specialists (2006 2008 (March) Customer/ labour market impact: Helsinki School of Economics/HSE Executive Education (former LTT reseach Ltd) (2006 2007)
Unemployment rate 15,4% The waves of PES reform in Finland Unemployment rate 3% Unemployment rate 7% Employment Unemployment rate 70% rate 8,4% 1990 1995 2000 2005 2010 Over-heating Massunemployment ICTboom Slow recovery Generation change First reform wave: internal rationalisation Second wave: Network cooperation Municipality reform PARAS
Change of problems and themes in Finland Unemployment Long term Unemployment Structural UE Unemployment Worforce Enlargement? Rising themes: (Contradictory) growth of demand, quality of working life, generation change, renewal of recruitment, renewal of rehabilitation, 2006 renewal of municipalities 2015
Unemployment rate EU (15 countries) 7,6 7,4 10 Denmark Finland 4,3 3,9 6,7 7,7 9,8 15,4 1995 2000 2006 Sweden 8,8 5,6 7,1 Norway 4,9 3,4 3,5 0 5 10 15 20 25
Employment rate EU (15 countries) 60,1 63,4 66 Denmark Finland Sweden 73,4 76,3 77,4 61,6 67,2 69,3 70,9 73 73,1 1995 2000 2006 Norway - 77,5 75,4 0 20 40 60 80 100
Finland Long period of persistent unemployment, recent change to better demand Low proportional share on disability schemes and sick leaves; difficult to get to disability pensions How to get long-term unemployed to work Where do we put the disabled Norway, NL, UK, Denmark, Sweden Unemployment low for a long time, shortage of labour High proportional share on disability schemes and sick leaves; easy to get to disability pensions Workforce enlargement How do we get the disabled to work
Finland Open markets Unemployed Norway, NL, UK, (Denmark, Sweden) Open markets Unemployed Long term unemployed On disablity schemes Long term enemployed On disability schemes Employment treshold in Finland Employment treshold in Norway, DK, NL, UK, S
The Finnish PES-reform stands First strand: LAFOS (38) Second strand: PES (101) Target: Structural unemployment via better crosssectoral/multiprofessional networking How are these connected to avoid fragmentation and split? Target: Open market brokerage via strong start and more efficient and focussed active measures Third strand: Workplace development (TE-centres -15) Target: Productivity, quality of working life and generation change via new Ministry (TEM) & f.ex. Workplace Development Programme
PES and LAFOS profiles Key elements PES - Employment Office LAFOS Main target groups Core services Emphasis Key cooperation network Customers aiming for open market immediately or after activation measures Job-search, job-brokerage, employer contacts, career guidance, training Strong start Self service and activity of customer; Regional, sub-regional and local strategy and cooperation Regional Economic and Employment centres, business community, municipalities Those in (assessed) need of intensive personal and individual service in order to upgrade coping and labour market skills Holistic, multiprofessional assessments and services Complementary special services to PES & municipalities, holistic life support, networking and rehabilitation, subcontracting Municipalities, third sector, business community
Ministry of Employment and Industries Other central administration Employment and Economic Centers (TE-centers) Workplace development Job seekers, Unemployed PES - strong start Open market brokerage SYNERGY? Municipalities LAFOS Pensions Subcontractors Intermediate labour markets Job-readiness Other active solutions
Country Profiles of PES-Reforms Point of dep. Key elements Strengths? Challenges? Finland: Network model Structural unemployment, fragmentation of services, recently growing demand PES-municipality cooperation (LAFOS) Efficient job brokerage New: Ministry of Employment and Industries( TEM Flexible networking on local level Piloting Connection to demand/ industries(?) Cross sectoral management? Complicated municipality reform? Position of LAFOS? Denmark Municipality model Strong demand and strenghtening of municipalities PES-municipality amalgamation Danish flexicurity model Unified structure and services on local level National labour market policy? Cross-sectoral management? Norway NAV model Growing costs of benefits and fragmentation of services PES-municipality one stop shop, New Ministry ( NAV ) Strong legislation and top-down elements Bottom-up elements? Connection to demand? NL Gatewaymodel Strong demand and addressing disability Profiling, subcontracted expertise Principal-agent model Fragmentation and costs? UK Segmentation model ( New Deal ) Strong demand and pockets of UE and disability Targeted and tailored customer services + partnerships & third sector expertise Practical customer orientation, partnership contracts PES keeping up with changes? Flexible New Deal
Key themes & future questions I Overcoming fragmentation of policies > New synergy of economic, employment, social & health, educational policies How does the worse end of labour market benefit from growing demand? ( workforce enlargement ) New holistic services addressing the generation change (recruitment+upgrading skills+rehabilitation+quality of workplace+productivity)
Key themes & future questions II Overcoming fragmentation of realisation structures State-municipality (dealing with multiple steering & policy building structures) Building multi-professional/multi-agent teams, networks and cultures Subcontracting/ using markets/ intermediate labour markets (the mature market, smart buyer smart producer challenge + dealing with a new level of complexity)