Employment and Labor Intermediation Services: What Are They and What Are They Good For?
Employment services are designed to match job seekers - whether unemployed or in a job - with available jobs. If done well, they fulfill three key labor market objectives: (1) reducing the time it takes to find a job (good for both the worker and the employer); (2) increasing the percentage of workers obtaining a job; and (3) enabling a better fit between the worker (their skills) and the job they are doing. A better fit of worker-to-job has related labor market benefits as well - the worker can be more productive, stay longer at the job (e.g. reduced job rotation and job volatility), and hopefully gain a higher wage due to the better, more productive fit. Employment services were never intended to be needed by everyone looking for a job, but as laid out in the previous chapter, it is clear that many disadvantaged workers in developing countries don’t have efficient or effective methods, particularly formal ones, to get jobs. Having in mind these gains of speed, placement and increased quality, we can both begin to see where employment services may fit in the set of needed policies for developing countries regarding employment and why adapting such services to local labor markets may assist in rectifying a range of employment and skill disconnections.
Both public and privately-run employment services to help job seekers get jobs have had more than a century of practice in the industrialized countries. Even so, no single model has emerged; they are still changing and adapting operating models to changing economies and technology. The basic services and economic rationale of what is known as the active labor market policy of employment services, however, are fundamentally similar, © The Author(s) 2017
J. Mazza, Labor Intermediation Services in Developing Economies, DOI 10.1057/978-1-137-48668-4_2
even if ever modernizing to newer forms. “Active” in this sense means actively matching a worker to a job or inserting a worker into employment.
This chapter discusses in detail the basics of employment services - the core functions, record and rationales - and then describes the more advanced version of labor intermediation services which is triggered when an employment service moves forward to create a set of extended services adapted to very different labor markets and national policies. From the basics of employment/intermediation services - what they are and who delivers them - the chapter then goes on to discuss what they are good for (and not good for!) in the broader framework of other labor market and social policies.