Who Provides These Services?

Before delving into the extended services, a quick look at who provides these services whether core or extended. The active labor market policy to improve the match of job seeker to job has long been associated with just one delivery agent - a publically-financed public employment service (PES). This means public funds finance the offices, the counselors, the online and walk-in services. But the truth is that the same function has from the outset also been done simultaneously by a set of public, private and non-profit institutions, albeit these very different agents usually serve different clientele according to different financing models.

Many countries used to follow a International Labour Organization (ILO) convention (since repealed) which prohibited private employment services from operating or charging a job seeker a fee (employers generally can be charged fees). It has taken years for many developed and developing countries to formally remove this restriction, even while it was often ignored. It is one of many factors - more important are demand and market size - to explain why there are far fewer private providers doing this work in developing countries. In Tunisia, for example, private providers of placement services are still prohibited by law.

Moving to today’s understanding of who provides employment services: public employment agencies, private employment or recruitment agencies, such as Manpower Inc., and non-profit agencies all conduct the three core services. Internet-only websites such as Monster.com or Caribbeanjobs.com are tools of job search and not of employment or labor intermediation services unless they provide all the core functions. In the developing and developed world, local services are also increasingly run by non-profit organizations or community organizations, such as Catholic churches in Lima, Peru, who have helped members of their congregations find work with local parishioners, or NGOs which can integrate job placement as part of the delivery of another service (an intermediation “plus” service). It should be noted, though, that when impact evaluations are done on the active labor market policy tool of employment services, they typically only measure the impact of the public service, even if the public service supports or its information and other services help the private and non-profit sectors to also have an intermediation impact.

Financing, coverage, and success rates can vary markedly between different public, private and non-profit actors. Public expenditure for public employment services in developing countries is and always will be constrained by limited public funds. That’s why public-private-non-profit partnerships become more essential to public employment services in developing countries than they have been in the developed countries (and even in the developed countries they are playing more roles). Public employment services in Africa working alone are noted as being particularly limited. When they do exist, their coverage is limited and there is not enough financing to extend to the rural areas or to have many local offices. A recent review found African public employment services lacked key mechanisms to serve clients and had “limited capacity” to respond to client needs, particularly of the most vulnerable.9 Private and non-profit services are financed either using a business model (e.g. firms pay for placement services, such as Manpower Inc. or private migration agencies are paid to process and send migrants to high-income Middle East nations) or by a foreign or domestic donations model that combines grants with perhaps some money selling their services (e.g. partial self-financing). Private employment agencies are traditionally found to concentrate on either of two markets: the “higher end” of the labor market - high tech and professional workers or large cohorts of low-skilled workers (e.g. administrative staff, construction for work abroad). Non-profit organizations, working with donations, are more able to concentrate directly on the poor and groups that face labor market discrimination and barriers to employment, such as women, youth, indigenous populations, and Afro descendants in non-African and Afro-descendent majority countries.

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