Building to a Labor Intermediation Service: Creating and Linking New Services

Core employment services, while important to do efficiently to establish a service, will soon face limitations in developing country markets, both in relation to dysfunctions present in the local labor market and in getting new job listings where formal sectors are small. Perhaps it will seem that there are not enough jobs to list or employers will say they can’t find qualified workers or don’t want to take risks making new hires. Extended services are used to help pry open job markets further, to address multiple barriers to employment, and in doing so build a basic employment service into a labor intermediation service. Particularly for developing countries this can extend the reach of the service into more “hidden” employment markets - such as internal and external migration, training leading to employment, and self-employment.

These additional services are called in this book “extended services” because they go beyond traditional matching of job seekers to vacancies of an employment service to extend the reach, effectiveness and relevance of the service. These extended services can either be delivered by the new public-private service or linked through information or referral, or contracted to independent providers. Extended services are grouped into three types in this book as a way of highlighting the distinct methods by which they seek to improve reach, relevance and effectiveness:

  • Information Services (Type 1) - these services provide data/infor- mation on labor market and career trends and, in some cases, information on the availability and performance of training and educational institutions so that job seekers can make better job search, career planning, training or education decisions based on employment prospects.
  • “Intermediation Plus” Services (Type 2) - these are services that either lead directly to a job match at the end or put the job seeker on the road to a job. Most common are skills or employment-readiness training designed so that trainees are placed either directly in jobs or that lead to jobs in the near future. Other forms of “intermediation plus” services include screening, testing, and profiling employees, acting as an in-house human resources department. The term “intermediation plus” services is used for a reason in this book: to deter the adoption of a range of services that are not focused or directly linked to employment and maintain a razor-sharp focus on delivering connections to employment. When there are multiple and complex barriers to employment involved, this book argues they are best handled by specialized programs targeting disadvantaged groups.
  • Program Administration and Support Services (Type 3) - here delivery of employment services is combined with other related labor market and social programs in order to draw more potential clients through the door and improve the administration and coordination of labor market or social programs.

Before getting overwhelmed by the range of services, please remember that Stage 2 means building services selectively over time, with emphasis on both building and selectivity. Particularly when one employs the third big-picture perspective on the whole intermediation market, no one public provider could or should do it all. Each of the services listed below are found in the spectrum of developing countries up to the middle- and high-income developing nations. Each country presents a different configuration of public and private institutions that might be drawn in to be principal providers or partners in such services. By Stage 2, we are far distant from the model of a single publically financed employment service trying to do it all. For each of the following extended services, one can name developing country cases where a public-private service provides it itself, contracts it to an external provider, or links to or relies principally on an outside provider to fill the market niche. These “no-one-size-fits-all” configurations in developing countries come about for many reasons - national and local institutional strengths and weaknesses, erratic funding cycles, capacities built during employment emergencies. Each of the extended services is described in this first section on creating and linking new services. Which services are created and which are linked via a network or referral is part of a larger alchemy laid out in the final section of this chapter. They are listed as the first big-picture change as typically a few new services are introduced on the road to realizing that, to grow and diversify more, the now labor intermediation service will need management restructuring (big picture item #2) to advance further.

Table 4.1 provides an summary of the three types of extended services. Next follows a fuller explanation of specific services under each of the three types, all of which have taken form in developing countries, adapted in different combinations, configurations and strengths to very different labor markets. If one were to generalize, nearly all Stage 2 services develop an early base of labor market information (Type 1) as this serves the information needs for better job hunting and better service delivery, and either link or manage a skills training program (Type 2) as this is an area of such fundamental deficit in the developing world.

Table 4.1 Extended service types

Extended service types

Service description

Principal client

Information services

Labor market observatory/

Job seekers, employers,

(Type 1)

information systems

educational and training institutions

Training, microenterprise,


education information systems

institutions, private providers

“Intermediation Plus”

Management of training or other

Employers; workers; job

(Type 2)

active labor market instruments


Migrant support services

Internal & external migrants; employers




Placement and human resources services for employers


Program administration

Labor market/unemployment

Eligible unemployed,

and support services

insurance administration


(Type 3)

Social service gateway/referral

Eligible population

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