Varied Models of National Intermediation Services in Even More Varied National Intermediation Markets

By the later stages of Stage 2, developing country labor intermediation services, now national, are very different from the classic national public employment service of old. It is important, though, that Stage 2 is not seen just as the strengthening of a national, formerly all-public, labor intermediation service, but that the service is seen to be playing a different foundational and catalytic role in a national intermediation “system.” This rethinking of system impact happens for a formerly solely public employment service on two planes: first, via the continually evolving public-private-NGO administrative configuration and contracting arrangements of the national service; and second, via the services themselves.

First, sub-contracting or shared administrative responsibilities with private and non-profit providers has been the principal mechanism in developed and developing countries for inducing new providers into the marketplace who almost never make their business solely by contracting to the public sector. Research is solid that the use of private contractors with performance monitoring gets better outcomes as well as stimulating a larger market of better intermediaries, via greater competition among more providers.49 Ingenus, a United Kingdom-based private intermediation services company, grew first through contracts with the public employment service to doing intermediation services internationally. Ingenus now has the contract for the entire Saudi Arabian intermediation system, for example.

Private or non-profit providers have been contracted to run the entire spectrum - from specific services (Turkey), a regional office of a public service (Ceara, Brazil) and a whole service (Saudi Arabia). Moser and Sol argue that many OECD countries have gradually substituted the public employment service for private providers over the last two decades, first for special groups but more recently for the more basic placement functions.50 By building a set of national intermediation providers over many years, Australia moved to a fully contracted-out public employment service with a sophisticated rating system for providers based on performance.

Australia with perhaps the most evolved set of “star” ratings for all its private providers evolved this ratings system over a decade, learning by doing. The system establishes “pay-for-performance” criteria related to the difficulty of insertion for different types of job seekers, paying for better, quicker and more lasting labor insertion. The results of the “star” system feed back each year and “rate” each of the private providers. The Australian system evolved from one largely focused on improving competition among newly developing providers to a more advanced contracting- out model that rewards providers who get better employment results with higher ratings each year. The Australian Jobs Network has reported dramatic reductions in average costs via the use of its performance -based system. In the Australian case, private providers must accept a package of clients from the easiest to the most difficult to re-employ and are paid based on performance and level of difficulty.51 The Australian case, among others, demonstrates as well that even the most advanced countries have gone through, and are continuing to go through, years of experimenting and stimulating a private intermediation market to get to their current configuration.

Private and non-profit providers collaborate in many different administrative roles apart from direct contracting. Whether they are service providers without direct contracts (Honduras), collaborators via mutual agreement (Jamaica), or part of local oversight councils (Mexico), these should be seen as channels for market change or expansion. These changes may be indirect but summed together can have market effects, including inducing more firms to openly list vacancies, and improved articulation of private sector employment and skill needs. The models of national intermediation services working with public, private and NGO institutions are in continual development in both the developed and developing world. They span a great range and include:

  • • Completely privatized national intermediation service (e.g. Australia’s Job Network);
  • • Single private provider of a national employment service (e.g. Saudi Arabia) or private provision of some state services within a national public service (e.g. Brazil)
  • • Contracted services for the long-term unemployed with reliance on a public employment service for the recently unemployed (up to 12 months) (e.g. United Kingdom);52
  • • Wide-ranging private and NGO market with smaller (comparatively) and highly decentralized public employment service linked with unemployment insurance (e.g. Switzerland).
  • • Highly decentralized set of municipal employment centers with extensive use of private contracting for training and services (e.g. Chile);
  • • Reliance principally on private provision with distinct state-level capacities (e.g. the United States);
  • • Independent public service with Ministry of Labor heading board of directors and NGO provision (e.g. Lebanon);
  • • Solely public intermediation service with large number of diverse regional offices (e.g. Tunisia).

Market expansion can secondarily be promoted by a multi-pronged national intermediation service by explicitly incorporating other providers in their services. This has been done in developing countries via a national service’s electronic platform and linked or integrated job databases, via its job fairs and via promotional events. Mexico’s national employment portal, el Portal de Empleo, lets private placement companies also list jobs on its national page and participate in their job fairs. If you search for work on a bank of computers in most developing countries, you are typically shown and get access to any job banks. Jamaica’s Electronic Labour Exchange (ELE) staff input jobs from newspaper employment ads in order to streamline job search for its users. As these efforts are largely ad hoc to date, it is not clear how much market expansion can be stimulated through consolidation and cooperation in services. However, in the future, this growth can be tracked and efforts made more systematic by including indicators on the growth of the market - for example, number of national listings and placements by source, and number of traineeships using on- the-job methods or contacts with the intermediation service.

Few assessments have been made to map and understand different developing country contexts for intermediation which might also better detect weaknesses and potential directions for contracting or service collaboration. Table 4.2 provides such a mapping exercise for the Middle East. The Middle East demonstrates the great diversity between high reliance on non-governmental providers (e.g. Yemen) to high reliance on the public sector (e.g. Tunisia).

This look at institutional mapping in the Middle East shows how different the fundamentals of national intermediation systems are even in the same region. As described in Box 3.3., Korea built into a system today that connects with its Korea Employment Information Service (KEIS) municipal job centers, special job centers for persons with disabilities (the latter two run by non-profit agencies), 9000 private employment agencies and 2000 temporary help agencies.53 Market stimulation efforts by less developed economies would need to take on very different dimensions, given the big differences in capacities and scale of market. Particularly in smaller countries, pairing with experienced internal providers has been drawn on more frequently. Institutional strengthening and training in project management for employment are likely needed for many non-governmental organizations, but would be more needed in countries with few organizations, private or NGO working in private sector demand-driven fields. Chile’s National Youth Program, Chile Joven, was launched through open competitive bidding in a country without many private firms or NGOs who had experience as intermediaries - finding job placement slots for potential trainees in firms and then designing the training. For each periodic bid, they provided training sessions on proposal design and practices to enter this new field of demand-driven training.

In thinking differently about the big picture - a more interconnected national system that promotes better job and skill intermediation - the end goal is not a super-service that can be all things to all job seekers. Rather the question might be to think more strategically about what is needed to create a larger and more and more self-propelling intermediation market, and set targets and programs accordingly. Three other components, or perhaps sub-strategies, of this larger, more interconnected intermediation system include: more employment-accountable schools and training institutions; the encouragement of human resources development as a career and market; and targeting employment growth sectors.

Country

Registered job seekers

Public sector

Private + NGO sectors

Number (thousands)

Percentage of women

Responsible Ministry or Public Employment Agency

#of

Regional

Offices

#of

NGO’s

Providing

Services

# of Private Employment Agencies

Egypt, Ajrab Republic

895.1

23.3%

Ministry of Manpower and Migration

307

3

54

Jordan

28

-

Department of Employment and Training

14

-

45

Lebanon

12.2*

-

National Employment Office, MoL

3

4

0

Morocco

517

40.6%

National Agency for Employment and Skills Promotion (ANAPEC)

74

Data not available

Data not available

Syrian Arab Republic

1703.8

31.9%

Central Nomination Unit, Directorate of Labor, Ministry of Social Affairs and Labor (MoSAL)

28

4

Legalized only in 2010

Tunisia

281

60%

National Agency for Employment and Independent Work (ANETI) Ministry of Vocational Training and Employment

91

2

Private agencies are illegal

Source: Diego F. Angel-Urdinola, Diego F., Arvo Kuddo, and Amina Semla. “Public Employment Agencies in the Middle East and North Africa.” Building Effective Employment Programs for Unemployed Youth in the Middle East and North Africa. World Bank, 2010. Tables 1.1, 1.2 and 1.3 ^Beirut only.

 
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