Public Employment Services (PES)The German Case

by Monika M SommerCounsellor (Labour and Social Affairs)

German Embassy, Pretoriasoz-1@pret.diplo.de

Overview

• Structure of the Federal Employment Agency -Services for job seekers and employers

• Issues of Finances• Special policies addressing Youth

Unemployment• Open discourse (Q & A)

StructureThe Federal Employment Agency (BA) is the labour market's biggest service provider. As a public body with self-governance it acts independently within the framework of applicable law.The BA is composed of– the head office in Nuremberg– 10 Regional Directorates (Regionaldirektionen)– 178 Employment Agencies and– approximately 610 branch offices. – The BA is headed by the Executive Board. It manages the BA and administrates its businesses.

It represents the BA in and out of court.– The Board of Governors as institution of supervision and legislation monitors the work of the

full-time Executive Board and advises on current labour market questions. It issues the BA's charter and annually determines the budget of the BA prepared by the Executive Board. It also approves the annual report which the Executive Board presents to the Federal Minister for Labour and Social Affairs.

– The Federal Board of Governers and subsequent BA's governing bodies form the core of the structure of self-governance. Representatives of employees, employers and public institutions serve without remuneration in the BA's governing bodies. These bodies' role becomes most evident through their suggestions for changes in organisational goals, decisions on major activities, reviews of completed activities and tracking of administrative work in progress. Members of these various boards and committees are also expected to provide the BA's management with ideas for new solutions that reach beyond the immediate needs of the day.

The Employer Services in NumbersHeadquarters

10 Regional Directorates

176 Employment Agencies

Development and Support

Management and Implementation

Employer Service Program

390 Employer Service Teams with circa

5,000 Job Placement and Counseling Specialists

ca. 4.9 mil. employers 1

ca. 2.2 mil. advertised jobs2

0.5m successful hires3

1 Employer, meaning establishments with which the Employment Agencies actively cooperate2 Jobs offers received by The Federal Employment Agency requiring social security contributions; Totals October 2010 – September 20113 Annual progress gains from January 2011 – September 2011 (0.38 mil. Jobs; 0.1 mil. Trainee positions)

Duties and Services (SGB III) The Federal Employment Agency offers a broad range of services on the labour and training market for citizens as well as companies and institutions. Main duties are: – placement in training places and workplaces – vocational guidance – employer counselling – promotion of vocational training – promotion of further training – promotion of professional integration of people with disabilities – benefits to retain and create workplaces and – compensations for reduced income, e.g. unemployment benefit or

insolvency payments (Insolvenzgeld).– The Federal Employment Agency furthermore conducts labour market and

occupational research, labour market observation and reporting and records labour market statistics. Moreover, it disburses child benefit (Kindergeld) as Family Benefits Office (Familienkasse). It also has the regulatory task to fight benefit fraud.

Public Private PartnershipIn some cases the BA can seek the cooperation with Private Employment Agents. One way is the granting of a placement coupon (Vermittlungsgutschein, VGS). It enables the job-seeker to get support in finding a job from private placement agents. If the private placement agent successfully places the unemployed into a new job, then the placement coupon money will be paid, for the first half being 1,000 Euros as soon as the employment has been going for 6 weeks, while the second half, being another 1,000 Euros, follows after the employment has run for 6 months.

Linkage of payment to qualification efforts

The unemployment grant will be denied, if the unemployed person does not cooperate in actively seeking a new job.-If (s)he does not accept a decent offer-If (s)he refuses further training to gain employability (last resort - counselling has to be given first)

Issues of Finances -

Development of integration costs in the various business segments

After a clear increase of costs per integration in the crisis year 2009 these costs dropped in all strategic business segments in 2010

2006 2007 2008 2009 2010

*

63.64867.894

75.885

64.171

Adults– costs per integration( dez . EGT+Alg 1 zu Integrationen 1 ohne EGG und GZ)

Youth – costs per inception(Kosten BaE und BVB; BB- Berichtsjahre)

Rehabilitants – costs per Integration(Kosten integrationsorientierter Teil Kap. 3

und rehaspezifischer Anteil BaE und BVB)

2006 2007 2008 2009 2010

2.777 2.592 3.102 3.242 2.907

2006 2007 2008 2009 2010

12.951 11.460 9.952 11.991 10.410

1

2

1 3

* 2006 keine vergleichbare Abbildung auf Grund der DWH Daten möglich

Hinweis SGF IVa : Ab 2011 werden die Kosten Alg 1 um die SV-Beiträge reduziert, da mit ERP eine zentrale Buchung erfolgt. Ein Vergleich mit 2011 ist daher nur eingeschränkt möglich. Die Kosten

2011 gehen aus diesem Grund zurück.

The result of effective BA management is a reduction of (the period of) unemployment, increased filling of vacancies and more satisfied customers

2006 2007 2008 2009 2010

-17,1 days

163,7149,9

124,1 126,9

146,6

shorter unemployment completed time duration of factual unemployment (LE) in days

end of year values

more filled vacanciesnumber of succesful filled vacancies

end of year values

more satisfied customerscustomer satisfaction job seekers in school grades

end of year values

less unemploymentAvarage stock unemployed total in thousand

end of year values

2006 2007 2008 2009 2010

+ 100,6 %

238.375

286.956

370.659348.123

478.161

2006 2007 2008 2009 2010

0,7 grading scale

2,92,6

2,4 2,3 2,2

of whomunemployedSGB III

2006 2007 2008 2009

1.663 1.252 1.010 1.194 1.077

4.487

3.777

3.2683.423

3.244

2010

- 27,7 %

Balance of the past 5 years

1,25

1,01

1,19

1,08

0,89 0,87

With declining unemployment, costs for the integration of individuals increase

Level of budget accounts for integration and unemployment in SGB III

3,6

Unemployed SGB III in Mio. persons

Expenditure per funded integration

1.7051.869

2.1332.346

3.162

2006 2007 2008 2009 2010

contribution rate of social securitydata in %years 2004 to 2011

The BA has been the only social security organisation that has reduced its contributions in the past time. We contribute to a decrease in the non-wage labour costs.

A global youth employment crisisYoung people have suffered heavily from the deterioration in labour market conditions.The rate of youth unemployment rose globally from 11.7 per cent in 2007 to 12.7 per cent in 2011, the advanced economies being particularly hard hit, where this rate jumped from 12.5 per cent to 17.9 per cent over this period. In addition to the 74.7 million unemployed youth around the world in 2011 – a growing number of whom are in long-term unemployment – an estimated 6.4 million young people have given up hope of finding a job and have dropped out of the labour market altogether. Young people who are employed are increasingly likely to find themselves in part-time employment and often on temporary contracts.In developing countries, youth are disproportionately among the working poor.(Youth employment will be the subject of the ILO’s Int. Labour Conference in June 2012)

Limitations of PES

PES cannot make up for deficits in general education.They can though, ease the transition of young people from general education (schools) into vocational training and working life.

Contribution of the BA to improve the transition from school to working life

Professional orientation§ 33 SGB III- Personal offers such as school meetings- media in the internet- in-depth career guidance

Financial supportKap. 4 SGB III- Vocational training grant (Berufsausbildungsbeihilfe – BAB)- Preparatory Training (BerufsvorbereitendeBildungsmaßnahme – BvB)- Procecess supportCounselling

§§ 29 ff. SGB IIICounselling in decision making- in individual counselling sessions- in short term meetings i.e. During counselling hours at a school

Matching for positions as apprentices § 35 ff. SGB III- demand-driven- individualised- developed in personal discourse or online through the „Job-Börse“

Werner Burg, Evelyn Thate 12.10.2010, © Bundesagentur für Arbeit

I am looking forward to your comments!