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Around the world, governments struggle with the challenge of effectively assisting people in finding employment. After several years of improvement, unemployment rates since the economic downturn have again sharply increased. The challenge is particularly acute when serving individuals who face barriers to employment, such as individuals with limited skills, those who have experienced long periods of unemployment, and those subject to discrimination in any form (e.g. minority groups, immigrants, and others). In an increasingly demanding and rapidly changing employment environment, unemployed workers often require active support, ranging from personalized coaching to skill training, to increase their employability. How can this process be improved?
Public employment services have the social responsibility of assisting unemployed persons in finding employment, through, among other means, the provision of various active support measures to improve employability. This approach can require intensive support services, and public agencies are often criticized for both inefficiency and ineffectiveness in connecting jobseekers to employers. Private, profit-oriented placement companies typically excel in rapid placement. With current and relevant knowledge of the labour market and state-of-the-art assessment tools, private employment agencies quickly assess the employability of a jobseeker and match candidates with job openings.
Partnerships between public and private providers are increasingly seen as a means to accelerate placement. The goal of a public-private partnership is to marry rapid placement with attention to the needs of all jobseekers, thereby increasing the efficiency of employment services by combining the strengths of the private and those of the public sectors. Well-structured partnerships between private and public providers combine the advantages of market forces with public social policy goals and can help mitigate the risk of both suboptimal outcomes in private services (e.g. due to insufficient support for hard-to-place people) and the inefficiencies of public employment services. On the other hand, experience around the world has shown that without consistent and thoughtful controls, public-private partnerships can fail in delivering adequate levels of service to disadvantaged jobseekers; thus, specific attention should be paid to this aspect when developing partnerships in labour markets.
Since the late 1990s, there has been a shift worldwide towards public-private partnerships. The United Kingdom started in 1997 by implementing programmes in specially designated Employment Zones. These initiatives demonstrated the ability of public-private partnerships to succeed in regions with very poor overall labour market conditions. Australia has contracted out a large part of its employment services to private providers since 1998. That country’s experience demonstrates the necessity of constantly monitoring and modifying the partnership to yield the desired results. The Netherlands embarked on a national policy to privatize its employment service in 2002, but suboptimal results in the placement of disadvantaged groups led to a modification of the programme in 2004, giving regions more control over the decision to form partnerships. In Germany, as in the Netherlands, the attempt to regulate public-private partnerships at the national level ultimately failed; after transferring responsibility from the national authority to regional actors, many innovative and successful partnerships between private and public providers have been established. The experiences in these countries demonstrate the potential of delegating authority to regional actors.
Evaluating the effectiveness of public-private partnerships is complex. These partnerships can be very successful in meeting targeted needs; however, the effects of these initiatives on the overall labour market are particularly difficult to measure. Nevertheless, evidence suggests that, with appropriate monitoring and assessment, the involvement of private employment services improves the matching of unemployed persons with employment opportunities.
Five key lessons emerge from an analysis of successful public-private partnerships:
1. The identification and implementation of appropriate performance metrics and financial incentives are critical to achieving the objectives of a partnership. One important objective is rapid placement cycles. Those involved in the placement of the disadvantaged must be given appropriate incentives to integrate these jobseekers into the workforce.
2. Emphasize regional approaches. Shifting responsibility to the regional level allows operators to respond to regional economic situations. Successful employment services – either public or private – must have a sound understanding of the local economic situation and the freedom and flexibility to craft solutions that are relevant to their particular issues.
3. Be aware of cultural factors. The cultural differences between public and private providers make it essential for both partners to be willing to cooperate. The very differences that make public and private partners a good team can divide the team before any effective cooperation is established.
4. Innovations require time. Successful partnerships are highly dependent upon the particular economic and social environment in which they are implemented. Partners in employment services must evaluate their day-to-day experiences and continue to develop new competences. Partnerships must be given the time needed to develop and succeed.
5. Emphasize networks. Employment services and the placement of different target groups in globalizing labour markets are complex processes. Network approaches connecting the competences of both partners in sustainable, well-developed partnerships are likely to provide more effective solutions, especially when it comes to integration of the most disadvantaged individuals.
The private sector’s responsiveness and special capabilities can make a substantial contribution to improved matching, while the public sector’s awareness of the social responsibility of employment services ensures that all groups are served. Bringing them together can improve employment opportunities for all.
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