Managing Expertise In Labour Offices

Managing Expertise in
Public Employment Agencies
From „Authority“ to „Service“

28.04.2009 HALL2013 Expertise in Governance 1

Why?
• Knowledge-intensive
• Changing
• Complex, hybrid organizations (think
tank/web-service provider/consultant/trainer/
government agency/fund/statistics provider
etc.)
• Mr. Lumio is busy


Introduction
• 4 Cases of Public Employment Administration
(PEA): Austria, Lithuania, France, Germany
– Shared histories? The emergence of KM & NPM
• PEA: match candidates with job
openings, disburse unemployment pay
• Hypothesis:
– Institutions as Mirrors
– Ideology shaping Organizations


A pointed remark
• Formerly:
– Everyone has the right to work, to free choice of
employment, to just and favourable conditions of
work and to protection against unemployment.”
(Art. 23, The Universal Declaration of Human
Rights, http://www.un.org/Overview/rights.html)
• Today:
– Everyone has the right to improve one’s
employability and to make use of job placement
services


The issue behind:
• Who is responsible for unemployment?
– The unemployed? (supply-sided)
• consulting, training, placement, employability, etc.
– Or the „economy“? (demand-sided)
• Business cycle stimulus, investment, anti-
discrimination, etc.
• Change of name plates: „Service“ vs. „Office“
– non-binding character, abdicating responsibility?


CASE I.: The Public Employment
Service Austria (AMS)
• Nokia again: „Wir
verbinden Mensch und
Arbeit“ („We connect
people and work“)
• An „HR service provider“
• Citizens = customers
• Supporting the „own
initiative“ of both job-
seekers and enterprises
• Core tasks:
consultancy, information,
qualification, financial
assistance

AMS - The Organization
• Enterprise (NPO) under public law in close
cooperation with labour and employers’
organisations (“Sozialpartnerschaft” – Neo-
Corporatism: corporate governance influenced
by representatives of industry, trade
unions, chambers of commerce & labour)
• Commissioned by the Federal Ministry of
Economic Affairs and Labour


AMS - The Organization
• 1 federal, 9 regional and 99 local organisations
• Staff: 4.853 (valid as of Annual Report 2007)
• Training an average of 50.000 unemployed/month


AMS History
• 1994: Labour market reform ->
Public Employment Service Act 1994: Spin-off of
Market Administration Authority
(“Arbeitsmarktverwaltung”), a ministerial
department -> outsourcing trend
“The transition from a mere employment office to the
Public Employment Service as a comprehensive service
provider is marked by the introduction of new
management strategies (management by
objectives, managerial accounting, launch of a
corporate identity project). The AMS also plays a crucial
role in establishing the pan-European job portal EURES.”


AMS History
• 1995: European partner institutions
• 1996: management by objectives, service-
oriented concept for staff and clients
• 1997: IT revolution; „All workstations of the
AMS are equipped with internet access, and
the new electronic job bank eJob-Room allows
for interactive job matching.” New training
modules for AMS employees


AMS History
• 1998: Expansion of IT systems
– eJob-Room Austria’s biggest online employment
marketplace, www.ams.at among the top ten of the
Austria’s most visited websites
– Data Warehouse project launched
– More service (health insurance coverage for the
unemployed) without additional staff
• face-to-face counselling, one-stop-shops, call centres
• Reorganisation of regional branch offices into three
“Zones” (Info Zone, Service Zone and Counselling Zone)


AMS History
• 2000 Best practice orientation
• 2001 Information campaigns and career
advice, video clips, gender mainstreaming
• 2002 e-government service section enlarged
• 2003 networking activities with
companies, restructuring of website
• 2007 International Benchmark
Project, comparing the results of 13 Public
Employment Services in Europe
SOURCE: http://www.ams.at/english/14603.html


Knowledge Management through
„Business Intelligence“
• What is Business Intelligence (BI)?
“Business intelligence (BI)refers to
skills, technologies, applications and practices used
to help a business acquire a better understanding of
its commercial context. Business intelligence may also
refer to the collected information itself. BI
applications provide historical, current, and predictive
views of business operations. Common functions of
business intelligence applications are
reporting, analytics, data mining, business
performance management, benchmarks, text
mining, and predictive analytics. Business intelligence
often aims to support better business decision-
making.” (Source: Wikipedia)

BI = Decision Support System
• analyzing data and making decisions
• Monitor DM (Management by Objectives) & Reporting
• span different areas with large amounts of related
operational data
• (aggregated) data in a historical perspective
– A form of disclosing tacit knowledge
• Customer Relationship Management
• Cost & Time Efficiency (Resource Optimization)

• Formerly: Not in Public NPOs, but e. g. K-Market
(customer DB, profiling, data mining), also SAP


BI in the AMS
• Internet & Call Center
• Data Warehousing (Siemens Ap)
At present, approx. 1,000 users (all over Austria)
– Labout Market Policy-controlling
– Budget-controlling (labour market subsidies)
– Employers Database
– Labour Market Database Research Tool, own Research Plattform!
• Answers to questions like :
– Which AMS-office fills vacancies in optimal time?
– How is the expenditure (of money) with respect to certain subsidies in
detail?
– Which employers are our best customers?
SOURCE: http://www.nvf.cz/zamestnanost/dokumenty/business_inteligence.pdf


Broader Trend
• The importance of corporatisations and government
agencies: Of the 300,000 civil servants in the early
1990s, about 40 % now work for incorporated
organisations. From 2000 to 2003, federal employment
decreased from 167,000 to around 152,000, with a further
25,000 jobs being cut after that period.
• Expectations:
– More efficiency and less cost in the provision of public services:
– Noticeable relieves to the federal budgets
– Reduction in the number of state employees
– Meeting the Maastricht criteria (public deficits and debt)
– In other words: LESS COSTS


AMS 1 of many hived off agencies
• Cultural institutions
• Zoo of Schönbrunn (Schönbrunner Tiergarten GmbH)
• Schönbrunn Castle (Schönbrunner Schloss)
• Spanish horse-riding school
• Federal theaters (Bundestheater)
• Museums
• Services of general commercial/ economic interest
• Austrian railways (ÖBB) (1993)
• Post and telecommunications (PTT Post und Telekom AG) (1996)
• State press
• Banking co-operation
• River maintenance
• Support and auxiliary
• Part of the federal real estate management (Bundesimmobilienverwaltung)
• Federal debt management (Österreichische Bundesfinanzierungs Agentur)
• Federal Computer Centre (Bundesrechenzentrum)
• Other services
• Unemployment service (Arbeitsmarktservice) (1994)
• Environment investigation (Umweltbundesamt)
• Mint
• Statistics Austria (Österreichisches Statistisches Zentralamt)
• Institute for Testing and Research


What does the Federal Accunting
Agency say?
Hiving off has brought:
• More flexible management of budgets
• Faster decision taking
• Faster modernisation
• More cost and service transparency
• More flexible personnel policy
BUT
• Limited parliamentary control
• Deficits of spin-offs are not shown in the federal balance of
accounts
• No relief on budgets
• Higher personnel and administrative costs
• Continuing influence of the state


With regard to AMS:
Media:
• Benchmarking Criticism: „hiding“ the
unemployed in training schemes
Rechnungshof:
• Overstaffed
• Departmentalisation/weak communication
• Weak leadership in middle management
• Partial non-fulfillment of placement tasks
• Handling of personal data

Lithuania


Knowledge management in Lithuanian
Labour Exchange
• EU pressure to improve public services;
• Using IT technologies in the organization: new
information system; labour supply and job search
systems using modern IT solutions; new applications
of IT provided by EU, Swedish National Labour
Market Board; regular training of staff;
• Problem: stock of well-qualified staff.

France


How do French authorities run the
fight against the unemployment?

Lack of efficiency
• The ANPE (national agency for employment) is
not very effective
Thus most people find their jobs by people they
know, fee-paying agencies or internal promotions
French government does not apply the model of
flexicurity ,because their idea is unemployment is
due economic circumstances, so help to
companies to boost the economy is emphasized

• However, stress is put more and more on training
scheme (how do youngsters coming out from
public school and not fee-paying can be
recognized by companies and find a job
appropriate to their skills? How to increase
efficiency of workers and so minimize number of
employees?)
Consequently the French scheme tends to be
managed more and more in the way private
companies run their organisation

• Welfare state, priority to well being of citizens, high
purchasing power are still officially the aim but actually
the aim is to reduce debts and public spendings
• For example currently a lot of demostrations in France
because of industrial layoffs without benefits for the
workers, not enough measures to protect workers from
relocations of their employers
To the contrary, financial help is granted to car
builders, to avoid bankruptcy and thus even more
layoffs though high tax rates

• France missed the step of new public
management and have started only for a
decade (with right wing government) to do
more with less
• French labour market is highly dualist (see
Doeringer and Piore 1971)that is there are
two sectors, one weak, with temporary
contracts, unskilled jobs; the other is stronger

• France knows an increasing unemployment
rate (between 9 and 10%), many factors can
explain it but experts of public powers are
criticised for their passivities
• Nevertheless new measures but not such big
change in labour market

• Policy in favour of seniors
• No charges scheme
• Services to people
• Employment pole
• New contracts
• new convention on unemployment insurance
• bonus for temporary contracts
• new indexes to measure crisis
• surveys to compamies’owners about the no taxes measure …

references
• http://www.premier-ministre.gouv.fr
• http://calenda.revues.org
• http://www.alternatives-economiques.fr
• Brises.org

Germany


Expertise in Public Sector
 Managing Services in Public Administration

Andre – Germany
Lukas – Austria
Pauline – France
Elena - Lithuania

Knowledge management in Lithuanian Labour
Exchange

EU pressure to improve public services
Using IT technologies in the organization:
• new information system
• labour supply and job search systems using modern IT solutions
• new applications of IT provided by EU
• Swedish National Labour Market Board
• regular staff training
Problem: stock of well-qualified staff.

Knowledge management in France Labour
Exchange
 ANP (National Agency for Employment)
 Problems: lack of effectiveness
 - most people find a job by people they know, chargeable private job
exchanges or internal promotions
 - no application of flexicurity model (flexibility and security on the labour
market) →greater emphasis on private companies to help them boosting their
activity in order to employ more people
 KM? → stress is put more and more on:
 - training for youngsters; retraining for eldery unnemployed; staff training
 - use of modern IT-technologies to link people and jobs together
 - new more significant labour market indices
 - more exhaustive labour market research

NPM and KM
 NPM  KM
 Professional Management  People and Information
 Performance Management
 Output Control  Links People, Systems and
 Disaggregation Information
 Competition  Maximum Benefit
 Private Sector Styles  Multi-disciplinary
 Discipline and Parsimony

Federal Employment Office
 Head Office in Nuremberg
 About 100.000 employees
 75% in administration

 The largest government agency
 Financed mainly through social security contributions
 Chairman: F.J.Weise, first chairman who comes from
business world and not politics
 quot;I can improve the organization's effectiveness and
efficiency, but I am not a consultant for the labour market
policy in Berlin.quot;

Principal duties of the FEO

employment service
employment and career consultancy
labour market monitoring and research
employment research
payment of unemployment benefits a.o.
employment promotion
vocational training

Challenges and Objectives

Challenges  Objectives
 Strong increase of  More flexibility on the
unemployment rate labour market
 - the elderly  Suppression of illegal
 - East Germans employment
 - permanently  Reduction of
unemployed unemployment
 Strain on the state budget  Reduction of social security
costs
 Increased efficiency→
 400.000 jobs

Four Levels of NPM (Pollitt)
 1. Discourse

 2. Decisions

 3. Practices

 4. Results

Pollitt

 Paradox: „To be successful NPM needs
its „enemy – the traditional
bureaucracy““

Hartz Commission (2002)

 Hartz Commission → „Modern Services on the Labor Market“
 Recommendations for internal and external (by law) reforms
 The external reforms were then put into practice
 as Hartz I- IV (2003-2005)
 quot;The greatest labour market reform since the founding of the Federal
Republicquot; (Schröder)
 Motto: -more personal responsibility
 New Emphasis: -finding jobs for the unemployed
rather than managing unemployment

Internal Reform Projects
 With the aid of McKinsey
 better customer focus by eliminating the distinction between
benefit and employment services (service from a single
source)
 acceleration of benefit payments through dezentralization
 Efficiency increase through:
Flattening of internal hierarchies
Outsourcing/aggregation of individual departments
Introduction of cost-performance accounting
Modernization of IT infrastructure

Internal Reforms

 Reduction of redundant data resources by centralizing data
storage
 Abolition of inconsequent vocational retraining
 Introduction of quot;virtual job market“
-simplified access to job applicants for employers and
and to job opportunities for job-seekers
-better integration of private job exchanges
-improving service quality through introduction of a
customer-response management

Reforms By Law
Hartz I-IV
 Renaming of the FEO in Federal Employment Agency
 Renaming of the departments in headquarters, regional job centers and
agencies
 Labor market release through support of private employment agencies
and tightening of conditions under which unemployment benefits are
paid
 „Me-plc“
 Temporary work
 1-Euro-Jobs
 Mini-Jobs
 Job Floater

Reforms By Law
Hartz I-IV


 Governmental sanctions
 Reduction of benefits
 „Bedarfsgemeinschaften“
 Case management

Case Management KM
 Individual Level  Institutional level

 Consultation  Proper analysis of demand
 Planning and supply on the labour
 Intervention market
 Monitoring  Labour market analysis
 Evaluation  Supplementation of
services available
 Development of
collaborative networks

Bad Results
• The ambition to halve unemployment within three years was unrealistic

• Protests/demonstration by unemployed organized by trade unions, charities

• Radicalization of population (benefits for right and left wing parties)

• Lack of attractiveness of the mini-jobs for the unemployed

• Splitting of regular job positions into several mini-jobs (are not subject to social
insurance contribution)

• Less unemployed but lower purchasing power due to the mini-jobs

• No improvement for permanently unemployed (update survey)

Bad Results
• Increased social security costs due to unclear legislation and abuse of social
benefits
• Me-first mentality

• More injustice in the society

• Fast-track training for the staff
• The authorities issued false or contradictory official notifications
(bug)
• Flat rates are driving many people into courtrooms/individual justice
• Largest process flood in German history
• Hudreds of amendments in the law until 2007

Good Results
• Positive signals for the Elderly and East Germans (update survey)

• Me-plc was successful

• Plaudit by economists „right steps“
→ Employer-related foundations: quot;Social is what creates jobs“

• Decline in short-term unemployment until May 2006

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