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Head-hunters to help Longterm Unemployed

| Text: Berit Kvam

Expert group proposes new models to meet labour market demands: “We believe that improving the function of the labour market and ensuring the availability of labour will be key factors in the next few years. This policy line includes the provision of some additional services for more hard-to-place applicants by ‘head-hunters’,” says Heikki Räisänen, an adviser at the Finnish Ministry of Labour.

He is in charge of the expert group who put forward the proposal on further developing the Labour Market Policy reform of 1998.

The proposal is called The Second Wave and was published by the Ministry of Labour in February.

“The basic idea,” says Räisänen, “is to strengthen the role of the Public Employment Service in the labour market by providing better services for employers and ensuring the smooth operation of the matching function.”

The implementation of what is meant to be a three-year experiment is now being planned. The idea is to contract head-hunting companies in the 8 largest cities in Finland to discover if they are better equipped to find jobs for the longterm unemployed and those in risk groups,  immigrants and other social groups. However, the target group for the experiment does not solely comprise the most hard to place, as this is also meant to become a profitable business opportunity for the companies involved.

Only successful placements will be rewarded. The harder the situation of the person involved, the bigger the incentive for the operator will be.

“Why are you outsourcing the weakest target groups of the Public Employment Service?”

“We have significantly increased the number of staff in local employment offices since 1997 and improved the qualifications of our staff. However, our resources are scarce in relation to the development of the labour market so we have to decide which are the basic functions of the Public Employment Service and which aims can be better achieved by cooperation with the private sector. Since the aim of the experiment is to create additional services for these target groups, they will remain registered as unemployed job seekers with the Public Employment Service and be eligible for all services.”

“The reward for placing a person for a minimum of 6-months in an open labour market job will always be less than the cost of that person's unemployment benefits, so this is basically profitable for government finances, says Heikki Räisänen.

“We can't know for sure whether the scheme will work or not, but some private companies have already shown an interest in the experiment. The political decision-makers have not yet taken any formal position, although the Minister of Labour is in favour of the development, and the government will make a final decision in August.”




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