The rigid service process applied for jobseekers currently leads to providing excessive services for independent jobseekers and inadequate services for those difficult to employ. The scarce resources of social welfare, health care and rehabilitation services make it difficult to improve the employment opportunities of persons difficult to employ. Legislation and instructions concerning the jobseeker’s service process must be developed to enable more efficient allocation of the personnel resources of TE Services based on clients’ service needs.
Persons who are difficult to employ account for about 40 per cent of all unemployed persons or those in the scope of services promoting employment. For this reason, the functioning of employment services aimed at people who are difficult to employ is important when the aim is to strengthen central government finances by promoting employment and reducing social security expenditure.
The audit assessed whether the Nordic labour market service model, cross-sectoral joint service promoting employment (TYP) and social impact bonds (SIB model) improve the employment opportunities of persons who are difficult to employ.
The Nordic model has not achieved its goals
The Nordic labour market service model introduced at the beginning of May 2022 aims to support individual job searches earlier and more frequently than before. The purpose of the model is to increase independent job search by imposing a quantitative job search obligation on the jobseeker, which requires the jobseeker to apply for at least four jobs a month as a rule.
The audit found that the Nordic labour market service model treats jobseekers rigidly in the same manner and not as individuals. Currently, the formulaic service process leads to excessive service provision for self-directed jobseekers and inadequate service provision for persons who are difficult to employ, as there are not enough resources for the intensive support needed by the latter group. The National Audit Office of Finland (NAOF) recommends that the personnel resources of TE Services should be allocated more efficiently according to clients’ service needs.
The quantitative job search obligation of the Nordic labour market service model is not uniformly imposed on all jobseekers, as the experts of TE services find the instructions to be ambiguous. According to the NAOF’s recommendation, the quantitative job search obligation should be simplified to make imposing the obligation sufficiently unambiguous. Fulfilling the job search obligation is challenging for many persons who are difficult to employ as their obstacles to employment are often associated with reduced work ability.
Ministries must ensure that jobseekers receive the services they need
The cross-sectoral joint service promoting employment (TYP) aims to support unemployed people in finding employment through cross-sectoral cooperation. In the TYP model, the employment service authority, the wellbeing services county and the Social Insurance Institution of Finland jointly assess unemployed people’s service needs, plan service packages appropriate from the viewpoint of finding employment, and are responsible for the progress and monitoring of the process of finding employment among unemployed people.
The TYP activities promote the referral of persons with long-term unemployment to services that meet their needs. However, the average TYP client relationship is considerably long, and some of the clients are actually unable to work. TYP clients have a high need for health services, and long waiting times in these services delay client processes. The NAOF recommends that the Ministry of Economic Affairs and Employment and the Ministry of Social Affairs and Health should work together to ensure that those who are difficult to employ are referred to the necessary social welfare, health care, rehabilitation and employment services.
Even if the SIB project does not always lead to employment, it may have positive impacts on functional capacity
The Social Impact Bond model is an approach for improving the employment rate that differs from traditional models. In the SIB model, the public sector orders impacts from the private sector and only pays the private sector based on verified results. In the model, investors fund the offered services and a project manager selects the service providers.
SIB projects are time-consuming and labour-intensive processes, but they have the potential to promote the employment of persons who are difficult to employ. Even if SIB projects do not always lead to employment, they may have positive impacts on the work ability and functional capacity of persons who are difficult to employ. In the future, in addition to performance indicators based on employment targets, attention should be paid as far as possible to the positive impacts of projects on the work ability and functional capacity of persons who are difficult to employ.
Additional information
Ville-Veikko Pulkka
Principal Performance Auditor, D.Soc.Sc.
Audit