The three keys to a first-class Employment Service

Foto: Sali Sasaki

Foto: Sali Sasaki

If we were to make a ranking of Public Employment Services (PES), Korea would place, without a doubt, one of the top positions. Just to give you an example, the Job Centers (the Employment Offices) secured employment for 1.5 million people with only 4,000 officers, while other countries, such as Japan, inserted 1.9 million workers with 28,000 employees. What are the keys to success of Korean PES? Without being exhaustive, I will list the three factors that during a recent visit I have found the most innovative and striking.

1. A clear focus on job creation. Although you can’t judge a book by its cover, the support to the unemployed in Korea is not called “Unemployment Insurance” but “Employment Insurance“. By doing it like this, they emphasize that the main objective of this service is not to give an allowance for the unemployed, but to enable an unemployed worker to rapidly find a job. For instance, in order to receive unemployment benefits, the unemployed person must be actively seeking reemployment, either by participating in recruitment processes, or by taking training courses. Even more strikingly,  if the unemployed finds a job in less than 3 months, he or she receives an “Early Reemployment Allowance” of up to 50% of the remaining amount to which he/she was entitled.

2. An integrated and specialized care. In Korea, the Job Centers centralize active and passive labor market policies in a single service. Under one umbrella, the employment offices provide career guidance to training and employment opportunities; manage the provision of social assistance and unemployment benefits; and provide individualized services for vulnerable groups. All this, with a focus placed on the user, streamlining services through the interconnection of programs and resources, and saving time and effort of job seekers.

3. An information and knowledge-based system. Information is power. Korea decided to make the most out of the technological potential and create an integrated information system that gives access to all incumbent parties (government, employers, job seekers, researchers, etc.) relevant and timely information about the labor market. For example, the job offers published in Work Net (the online exchange employment network) provide real-time vacancies difficult to fill; courses paid with a “training card” (like a credit card linked to Employment Insurance) are recorded directly on Employment Services, so that automatically verifies that the job seeker can receive unemployment benefits, etc. The integration of all these data sources generates useful and timely information, which is used for making evidence-based policy decisions, to assess the efficiency of services and to constantly evolve toward more effective systems.

One can draw many more lesson from the case of Korea, even for countries in our region, which in many cases, may be far from having a similar Employment Service. Nonetheless, I think if we let ourselves get inspired by their absolute determination to create a powerful Employment Service and their focus on continuous reviewing and improving their systems, we could take a jump start or even leap frog the employment services in our countries, which in turn will result in better functioning labor markets. The possibility of employing thousands of workers in our region is worth the effort, isn’t it?

About the Author

Verónica Alaimo
Verónica Alaimo es especialista sénior de la División de Mercados Laborales del Banco Interamericano de Desarrollo (BID). Verónica inició sus labores en el BID en 2008 como especialista en desarrollo social en la División de Salud y Protección Social. Verónica lidera la investigación en temas de protección contra el riesgo de desempleo, incluyendo el libro 'Empleos para crecer', de reciente publicación, y la generación de indicadores laborales. Además, participa en el diseño e implementación de proyectos sobre mercados laborales en la región. Antes de ingresar al BID, Verónica fue consultora del Banco Mundial. Cuenta con un Doctorado en Economía de la Universidad de Illinois en Urbana-Champaign en el 2007, y con una Maestría y una Licenciatura en Economía de la Universidad Nacional de La Plata.

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