Can Growth Services be extracted from the commercial markets?

Mr. Jari Gustavsson, Permanent Secretary, at Ministry of Economic Affairs and Employment presented his views on how economic growth and employment services can be complimented with more input from more private evictors in connection with the establishment of the new Counties.

Here are the main points as reported by the Permanent Secretary, at Ministry of Economic Affairs and Employment:

  1. This work has been prepared with over 40 interested stakeholders from all sector of the national over the last 2.5 years with monthly meetings. Communications have been maximised with this process, in addition to studies made abroad of other existing systems.
  2. The Counties will be responsible for regulating and managing this activity under a new employment law, with service providers being responsible for providing the service.
  3. It is planned that social services will be combined with normal employment services in an integrated unit within the Counties. This will create important improvements in productivity to place more difficult cases in employment.
  4. With 18 Counties, there will probably be a big improvement in productivity by combining expertise and by getting labor to move to jobs rather than staying unemployed in their own region. They are meant to work with vocational colleges which are run by the municipal system. 
  5. Finland has far too many small SME’s there are too few that are big enough or growing for economic growth and international business. 
  6. The 2 800 staff of TE offices move to the Counties to manage and organise the employment services and the new employment law will allow the private sector to handle employment and training services on the ground. The private sector is faster, leaner, more innovative at offering services in parallel with public sector. This is what is behind this proposal… there is much talk about “Alliance Models” the combination of public service and private service providers… 
  7. An interesting study trip was made to Australia, where they have 20 year’s experience with working with private employment service providers. The main points noted were transparency and broad approaches in procuring long-term 5 year contracts for these services. 
  8. Much attention is paid to incentives and quality controls. Naturally the application of an Australian cannot be made directly to Finland because owe have different public service structures. 
  9. However, procurement and contracting skills and expertise are needed within the Counties. Incentives and quality control require IT systems to collect data. Employment services should receive the right incentives and be well defined on a granular basis. Services providers should be rewarded for the more demanding jobs services. Quality contra should be based on a transparent point system – this seems to be an effective system. The incentives should also take the government’s costs of unemployment into consideration. Does Finland want to pay only for employment or do we want to pay for short term jobs, growth in SME’s or other data indicators.Australia has produced quite detailed instructions to limit employment service providers’ freedom of operation. This means that the new employment law could be left at a more general level, giving the Counties greater freedom.

    The Australian service providers had the freedom to supply a whole range of services fro more difficult customs to help them “recover” sufficiently to find work. An interesting case for one-stop services – examples given – special work shoes, dental treatment, on the job training, etc…Naturally the above points are subject to Parliamentary scrutiny and legislation and regulations will be developed for implementation in the coming years. So far there is no clear resolution regarding the final outcome of this work. In the present political climate with less than one year before the next elections, there are many destabilising factors that could delay the final legislation. 

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