federal departement of economic affairs fdea state secretariat for economic affairs seco labour...
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Federal Departement of Economic Affairs FDEAState Secretariat for Economic Affairs SECOLabour DirectorateLabour Market / Unemployment Insurance
From centralized to decentralized steering
The Performance Management System of the Swiss unemployment insurance
WAPES Conference Moscow, Russia - September 2014
Olivier Nussbaum - SECO
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Some facts and figures about Switzerland and the Swiss labour market
Population: 8.1 million, 23.8% of whom are foreign nationals
National languages: German (65%), French (23%), Italian (8%),Rumantsch (0.5%), other (21%)
Net activity rate (15 - 64 age range): 83.5%
Unemployment rate by ILO standards: 4.4% Youth unemployment rate : 7.7%
Liberal Labour Market policy
Structure: - primary sector 3.5%- secondary sector 22.3%- tertiary sector 74.2%
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Registered Unemployment: Regional differences (July 2014)
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Since 1995: active labour market policy
• Objective: rapid and durable reinsertion of jobseekers into labour market
• Means: - Regional Employment Centres REC- Labour market programms LMP- Strict definition of a ‘reasonable job’
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Rights and duties of job seekers
Rights: - Receive unemployment benefits- Get help from job centres to find a new job
Duties: - Actively search for a new job (own initiative)
- Respect control regulations - Respect instructions from the job centres
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From centralized steering…
• Pilot REC in two cantons 1995-1996
• Evaluation in 1996
• Decision of general implementation in 1996
• Deployment in 1997 All cantons had to establish REC and increase LMP Number of counsellors per jobseeker Number of administrative staff per jobseeker Number of managers per counsellors Number of interviews per jobseekers Minimal offer of LMP and of counselling
Steering over input / output (resources and activities)
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… to decentralized steering
• Evaluation of the deployment phase in 1999
• The system being established, decision to switch to outcome oriented steering from 2000 Benchmark over outcome oriented indicators Global budget: maximal budget, but more freedom for the cantons
when it comes to input (resources) and outputs (activities)
Two very important aspects of the way we do things:
Pilot before general implementation
PLAN – DO – CHECK – ACT
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Management system – paradigm shift
3’000 local employment offices
unprofessional
120-150 regional employment centres
professionalInput/output-oriented
New agreements
professionaloutcome-oriented
19962000
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Management by results• Steering no longer via inputs, but via results achieved on reinsertion
of unemployed persons• Confederation sets out objectives for the cantons. The Confederation
forgoes imposing detailed regulations. No longer tells cantons how to reach objectives.
• Results-oriented agreement• between cantonal governments and Federal Department of
Economic Affairs• first agreement in 2000, renewed 2003, 2006 and 2010
• Budget allowed to the cantons depending on cantonal jobseeking rate and cantonal number of jobseekers
paradigm shift (NPM)
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Preconditions for implementing PMS
• Political framework: • Commitment• Stability in goals / patience• Evaluation / no over-steering• Accept not to control everything centrally and accept
local differences in implementation
• Legal framework: • Stable legal basis (law), also for financing• Contracts between parties defining the modalities of
PMS
• Technical framework: Data availability and quality
• Resources: Planning possible at regional level
• Process / Development of PES: Some processes must already be implemented
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“Global budget”
• Budget of Regional Employment Centres depends on two parameters: cantonal job seeking rate and cantonal number of jobseekers (decreasing scale)
• Effective costs refunded
• Greater scope for the cantons regarding:- Staff- Investments- Processes- Active labour market measures
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Labour Market Authorities of Switzerland
SECO – Directorate of LabourLabour Market / Unemployment insurance
Public employment servicesPES Unemployment funds
RegionalEmploymentCentres REC
Employers Jobseekers
DisabilityInsuranceAgency
SocialSecurityServices
PrivateEmployment
Agencies
CareerCounselling
LabourMarket
Measures
Federal
Cantonal
Labour Market
Cooperation
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SECO – Directorate of Labour
• Responsible for instruments of Swiss labour market policy (Unemployment Insurance Act AVIG and Employment Services Act AVG)
• Administration of unemployment insurance fund• Supports cantons in strategic management • Responsible for European agreement on the free movement of
persons
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Public Employment Services of the Cantons
• Responsible for: • Implementing relevant legal acts• Organising different public employment services: Regional
Employment Centres, unemployment funds, Logistical Centres for Labour Market Measures
• Implementing labour market measures• Most operative work delegated to public employment services
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Regional Employment Centres REC
• More than 120 Regional Employment Centres in 26 cantons
• More than 1,500 counsellors
• 4 instruments: - counselling - job placement
- training / labour market measures- controls and sanctions
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Federal Ministry (SECO)
Regulatory framework
Agreement between cantonal governments and federal ministry
Steering CommitteeCantonal
governments
Federal act / ordinance
- AVIG
- AVIV
- AVG
Financing
- operating cost
- vocational training
Steering tool (benchmark) Activity of cantons
Measurement of efficiency(Result indicators)
Communication of results
Process and output indicators
Review of the situation
Exchange of best practices
Transfe
r of b
est
pra
ctices
Co
mp
etitio
n
Activity according to the law:
- Counselling- Job placement- Training- Controls and sanctions
Outcome measurement
4 results indicators:
- Rapid reintegration
- Reduce long-term unempl.
- Reduce exhaustion of benefits
- Reduce re-registrations
Continuous improvement process
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Objectives and indicators
Objectives Indicator Weight.
1
2
3
4
Rapid reintegration
Prevent/reduce long-term unemployment
Prevent/reduce exhaustion of benefits
Prevent/reduce re-registrations
Rapid and sustainable reintegration
Avg. no. of benefit days drawn by former beneficiaries.
Entrants to long-term unemployment divided by the # of persons who entered a new framework period 13 months earlier.
# of exhaustions of benefits in the reporting month, divided by the # of persons who entered a new framework period 2 years earlier.
Proportion of benefit recipients who re-register within 4 months.
Global indicator
50%
20%
20%
10%
100%
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Management by results :The econometric model
• Purpose: Enable comparisons between cantons
• How: By setting off the influence of special regionalfeatures (exogenous factors):
- Labour market situation- Seasonality
- Nationality- Frontier workers (persons living abroad and
working in Switzerland)- Size of agglomeration
• Calculated and made public once a year, at the beginning of June of the following year.
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Measure of performance: publication of results
• Benchmark using the econometric model calculated and made public once a year
• Relative benchmark. Average = 100.
• Published at the beginning of June of the following year.
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Example of relative Benchmark result
Total index unadjusted Total index adjusted
0
20
40
60
80
100
120
140
160
ZH BE LU UR SZ NW-OW
GL ZG FR SO BS BL SH AR AI SG GR AG TG TI VD VS NE GE JU CH
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Some Lessons learned (1)
• Management by results is tried, tested and accepted
• Strong incentive for improvement (competition, reputation effect)
• Incentive to reintegrate jobseekers as fast as possible (social security is financed by cantonal and local authorities)
• Incentive to cooperate with private employment services and any other partner
• Better possibilities to act on part of cantons by introducing global budgets
• Political shield
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Some Lessons learned (2)
• Too strong competition and monetary incentives lead to demotivation
• Relation between inputs, outputs and impacts can not be modelled
• Strong focus on rapid reintegration may lead to neglect of sustainability of reintegration
• Focus on benefit recipients may lead to a trade off with non benefit recipients, the later being less taken care of
• Econometric model considered by cantons to be too complicated / a black box
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Thank you for your attention
Olivier Nussbaum
Federal Department of Economic Affairs, Education and Research - EAERState Secretariat for Economic Affairs – SECOLabour DirectorateLabour Market and Unemployment Insurance
Holzikofenweg 36, 3003 Berne, Switzerland
Phone ++ 41 58 464 15 78
Cellular ++ 41 79 875 34 77
www.seco.admin.ch