Chapter 2. Reforming the institutional landscape
This chapter provides an overview of the recent reform package in the institutions and organisations in the Italian labour market called the Jobs Act. Alongside its objective to reform the labour market to introduce flexicurity, the Jobs Act aims to restructure the system of employment services and to increase the quality of active labour market policies. The chapter discusses the first steps of the reform process such as establishing the network of employment services, creating the National Agency for Active Labour Market Policies to coordinate the network and introducing activation conditionality on benefit recipients. Furthermore, it displays the challenges of the implementation processes stemming from underdeveloped IT infrastructure and insufficient human resources in the local employment offices.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
2.1. Introduction
Italy launched a set of reforms in 2014-16 to address its deeply-rooted economic challenges. This chapter discusses the reform in the institutions and organisations in the Italian labour market called the Jobs Act, focussing on the reform process concerning strengthening the system of employment services.
The Jobs Act aims to introduce the flexicurity model in the Italian labour market by reforming the employment protection legislation, the system of unemployment benefits and the active labour market policies. Modest positive effects have occurred during the first few years since the changes regarding labour market flexibility and unemployment benefits were introduced. The number of new open-ended contracts increased by 63% in 2015 (though only temporarily) and the coverage of unemployment benefits increased from 6.7% in 2014 to 7.8% in 2016 (the share of unemployed receiving unemployment benefits).
Progress towards stronger active labour market policies has been more cumbersome. The design of the Jobs Act has good potential to significantly enhance the system of employment services. However, the implementation process has to be improved by stronger co-operation between the stakeholders of the network of employment services (involving putting monitoring and accountability system in place), establishing the National Agency for Active Labour Market Policies as a strong support unit for local employment offices, building a modern IT infrastructure supporting local offices and strengthening the local offices regarding their staff numbers, skills and processes in place.
The chapter proceeds as follows. The second section provides a general overview of the Jobs Act and its objectives, particularly the changes that were introduced to increase labour market flexibility and the changes in the unemployment benefit system. The third section discusses the efforts to strengthen the system of employment services, in particular the restructuring of the system and the attempts to increase service quality. It discusses also the efforts to link unemployment benefits with activation conditionality, the establishment of the new National Agency for Active Labour Market Policies and the IT infrastructure and capacity of the local employment offices needed to implement the Jobs Act. The final section concludes the chapter.
2.2. Reforming the labour market
The Jobs Act, the latest reform of the labour market in Italy, introduces the flexicurity concept resting on three pillars: changing employment protection legislation (flexibility), reforming the benefit system (security) and strengthening the system of active labour market policies. The introduction of a single type of permanent contract and the exemptions from social security contributions for new contracts have reduced the labour market duality to some extent by encouraging converting temporary contracts to permanent positions and triggering new employment relationships. The coverage of unemployment benefits has increased as a new universal unemployment benefit scheme has been introduced and the weakly targeted wage supplementation schemes have been cut.
2.2.1. Objectives of the Jobs Act
The deep and lengthy economic crisis demonstrated Italy’s long-standing productivity problems, urging the Italian government to launch a set of broad and complementary reform strategies in 2014-16 in order to strengthen the economy and the labour market. Within this framework, the Italian government set a goal to modernise labour market institutions by implementing the “Jobs Act” as a major reform of the labour market. One of the main objectives of the reform is to create a new comprehensive and inclusive model of labour market governance to support employment growth. In March 2014, some preliminary new measures were introduced with the so-called “Poletti decree” to foster employment and simplify bureaucratic procedures for temporary contracts. Subsequently, a wide-ranging law was passed in December 2014 that enabled passing eight legislative decrees in the following months, covering an extensive set of issues from active and passive labour market policies to reconciling work and family life. These decrees were all adopted by September 2015.
On the one hand, the reform relaxed employment protection legislation for open-ended contracts while increasing stability for temporary workers, relying on a combination of hiring incentives and a reduction in firing costs. On the other hand, it aims at strengthening active labour market policies that have been traditionally very weak in Italy, while also reforming passive policies by linking them with active labour market policies through conditionality provisions and activation strategies.
More flexibility for firms is offset by more “security” for workers in the labour market. The “security” relies on the interplay of two components: i) income sustainability by means of solid benefit schemes and ii) concrete help that can be provided through ALMPs in order to re-integrate people in the labour market. With the intention of strengthening the governance of ALMPs and integrating them with unemployment benefits, the government created a new state agency – Agenzia Nazionale per le Politiche Attive del Lavoro (ANPAL) – assigning it with the tasks of modernising the Italian system of employment services and providing a new set of tools and incentives to apply conditionality of benefits and activate jobseekers. The original idea of the Jobs Act was to transfer the competencies and responsibilities for the design and delivery of ALMPs from the provincial to the national level. However, this restructuring needed a change in the constitution. The rejection of the constitutional referendum in December 2016 put a halt to this plan and it has only been possible to transfer the responsibilities from the provincial to the regional level.
The “Jobs Act” reform included also other novelties to modernise labour market regulation such as advancing greater organisational flexibility by allowing employers to modify duties of their employees in the course of the employment relationships. Other changes included a relaxation of some restrictions on remotely controlling workers, a simplification of administrative procedures encouraging the use of telematic channels to interact with labour market authorities, a unification of different separate inspectorates into a single National Work Inspectorate and new work-life balance measures that relaxed some criteria for parental leave.
The “Jobs Act” has been complemented by two additional reforms, Buona Scuola and Industria 4.0, aiming jointly at boosting productivity and improving the ability of the economy to adjust to external shocks due to global changes (Pinelli et al. (2017[1])). Buona Scuola aims more specifically at reinforcing skills formation and the linkages between education and work (see Box 2.1). The goal of Industria 4.0 is to stimulate innovative production systems and to boost them towards the technological frontier (see Box 2.2). These three reforms complement each other well as together they have the potential to increase the supply of skilled labour, the demand for skilled labour and improve the matching between the two.
Skill mismatch and skill shortages have seriously affected Italian labour market and productivity in recent years, in addition to high levels of youth unemployment (ISTAT, 2016[2]), (OECD, 2017[3]). Among the provisions of Buona Scuola, a special chapter has been devoted to this problem, attempting to address the Italian skill imbalance by a tool called Alternanza Scuola-Lavoro (ASL), a work-based learning program aimed at improving school-to-work transition. This scheme has been a part of the Italian educational system already since 2003, playing however only a marginal role before Buona Scuola as it was not compulsory. The reform has substantially strengthened the tool introducing compulsory internship periods in secondary schools, both for vocational education tracks (technical and professional schools), for an amount of 400 hours, and for humanistic and scientific general education (licei, usually oriented to continue to study at the University), for 200 hours. This reform has the potential to improve the alignment between educational programs and employers’ needs, with the aim of overcoming the unfortunate tradition of scarce interaction between schools and firms.
ASL represents an attempt to emulate German dual vocational training system” (Duales System). However, important differences still remain between the two countries. The German model combines high public and private investments. The expenditure for the Duales System shows that 96.1% of new contracts in 2015 were mostly financed by companies, as opposed to 4.9% mostly publicly financed positions (BIBB, 2017[4]). Social partners and firms’ representatives are involved in the management of the dual vocational training system as well. This is different in Italy, where the participation of the firms’ representatives in the administration of vocational schools was abolished more than forty years ago (Decree 416/1974). At the same time, while the German model provides a real work experience, based on an apprenticeship contract and aimed at the achievement of standardised qualification degrees, in the Italian ASL, schools rely both on “soft” activities (such as orientation, visits to the companies, meetings with company staff), and more “heavy and demanding” activities (such as internships integrated with teaching, project works performed by students for companies, business simulations). The role of the state dominates in the funding of the system. Law 107/2015 earmarked 100 million per year from 2016 onwards to finance ASL, with the possibility to add further resources coming from the private sector, depending on the specific partnership implemented at the local level.
The first results of the reform are promising. For example, 90.6% of the graduate year students got enrolled to the work-based training program in 2015/2016 covering 96% of the high schools compared to only 17% of students covering 54% of high schools a year before (INDIRE, 2016[5]).
Source: ISTAT (2016[2]), Rapporto annuale. La situazione del Paese, https://www.istat.it/storage/rapporto-annuale/2018/Rapportoannuale2018.pdf; OECD (2017[3]), Getting Skills Right: Italy, https://dx.doi.org/10.1787/9789264278639-en; BIBB (2017[4]), Datenreport zum Berufsbildungsbericht 2017, https://www.bibb.de/dokumente/pdf/bibb_datenreport_2017.pdf; INDIRE (2016[5]), Presentati al Miur il monitoraggio nazionale e il programma “I Campioni dell’Alternanza”, www.indire.it/2016/10/18/presentati-al-miur-il-monitoraggio-nazionale-e-i-campioni-dellalternanza/.
Inspired by similar national strategies in Germany (Platform Industrie 4.0) and France (Alliance Industrie du Futur), the Italian Ministry for Economic Development presented “Industria 4.0 National Plan” in September 2016. The government earmarked approximately EUR 20 billion s with the budgetary law 2017 for this National Plan.
Industria 4.0 (I4.0) represents an ambitious set of measures aiming at supporting industrial change and boosting the competitiveness of Italian companies. These measures correspond to: tax-benefits based on different incentive structures; facilitation of firms’ access to investments oriented to technological transformation; and R&D initiatives and digital upskilling of workers. The main objectives of the reform are the support of innovative investments and the empowerment of skills related to the fourth industrial revolution. Big data, cloud computing, advanced internet connection, 3D printing and robots are some examples of technologies that firms can implement in their manufacturing production relying on tax benefits. Furthermore, concerning the empowerment of skills, I4.0 foresees several measures focusing on educational programs such as “Scuola Digitale” (a national programme modernising and restructuring learning processes of digital knowledge) and interacts with Alternanza Scuola-Lavoro (a work-based learning program aimed at improving school-to-work transition ), mainly strengthening the potential of technical high schools (Istituti Tecnici Superiori) for projects related to I4.0 topics.
To support the whole framework, a “National Network Industria 4.0” assists firms in digital transformation, disseminating knowledge and expertise related to the benefits emerging from the Plan, identifying technology needs, stimulating research projects and development.
The Plan has been relaunched, adding further 9.8 billion with the budgetary law 2018. A decree in June 2018 has also introduced new experimental incentives for digital upskilling of workers, recognising tax credits for training courses related to I4.0 topics, up to a yearly amount of EUR 300 000.
SVIMEZ (Cappellani and Prezioso, 2017[6]) has evaluated the impact of the policy at the territorial level. The main results show that investments will be 4 percentage points higher in the South compared to the Centre-North of the country. At the same time, regions in the Centre-North are those that should benefit more in the long-term, by an increase in productivity equal to 0.6 percentage points compared to the 0.2 in the South.
ISTAT (2018[7]) has conducted both a survey among firms and an econometric evaluation to study preliminary effects of the I4.0 reform. The majority of firms across all sectors consider the measures relevant for their investment decisions. At the same time, it is estimated that the tax benefits should produce an increase in the total increase of investments of 0.1 percentage points in 2018 and 0.2 in 2019 compared with 2017. Tax credits associated with R&D should lead to positive effects in terms of hiring specialists on topics related to I4.0.
Source: Cappellani, L. and S. Prezioso (2017[6]), Il “Piano nazionale Industria 4.0”: una valutazione dei possibili effetti nei sistemi economici di Mezzogiorno e del Centro-Nord, https://www.svimez.info/images/note_ricerca/2017_07_10_industria_4_0_nota.pdf; ISTAT (2018[7]) Rapporto sulla competitività dei settori produttivi. Edizione 2018, https://www.istat.it/storage/settori-produttivi/2018/Rapporto-competitivita-2018.pdf.
2.2.2. Decreasing labour market duality and fostering employment
Historically, firing costs have been high for permanent contracts in Italy which has hindered job creation and increased labour-market duality with respect to permanent and fixed-term workers. Increasing labour market flexibility has been the aim of several reforms since the nineties when different types of fixed-term contracts were introduced. Introducing additional types of fixed-term contracts, however, did not increase flexibility, but rather fostered labour market dualism as the fixed-term contracts were also used as a cheap screening device before hiring on a permanent contract, other than using these contracts for temporary labour demand (Sestito and Viviano, 2016[8]).
Italy used to have uncertain and potentially high firing costs in case of open-ended contracts as an unfair dismissal meant reinstatement of the employee or paying up to six-months-salary1 preceded by a lengthy legal process. The “Fornero reform” in 2012 tried to lower the firing costs and the uncertainty of these costs for open-ended contracts by limiting the possibilities for reinstatement and shortening the related legal processes (Sestito and Viviano, 2016[8]). The uncertainty of firing costs was cut further by the Jobs Act in 2015 by restricting the grounds for reinstatement in cases of dismissal without just cause for newly signed permanent contracts (after 7 March 2015) of firms with more than 15 employees. Additionally, the Jobs Act replaced the different forms of open-ended contracts with one permanent contract type with severance payments increasing with the job tenure (tutele crescenti). Following these changes, the strictness of employment protection legislation for permanent workers against individual dismissals has fallen from 2.74 to 2.54 in 2015 [preliminary estimations by Garda (2017[9])], leading to a smaller gap in protection between permanent and temporary contracts.
Moreover, all new permanent contracts were exempted from the social security contributions in 2015 (capped at EUR 8 060 annually for the first 3 years). In 2016, the social security exemptions were reduced (up to EUR 3 250 in 2 years). The budget for 2017 extended the social security exemptions for two more years, but limited them only to students newly hired to firms where they completed their internship or traineeship (up to EUR 3 250) or young workers hired in the southern regions with permanent or internship contracts [up to EUR 8 060, (OECD, 2017[10])].
Analysis of the reform conducted by the Italian National Institute of Social Welfare (Istituto Nazionale Previdenza Sociale, INPS), shows that the number of new open-ended contracts increased indeed as expected in 2015 (by 63%), but fell again back to the 2014 level in 2016 when the social security exemptions were cut. The number of fixed-term contracts increased as well in 2015 (although marginally), but continued to increase in 2016. The rise of new permanent contracts rose in 2015 both in terms of new hirings with permanent contracts as well of conversions of fixed-term contracts to permanent contracts (INPS, 2016[11]), (INPS, 2018[12]). In 2017, the number of new permanent contracts even decreased by 7% compared to 2014 (INPS, 2018[12]).
Additionally, the survival rates of employment relationships started by permanent contracts in the first quarter of 2015 using the social security exemptions have been higher in 12 and 18 months after the start of the relationship than the survival rates of those permanent contracts that did not yet use the social security exemption (signed in the first quarter of 2014; (INPS, 2017[13])). In 2019 it will be possible to estimate if these employment relationships have higher survival rates also beyond 36 months, the maximum period of social security exemptions for permanent contracts signed in 2015.
Despite the higher number of permanent contracts and their longer actual duration in 2015, the share of employees with permanent contracts has not visibly changed yet (Figure 2.1). The share of employees with permanent contracts has slightly decreased over the years and remained stable during the past few years in Italy, whereas this share has slightly increased over the past decade on average in the OECD countries (particularly in Spain and Japan).
a. 2010 instead of 2007 for Chile and Costa Rica.
b. Weighted average of the 32 OECD member countries shown in the chart above (data not available for Israel, Mexico, New Zealand and the United States). Colombia and Costa Rica are following the accession process to become OECD member countries.
Source: OECD Labour Force Database, Incidence of permanent employment Dataset, http://stats.oecd.org//Index.aspx?QueryId=9588.
The use of fixed-term contracts has been particularly common practice in Italy for young employees. During the past years, more than half of the young employees were working on short-term contracts. In 2016, the share of permanent contracts for young employees saw a slight increase, but in 2017 this share decreased again.
Sestito and Viviano (2018[14]) use microdata for the Veneto region and apply a difference-in-difference approach to estimate the impact of firing cost reductions and hiring incentives introduced in 2015. They conclude that the exemptions on social security contributions and changes in the employment protection legislation have both contributed to a reduction in the duality on the Italian labour market and have encouraged labour demand. However, by exploiting the differences in the design of the policies (differences in the timing of the announcement of the reforms and which firms and employees they concerned), they conclude that the larger part of the effect can be attributed to the social security exemptions. Nevertheless, the decrease in the uncertainty of firing costs had a significant effect on new permanent contracts. This was not only achieved through the effect of converting more temporary contracts into permanent ones, but also through the increased willingness of employers to hire new (yet “untested”) employees using permanent contracts. Cirillo et al. (2017[15]) have shown similarly that the effect of new permanent contracts has emerged mainly through monetary incentives, but also that the new permanent contracts were mostly fixed-term contracts transformed into permanent ones. A remarkable share (41% in January to September 2015) of new permanent contracts concerned part-time jobs, while the increase in employment concerned mostly older employees. The new permanent jobs emerged more in low-skilled and low-tech service sectors. The fact that the change in the employment protection legislation concerned firms with more than 15 employees is used by Boeri and Garibaldi (2018[16]) to study the effects of the new single type of permanent contract. They conclude that hiring with permanent contracts, the transformations of fixed-term contracts to permanent contracts and also firing increased in firms with more than 15 employees relative to smaller firms due to the changes in employment protection legislation.
However, more time is needed to estimate the longer term effects of the exemptions on the social security contributions and the changes in the employment protection legislation. Besides increasing employment, the reduction in employment protection has the potential to increase productivity through improved labour allocation and skill match as the firms can more easily adapt their workforce according to changing demand conditions and technology and as the workers have better opportunities to find better matching jobs (OECD, 2013[17]). Bassanini and Garnero (2013[18]) show additionally that the high extent of reinstatement in case of unfair dismissals, which has been the case in Italy, is a particularly hindering factor for worker flows. Skill mismatch has been one of the key problems on the Italian labour market hobbling productivity (see Chapter 1). Berton et al. (2017[19]) have shown that the Fornero reform, which was a step towards less strict employment protection before the introduction of the Jobs Act, indeed favoured labour reallocation, somewhat increased better skill matches and even led to a small increase in productivity. Similarly Hijzen et al. (2013[20]) show that before the Fornero reform higher employment protection in bigger firms was associated with lower labour productivity.
The exemptions form the social security contributions and the changes in the employment protection legislation together with concentrating all the inspection activity related to undeclared work in a single new body (National Inspection Agency) have also the potential to decrease the extent of undeclared work in the Italian labour market. A recent estimate by Schneider and Boockmann (2017[21]) puts the share of the shadow economy to close to 20% of GDP in 2017 (Figure 2.2). Although the share has recently decreased, it is still higher than in many other OECD countries. A study by the Study Foundation (Fondazione Studi) of Labour Consultants (Consulenti del Lavoro) claimed that in 2015 the number of persons informally employed decreased to 1.9 million i.e. 200 000 persons lower than the year before due to the Jobs Act and the three-year social security contributions exemptions (Consulenti del Lavoro, 2016[22]). If the conversion of informal employment to formal employment indeed has taken place during this period, the statistics for the additional employment contracts might overestimate the impact of the Jobs Act. Nevertheless, the study on the informal economy by ISTAT indicates that the total number of employees working unofficially (no formal employment contracts, including people working in a family business or farm) increased slightly in 2015 compared with 2014, from 3 667 thousand employees to 3 724 thousand employees [from 15.7% of employees to 15.9% of employees, (ISTAT, 2017[23])].
a. Unweighted average of the 20 OECD member countries shown in the chart above.
Source: Data from Schneider, F. and B. Boockmann (2017), Die Größe der Schattenwirtschaft – Methodik und Berechnungen für das Jahr 2017, www.iaw.edu/index.php/aktuelles-detail/734.
Regardless of some positive effects on labour demand and the labour market duality due to the Jobs Act, recent developments in Italy have put further positive effects under question. First, the Italian Constitutional Court declared in the end of September 2018 that rigid indemnities upon unfair dismissal dependent solely on seniority are unconstitutional. Second, the new Italian government coming to power in 2018 increased the level of firing costs. The “Dignity Decree” approved in July 2018 states that in case of unfair dismissal, the employer has to cover for the employee salary costs for 6 to 36 months depending on tenure. Due to the decision by the Constitutional Court, the exact amount depends on the decision by the courts as the judge has to consider also other factors besides tenure. In addition, the Dignity Decree constrains the use of fixed-term contracts by decreasing its maximum duration and limiting possibilities to extend the contract (new fixed-term contracts signed after 14 July 2018 or renewed after 31 October 2018). Although the aim of the Dignity Decree is to decrease the labour market duality by discouraging the use of fixed-term contracts, the changes introduced with this decree might make employers more hesitant to hire additional employees altogether which might limit further improvements in the employment rate.
2.2.3. Introducing more equal and universal unemployment benefits
The Italian unemployment benefit system has been characterised by long-lasting problems of fragmentation, limited and unequal coverage, generous levels and absence of any link between passive and active labour market policies.
The expenditure on passive labour market policies has been relatively high in Italy compared to other OECD countries (1.29% of GDP in Italy and 0.79% on average in OECD countries in 2015, see Figure 1.13 in Chapter 1). During 2012-15, both the unemployment rate and the spending on passive labour market policies relative to GDP in Italy were 60% to 70% higher than the respective average figures for the OECD. Yet, only 8.5% of unemployed people received unemployment benefits in Italy in 2016, which is one of the lowest shares in the European Union, second lowest after the Slovak Republic (see
Figure 2.3). A large share of expenditures are dedicated to wage supplementation schemes for workers on reduced working hours. This is one of the main reasons why the share of benefit recipients among the unemployed is so low even though expenditures on passive labour market measures are high in comparison with those in other OECD countries.
Note: EU: European Union. PES: Public employment service. Data refer to all unemployed people regardless of being registered or not at the PES, by whether they receive benefits or assistance.
a. Data refer to 2013 for Germany.
b. Unweighted average of the 22 EU countries in the figure.
c. Unweighted average of the EU countries in the figure which are OECD member countries, excluding Lithuania.
Source: European Union Labour Force Survey (EULFS) Database, http://ec.europa.eu/eurostat/web/lfs/data/database.
Wage supplementation schemes dominate passive labour market policies
Italy’s passive labour market policies have historically relied on wage supplementation schemes (Cassa Integrazione Guadagni Ordinaria – CIGO and Cassa Integrazione Guadagni Straordinaria – CIGS). These benefits are paid for workers on reduced working hours (including in the cases when working hours are reduced to zero, but the working contract is formally maintained). They were introduced in the 1950s and 1960s to help firms cope with temporary difficulties or lengthier processes of restructuring. Nevertheless, over time these kinds of benefits were used increasingly to cover permanent redundancies. Since they are not universal, one of the consequences of the massive reliance on these schemes has been a high level of differentiation in the coverage of workers, mainly by contract type and seniority, firm size and sector of activity as well as by the discretion of the public authority who can decide the access to the funds.2 These schemes are very generous as they replace up to 80% of the wage and require a contribution from employers which does not exceed 8% of the benefit. These generous conditions make them more popular than the unemployment benefit schemes for both employers and employees. However, they limit the potential for mobility across firms and reallocation to more productive jobs, they leave room for opportunistic behaviour due to the lack of job-search conditionality and they cover only some workers while many others lack effective protection (Calligaris et al., 2016[24]).
These schemes are used as substitutes for the unemployment benefit system, but only for the workers in specific sectors. The coverage of sectors was extended in the period following the crisis by applying the “social shock absorbers in derogation” (ammortizzatori sociali in deroga – AD) which relaxed the entitlement criteria for both wage supplementation schemes and for the occupational mobility allowance (Mobilità in deroga, which serves in essence the same purpose as CIGO and CIGS).3 These new criteria allowed regional authorities to include firms that were previously not covered because of their sector or size as well as employees on non-standard contracts. Newly admitted firms accessed the system without making any contributions, as the cost was covered by the state budget. At the same time, the maximum period for wage supplementation was extended indefinitely.4 The government earmarked almost EUR 12 billion between 2009 and 2015 for this purpose (8.1 billion for wage supplementation schemes and 3.5 billion for the mobility allowance, partially co-financed by the regions and the European Social Fund).
The share of wage supplementation schemes and occupational mobility allowance has formed around 40% of the total expenditure of PLMPs in Italy in the past years (Figure 2.4). The increase during the crisis was due to the introduction of AD.
Note: GDP: Gross domestic product.
Source: OECD/Eurostat Labour Market Programme Database, https://doi.org/10.1787/data-00312-en.
Table 2.1 compares CIGO and CIGS with the two general unemployment benefit schemes existing before the Fornero reform in 2012 – the full requirements unemployment benefit (Indennità di disoccupazione a requisiti pieni) and the reduced requirements unemployment benefit (Indennità di disoccupazione a requisiti ridotti).5 It shows that the wage supplementation schemes used to be more generous and had lighter requirements than the unemployment benefits that existed at the time. For employers, they represented a tool for internal flexibility in response to the strict employment protection legislation (Sacchi, Pancaldi and Arisi, 2011[25]).
Changes in the system of passive labour market policies
The Jobs Act intends to introduce three main changes in the system of passive labour market policies: i) reduce the reliance on wage supplementation schemes, ii) harmonise the unemployment benefit system into one universal insurance scheme linking the duration of benefits with the previous working history, and iii) strengthen the link between active measures and benefit recipiency by strengthening the principle of activation conditionality.
Regarding the wage supplementation schemes, the Jobs Act brought about a harmonisation of CIGO and CIGS and reduced the ground for redundancies, extended their coverage and linked the schemes better with ALMPs. The coverage of contract types was extended to all employees and the length was reduced to a maximum of 24 months over a moving five-year period (cumulated length of CIGO and CIGS). The cost for firms was made more responsive to the actual use of the schemes by making their contribution proportional to the extent of the CIGO and CIGS used.6 Bureaucratic procedures were simplified by smoothing the access procedure to the funds as the wage supplements are now granted directly by INPS and the local committees were abolished.7 Concerning the link with ALMPs, workers whose working hours are reduced by more than 50% are required to sign the “personalised service pact” with employment services (similarly to the recipients of unemployment benefits) in order to help them to be reintegrated into the labour market.
Concerning the unemployment benefit schemes, the Jobs Act created one single main insurance scheme called “New Social Insurance for Employment” (Nuova Assicurazione Sociale per l’Impiego, NASPI) and a smaller one dedicated to dependent self-employed workers (Disoccupazione collaborator, DIS-COLL). NASPI was introduced in March 2015 replacing the “Social Insurance for Employment” (Assicurazione Sociale per l’Impiego – ASPI) and the “Mini-Social Insurance for Employment” (mini-ASPI) which had been introduced with the Fornero reform in 2012.
The Jobs Act harmonised the entitlement and eligibility criteria and extended both the coverage and the duration of the benefits (see Table 2.2 for a comparison of the eligibility conditions and benefit characteristics of NASPI with ASPI and mini-ASPI). First of all, contrary to the previous system, NASPI applies also to workers whose contract has been terminated consensually or by resignation. An increase in the coverage rate of unemployment benefits has been achieved also by loosening the entitlement criteria.
Table 2.3 shows the number of unemployed people entitled to NASPI in 2015 and 2016 and compares this with the situation in which they would have filled requirements to access the previous ASPI/mini-ASPI system. In both years, the number of benefit recipients would have been almost 6% lower. The new system appears to benefit particularly the workers on temporary contracts, which is possibly a result of the more relaxed entitlement criteria. It means that the new scheme might enable an easier accumulation of working records, as career breaks probably have a smaller impact on the benefit entitlement.
The maximum duration of NASPI is longer than of ASPI. NASPI is granted for a number of weeks equal to half the weeks of insurance contribution in the last four years,8 while this window was restricted to one year for ASPI. The maximum potential period of NASPI is now in total a few months longer than it was for ASPI (see Table 2.4 for a full comparison of the two schemes). The increase is particularly high for open-ended contracts due to the higher number of weeks of contributions in the period before unemployment that is used to establish benefit duration. This means that people working more continuously (with less career breaks) might benefit more from the new system.
The amount of the benefit has not changed. NASPI grants 75% of the monthly “standardised” wage9 for those who earn up to a threshold of EUR 1 195 per month.10 For wages above the threshold, the benefit is equal to 75% of EUR 1 195 plus 25% of the difference between the monthly wage and the threshold itself, limiting the maximum benefit at EUR 1 300.11
The smaller-scale unemployment benefit scheme dedicated to dependent self-employed workers (Disoccupazione collaboratore – DIS-COLL)12 requires a minimum of three months of contributions, from the beginning of the year preceding unemployment. The duration and amount of the benefit are the same as for NASPI, with the only difference that the maximum duration cannot exceed six months. It represents the first protection introduced for an emblematic category in the Italian dual labour market, the dependent self-employed workers. These are mainly so-called collaborators (collaborazione a progetto), whose share in the Italian labour market has dramatically increased after the liberalisation of this kind of contracts by the “Biagi reform” in 2003.
Another important novelty in the Jobs Act was the introduction of the Assegno Sociale di Disoccupazione (ASDI) that relies on general taxation. This benefit is targeted to those unemployed who do not fulfil the minimum entitlement criteria for NASPI or who have exhausted its maximum period, but who continue to be unemployed and also in poverty.13 In 2017, it was replaced by the “Inclusion Income” Reddito di Inclusione (REI),14 which extended both the benefit coverage and duration. REI was originally designed with entitlement criteria related both to the family composition15 and the household’s income16 and then changed with the 2018 budget removing family requirements from 1 June 2018. All persons in the household have to agree to a “personalised project”, involving not only employment services but also social assistance services. Very importantly, this benefit is conditioned on active job search, but also on other commitments, such as healthcare and attendance of school for minors, in order to help families to overcome poverty and address social exclusion.
For the new benefit schemes to serve the purpose of providing income support during job search, activation conditionality is aimed at concerning all the benefits introduced with the Jobs Act. Activation conditionality (obligation to look for a job, accept suitable job offers, etc.) applied on unemployment benefits is a common and crucial feature of developed systems of labour market policies among OECD countries (OECD, 2013[17]), (OECD, 2015[26]). In addition, in the intention of the Italian policy-makers, the introduction of the new means-tested unemployment benefit (REI) would enable the Italian income support system to conform with the most widespread model in the Western Europe, i.e. the protection against unemployment is organised on two pillars, unemployment insurance and unemployment assistance (Sacchi, 2014[27]).
The new Italian government, which came to power in 2018, aims to reform REI to transform it into a universal income benefit, i.e. a universal measure against poverty. Some changes were implemented already in June 2018 (abolishing the requirements on family situation) and further and more extensive changes are foreseen for 2019. The budget law for 2019 allocates a substantial additional funding for this reformed benefit indicating an increase in its generosity. However, the exact details of the new scheme are not fixed yet as of autumn 2018. If the new scheme will be indeed more generous, the activation conditionality becomes even more crucial for the benefit scheme to have positive effects on the employment rate.
2.3. Strengthening the system of employment services
The Jobs Act aims to strengthen activation policies through a restructuring of the system and the institutions responsible for the design and delivery of ALMPs and the creation of the National Agency for Active Labour Market Policies as the coordinator of the network of employment services. In addition, it strengthens the activation concept supported by modernising the IT infrastructure, updating the service models and introducing monitoring and transparency to the system. These changes have the potential to make the system of employment services more effective and efficient.
2.3.1. Restructuring the system and enhancing service quality
Although there have been many attempts to advance labour market flexibility and passive labour market policies in Italy during the past 30 years, the provision of active labour market policies has been lagging behind.
The previous reforms of employment services have shifted the responsibilities across different government levels, but the concept and content of active measures have remained nearly untouched. The reform of active measures within the Jobs Act brings about on the one hand yet another restructuring of the system, this time aiming at harmonisation and decreasing fragmentation. In addition to that, the Jobs Act targets the content and above all the quality of active labour market policies. First, it identifies general principles of active labour market policies and sets grounds for introducing minimum service standards across Italy. Second, it aims to increase the quality of employment services by enhancing the quasi-market for employment services and stimulating competition between the public and private providers (this issue is discussed more thoroughly also in Chapter 3 of this report). Third, activation conditionality on benefit recipients is enforced to shift the focus from passive measures to active measures in the system.
Restructuring the system: some fragmentation will likely remain
The initial intention of the Jobs Act was to fundamentally restructure the system of employment services to increase the effectiveness of active labour market policies across Italy by centralising the competencies for active measures from the provincial level to the national level. The newly created National Agency for Active Labour Market Policies (ANPAL) was tasked with setting the objectives and strategies for the employment services in Italy. However, this step of centralised competencies required a constitutional reform preceded by a referendum.17 Due to the negative outcome of the referendum in December 2016 it was not possible to centralise the responsibilities to the national level, but only consolidate the competencies to the regional level. This process had started already in 2014, but is not completed yet. One of the difficulties in this process has been the negotiations with the trade unions of the staff in the local employment offices that are not welcoming the new regional approaches.
Although this partial transfer of responsibilities was not the desired outcome, it was a step forward from the highly fragmented system, in which more than hundred provinces were implementing the employment services, to a system of 19 regions and 2 autonomous provinces.
Additionally, the roles and relationships between the stakeholders had to be redefined compared with the initial model. ANPAL is now the coordinator of the activities of the relevant stakeholders involved in the delivery of employment services.
The Jobs Act established a network of employment services with the task to introduce actions and services aimed at improving the efficiency of the labour market for both employers in terms of satisfying skill needs and for jobseekers by providing support for labour market integration. The network is composed of a number of actors:
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The National Agency for Active Labour Market Policies (ANPAL), formerly the General Directorate for Active Policies, Employment and Training Services of the Ministry of Labour and Social Policies. ANPAL is tasked to be the coordinator of the network of employment services. Monitored and steered by the Ministry of Labour and Social Policies.
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The regional structures for active labour market policies. The regions have the competencies to provide the employment services thorough their local employment offices (Centri per l’Impiego, CPIs). Previously, the provinces were in charge of the local employment offices. About half of the regions (nine of them) have a regional agency for employment services to manage the local employment offices, in others regional administration manages the employment offices directly.
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The National Institute for Social Protection (INPS) being in charge of employment subsidies and income support measures (i.e. also passive labour market measures), a national centralised organisation (no change due to the reform). Monitored and steered by the Ministry of Labour and Social Policies.
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The Institute for Insurance against Accidents at Work (INAIL) co-operating with the system of public employment services regarding job integration of people with work-related disabilities (no change due to the reform). Monitored and steered by the Ministry of Labour and Social Policies.
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Private (accredited) providers of employment services providing active measures alongside the public local employment offices. These service providers existed also before the reform, though the reform aims at developing the market for private service providers further.
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Inter-professional funds for lifelong training and bilateral funds i.e. funds for training measures for which the task of supervision is given by the reform to ANPAL.
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The Institute for the Development of Workers’ Professional Training (ISFOL) changed by the same decree to the National Institute for Public Policy Analysis (INAPP). Some staff of ISFOL was transferred to ANPAL as part of the reform. The main task of INAPP is to study, monitor and evaluate public policies, including labour market policies. Monitored and steered by the Ministry of Labour and Social Policies.
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Italia Lavoro S.p.A. changed to ANPAL Servizi S.p.A. and transformed to an in-house entity of ANPAL. While Italia Lavoro used to be a joint-stock company owned by the Ministry of Economy and Finance mainly to manage locally the provision of employment services from ESF funding, the transformed ANPAL Servizi (now a joint-stock company owned by ANPAL) should assist and support ANPAL in its activities. As ANPAL Servizi contrary to ANPAL has employees also in the regional level, it assists also the regions and CPIs locally (though considering the guidelines from ANPAL).
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The Union of the Chambers of Commerce, Industry, Crafts and Agriculture called Unioncamere) regarding an input for trainings (anticipating skill needs), universities and upper secondary schools regarding training provision.
All of these organisations existed in some form also before the reform. Thus, the creation of this network was a slight rearrangement of responsibilities between the organisations rather than creating a new set-up of employment services. For example, prior to the reform, ANPAL existed as a directorate in the Ministry of Labour and Social Policies and had somewhat similar responsibilities as after the reform. ANPAL is today still steered and monitored by the Ministry of Labour, similarly to several other organisations in the network of employment services. ANPAL was created transferring some staff from the Ministry and from the ISFOL/INAPP together with the respective funds aiming at no additional burden to be generated to the public sector in terms of costs.
All stakeholders of employment services in Italy are depicted in Figure 2.5 by their function, highlighting the core actors of public employment services in black font. Although ANPAL coordinates the network of employment services,18 it is not responsible for active labour market policies. The Ministry of Labour and Social Policies together with the Regions and Autonomous Provinces (hereinafter referred to as the Regions) identify the relevant strategies, objectives and priorities. Specifically, the Ministry of Labour and Social Policies acting together with the State-Regions Conference is responsible for fixing three-year strategies and yearly objectives regarding active labour market policies and for defining minimum service levels throughout the country. The Ministry and the Regions sign yearly framework agreements regulating the relations and obligations concerning the management of employment services and active labour market policies, the activities that are outsourced from the private accredited bodies and the duties entrusted to ANPAL.19 However, ANPAL coordinates the preparation process for the different strategic documents and thus can have an influence over activation policies. ANPAL established for that a Committee of Active Labour Market Policies as one of its first steps. This committee involves all regional directors, is chaired by the general director of ANPAL and meets about ten times a year to discuss strategic issues regarding employment services.
Note: Column 1 refers to the function of actors, Columns 2 to 4 to actors. The Ministry of Labour and Social Policy is not a member of the network of employment services.
Active labour market policies are delivered by the local employment offices (CPIs) or outsourced to private (accredited) providers for employment services. After the full implementation of the reform, the CPIs are steered by the Regions. Although the consolidation of the competencies from the provinces to the regional level began already in 2014, this process was still ongoing as of June 2018 (only 10 out of 19 regions had completed the consolidation process).20 In addition, the financial resources were not moved to the regional level alongside the responsibilities, which hinders the consolidation process. As an (intermediary) solution, the funding of the CPIs was shared between the Ministry and the Regions and regulated by the yearly framework agreements in 2016 and 2017. The budget law for 2018 established a permanent transfer from the State budget to the Regions.
Due to the consolidation of responsibilities, the fragmentation of the system has decreased as there are 21 Regions implementing employment services instead of over a hundred different provinces. Yet, the number of partners in the system is still too high for a smooth and harmonious implementation of active policies. The fragmentation has caused delays in the progress of improvements in the system and is considered to be one of the main challenges by many stakeholders. The main actors in the system of employment services should co-operate more to overcome the fragmentation of the system and make progress in implementing the Jobs Act.
The co-operation is particularly low among the Regions as they do not see the clear benefits from the activities of ANPAL and from co-operating with other Regions. The wide-spread belief that the regional labour markets are very different leaves little scope for learning from each other and co-operating. However, in reality, the Regions share many similar features and challenges and the regional labour markets are indeed interconnected (see for example ISTAT (2014[28]) and Franconi et al. (2017[29])).
The benchlearning initiative of the EU PES Network has demonstrated the benefits of co-operation and sharing of best practices despite important differences in the labour market situation and business models among the public employment services in the EU. In that context, a method has been developed to monitor performance of employment services, detect best practices and mutually learn good practices from each other and for which the feedback through the satisfaction surveys has been very positive by the public employment services (see Box 2.3 for more details). Spain, a country with a decentralised system of employment services and relatively high regional labour market disparities (OECD, 2017[10]), has successfully adapted the same methodology to apply it in its regional employment services and encourage thus mutual learning and continuous improvement. In Italy, this approach could be managed and supported by ANPAL to promote co-operation between the Regions.
The Decision of the European Parliament and Council on enhanced co-operation between public employment services in 2014 established a network of PES in the European Union and set a method called “benchlearning” as one form of co-operation to integrate benchmarking and mutual learning activities to improve sharing of best practices. Benchlearning is a systematic, indicator-based learning method supporting PES to improve their performance.
Benchlearning involves two exercises – benchmarking and mutual learning. Benchmarking consists of quantitative benchmarking of PES performance and qualitative benchmarking of organisational arrangements. This double benchmarking method enables to identify relationships between PES organisational arrangements and performance while controlling for institutional and economic context. An econometric modelling exercise is conducted to identify the “true enablers” of PES performance.
Quantitative benchmarking involves comparing quantitative performance indicators related to transitions of registered unemployed persons to employment, filling of vacancies and satisfaction of employers and jobseekers with PES. For this purpose, data is gathered in a harmonised methodology from PES registers, aiming at comparable data regardless of different institutional contexts.
Qualitative benchmarking assess organisational arrangements in seven areas: i) strategic performance management; ii) design of operational processes; iii) sustainable activation and management of transitions; iv) relations to employers; v) evidence-based design and implementation of PES services; vi) effective management of partnerships with stakeholders; vii) allocation of PES resources. First, the PES conducts the evaluation of its organisational arrangements as a self-assessment, and second a team of external experts including from peer PES carry out an assessment. The assessment follows a Common Assessment Framework (CAF) model adapted to PES, which in turn is the Excellence Model of the European Foundation for Quality Management (EFQM) adapted to public sector organisations. The organisational arrangements are assessed following a plan-do-check-act cycle. As an output of qualitative assessment, the PES receives a report providing suggestions and recommendations for peer PES as potential exchange partners.
Mutual learning builds on the evidence from quantitative and qualitative benchmarking results. Benchmarking exercises identify learning needs (topics), potential thematic clusters and best practices that can be shared. Mutual learning takes place for example in thematic review workshops, PES Network seminars, conferences as well as smaller-scale formats such as study visits, smaller working groups or mutual assistance projects for PES that need more intense support. In addition, the key outputs of the mutual learning exercise such as the fiches of best practices, analytical papers and toolkits, are disseminated in the PES Knowledge Centre also externally. 21
The main factor of success of this methodology in the EU PES Network has been that the participants do not perceive this exercise as a contest of performance, but have a strong motivation to learn from others and share their own good practices. Thus, they contribute to open and truthful self-assessments and external assessments and exhibit a strong will to improve.
A similar exercise could be applied in Italy to encourage a structured and evidence-based sharing of good practices between the Regions. As gathering quantitative data depends on the IT developments and might still take some time, as a first step the qualitative benchmarking could be implemented to detect potential good practices and to build mutual learning on. The exercise needs coordination [organising practical arrangements concerning qualitative assessments and mutual learning events, potentially involving external partners to support the exercise, disseminating the good practices detected (potentially also through a repository), collect and process data, etc.], which should be done by ANPAL.
Source: Fertig, M. and N. Ziminiene (2017[30]), PES Network Benchlearning Manual, EC, Brussels, https://doi.org/10.2767/254654; European Parliament and the Council (2014[31]), “Decision No 573/2014/EU of the European Parliament and of the Council”, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2014.159.01.0032.01.ENG.
Setting minimum standards
The Jobs Act aims at harmonising the concept of employment services and setting minimum quality standards in the otherwise diverse regionalised system. The Decree 150/2015 implementing the Jobs Act defines the basic concepts such as the status of unemployment and it identifies general principles of active labour market policies.22 Given the institutional setting in Italy and the decentralised responsibilities for the design and implementation of active measures, the set of measures varies greatly across Italy. The Jobs Act outlines the minimum set of active labour market policies that has to be available for all the jobseekers across Italy. However, the Regions can (and they do) provide additional measures to this minimum set of measures.
In addition, the Jobs Act calls for the establishment of minimum quality standards for the outlined active measures with the help of ANPAL. The agreement for these minimum standards was reached with the Regions the first time at the end of 2017 and these are fixed in the Triennial Strategy for the Action on Active Policies. The concluded agreement has been a step forward in guaranteeing access to employment services for citizens across Italy. In principle, ANPAL has the right to manage labour market programmes directly in case the essential service standards are not guaranteed and hence intervene in the management of CPIs in case of weak performance. However, monitoring of the implementation of these minimum quality levels has remained yet problematic. ANPAL did conduct a monitoring survey among the local employment offices in 2016-17, but this did not follow (yet) precisely the minimum service standards agreed upon and the monitoring framework itself did not follow any agreed framework. Nevertheless, these monitoring results indicate that while basic activities of the minimum service standards tend to be in place in most of the CPIs, many activities are still problematic across Italy (ANPAL, 2018[32]). The preliminary performance management system (including the management information system) has to be developed further to accommodate monitoring of the quality of services and actions have to be agreed when the service quality is below the minimum agreed level.23
Enhancing quasi-market
A true novelty in the law 150/2015 regarding the set of active measures is the provision of individual “reintegration vouchers” (“replacement vouchers”) which allows the jobseeker to decide which service provider to use for an intensive support service for job search. This legal provision aims at increasing the role of private providers of employment services to complement the limited resources of the public providers as well as stimulating competition between the public and private providers to enhance service quality. The value of the reintegration voucher depends on the employability profile of the jobseeker (the harder to place jobseekers needing more intensive support) and the payments depend on the employment results achieved, thus aiming at performance, but avoiding creaming. The development of the operational scheme and monitoring methods of the reintegration vouchers have been some of the tasks delivered by ANPAL during the first year of its operation. The actors in the network of employment services share the view that the complementarity from the private service providers is welcome as the resources in the public system are insufficient. Yet, the provision of reintegration voucher during its piloting year in 2017 has not been viewed as a success as the take-up has been lower than expected, the employment outcomes have been weak [the evaluation results for the experimental phase of the voucher by ANPAL show no statistically significant improvement in employment outcomes due to the vouchers (ANPAL, forthcoming[33])] and the information on job quality has been largely missing.
Linking passive with active measures: enforcing conditionality
The link between unemployment benefit recipiency and active job-search requirement (job-search conditionality) has traditionally been weak in the Italian system. Until the Jobs Act the job-search conditionality was regulated very rigidly in the law, establishing a complete loss of benefit in any lack of compliance with commitments agreed with employment services. Despite this strict definition, conditionality was never applied in practice. The Decree 150 of September 2015 strengthened the principle of conditionality through two main changes. First, there is a more gradual application of sanctions in case jobseekers are not complying with commitments agreed. Second, it establishes mechanisms to implement conditionality by relaunching setting mutual obligations for employment offices and jobseekers and by incentivising employment offices to apply sanctions.
With the aim to increase the activity of jobseekers and make benefit receipt conditional on job-search activity on the one hand and to increase the personalised support for the jobseekers on the other, “an individual service pact” (“patto di servizio personalizzato”), is introduced by the law. After registration through an online system as unemployed, a jobseeker has to contact a local employment office within 30 days to validate his/her status as unemployed. The local employment office has to propose an individual service pact within 60 days after registration. The service pact is in essence an individual action plan (or job integration agreement) used in some form by all of the public employment services in the European Union [see e.g. Wittenberg et al. (2016[34]) and Tubb (2012[35])].
The service pact lays down mutual obligations of the jobseeker and the employment office. The employment service commits to providing labour market services according to the individual needs of the jobseeker (e.g. job-search counselling, training, reintegration voucher, unemployment benefit REI) and the jobseeker agrees to participate in these activities, take steps to find employment and accept suitable job offers. A failure to comply with the activation activities (no-show to an appointment in the employment office, failure to participate in an active measure or refusal of a suitable job offer) incurs sanctions on benefits ranging from the reduction to the termination of unemployment benefits (NASPI and DIS-COLL, REI), as well as the reduction or loss of income support measures (CIGO, CIGS, Solidarity Contract and Solidarity Funds). However, so far the service pact has not been applied in a homogenous way across Italy and not always covering all benefit recipients (involving for example only recipients of certain services such as the reintegration voucher).24 This is why ANPAL proposed a common form to be used for the service pact in May 2018 (see Chapter 3), which is however not binding for the employment offices to use.
Although the activation conditionality on benefits existed in the legislation already before the introduction of the Jobs Act, these principles were never implemented (Pinelli et al., 2017[1]). One of the reasons the conditionality has not been enforced in the past is the lack of IT infrastructure which would enable the employment services to communicate with INPS which is responsible for the benefit delivery to the unemployed. The Jobs Act specifies that the employment offices have to use the online system to communicate violations of activation activities by jobseekers to ANPAL and INPS which executes the resulting benefit adjustments. However, the integrated single IT system has not yet been completed, which makes any communication attempt rather burdensome.
In order to strengthen job-search conditionality, the Jobs Act foresees disciplinary and financial sanctions for the staff in employment offices failing to apply the sanctions on benefit recipients and rewards them in case of compliance. The Regions receive 50% of the benefits saved from applying sanctions which can be used as incentive tools for staff in local employment offices and the remaining 50% of benefit savings goes to the national fund for active labour market policies.
The biggest obstacle in the implementation of activation conditionality has been that the concept of a suitable job offer was not furnished and approved by the Ministry of Labour and Social Policies until July 2018. As such, the CPIs and operators were afraid to apply the activation conditionality due to the possible lawsuits as it would not have been possible for them to prove that the job offer was suitable.
The Ministerial decree from July 2018 defines suitable job offer through i) the match between the job offer and jobseeker regarding experience and skills (better match required when shorter unemployment duration), ii) geographical distance and commuting times (obligation to accept jobs up to 50 km distance when the unemployment duration is less than 12 months, but 80 km thereafter), iii) wage level in case of unemployment benefit recipients (wage should be 20% higher than benefit). Additionally, the job offer should be at least for three months, with at least 80% working time, provide at least the minimum wage required by the applicable collective agreement and be compatible with health limitations in case of a disabled jobseeker. The application of the suitable job offer is set to be dependent on the new IT system for providing employment services (an integrated single IT system of active labour market policies, see Subsection 2.3.3). The employment offices should receive data about the amount of unemployment benefit from INPS through the IT system to apply the income criterion. The matching of skills and experience depends on what is agreed in the service pact using the classifications for occupations and economic sectors from the new IT system. Thus, the decree postpones the application of criteria related to skill match until the full operation of the new IT system.
As a result, it is unlikely that the concept of suitable job offer will be applied as part of the activation conditionality before the new IT system is functional. In addition, even if drawing up service pacts incorporating jobseekers’ skills and suitable job offers will be supported by the new IT system, there would be difficulties for the operators to prove that the jobseeker refused the job offer. For the new IT system to support the application of activation conditionality in general, the activities agreed with the jobseeker and the activities of the jobseeker executed should be recorded in the IT system.
Clearly, it will be unavoidable that the application of conditionality will incur some appeals and lawsuits from jobseekers and thus the Regional authorities will have to devote some additional budget for legal costs. Yet, the additional legal costs will be marginal compared to the additional benefits that the application of activation conditionality brings if implemented properly. For example, in Estonia the reform of labour market policies took place in May 2009 incurring activation conditionality to be applied on registered jobseekers supported by fundamental changes throughout the business model, including building a modern IT infrastructure to support the changes. Although the eligibility criteria for unemployment benefits (e.g. conditions for availability for work, job-search requirements, etc.) in Estonia are some of the strictest among the OECD countries (Langenbucher, 2015[36]), the share of appeals by jobseekers has been around 0.5% relative to the stock of registered unemployed and only a third of the appeals have been settled in favour of the jobseekers.25 Furthermore, activating jobseekers does not only occur costs, but also significant benefits. Activating jobseekers brings them quicker to the labour market and saves costs for the system of employment services. The meta-analysis of evaluations of early activation policies in 11 EU countries conducted by Csillag et al. (2018[37]) indicates that many early activation programs are effective and cost efficient (high positive benefit to cost ratio). This is particularly the case of intensified early support programmes involving individual job counselling (stronger evidence than for example for early group job counselling, early participation in training programs or early measures in case of collective dismissals).
To strengthen the enforcement of activation conditionality, the operators in the CPIs have to be trained to implement activation, making them aware of its objectives and build the know-how to use the appropriate tools. The difficult conditions in the labour market together with no prior experience in applying conditionality make the employment offices and their staff reluctant to impose sanctions on benefit recipients and share this information with INPS and ANPAL.
The monitoring and performance management system have to be developed further to accommodate activation activities. In the set of indicators agreed in the Triennial Strategy for the Action on Active Policies in December 2017, also indicators for the sanctions applied on benefit recipients and for the number of service pacts signed are included. However, no target has been set for these indicators yet26 nor is it clear how to gather the data for them.
Finally, a key factor which may limit the applicability of the activation conditionality is the very small number of vacancies mediated by the public employment services, which makes it harder for the operators in the CPIs to refer jobseekers to suitable jobs. Hence, shifting the system of employment services towards activation also requires putting a strategy for employer outreach in place (see Chapter 3 for more details on this matter). Given all these constraints and the limited progress so far, it is possible that the implementation of activation conditionality on benefit recipients will take a few years despite the additional new mechanisms provided by the Jobs Act.
If the proposal by the new government to transform the means-tested benefit REI into a universal benefit scheme will be implemented, the implementation of activation conditionality becomes even more critical as the number and potentially the level of benefit will be substantially increased. This scheme will reduce poverty and increase employment only in case benefit recipients are well supported by the employment services helping them to actively seek work and providing them with the necessary active measures to succeed in job search.
2.3.2. The crucial role of the National Agency for Active Labour Market Policies
Despite the change in ANPAL’s role following the outcome of the referendum, the organisation is still one of the key actors in the system of employment services and has a critical role to play. The main tasks of ANPAL are laid down in the decree implementing the Jobs Act regarding active labour market policies (decree 150/2015). Besides co-ordinating the network of employment services, ANPAL is tasked with developing methodologies for different tools (reintegration voucher, jobseeker profiling, services for enterprises going through downsizing / services for displaced workers, training programmes), developing the support systems for service provision (integrated IT system, system of accrediting service providers, system of employment incentives) and contributing to the management of the related funds (ESF funding, EGF funding, funds for life-long learning). Very importantly, ANPAL is also setting the (minimum) standards for providing employment services and monitoring and evaluating the service provision.
Thus, the decree provides ANPAL with many different responsibilities which are similar in nature to the ones that the respective previous directorate of the Ministry of Labour and Social Policies used to have. Despite that, the law does not provide ANPAL with a main objective, the raison d’être. In reality, of course, ANPAL has an important main role to fill in coordinating the network of employment services and supporting the Regions to reform the system of employment services.
The statute of ANPAL (a presidential decree effective from June 2016) declares that ANPAL performs the functions and tasks assigned to it by the Decree 150 from 2015 in order to promote the effectiveness of the rights to work, training and professional development and the right of every individual to access free placement services, through interventions and services aimed at improving efficiency of the labour market.
The other strategic documents defining among other matters the activities of ANPAL are the two strategic agreements between the Ministry of Labour and Social Policies and the Regions: i) the Triennial Strategy for the Action on Active Policies, and ii) the Plan to Strengthen Employment Services and Measures. The current plans in force as of autumn 2018 were agreed on in the end of 2017 after negotiations coordinated by ANPAL. The two plans define the objectives, common principles and the key activities for the system of employment services to implement the Jobs Act. The Triennial Strategy for the Action on Active Policies establishes also a set of indicators to monitor the objectives (key activities) for 2018. These plans contain agreements to co-operate in developing and applying the different methodologies and systems being developed by ANPAL (outlining the key activities of the legal Decree 150/2015 in more detail), but do not assign additional duties or functions on ANPAL compared to the legal Decree 150/2015.
ANPAL’s strategic view
ANPAL’s Performance Plan laid down first in November 2017 and further strengthened in February 2018 (ANPAL, 2018[38])27 is the main strategic document which describes the organisational set-up, defines the general tasks of each structural unit28 and sets specific tasks for ANPAL for the next three years.29 This is an elaborate strategic plan aiming to define its tasks in detail to support the reform in the Italian employment services the best possible way.
In its Performance Plan, ANPAL refers to the functions and tasks assigned to it by the Decree 150/2015 and in its statute as ANPAL’s mandate and mission.30 As ANPAL defines itself through these tasks, it has made also a lot of progress during its first years in fulfilling many of these individual responsibilities. For example, ANPAL has proposed new methodologies for profiling jobseekers, contracting out employment services, etc. It has managed to reach agreements with the other stakeholders on defining common concepts (a suitable job offer for jobseekers, minimum service standards, measuring performance in local offices, etc.) and it has provided new IT solutions.
In addition, ANPAL has made great efforts in generating and disseminating knowledge about the situation in the system of employment services, conducting surveys for that among the local employment offices as well as among their customers. This has created solid awareness about the challenges in the system for ANPAL itself, but also for the other members in the network of employment services as well as for the general public.
To tackle these evident challenges in the system of employment services, ANPAL has a critical role in supporting the network of employment services, particularly the Regions. ANPAL is the key institution to coordinate the network to design change (strategic plan for the system) and implement it. This requires ANPAL to have a strategic role, going beyond the individual detailed tasks provided by the legal framework. ANPAL’s central support will enable the system to go through a more fundamental reform, rather than a patchwork of small adaptions. ANPAL’s clear strategic plan regarding its own role in the system is thus vital.
While ANPAL has an elaborate Performance Plan in place, it is important for ANPAL to elaborate its strategic view even further, beyond the detailed tasks of the legal framework and highlighting more its main raison d’être – supporting the Regions and co-ordinating the network in order to improve the system of employment services. First, a well-developed strategic plan (i.e. not necessarily very detailed, but highlighting the crucial strategic aspects) enables an organisation to set its goals, its key actions as well as other critical elements to achieve these goals. Second, a strategic plan helps an organisation to communicate its raison d’être both internally and externally, thus helping it to achieve the set objectives. A good strategic plan should be easily comprehensible, focused and highlighting the critical elements, in order to facilitate its communication. Generally, a strategic plan should state the mission of the organisation (its purpose, what the organisation does), vision (an inspirational statement what the organisation wishes to achieve), core values of the organisation, clients to whom its services are targeted to, key partners to achieve its objectives, key activities to fulfil the goals and key performance indicators to assess the progress. Some good examples of the key elements in the strategic plans of the public employment services in France, Estonia, Spain and Denmark are provided in Box 2.4 (in the case of Spain and Denmark there is a central independent public body in a decentralised system of employment services similarly to ANPAL).
Estonia. Estonian Unemployment Insurance Fund. Development Plan for 2016-19
Mission: We support finding work and workers.
Vision: We are the best and most inspiring labour market organisation in Estonia and Europe.
Core values:
Trust – we have an in-depth understanding of our field and we focus on results; we notice and take into account the individual opportunities and needs of the customer; we follow good practices and keep our promises; our decisions are reasoned and comprehensible; we ensure the purposeful use of resources.
Co-operation – we initiate and maintain meaningful co-operation; we listen to the proposals of our customers and partners and work together to find solutions; we are accessible, helpful and friendly to our customers and partners; we work as a team and value each and every colleague.
Innovation – we actively acquire new knowledge and share our experience with colleagues and partners; we are creative in finding and adopting solutions; we make effective use of modern information and communication technology; our ideas support the development of the organisation.
France. Pôle emploi
Mission: In order to fulfill our public service mission, we develop a range of personalised services, based on our in-depth expertise of the labour market in France.
As Pôle emploi has a strong focus on innovation and digitalisation,31 it introduces its mission to its clients on its website in an easily comprehensible and short format, focusing on the key elements of its strategy such as its core values of proximity and accessibility, listening to the needs of employers and innovation (https://youtu.be/G2D9S2Eda8c).
Spain. State Public Employment Service (SEPE). Services Charter 2015-18.
Mission: To contribute to the development of an employment policy, manage the unemployment protection system and guarantee the flow of information on the labour market to ensure insertion and long-term employment for workers and improvement of human capital for companies in collaboration with the Autonomous Communities’ Public Employment Service and other actors in the labour market.
Vision: Achieve excellence in the management of our citizen services, making the most of new technologies and directing contributions through the National Employment System to increase the quality of the labour market.
Core values: In order to comply with the provision of services entrusted to us and to reach objectives of being a quality body of reference in the delivery of those services, we are governed by the following principles: 1) Culture of service to citizens, 2) Innovative capacity, 3) Transparency, 4) Collaboration with other actors in the labour market, 5) Commitment to the body’s personnel, 6) Quality in management.
Responsibilities: 1) Develop state-wide policy proposals regarding employment, training for employment and unemployment protection. 2) Plan and foster employment policy proposals focused on people’s and corporate needs. 3 Manage unemployment benefits, realising the protection rights of unemployed people. 4) Conduct research, studies, analysis and statistics collection at a state level on the situation of the labour market and provide solutions to improve it.
These functions are performed proactively, by anticipating new needs, with the aim of providing a fast and efficient service.
Denmark. Strategy 2018-21 of the Danish Agency for Labour Market and Recruitment (STAR). Building tomorrow’s labour market together.
Mission: STAR promotes effective labour market policy by which businesses receive the necessary labour and as many citizens as possible have a job or are in education.
Vision: STAR makes it possible to make decisions regarding the labour market on a qualified basis. STAR makes it possible to transform labour market policy into effective practice that benefits citizens. STAR makes it possible for businesses to receive the necessary labour.
Source: Estonian Unemployment Insurance Fund (2015[39]), Development Plan for 2016-2019, https://www.tootukassa.ee/sites/tootukassa.ee/files/euif_development_plan_2016_2019.pdf; Pôle emploi (2018[40]), Nos missions, http://www.pole-emploi.org/poleemploi/mission/nos-missions.html?type=article; SEPE (2015[41]), Services Charter 2015-2018, https://www.sepe.es/contenidos/que_es_el_sepe/publicaciones/pdf/pdf_sobre_el_sepe/carta_servicios_f_ing.pdf; STAR (2018[42]), STAR’s Strategy 2018-2021: Building Tomorrow’s Labour Market Together, https://www.star.dk/media/7669/strategy_star.pdf.
Further strengthening of ANPAL’s strategic identification and a view of its role would benefit the implementation of the reform in the system of employment services. First, a stronger strategic view would be benefiting the co-operation between ANPAL and the other partners in the network of employment services (particularly the Regions) as there would be more clarity about the exact role of ANPAL and whether and what kind of support the Regional authorities could expect from ANPAL. Indeed, 13 out of 18 Regions that answered a question about how ANPAL could improve the system of employment services (a questionnaire administered by the OECD in 2018),32 thought that ANPAL could provide more support to Regions, local offices and staff in the local offices. Above all, the Regions need ANPAL to contribute to the training of staff, but also support on interpreting legal provisions, provide technical assistance to implement the methods and tools, disseminate knowledge and share good practices. Five Regions also expressed the concern to involve them more in the development of the methods and tools (i.e. the need for support and co-operation instead of imposing methods).33 These results put forward a strong expectation from the Regions, which could be more straightforwardly reflected in the mission of ANPAL.
Second, a clear and easily comprehensible mission is beneficial for co-operation within ANPAL as an organisation itself, especially regarding the co-operation between ANPAL and its in-house entity ANPAL Servizi, but also employees from previously different organisations such as from INAPP and the Ministry of Labour and Social Affairs. A clear mission statement and strategy helps to understand objectives and tasks in the same way across the organisation.
Regarding internal stakeholders, the current strategy could be strengthened by treating the ANPAL Servizi staff as an integral part of the organisation, and considering them as ANPAL’s extension to the Regions and CPIs. Although the President of ANPAL is also the Director of ANPAL Servizi, these two entities operate currently as two separate organisations, thus making co-operating more difficult. Ideally, ANPAL Servizi should be operating similarly to the different divisions of ANPAL, i.e. being part of the same information exchange and chain of command and having similar rights and obligations. The employees of ANPAL Servizi on regional level should be helping to implement the methodologies and tools that are developed by ANPAL in co-operation with the central level ANPAL Servizi, the Regions and other partners. ANPAL Servizi staff should be the main channel of support for the local offices and front-line counsellors, helping the CPI staff to interpret provisions, providing technical assistance to use new tools and methodologies and organising training to enhance their skills. The regional staff of ANPAL Servizi should be the channel to advocate the reform agenda of the system of employment services and communicate the strategy of ANPAL.
ANPAL could further strengthen its strategy by defining its main clients as part of its strategy. ANPAL’s task is to support the Regions and local employment offices to improve the employment services rather than deliver services to jobseekers and employers, which is under the responsibility of the local offices and the regional authorities. The strategy should state straightforwardly that ANPAL is the enabler for CPIs, supporting them in improving their services and in fulfilling their mission.
Thus, ANPAL’s role in the Italian system of employment services is crucial and it would be beneficial to address that stronger in the ANPAL’s strategy. Further developments in its strategy should keep both its external and internal stakeholders in mind. The new strategy should lay down a clear and easily comprehensible mission which will define ANPAL’s role as an independent organisation. The communication of its strategy should become an integral part of its business model to become effective. For example in the Estonian public employment service which took over the responsibilities for active labour market policies from a poorly performing state-governed public body in May 2009, the management board visited all local employment offices during the preceding months before the take-over to learn about the challenges that the local offices had, to introduce the new ideas to go forward and to discuss the strategy ahead. The management board has continued visiting all the local offices each year, providing every staff member the opportunity to meet the top managers and enabling bi-directional communication on the strategy and performance. In addition, there are several other tools in place to involve also staff members in local offices in strategy design and strategy communication, such as yearly strategy days involving all key employees and conducting regular self-evaluation exercises using Common Assessment Framework methodology.
The Italian system of employment services is clearly too large to apply exactly the same tools for strategy communication as the Estonian public employment service. Yet, higher involvement of local offices in strategy design and communication could be achieved. For example, it would be feasible for the management of ANPAL to organise meetings regionally, involving all the managers of local offices in a region (and the regional authorities) to discuss their challenges, their specific needs for support and the steps needed to improve the system. These activities would provide input for the strategic view of ANPAL as well as for the strategies of the whole system of employment services (such as the triennial strategy).
Co-ordination of the system of employment services remains a challenge
ANPAL is still very new in the role as a coordinator of the network of employment services and has not been able to establish itself fully as such. The ability of ANPAL to coordinate and harmonise the system depends largely on its capabilities to lead the negotiations on implementing the Jobs Act, i.e. the negotiations to draw up the strategic plans (the triennial strategies, the Plan to Strengthen Employment Services and Measures), develop the appropriate tools and to implement them. ANPAL has made great efforts to enable reaching agreements on necessary changes in the system, but as there are more than 20 Regions with different levels of development and resources that ought to agree with these plans and methodologies, the negotiations are slow and the progress of implementation cumbersome. For example, the preparation of the Plan to Strengthen Employment Services and Measures started in 2016 and was agreed upon at the end of 2017. Most importantly, the additional hiring and training of the staff for the CPIs, which was extremely crucial and what the Regions looked forward to the most, had not started yet by summer 2018.34 As the progress of reforming the system is thus slow, the contributions of ANPAL are less evident for the other stakeholders and its credibility is harmed.
Moreover, there is a clear disconnection between the multiple and diverse tasks that the law assigns to ANPAL and the tools that are provided to ANPAL to fulfil its role. For example, financial incentives depending on the achievements of set objectives could be used successfully to encourage effective provision of employment services in a decentralised system [see OECD (2005[43]) and Weishaupt (2014[44])]. Encouraging co-opetition at a local level with a performance management system and appropriate incentives is crucial in any system of public employment services. Yet this becomes even more critical in a decentralised system where the local units have more flexibility to define their business model. For example, performance of employment services has been successfully improved by performance transparency and financial incentives in the decentralised systems of Denmark and Spain (see also Box 2.5). In Denmark, the state reimburses parts of the unemployment benefits that municipalities pay to jobseekers, but the reimbursement rate decreases over time, incentivising municipalities to help jobseekers find employment quicker. In Spain, the regional performance of employment services is measured by a complex commonly agreed framework enabling to reward improvement in the performance as increased budget for the following year. An incentive system rewarding an increase in performance (i.e. not the absolute level of performance) could be potentially feasible also in Italy, for example through the budget for operating costs of local employment services from the state budget.
Denmark – Financial incentives for municipalities
Performance management has a central role in the Danish decentralised system of employment services. The state reimburses the costs of unemployment benefits that the municipalities pay to jobseekers. Within the reformed performance management framework applied since 2016, the reimbursement rate decreases over the unemployment period, incentivising job centres to provide prompt support to jobseekers for transitions to employment and education. Thus, municipalities are encouraged to introduce active labour market policies without the central level dictating how these policies should be implemented in practice. The main function of the central organisation is to gather knowledge on what works and for whom (or what does not work) and disseminate this knowledge to the jobcentres. In addition, the central organisation provides technical assistance to the jobcentres to build their local capacity, e.g. gaining budget for active labour market policies.
Spain – Financial incentives for autonomous regions
In Spain, providing active labour market policies is the responsibility of 17 regional PES. Since 2013, a performance management system called the Assessment Framework is applied following a mutual agreement between the stakeholders of the system of employment services. The Assessment Framework consists in total of 13 strategic (general political) and 48 structural (PES tasks related) indicators. The performance of regional PES are compared using the aggregated scores of the Assessment Framework and an improvement in the results triggers an increase in the regional budget. The performance management system is complemented by mutual learning seminars to share good regional practices on critical topics such as profiling, implementing training voucher schemes or certifying competencies. Some of these seminars have involved also external partners, such as OECD.
Switzerland – Benchmarking and peer pressure
The performance management in the system of public employment services in Switzerland is set in the framework of allowing local differences in implementation and no over-steering form the central level (by the ministry). The central performance management system consists of four overall targets – integrating jobseekers rapidly, preventing and reducing long-term unemployment, preventing and reducing exhaustion of benefits and preventing and reducing re-registrations. To enable comparison between cantons, exogenous factors stemming from the local labour market situation, seasonality, nationality of jobseekers, the incidence of frontier workers (people working in Switzerland, but living abroad) and agglomeration are taken into account through regression analysis. The comparable indicator results are published every year to encourage competition and improve performance. Though the initial aim of setting up such a performance management system was to make funding of cantons dependent on their results, this has not been done due to the resistance of cantons. Nevertheless, the current system does encourage performance through providing cantons with performance data to manage their employment offices and creating peer pressure.
The Netherlands – Customer satisfaction and manager bonuses
The Dutch public employment service (a centralised PES in a partly decentralised service delivery model) uses a set of 12 objectives for local employment offices to assess performance. A key indicator is the customer (jobseekers and employers) satisfaction with the services, particularly focusing on accessibility of the services and fit to customer needs. The system encourages the managers of local offices to focus on customer needs by publishing the results of customer satisfaction surveys across the PES and by implementing bonuses (5% additional payment) for managers in case of positive customer feedback.
Source: STAR (2018[45]), Performance management in the Danish employment system, https://star.dk/en/about-the-danish-agency-for-labour-market-and-recruitment/performance-management-in-the-danish-employment-system/; Graversen, P. (2018[46]), Economic incentives for municipalities to reduce the time it takes to return people to employment, http://ec.europa.eu/social/BlobServlet?docId=19257&langId=en; Weishaupt, T. (2016[47]), Establishing and Operating Performance Management in PES, https://doi.org/10.2767/166351; de la Rica, S. (2015[48]), A New Strategy for Employment Activation (SEA)-Spain 2014, http://ec.europa.eu/social/BlobServlet?docId=14564&langId=en; van Zutphen, M. (2016[49]), Improving PES by measuring customer satisfaction and implementing manager bonuses, http://ec.europa.eu/social/BlobServlet?docId=15337&langId=en; Nussbaum, O. (2013[50]), Performance management in PES Some aspects of the Swiss system, http://ec.europa.eu/social/BlobServlet?docId=11014&langId=en; OECD (2016[51]), Employment and Skills Strategies in Poland. OECD Reviews on Local Job Creation, https://doi.org/10.1787/9789264256521-en.
However, in the case of Italy, so far also the budget laws regulating the funding of the system of employment services have been passed without making funding of CPIs conditional on their performance.
A comparability of the entities (e.g. Regions or local offices) should be aimed at before applying ranking and/or assigning targets. In Italy, where there is a high number of local offices present, a clustering methodology can be successfully applied, similarly to what is done for example in Germany (see Box 2.6) where the 156 local employment offices are grouped into 12 clusters based on local labour market conditions [defined by a regression analysis on the variables affecting labour market integration rates, (Sottung, 2016[52])]. Alternatively, the local labour market situation can be taken into account by controlling for variables of local labour market situation in a regression model and not clustering the subjects, but adding a corrective component to the performance indicators, such as is done in Switzerland (for cantons) or even in the EU Network of Public Employment Services (for public employment services in member countries).
These kinds of exercises such as clustering or correcting for local economic situation make it possible to compare the performance of local employment offices in a fair way and assign them appropriate performance targets. This system could be a first step in developing accountability in Italy, involving publishing the performance results to encourage peer pressure such in the Dutch and Swiss performance management systems (see Box 2.5). The second step would be linking the achievement of performance targets to financial incentives. An underlying fair benchmarking enables rewarding when improvement in performance is achieved, instead of rewarding good results in absolute terms, which might lead to even poorer financing of those employment offices that are already in worse circumstances. Finances that are allocated from the State budget to the Regions can be this way conditional on improvements in performance. This performance conditionality becomes even more applicable and crucial if the funding of public employment services from the State budget will be increased as has been announced by the new government in 2018.
To assess the performance of local employment offices in a fair way, the German public employment service applies a clustering method on its 156 offices. A regression analysis is conducted to identify which variables indicating the local labour market conditions (unemployment rate, seasonality, regional migration, structure of economy, relative level of employment opportunities, qualification level of labour force, size of enterprises, etc.) influence labour market integration rates of customers. The variables identified in the regression analysis are feeding into the cluster analysis that helps to group the local offices into clusters containing most similar offices. Currently, there are 12 clusters, but the exercise is repeated every few years to take into account the changing economic environment.
The targets for the indicators in the performance management system are set through a bottom-up approach, where the local employment offices propose their target levels themselves at first. The process of setting the targets uses an iterative approach as the proposed targets are then discussed between the regional level and the local offices as well as the national level and the regional level until consensus is reached and fixed in target agreements at all management levels. Clustering supports setting benchmarks, helps to identify potential for improvement, motivates performance and encourages peer learning, but it also helps to reach fair target agreements across the local offices. In addition, the performance monitoring and assessment is fairer due to clustering.
Source: Sottung, S. (2016[52]), Local PES office clusters, EC, https://ec.europa.eu/social/BlobServlet?docId=15352&langId=en; OECD (2016[51]), Employment and Skills Strategies in Poland. OECD Reviews on Local Job Creation, https://doi.org/10.1787/9789264256521-en.
Nevertheless, the law does provide ANPAL with some tools, such as the authorisation to monitor and evaluate the management of active labour market policies and the results achieved by public and accredited private providers of employment services. In addition, ANPAL has the right to manage labour market programmes directly in case the minimum service standards are not being respected, and to support the Regions in case there is a risk that the minimum service standards are not guaranteed, by managing these employment offices directly. Thus, by law ANPAL can intervene in the management of the CPIs in case of low performance. However, the minimum service standards and the indicators for monitoring the CPIs were agreed upon only in December 2017 in the Triennial Strategy for the Action on Active Policies (approved by ministerial decree in early 2018), and the IT systems to gather the monitoring data are not yet fully functional as of summer 2018. In addition, such an intervention needs an application of the subsidiary principle, meaning how the intervention process in case of low performance should be conducted (e.g. a task force from ANPAL assisting the respective local office). The prerequisites for the subsidiarity principle were laid down by a ministerial decree in the beginning of 2018, but the process is not fully defined yet or agreed upon.35 This means that ANPAL has not been able yet to use these tools to coordinate and harmonise the system of employment services. Evidently intervening in the management of local offices is also seen as a last resort, an extreme intervention, and milder support actions are preferred.
Furthermore, even when the appropriate infrastructure and methodologies will be eventually developed and imposed, these do not guarantee co-operation between the stakeholders. Trust, the key for the success of a system with many actors, is currently missing and conflicts are visible. For example, the number of disputes between the State and the Regions in the constitutional court has grown. Although many of the stakeholders share their views about which are the main challenges facing the Italian labour market, the ways to solve them are not always shared. The differences in the level of provision of employment services among the Regions make it harder to reach agreements on harmonisation of services satisfying all counterparts.
To be successful in its role as the coordinator of employment services, ANPAL should build trust among stakeholders through its activities to encourage collaboration in the system. Its objective should not be harmonising the system at any cost, but to offer methodologies and tools which would benefit all the Regions. The key is to find good working methods that could be delivered in all the Regions while making it possible to accommodate best practices already in use and possibilities to develop and innovate. The development of these kinds of tools is possible only if the Regions are incorporated in the development processes and cannot be imposed by ANPAL alone. ANPAL has put great effort in discussing good common methods with the regional representatives above all in the Committee of Active Labour Market Policies, but progress depends a lot on the willingness of the Regions to co-operate. The co-operation of the Regions is critical, particularly as the resources are very limited and thus developing nation-wide tools is more efficient, saving funds for staff and active policies.
For example, the Spanish decentralised system of employment services has significantly improved their services through co-operation between the stakeholders. Among other improvements, a common functional “integrated information system for the vocational training for employment system” in addition to the nationwide IT system of public employment services was established recently in co-operation between SEPE (the State Public Employment Service), regional offices of public employment services and regional training institutions (Dorenburg and Haaland-Wittenberg, 2016[53]), (SEPE, 2015[41]). A good example of fruitful co-operation is also the Benchlearning exercise taking place between the 28 EU countries, Norway and Iceland supported by the European Commission in the framework of the European Network of Public Employment Services. As the countries participating in the network have different legal and institutional contexts and the employment services are applying different business models, the co-operation does not involve developing necessarily common tools and infrastructure. However, a common performance measurement system is agreed upon which identifies best practices (see also Box 2.3) enables mutual learning through sharing good practices between countries and provides technical assistance from peer employment services to those most in need. All of these forms of co-operation to create mutual improvements can be even more easily applicable in the case of the Italian Regions where the institutional context is much more similar than across European countries.
2.3.3. Building the IT infrastructure
A well-functioning and supportive IT infrastructure is an integral part of a modern public employment service, the backbone for the tasks that it performs. A well-developed IT infrastructure and digitalisation have the potential not only to increase the efficiency (doing more with less) and effectiveness (targeted measures, better matching of vacancies and jobs, data supported decision making) of the public employment services, but also customer satisfaction and transparency can be enhanced (Pietersen, 2016[54]). The highly fragmented division of responsibilities for employment services in Italy over the past decades has led to an abundance of IT systems and databases on provincial and regional levels. Due to this fragmentation it has never before been possible to have an overview of the number of clients registered with the public employment services, monitor the activities of local employment offices or evaluate the effectiveness and efficiency of employment services provided across Italy. Before the reform there were no unique online platforms available for the jobseekers or employers facilitating the communication with the system of employment services and supporting the matching of jobseekers and vacancies across the Regions.
IT infrastructure is one of the key areas that the reform in the system of employment services targets. The Jobs Act and the related strategic documents assign ANPAL several tasks related to digitalisation, the IT infrastructure and data exchange. Most importantly, ANPAL is expected to develop and manage an integrated single IT system of active labour market policies (SIU). This system should serve as the basis for monitoring the activities and effectiveness of the Regions and the CPIs allowing introducing performance management in the system.
SIU should have an application that allows integrating data from the existing regional IT systems. It will have also functionalities to exchange data with other organisations such as providing data on activation conditionality on benefit recipients to INPS and receive data about the jobseekers from the databases concerning education information, income and income tax returns data, land and real estate data. Data exchange is envisaged also with INAPP to enable it to evaluate training activities and active labour market policies. SIU should also benefit the jobseeker clients and citizens to integrate data from the online registration platform (data about jobseekers declaring their availability to work, DID) and proving them a “worker’s dossier” i.e. generating a file containing the information about them available in the system. Employers should be able to not only insert their vacancies, but also gathering information concerning recruitments and terminations of employment relationships will be facilitated. When fully implemented, the administrative burden in the CPIs should be reduced significantly, for example when it will become possible to exchange data about the status of unemployment with other organisations. Hence, effectiveness, efficiency and customer satisfaction should be significantly increased when the IT development plans will be fully realised.
ANPAL has already made a number of steps in the right direction when developing the concept of a common IT infrastructure. It should be kept in mind that it takes time to develop an appropriate IT infrastructure that supports the business model, particularly in the case of Italy where there is a legacy of a number of regional IT systems that many of the Regions aim to maintain in use.
The first version of SIU became effective in December 2017 making it possible for the first time to gather data of all registered jobseekers and the services provided. Nevertheless, the data quality is not high enough yet to serve as a reliable input in the decision making process and performance management system. The first checks of the data have indicated errors and highlighted incomparability of Regions and local offices, possibly due to different regional practices, but also due to a lack of built-in data controls. Also, the process to use the data is too cumbersome as the IT system is using an external infrastructure (under the Ministry of Labour and Social Policies). Additionally, as SIU aims to integrate 21 different regional IT systems, errors have often occurred during the initial year of its effectiveness and thus the system is frequently down whether unexpectedly or in a short notice for maintenance works. Furthermore, as the development of different parts of the infrastructure is still in the initial phase, many of the applications are not yet integrated, such as a tool to gather vacancies, the jobseekers’ online registration platform, etc. The tools to exchange data with other organisations are not yet built, notably the tool to send data to INPS on activation conditionality is not yet functional.
However, there have been already some first experimental attempts to exchange data. For the first time, in 2017, INAPP received registry data about jobseekers and their benefits to conduct policy evaluations. Also the possibilities to use registry data have improved for the National Institute for Statistics (ISTAT). These data exchanges are necessary conditions for the use of linked register data for the evaluation of labour market programmes which help to improve the effectiveness and efficiency of public interventions.
In this initial period of setting up the new IT system and during periods when the IT infrastructure is not working, the amount of administrative tasks in the CPIs has increased and thus the efficiency has declined. Especially the front-line staff in the CPIs have witnessed an increase in their workload since the start of the reform and the introduction of the new IT applications. Given the reluctance from many of the Regions to trust and co-operate with ANPAL already before the introduction of the new systems, these first IT applications have further deteriorated this co-operation. Moreover, CPI staff have not received training on how to use the new systems and are not aware of the strategic plans regarding IT developments. This unawareness encourages resistance to the reform and puts the credibility of ANPAL at risk. For that reason, it is important to communicate regularly the development plans and the different stages of the developments to the end-users, creating awareness about the objectives of the different new tools and features and building know-how about their use.
ANPAL has decided to abandon the new IT system only a few months after it was launched and to develop a new system from scratch. The main reason for this is that the first version used the underlying infrastructure from the Ministry of Labour and Social Policies, which did not enable a direct access to the data for ANPAL and was thus not a good set-up for performance management and monitoring or data management and analysis in general. ANPAL’s decision to build this new system should lead to improvements in data collection and availability of information, especially if it overcomes the limitations identified in the previous system. Although it will have financial implications in the short-run, an improved version might be cheaper, more effective and efficient in the longer term. However, the development of the new system will delay the use of data to support the monitoring, evaluation and performance management, and may also delay the implementation of the Jobs Act in general (applying activation conditionality, etc.).
Practitioners and end users have a crucial role to play in the development of the new version. They should be tightly involved in the development process to ensure the fit in the business model and processes and the modules should be thoroughly tested by end users before launches. Moreover, the development plans and progress should be communicated continuously to the Regions, CPIs and staff. The launches of modules should be accompanied by training for the staff and every CPI should have a technical support continuously available (e.g. a staff member from the CPI receiving more thorough training or a local ANPAL Servizi staff member is more thoroughly trained and supporting the CPIs; a support unit in ANPAL is continuously available to support the CPIs in case of more complicated questions). Good examples for developing IT infrastructures to support the public employment services are for example in Estonia, Flemish PES in Belgium (see Box 2.7) and the Netherlands. In all of these practices, the IT tools aim at supporting the users, the practitioners are tightly involved in the development and testing the IT tools and the users are provided with training and technical support.
The transformation of Flemish PES (Belgium) to apply Digital Era Governance
Within the past years, IT has become a key enabler in the Flemish PES in Belgium (VDAB) leading to more integrated and holistic processes taking full advantage of digitalisation. Six principles were laid down to support this transformation:
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From digital support to digital first – Intelligent digitally-enabled services accessible 24/7 through self-service as well as proactive and flexible individualised services.
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From service provision strategy to ecosystem strategy – VDAB as the labour market conductor building partnerships with other actors and providing innovative digital solutions to advance labour market transparency and matching demand and supply.
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From offering services to co-ordinating dynamic service journeys – Providing a wide range of services to labour demand and supply side supported by a digital platform that monitors customer behaviour, analyses it and dynamically adapts the service.
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From “have to” to “want to” partner involvement – Developing services that labour market agents want to use.
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From plan-driven to agile projects – Transparent and flexible development methodology to match increasingly dynamic and complex labour market needs.
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From “ad hoc” initiatives to developing organisational capabilities – An integrated view on innovation projects to achieve VDAB’s objectives.
The four cornerstones of the Digital Strategy in the Estonian PES
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Efficiency, i.e. doing more with less using digital technologies. For instance, a fully automated process for unemployment benefits was developed decreasing processing time per application from 10 minutes in 2003 to less than a minute in 2018.
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Multi-channelling. Customers are provided with a choice of channels to contact the PES – Face-to-face, phone (including Skype), online, Facebook groups and personal chats, chat on PES web.
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Agile development methodology, i.e. the infrastructure is developed in cross-functional teams involving end users leading to continuous improvement and fast and flexible response to changes. The development teams involve not only people with IT competencies, but also people who know the business model and the services as well as people who know the legal environment.
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Business-led service design process. IT development processes are led by the business side of the PES, not by IT. Every process has a designated owner, who takes time to participate in IT analysis meetings and contributes to defining data needs, process charts, etc. Also, the IT developer creates demos/prototypes after every meeting for which the project owner must give feedback.
Monthly IT developments are tested by the staff in the PES, providing feedback for the developers before the release. Every release is followed by a retrospective review where the PES staff and the IT developer provide feedback for the last process in order to improve the process in the next cycle. End-user training supports the application of new IT releases.
Source: Kõrreveski, K. (2018[55]), The Role of Digitalisation in the Delivery of PES Services, http://wapes.org/en/system/files/en_karolin_korreveski_wwc_2018.pdf; Danneels, L. and S. Viaene (2015[56]), “Simple rules strategy to transform government: An ADR approach”, https://doi.org/10.1016/j.giq.2015.09.006; Struyven, L. and L. Van Parys (2016[57]), How to Act? Implementation and evolution of the PES conductor role: The Belgian PES in Flanders as a case study, https://doi.org/10.2767/527014.
The quality of the systems developed by ANPAL is of ultimate importance regarding its credibility among the stakeholders. The development process should be planned to minimise negative side-effects to the staff in the CPIs, above all the integration of different applications and their fit to the processes should be given more consideration.
An additional issue that needs attention from the Regions is that in order to use the IT systems, the local offices need to be equipped with modern IT hardware and internet connection. According to a study by ANAPL (2018[32]), 46% of local employment offices in 2017 did not have an adequate IT equipment for using modern IT systems while this share reached 70% in the Southern regions. Moreover, 36% of the employment offices did not have a sufficiently good internet connection (about 55% in the Southern regions).36 None of the functionalities and benefits of the common IT infrastructure (including data exchange with INPS about activation conditionality) can be realised unless the Regions allocate their budgets to update the IT equipment in the employment offices and provide them with adequate internet connection.
2.3.4. Supporting the local employment offices
The decrees and strategic documents laying down the plans how to reform public employment services in Italy are elaborate and aim to improve the situation significantly. However, the implementation of these plans depends heavily on the resources to carry out the changes and activities. As the services are delivered to customers by the staff in the local employment offices, adequate front-line human resources are vital to make the changes in the service concept foreseen in the strategic plans. Italy has made some steps towards securing more human resources for the delivery of ALMPs, but these do not seem yet to fully respond to the growing and changing needs.
The number of staff is modest
Figure 2.6 depicts the caseloads in the public employment services in the EU countries using administrative data for jobseeking clients and staff members servicing these clients. This figure provides only a very general idea of the level of staff used to serve jobseekers and thus gives a hint of how intensively are the jobseekers supported in their job search and how intense the job-search monitoring can be. Nevertheless, the institutional context and business models across employment services differ (e.g. which client groups the employment services are ought to serve or which benefits they are ought to provide, etc.), implying that this indicator has to be interpreted with caution.
Note: EU: European Union. PES: Public employment service.
a. No sufficient data available for Denmark, Ireland, Hungary, Norway and Poland. Belgium is presented by its three main public employment services – VDAB (Flanders region), Le Forem (Walloon region) and Actiris (Brussels).
ii)Only these staff members taken into account that serve clients (excluding those servicing employers), in the Italian data those staff members who work in the front office of local employment offices (83.5% of all staff in the local offices).
iii)For all countries except Italy, administrative data sources are used for calculating the number of jobseeking clients. Italian data about jobseekers: Number of unemployed who use PES for job search – unemployed who contacted public employment service for seeking work during the past four weeks i.e. unemployed who declared having used this method as one of the channels to seek work (an unemployed person might use several methods at once). Number of PES users – unemployed who have contacted public employment services at any point in the past regardless of the reason (only half of the users contacted public employment services in 2016 for active job search). Number of registered unemployed – unemployed who are registered with the public employment services, regardless of when and for what reason was their last contact. This is likely the most comparable figure with the data presented for public employment services in the other countries.
iv)There are no data included for the Autonomous Province of Bolzano in the Italian data for staff number nor for the number of jobseekers/unemployed.
b. The presented data should be compared between the employment services with caution as the institutional context, business models and tasks of the staff are different – i.e. some public employment services are in charge of different benefits while others not, some have staff members working simultaneously in the front and back office while others not, some have outsourced certain services while still providing some services to the clients themselves, some have outsourced the job placement entirely (and the client is not in the caseload of the public system any longer) and some provide a thorough service package by the public system, etc.
Source: OECD estimates using Italian data for staff numbers and front-office ratio from ANPAL (2017), Piano di rafforzamento dei servizi e delle misure di politica attiva del lavoro, http://bancadati.anpalservizi.it/bdds/download?fileName=e7a12b3a-a0be-450b-9ce5-ab6543378847.pdf&uid=e7a12b3a-a0be-450b-9ce5-ab6543378847; number of PES users from ANPAL (2017), Gli operatori dei Centri per l’impiego (dati al 31/12/2016); number for registered unemployed and unemployed who use PES for job search from the European Union Labour Force Survey (EULFS) Database, http://ec.europa.eu/eurostat/web/lfs/data/database. Data for other countries are from Peters, M. (2016), Assessment Report on PES Capacity 2016, European Commission in co-operation with ICON Institute that uses responses to the EU PES Capacity Report questionnaire for 2016 and data gathered within the EU PES Benchlearning initiative, https://doi.org/10.2767/861018.
Moreover, the data sources used in this Figure for Italy differ from those used for the other countries. As there have not been any functioning national IT system for registering jobseekers in Italy so far, there are no administrative data available for the number of jobseekers registered with the PES. Instead, the following data from the Italian Labour Force Survey are used to develop caseload indicators for Italy: i) unemployed registering with public employment services, ii) unemployed who have contacted public employment services during the past four weeks for seeking work, iii) unemployed who have contacted at some point the public employment services (regardless of the reason). The caseload indicator using all jobseekers contacting public employment services is most likely overestimating the indicator available for other countries as the contact might have occurred long time ago and for any other reason than looking for a job. The indicator using jobseekers who contacted public employment services in the past month might underestimate the indicator for Italy as the contact does not necessarily take place that often. The indicator using the number of registered jobseekers is likely the most comparable one with the other public employment services.
Regardless of the indicator used, the caseloads in Italy are high in comparison with other EU countries which makes it difficult to provide appropriate support for the jobseekers and apply activation conditionality on benefit recipients. Indeed, 83.5% of local employment offices feel that they lack human resources, on average about 11 employees per office (ANPAL, 2018[32]).
Although the Jobs Act aims at enforcing the employment services, the total number of staff in the system of public employment services has in reality declined since the beginning of the reform. In 2016, there were 7 934 staff members employed in the local employment services [end of 2016 excluding the autonomous province of Bolzano (ANPAL, 2017[58])], 10% less than the year before [data from ISFOL (2016[59])]. In 2017 the declining trend continued, reaching 7 503 employees by the end of the first quarter (ANPAL, 2017[60]). This decline in the number of CPI staff does not reflect a mild decline in the number of unemployed persons, which was only 1% between 2015 and 2016 (Figure 2.7).
The decline in staff numbers is due to the decline in the number of additional staff on temporary contracts (from about 750 people in 2015 to 450 in 2016) and the retirement of employees on permanent contracts who were not replaced by new hires. With the reform, hiring additional staff members on temporary contracts is not available anymore to local offices as a tool to increase their human resources. These employees on temporary contracts were not only a source of additional workforce, but even more importantly a source of staff with more specialised skills, which helped the employment offices to provide more easily specific active services corresponding to the needs of jobseekers, such as psychologic counselling. This calls even more for strengthening employment services.
Note: Weighted averages for Italy. No data available for staff numbers in the Autonomous Province of Bolzano in 2016.
Source: OECD estimates on the basis of staff numbers for 2016 from ANPAL (2017), Piano di rafforzamento dei servizi e delle misure di politica attiva del lavoro, http://bancadati.anpalservizi.it/bdds/download?fileName=e7a12b3a-a0be-450b-9ce5-ab6543378847.pdf&uid=e7a12b3a-a0be-450b-9ce5-ab6543378847; staff numbers for 2015 from ISFOL (2016), Rapporto di monitoraggio sui Servizi per il lavoro 2015, http://bw5.cineca.it/bw5ne2/opac.aspx?WEB=INAP&IDS=20724; and the number of unemployed from I.Stat, http://dati.istat.it/.
In addition to the declining number of CPI staff, the regional disparities in terms of human resources available in the system have increased after the reform. Some Regions with originally low numbers of CPI staff experienced further losses (such as Campania, Puglia, Piedmont), whereas other Regions with relatively higher numbers of staff were able to hire additional employees (such as Valle d’Aosta, Trento, Sicily, Sardinia (Figure 2.8). This has led to larger differences in the capabilities to provide active measures between the Regions, but also within the Regions.
Note: PES: Public employment service. Weighted averages for Italy. Regions are ranked in increasing order of the number of unemployed (15-year-olds and over) per staff in 2016.
Panel A: Share of unemployed who have contacted the PES at any point in the past regardless of the reason (only half of the users contacted the PES for active job search). The indicator for Trento represents Trentino alto Adige (Trento and Bolzano Autonomous Provinces together).
Panel B represents the potential caseload per staff member, not the real caseload as not all unemployed register in the PES. In this panel, there is no data available for staff numbers in the Autonomous Province of Bolzano in 2016.
Source: OECD estimates on the basis of staff numbers for 2016 from ANPAL (2017), Gli operatori dei Centri per l’impiego (dati al 31/12/2016); staff numbers for 2015 from ISFOL (2016), Rapporto di monitoraggio sui Servizi per il lavoro 2015, http://bw5.cineca.it/bw5ne2/opac.aspx?WEB=INAP&IDS=20724; the share of PES users from ANPAL (ANPAL, 2017), Piano di rafforzamento dei servizi e delle misure di politica attiva del lavoro, http://bancadati.anpalservizi.it/bdds/download?fileName=e7a12b3a-a0be-450b-9ce5-ab6543378847.pdf&uid=e7a12b3a-a0be-450b-9ce5-ab6543378847; and the number of unemployed from I.Stat, http://dati.istat.it/.
While there are large differences between the Regions in the indicator of the number of unemployed per staff member, the actual caseloads of front-line staff are somewhat more similar across the Regions. On the one hand, the processes are set up differently, thus freeing more resources for the front-line counsellors in some offices than in others. On the other hand, the share of potential clients (unemployed) who actually use the services from local employment offices varies (Panel A, Figure 2.8). When taking into account that the share of clients among the total number of unemployed tends to be lower in those Regions where the potential clientele is higher, the differences between the Regions become smaller (Figure 2.9). However, the question arises then whether the share of jobseekers using the help of public employment service has declined in those Regions because the public employment service does not have enough resources to attend to them. In addition, there are disparities not only between the Regions but also within the Regions as the local offices previously steered by the provinces have developed different business models and hence some local offices are more capable of providing active measures than others.
Note: PES: Public employment service. REI – Reddito di Inclusione “Inclusion Income” (unemployment benefit). The number of PES users in 2016 is used for all three indicators depicted in the graph. PES users are defined as unemployed who have contacted the PES at any point in the past regardless of the reason (only half of the users contacted the PES for active job search). Regions are ranked in increasing order of the number of PES users per staff member in 2016.
The baseline for staff numbers is as of 15/03/2017 as in ANPAL (2017), however the number of staff might be lower by the time the additional employees will be hired (and thus, the caseloads will remain higher).
No data available for staff numbers in Trentino alto Adige in 2016.
Source: OECD estimates on the basis of staff numbers for 2016 from ANPAL (2017), Gli operatori dei Centri per l’impiego (dati al 31/12/2016); number of PES users and the planned number of employees from ANPAL (2017), Piano di rafforzamento dei servizi e delle misure di politica attiva del lavoro, http://bancadati.anpalservizi.it/bdds/download?fileName=e7a12b3a-a0be-450b-9ce5-ab6543378847.pdf&uid=e7a12b3a-a0be-450b-9ce5-ab6543378847.
The Plan to Strengthen Employment Services and Measures (ANPAL, 2017[60]) foresees 1 000 additional front-line staff members for the local offices to reinforce the provision of active labour market policies. These additional staff members are expected to conduct similar tasks and have similar skills as the existing front-line officers. Additionally, 600 people are expected to be hired in local offices for the implementation of REI (income for active inclusion) targeted to particularly disadvantaged groups to combat poverty. These 600 recruits are expected to have a more advanced and specialised set of skills to be able to provide social support such as psychological counselling and to network with the providers of social services for an integrated service provision. Hiring the additional 1 600 officers will increase the number of staff in local offices back to the pre-reform level, but will not provide additional support.37 Nevertheless, the additional recruitments will help harmonise the resources between the Regions (Figure 2.9), also with respect to the level of specialised officers.
The additional 1 600 staff will be hired using financial resources from the European Social Fund, which however is only a temporary solution considering the programming period being up to 2020. Yet, any more permanent additions of employees to the system are hindered as the number of employees in the Italian public sector is capped. It means that any addition of staff to the public employment services would have to take place simultaneously with a decrease or relocation of staff in the other segments of the public sector. As the civil servants in Italy have very high job protection and strong trade unions, this solution is difficult and would require a much wider agreement on reorganising the public sector in Italy.
Nevertheless, the new Italian government (from 2018) has declared it a priority to strengthen active labour market policies. The budget law for 2019 foresees a substantial additional funding for public employment services. Indeed, the CPI need additional staff beyond the 1 600 additional employees regardless of possible improvements in the business model to use the staff more efficiently. Simultaneously, there are other areas regarding employment offices that need additional investments (staff skills, IT systems, software, hardware, internet connection; see the next two subsections). However, the details and conditions for the additional funding have not been specified yet by the government as of autumn 2018. In order to truly increase quality in active labour market policies, the additional funding should follow an agreed accountability framework, rewarding the Regions and local employment offices which improve their services (see also Subsection 2.3.2).
Despite the high caseloads in Italy, there are ways to improve service provision and activation of jobseekers with the same level of resources. For example, several other public employment services in Europe such as in Finland and in the Netherlands have similarly high caseloads and have developed strategies to cope with that. The Dutch public employment service has implemented a tool to profile jobseekers according to their needs for more or less intensive support, directing those jobseekers that are closer to the labour market to use online tools rather than receiving face-to-face counselling (see also Box 3.3 in Chapter 3). Additionally, they are co-operating actively with other actors in the labour market such as municipalities, employers and temporary employment agencies to provide employment services. Services for jobseekers with disabilities are outsourced to private service providers. Thus, there are different ways also in Italy to make a more efficient use of existing CPI staff, such as the use of a supportive IT infrastructure and online services to free up the time of CPI staff for more specialised services (or those services which need a face-to-face channel) and a greater use of private service providers. The development of the quasi-market for employment services, jobseeker profiling tools to assign more self-reliable jobseekers to use online-tools and IT infrastructure supporting demand-side services are discussed in detail in Chapter 3 of this report.
The set-up of processes does not support efficient use of human resources, yet
Italy would benefit from a more efficient allocation of its scarce resources in the area of ALMPs. The share of PES staff dedicated servicing jobseekers (i.e. employment counsellors) is only 30% (Peters, 2017[61]), which is low in comparison with that in the other public employment services in the European Union (Figure 2.10). A large share of personnel is overwhelmed with administrative tasks, leaving very limited capacity to serve jobseekers. As the number of staff members is scarce to begin with, the set-up of processes leaves basically no capacity for counselling and activating jobseekers or reaching out to employers. The focus on administrative tasks rather than counselling jobseekers stems partially from the organisation culture and the mentality in the CPIs (the priority has been historically on administrative duties in the Italian public sector). This is something that ANPAL cannot influence directly as it does not manage the CPIs in the new set-up. Yet, ANPAL plays a role how the central processes and systems are set up. These, however, currently do not support an efficient business model either. For example, the processes concerning the new IT tools such as the online registration platform and the central system to collect jobseeker data are not presently supporting front-line staff to provide counselling and activation services, which should be the core of the business model.
Note: ALMP: Active labour market policy. EU: European Union. NEET: Neither in employment, nor in education or training. PES: Public employment service. Data for only these PES which deploy staff members servicing jobseekers. No sufficient data available for Denmark, Finland, Latvia, Poland, Portugal and Romania. The data for Spain refers to benefit officers only (excluding staff in charge of ALMPs).
The indicator in the figure is calculated as the number of staff in PES dedicated to jobseekers (special employment counsellors to deliver tailored support to jobseekers, targeting jobseekers in general or some specific group such as NEET) divided by the overall of number of staff in the PES.
Belgium – VDAB: The PES in Flanders (Belgium).
Belgium – Actiris: The PES in Brussels (Belgium).
Belgium – Le Forem: The PES in Wallonia (Belgium).
Source: Peters, M. (2017), Assessment Report on PES Capacity 2017, EC in co-operation with ICON Institute using data from responses to the EU PES Capacity Report questionnaire, https://doi.org/10.2767/880082.
One of the examples of inefficient resource management is the current set-up for the process of registering unemployed. Jobseekers are required first to register online through a tool developed by ANPAL. However, jobseekers get their status as registered unemployed only after physically visiting a local employment office and confirming their Statement of Immediate Availability (“Dichiarazione di immediata disponibilità”, DID). The forms filled in online are printed in the office, signed and then archived. This is merely an administrative act and does not involve counselling. This activity absorbs most of the capacity of the front-line officers and is viewed by them even more inefficient than the system before the additional online tool was implemented. A simplification of this system could save resources while potentially not creating grounds for abuse. This online tool and the process of using it should be developed further so that the online process should not be duplicated physically in the office. Online channels as such are an efficient way for both the employment service as well as the clients to register jobseekers, particularly if the tool is able to use other administrative registers for data sources as much as possible (e.g. for previous employment records) to minimise the information that needs to be collected. Cross-using other administrative data helps also the employment service to receive more accurate data and prevent fraud. The scarce resources of staff in the employment offices should be used as much as possible to provide actual support for jobseekers, minimising their administrative obligations. So, a face-to-face meeting with the jobseeker after online registration should take place especially if the person is deemed to require more support from the employment service, but the time should be allocated to counselling the jobseeker on the next steps to be integrated to the labour market.
Other administrative activities in the employment offices involve for example certifying that the jobseeker is indeed registered with the public employment service to be eligible for benefits and services from other institutions. This is at the moment time consuming due to the lack of data exchange between the different organisations. However, there are plans to develop the necessary tools for data exchange and a freely accessible worker’s dossier that should eliminate these administrative tasks in the future. In this case, the other organisations could get access to the administrative data about registered jobseekers directly, without any involvement by the staff in the public employment service.
Another example of excess administrative burden is a side-product of the transition of powers to the Regions. Under the steering of provinces, some databases were developed on the provincial level, but the data have not been always successfully migrated to the regional/national databases creating additional administrative burden for the CPI staff to re-collect the necessary data. Thus, some inefficiency stems from the transitional period to the new system and will remain unless the previously collected data are migrated successfully into the new system.
Nonetheless, besides the new IT tools not being fully developed (parts of processes not covered), they are also prone to breakdowns and not yet fully integrated with each other (multitude of different applications) or with other processes. For example, a new application developed by ANPAL and implemented since 4 December 2017 aims at gathering the data about the jobseekers in the same manner across Italy and at assuring that the information would be centrally available for all registered jobseekers (see also Subsection 2.3.3). However, due to the strong focus on the validity of the data, it has not yet had any efficiency gains which would normally emerge in the form of reduced paperwork for local employment offices. This in turn adds to the low buy-in to the reform and the undertakings of ANPAL by the local level staff decreasing their morale to contribute to the change. Though data validity and strict procedures are important to detect fraud and avoid abuse, it should not be the central aim of building the IT structures. The main purpose of the IT system should be to serve the CPIs and facilitate their tasks. Their needs, together with those of the jobseekers and employers have to be kept in mind when thinking about the design and architecture of the ICT infrastructure.
In addition, the set and division of tasks in the CPIs should be analysed as some of the responsibilities and processes might be more efficiently executed if centralised to the regional or the national level, freeing up more resources for the core responsibilities. Duties such as accounting, personnel management or archiving are for example among the responsibilities of the staff members in the local offices, sometimes carried out by the same people in charge of servicing jobseekers and employers. The consolidation at the regional or national level could involve not only the “back-office” activities, but also some of the administrative activities regarding jobseekers. The local offices should focus above all on those tasks that are needed for their customers at place (such as face-to-face counselling jobseekers and co-operating with local employers), while more general services and particularly services via online tools and telephone do not have to be physically close to the customer.
A call centre (a unique phone number supported by chat and e-mail option) set up by ANPAL in November 2016 is thus a good initiative. It provides information for jobseekers and employers, but also to the staff in the CPIs and private service providers concerning mainly the IT tools (ANPAL’s portal, DID) and active labour market policies (reintegration voucher, employment incentives, Youth Guarantee) (ANPAL, 2018[62]). Considering that during the first year of its operation the call centre was contacted about 3 000 times a month which is only about 0.1% of the average number of CPI users, there is still some room for developing its activities further, reaching more clients and respectively decreasing the administrative burden in the CPIs. The marketing of this option to the potential customers could be enhanced by communicating the call centre contacts in the local offices (e.g. posters and leaflets) and on the respective regional webpages (e.g. the webpages of regional agencies for employment services). The call centre could include an overview of the regional measures (the Regions should then provide it with the details of their measures such as the eligibility criteria, potential duration, etc.) in addition to the national schemes. Furthermore, it could be considered whether the call centre could provide services in addition to providing general information, for example fulfilling simpler administrative tasks such as providing certificates of registered unemployment on request.
The qualification of staff is low undermining the potential for service quality
The education level and skills of the employees in the local employment offices is currently insufficient to deliver employment services of the quality needed to implement the Jobs Act. Just over a quarter of staff (27.9%) has tertiary education while the majority has an upper-secondary degree and a substantial part of staff has lower secondary education or less (12.3%).38 The structure of staff by education level has improved very slightly over the past few years not because of new hires with higher education, but due to the retirement of staff members with lower education levels39 and the reduction in temporary contracts which were held by persons with higher education than those on permanent contracts hired a long time ago.40 Indeed, there is a strong reverse correlation between age and the level of education in employment offices (Figure 2.11).
There are large variations in the education level across the employment offices. While in Umbria and Sardinia more than half of the staff members have tertiary degrees, the share of staff with high educational attainment in Basilicata, Sicily and Puglia is less than 15%. As the education level tends to be lower in the Regions where also the number of employees in the CPIs is relatively lower, it further exacerbates the lack of sufficient human resources and hence the delivery of adequate services there. Noteworthy is also the blend of Regions in the two ends of the scale, diverging from the traditional South-Italy versus North-Italy narrative. There is a mix of Regions from the South and North having staff with very low qualification.
Note: Out of 7 934 employees, age was missing in the data for 11 people and education level for 238 people. Additionally, data is entirely missing for the Autonomous Province of Bolzano. Regions are ranked in decreasing order of the share of staff with a tertiary degree.
Source: Data from ANPAL collected by the monitoring survey, ANPAL (2018), Monitoraggio sulla struttura e il funzionamento dei servizi al lavoro, http://www.anpal.gov.it/Dati-e-pubblicazioni/Documents/Rapporto-monitoraggio-spi-2017.pdf.
Low education level is accompanied by low level of competencies among the staff working in the local offices, making any implementation of activation policies currently doubtful. A survey among the local employment offices in 2017 (ANPAL, 2018[32]) showed that lack of competencies is a problem in over a third (35%) of employment offices in supporting jobseekers to draw up a career development plan and the associated individual action plan. Almost a third (31%) of offices consider their low competencies to be problematic to provide career counselling. Every fourth to fifth employment office recognises lack of competencies in identifying user needs, mapping the social and occupational characteristics, supporting jobseekers in receiving information on occupational, job and training opportunities, interviewing jobseekers and defining individual action plans, providing services related to matching jobseekers to vacancies and providing services for jobseekers with disabilities.
Despite the evidence of limited skills of CPI staff, there have not been systematic training programmes during the past years to advance the necessary skills. Staff from 58% of employment offices participated in some form of training recently (during the past 12 months before the survey in 2017), with considerable differences among the Regions [46% in the Southern Regions to 72% in The North-Western Regions, (ANPAL, 2018[32])]. Centrally, training sessions have been provided so far only to a limited number of staff on specific topics [e.g. preparing some staff members to conduct the testing of the PIAAC tool on jobseekers (see Chapter 3)]. Training has not been systematically provided for the front-line staff even in the cases when new processes, measures or IT systems have been implemented, hindering homogeneous application.
Thus, 90% of employment offices feel that their staff needs additional training and this demand is homogenous across the country. The most urgent training needs concern updates on legislation such as about the Jobs Act and the Youth Guarantee, their implications on CPIs’ work and processes, how to implement the changes and how to inform the customers (28% of all requests for training). Training need is high also on jobseeker services, particularly on supporting jobseekers in labour market integration i.e. counselling (20% of all requests), services for employers and self-employed (12%), IT (12%) and communication and marketing (9%) (ANPAL, 2018[32]).
The Plan to Strengthen Employment Services and Measures will help to some extent by hiring 600 new CPI employees with specific competencies to help the jobseekers furthest from the labour market. Nevertheless, the specialised staff members will constitute only a small fraction of the total staff being able to deliver also a fraction of the services.
Second, the plan foresees training for the existing employees. ANPAL Servizi, the in-house body of ANPAL, is expected to develop a methodology for the training to target the skills the staff is lacking. The aim of the training is to harmonise the knowledge and use of the newly developed tools and instruments thus harmonising the level of service provision. In particular, this training will target the use of IT tools and databases, skills to match vacancies and jobseekers and the skills to analyse the training needs of the jobseekers. This training has to reach all employees of the CPIs, requiring non-negligible investments of time and financial resources. Additionally, a plan for a continuation of the training has to be drawn up to keep the skills of the staff continuously up to date along with improvement in the methodologies, developments of the IT infrastructure and new recruits. At the moment, the existing plans do not cover these aspects yet sufficiently.
CPI staff should be given the motivation and tools to contribute to the reform
In general, CPI staff tend to feel unsatisfied with their jobs and might not motivated to contribute to the system. The underlying causes are the lack of human resources, their insufficient skills and limited training as well as the inefficient processes and support structures leading to high workloads. In addition, the low level of feedback about the work performed is degrading motivation. Thus, further developments in the performance management system are necessary to overcome that. The reform in the system of employment services has to be implemented with the help of existing human resources and requires a communication plan of the reform agenda and the strategy of ANPAL to inspire commitment among the front-line staff. The regional units of ANPAL Servizi should be utilised to implement the communication plan.
The systems of public employment services often go through changes and reforms. Gaining the support of PES staff is of primary importance for the success of such reforms. Nevertheless, regardless of the shortage of resources and the disruption from change, staff members in employment services usually find motivation to do their job, because they feel that they are helping the jobseekers. In the Italian system on the contrary, this aspect of the job tends to be missing in many of the Regions. Front-line employees perceive their tasks to be more administrative in nature, not necessarily as assisting the jobseekers to get back to employment. In general, they do not get the feedback when a person gets employed, neither through the tasks they are fulfilling nor through a statistical overview, report or performance management system. The exceptions are local employment offices in a few Regions where performance monitoring does take place such as in Piedmont (see Box 2.8) and Lombardy. For example in Piedmont, the staff in a local office visited during the preparation of this review, has a lot of administrative tasks similarly to offices in the other Regions. Yet, the mind-set of the staff is quite different. The client is in the centre of attention and the staff are able to think beyond their bureaucratic duties and feel motivated to perform their job because of its nature, i.e. the social aspects of it.
The Piedmont Work Agency (Agenzia Piemonte Lavoro) manages and co-ordinates local employment offices in the Piedmont region and supports them with labour market research and analysis. Performance management is an integral part of the Agency as it has set itself a thorough Performance Plan for 2018-20, establishing its mission, strategic objectives, operational activities to reach the objectives and indicators to measure progress. However, there is no performance management in place, which would set objectives and targets also for the individual local employment offices.
Nevertheless, the regional labour market performance is monitored enabling the staff to get an understanding of the situation and progress. The Agency publishes regular labour market overviews called the Chronicles of Work (Cronache del lavoro) that uses above all data from the regional labour market information system. This IT system is used by the local employment offices and contains data about unemployment, employment, enterprises and labour market policies.
The Chronicles of Work provides and overview of general trends concerning population, employment and unemployment in Piedmont and in the municipalities. In addition, it analyses different aspects of labour demand (statistics by contracts used, sectors, qualifications, occupations, statistics on new internships, trends in job placements of disabled people, etc.) and labour supply (jobseekers registered with the local employment offices).
Source: Agenzia Piemonte Lavoro (2018[63]), Cronache del Lavoro. Rapporto dei Centri per l’Impiego in Piemonte, www.agenziapiemontelavoro.it/index.php?option=com_remository&Itemid=230&func=fileinfo&id=597; Agenzia Piemonte Lavoro (2018[64]), Piano performance 2018-2020, http://www.agenziapiemontelavoro.it/images/ammtrasp2016/PianoPerformance-2018-2020-complessivo.pdf.
The motivation of front-line staff will also increase in the other Regions if the usefulness of their job will be more evident. On the one hand, it requires a change in the nature of tasks to shift the focus away from administrative activities to more support to and counselling of jobseekers and employers. This change of focus is also planned within the reform of the employment services. On the other hand, a performance management system including indicators and targets showing the value added of the public employment services (such as indicators for labour market integration rates and vacancies filled) would make the contributions of the staff more evident. The indicators should be broken down at least at the level of local employment offices (if employee level is not possible due to e.g. trade union resistance or data protection rules) to create a feeling of ownership among the staff and encourage them to take responsibility for the labour market outcomes of jobseekers. These indicators and the respective break-downs were proposed by ANPAL within the Triennial Strategy for the Action on Active Policies and agreed on by the Regions in December 2017. As of now, none of the monitoring activities has taken place, because the necessary integrated IT system (SIU) has not been fully developed, yet.
The performance management systems in Estonia (employee level break-down) and Austria (local office level break-down) could serve as good practices in encouraging employee engagement to further improve the performance management in the Italian system of employment services (see Box 2.9). An existence of the necessary data is the key precondition for the establishment of such a performance management system. The performance results should be transparent and disseminated across the system of public employment services, ideally through an easily understandable and visualised dashboard (a management information system), accessible to both managers and front-line staff.
Feedback on performance on employee level in the Estonian PES
The performance management system in Estonia consists of three types of indicators – outcome indicators (jobseekers entering employment), input indicators (quantity of services provided) and quality indicators (customer satisfaction, quality of services, timeliness of processes). The set of indicators on outcome is deemed to be the most crucial regarding performance and is thus charged with higher weight than the other two sets (as of 2018, outcome weighs 70%, quality 30% and input is only monitored, but not scored) when calculating the overall performance index on the regional level. The overall performance index feeds into incentive pay (one of the three components of incentive pay together with the individual level performance results and organisational level performance results). The overall index as well as individual indicators help also to detect and share good practices as well as areas for improvement.
A constant monitoring and feedback system is in place to give insights about the progress. As exit to employment is considered to be the most critical indicator to fulfil the PES mission, engaging employees to achieve these targets is a particular focus. The PES register data is linked with tax data to monitor labour market integration rates, enabling to get a fair and accurate understanding on performance. As the linking process with the tax register data is feasible twice a year only, additional monthly indicators are generated based on the PES register to provide a more timely (though slightly less accurate) insight into performance progress. This statistics is generated on the job search counsellor level to provide management input for managers of local offices. The top ten counsellors by each of the three customer groups by labour market integration difficulties are published monthly across the PES to create positive examples and motivation. In addition, top counsellors in each local office are announced to encourage employee engagement in each local unit.
Feedback on performance on employment office level in the Austrian PES
The Austrian PES uses a Balanced Scorecard for performance management, incorporating indicators for outcome, quality and output of employment services. The 100 local offices are grouped into six clusters when benchmarking performance, taking into account differences in budgets, staffing and local labour market.
The information on the indicators, target levels, benchmarks and results of the Balanced Scorecard are published in a data warehouse, accessible for all PES staff through a dedicated easily-understandable dashboard. The performance information is published at the regional level and local office level, together with the information on clusters. Publishing the data enhances the clarity and transparency of the system, encouraging employee engagement to performance.
Rewards to acknowledge good results
Both the Austrian and the Estonian public employment services implement non-monetary incentives in the form of rewards to further encourage employee engagement beyond the monetary incentives connected to their performance management systems. The best offices (Austria) and case workers (Estonia) are honoured at a yearly event acknowledging their achievements. In addition, other rewards such as for the best initiatives, the best practices (introducing or sharing of practices), the best new digital tools or the best campaigns are announced. These non-monetary incentives further motivate staff engagement when the rules set for the rewards are fair and transparent.
Source: Lauringson, A. (2015[65]), Recent developments and experiences of reviewing performance management system in Estonian PES; Lauringson, A. (2013[66]), Performance management system in the Estonian PES, http://ec.europa.eu/social/BlobServlet?docId=9976&langId=en; Lauringson, A. (2013[67]), Continuous learning as a central feature of performance management in the Estonian PES, http://ec.europa.eu/social/BlobServlet?docId=10984&langId=en; Weishaupt, T. (2016[47]), Establishing and Operating Performance Management in PES, https://doi.org/10.2767/166351; Adamecz, A. (2013[68]), Performance management in Public Employment Services: Benchmarking, clustering and individual performance management, http://ec.europa.eu/social/BlobServlet?docId=11015&langId=en; Knab, C. (2016[69]), Implementing non-monetary incentives by awards, https://ec.europa.eu/social/BlobServlet?docId=17896&langId=en; Wilk, M. and S. Putz (2016[70]), AMS Balanced Scorecard (BSC), EC, https://ec.europa.eu/social/BlobServlet?docId=15215&langId=en.
In addition to providing information on the value-added of work in the local offices, a performance management system helps to motivate staff with financial as well as non-financial incentives by rewarding these in case of good performance. The mechanism for financial incentives is provided with the Jobs Act by applying activation conditionality on benefit recipients allowing to allocate half of the costs saved as financial rewards for the local offices. Yet, this mechanism is unlikely to be fully operational in the near future and there are no other means to implement financial incentives.
Non-monetary incentives are not widely used among the Regions. Only six Regions use some forms of non-monetary incentives (Friuli-Venezia-Giulia, Lombardy, Marche, Trento, Tuscany, Umbria), mostly as training possibilities for the staff (data from a survey conducted by OECD in May-June 2018). In this situation, non-monetary incentives like recognition and awards such as “best performing employment office”, “best new practice”, etc. could be much more extensively used to encourage motivation and performance. These rewards can be implemented at the national level (such as in Austria and Estonia) as well as at the regional level.
Besides the scarcity of information about performance among the staff in the CPIs, there is also a scarcity of information regarding the reform and the prospective changes. This situation creates uncertainty, which is demotivating for the staff. One of the most demotivating cases in this respect has been the ill-design of the reform of transferring responsibilities for employment services from provinces to the Regions in 2014 without transferring the corresponding budget. This has had severe repercussions on the already problematic implementation process. In addition, confusion and unease among the front-line officers increased due to the unwillingness of different government levels to take responsibility for them. In July 2015, an agreement between the State and the Regions established the costs for the local offices to be shared (2/3 by the State and 1/3 by the Region), although the negative outcome of the referendum at the end of 2016 put this agreement in jeopardy. This situation was permanently resolved only with the budget law for 2018 which established a continuous transfer from the State budget to the Regions.
Despite all the above challenges CPI staff face, the overall staff turnover was one of the lowest among the European public employment services in 2016 (see Figure 2.12). Basically, employees leaving the employment offices comprise mainly retirees and employees on fixed-term contracts when their contracts expire. The motivation to stay in the system is high irrespective of the motivation to contribute to the system being probably low. Employees do not leave their jobs due to the bad labour market situation in Italy and scarce job opportunities. In addition, it is not easy to fire incompetent employees on open-ended contracts. Thus, the new business model of the system of employment services has to be implemented with the help of the existing staff and the necessary changes have to be implemented to make this work.
Note: EU: European Union. No data available for France, Latvia, the Netherlands and Romania. All reasons for leaving the organisation included (retirement, redundancy, etc.).
Source: Peters, M. (2017[61]), Assessment Report on PES Capacity 2017, EC in co-operation with ICON Institute using data from responses to the EU PES Capacity Report questionnaire, https://doi.org/10.2767/880082.
However, it will not be possible to deliver the activation policies for jobseekers and provide services for employers with staff unwilling to commit to the new tasks and exhibiting a negative mind-set towards the reform. Hence, much more should be done beyond the training increasing the skills foreseen in the Plan to Strengthen the Employment Services and Measures to provide activation policies with the support of existing staff.41 A communication plan of the reform agenda and the strategy of ANPAL should be drawn up (see also Subsection 2.3.2) to mobilise staff in local offices. It has to be systematic and reach all offices and front-line staff and aim at encouraging support for the reform. It has to provide an overall vision of the system and create the feeling of common mission contrary to providing fragmented pieces of information only on specific activities as it has happened so far. Additionally, the staff of ANPAL Servizi situated physically in the regional level should be utilised as advocates for the reform, communicating directly and face-to-face with the local offices and front-line staff and not only via regional authorities. The staff of regional ANPAL Servizi can serve as a contact point and mediator between ANPAL and the local employment offices to inspire commitment to the reform in the local offices and provide feedback on the challenges and needs for adjustment to the reform agenda to ANPAL. Regional ANPAL Servizi has to co-operate with regional authorities to fit the change agenda provided by ANPAL to the regional plans.
A staff satisfaction survey should be used to monitor the situation in the local employment offices. This is a common practice in many public employment services in OECD countries which helps to collect information on how to improve the motivation and performance of staff members. Alternatively, a survey targeting specifically employee engagement can be designed such as in the German public employment system (see Box 2.10) to focus more on the staff performance rather than their job satisfaction.
Employee Engagement Index was introduced in the German public employment service in 2013 aiming at promoting and securing work ability and motivation in response to challenges stemming from staff ageing and increasing diversity and from demographic change and the extension of working life.
Employee Engagement Index combines the notions of employees’ willingness to perform and ability to perform. The survey for employee engagement is currently conducted every two years comprising of 19 questions related to 5 dimensions – willingness to make an effort, identification with employer objectives, psychological contact (balance of expectations between employee and employer), work ability and ability to communicate effectively.
The results of Employee Engagement Index are made available by each management level (central, regional, local) and are inputs to performance related payments to managers. Furthermore, the results are followed up by dialogue-based activities such as workshops where managers and employees discuss how to address the less developed dimensions of employee engagement and decide on the actions to be taken.
The data from German experience indicate that the Employee Engagement Index has a significant impact on the results of customer satisfaction surveys, even when controlling for other factors (e.g. characteristics of employees). Thus, employee engagement affects the performance of public employment service. In addition, the results of Employee Engagement Index have shown slight positive trend since the implementation of the survey and follow-up measures.
Source: Behrens, B. (2015[71]), Strengthening leadership capabilities of public sector organizations for improved employee engagement, Presentation at the OECD conference; Behrens, B. (2016[72]), Employee Engagement Index, EC, http://ec.europa.eu/social/BlobServlet?docId=15340&langId=en.
A critical aspect of employee engagement in a major reform is employees’ feeling of ownership. A good way to achieve ownership as well as to generate effective change is to involve a wider range of staff in the development of change agenda. The so-called “co-creation” is an innovative way to design reform process involving staff affected the most by the change in the design of the reform, practiced usefully for example in the public employment services of Belgium-Wallonia and France (Dorenburg and Haaland-Wittenberg, 2016[53]). In the context of Italy, it means that ANPAL could try to involve more staff from the local offices (managers and front-line staff) in designing and testing new methodologies and tools. In addition to developing more applicable tools in this way, the staff engagement and commitment to the reform agenda would increase.
2.4. Conclusions
The Jobs Act has had some positive effects on the Italian labour market by enhancing labour market flexibility and harmonising unemployment benefits. However, the third major pillar of this reform which aims at strengthening the system of employment services has been the most cumbersome to implement.
There are a number of challenges that need to be addressed to implement the reform and make the system of employment services more effective and efficient. A monitoring and accountability system has to be put in place to initiate co-operation between the stakeholders and harmonise the fractured system. The National Agency for Active Labour Market Policies has to establish itself further as the coordinator of the network of employment services and as a strong support unit for the local employment offices. The local employment offices are vital in making the changes in the service concept and they need more support such as more training to apply the new concepts, updating of business processes focussing relieving administrative burden and IT infrastructure supporting their work. Developing appropriate IT infrastructure and linking it with other registers is also critical to link active and passive labour market policies.
The subsequent chapter (Chapter 3) discusses some of the specific approaches that the Italian system of employment services is developing to improve the provision of active labour market policies. In particular, the regional practices and the national initiatives are presented concerning the use of jobseeker profiling tools to target active labour market policies, enhancing quasi-market for employment services to increase the quality and capacity of employment services and advancing demand-side services to meet the employers’ needs and support matching jobseekers to vacancies.
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Notes
← 1. In case of companies with at least 15 employees, the employee had to be reinstated. Companies with less than 15 employees could choose between reinstatement and paying a severance-payment depending on worker’s seniority (2.5 to 6 monthly salaries) (Sestito and Viviano, 2016[8]).
← 2. A provincial tripartite committee chaired by the representatives of the Ministry ultimately decides on granting CIG following negotiations with unions, and negotiates also possible extensions, on a case-by-case basis.
← 3. This scheme was introduced in the early 1990s by Law 223/1991. It was also a very generous scheme, particularly in terms of benefit duration. It could be considered to be an integral scheme of CIGS as it was paid either at the end of CIGS provisions or when the firm was not able to include some of its workers in CIGS, and put them in these “mobility lists” (after authorisation). It was subject to the same authorisation procedures by public authorities like CIGS.
← 4. The extension was regulated by regional tripartite agreements, conditional on the availability of resources in the regional budgets, where resources were assigned to the Regions following negotiations with the Treasury Ministry.
← 5. The system of unemployment insurance included at the same time a variety of ad-hoc schemes (e.g. unemployment benefits for agricultural or construction workers).
← 6. For the first 12 months, there will be a 9% increase of the wage lost by the worker, which will rise to 12-15% once the 12-month threshold of use is exceeded.
← 7. Concerning CIGS, commitments towards unions regarding preventive communications have also been abolished.
← 8. Contributions are paid by employers in the share of 1.61% of gross wage on permanent contracts and 3% on fixed-term contracts (2018).
← 9. The amount of the benefit is calculated as gross wage of the last four years divided by the number of contribution weeks and multiplied by a factor of 4.33.
← 10. For ASPI, this threshold was established at EUR 1 180.
← 11. This threshold is revalued annually using the consumer price index from the year before.
← 12. In the intentions of the government, this scheme corresponded originally to an experimental and temporary measure, since most of this kind of contracts (“project collaborations” – collaborazioni a progetto) have been abolished by the Jobs Act, being transformed into the new permanent contract type from 1 January 2016. Instead, “continuative coordinated collaborations” (collaborazioni coordinate e continuative) contracts are being used in cases of some categories. The government decided to confirm DIS-COLL as a stable measure after the Decree 81/2017, addressing the benefit to those workers paying the threshold of 34% of unemployment benefit contribution for a “separate insurance” of INPS (“gestione separata INPS”), a fund for specific and residual categories of self-employed workers.
← 13. The amount of this unemployment benefit was equal to 75% of the NASPI, and it was due for a maximum duration of six months after the period of unemployment insurance benefit if the worker remained in a situation of particularly difficult conditions: yearly household income not higher than EUR 5 000, being close to the retirement age (at least 55 years old) or having children. In addition, the recipient had to fulfil an individual “service pact” conditioning the benefit to active job search.
← 14. This scheme combined ASDI and “Sustainment for the Active Inclusion” (Sostegno all’Inclusione Attiva – SIA), introduced in 2016, a social assistance scheme to address poverty based on households’ income and managed by municipalities.
← 15. In order to obtain the benefit, a household has to include at least one member, who is an unemployed person over 55 years of age, a child, a pregnant woman or a disabled person.
← 16. The household’s income not exceeding EUR 6 000. This threshold is accompanied by the provision of ISRE (income indicator in relation to the composition of nuclear family) up to EUR 3 000, real estate not exceeding EUR 20 000 and assets up to EUR 10 000 (EUR 6 000 for singles, EUR 8 000 for couples). The amount of the benefit is not anymore related to the previous wage, but its rate is fixed depending on family composition, up to a maximum of about EUR 500 in case of five people in a household. Therefore, REI assigns an allowance lower than ASDI on a monthly basis, but for a longer duration (up to 18 months).
← 17. Along with similar intentions to reform the division of powers between the State, the Regions, and administrative entities concerning other fields.
← 18. However, as of summer 2018, there have been no meetings organised for the whole network of employment services. Only meetings between the Regions and ANPAL (the Committee of Active Labour Market Policies) take place regularly.
← 19. These bilateral agreements are signed additionally to the two strategic documents, which all the Regions sign (the Triennial Strategy for the Action on Active Policies and the Plan to Strengthen Employment Services and Measures).
← 20. Nineteen regions, i.e. not considering the two Autonomous Provinces where the centralisation does not take place. Results via a questionnaire among the Regions by the OECD in May to June 2018.
← 21. http://ec.europa.eu/social/main.jsp?catId=1163&langId=en, http://ec.europa.eu/social/main.jsp?catId=1206&langId=en.
← 22. For example, who can register with employment offices, which measures can be provided to them, which job search requirements have to be satisfied in order to be able to remain registered with the employment offices and receive activation measures, how the service provision should be arranged, etc.
← 23. The set of indicators agreed in the Triennial Strategy for the Action on Active Policies in December 2017 contain some indicators related to this area (e.g. number of active measures provided and the share of participants in employment after 3, 6 and 12 months). However, as of summer 2018, neither a target for these indicators has been set nor are there any data available, yet.
← 24. Besides the concept of service pacts, also individual action plans have been used by the Italian Regions. Even though the Decree 150/2015 provides only the concept of the service pact, some Regions/CPIs sign two different agreements with the jobseeker, the service pact targeting more the services to be provided and the individual action plan targeting more the pathways to work. However, the provision of services and the pathways to work should be complementary and integrated into one administrative activity to decrease administrative burden in the offices.
← 25. Data for 2010-15 (i.e. before the Work Ability Reform that added additional client group). Data for jobseekers from https://www.tootukassa.ee/content/tootukassast/peamised-statistilised-naitajad, data for appeals from https://www.tootukassa.ee/content/tootukassast/majandusaasta-aruanded. Appeals related to participation in active labour market policies, sanctions on benefits, but also to granting unemployment benefits, i.e. the number of appeals strictly related to activation conditionality is even somewhat lower.
← 26. As there are no data available to have an overview of the current level of the indicators, let alone the level these indicators should be reaching in the coming years.
← 27. ANPAL was supported in that through a Mutual Assistance Program of the EU PES Network and the European Commission.
← 28. These are also set out in the organisational regulations (ANPAL, 2018[76]).
← 29. ANPAL outlines its key activities in a greater detail also annually in the budget planning process.
← 30. Additionally, ANPAL states its objective in the annual plan for budget, which is similar to the mandate in its statute: “ANPAL, through interventions and services to improve the efficiency of the labour market, coordinates the network of the services for labour policies, promoting the effectiveness of the employment, training and professional elevation rights and the right for each person to access free placement services.” (ANPAL, 2017[75]), (ANPAL, 2018[62]). ANPAL also communicates its main objective on its website, though somewhat differently, stating that “the main objective of ANPAL is the coordination of labour policies in favour of jobseekers and the reintegration of the unemployed in NASPI (new social insurance for employment), in DIS-COLL for employees and precarious workers or in ASDI (unemployment allowance), through the preparation of tools and methodologies to support public and private operators in the labour market.” (ANPAL, 2018[73]).
← 31. See more on: http://ec.europa.eu/social/BlobServlet?docId=18516&langId=en.
← 32. Results via a questionnaire among the Regions by the OECD in May to June 2018.
← 33. Another common concern involved the development of a functional IT framework, highlighted by six Regions.
← 34. Only one Region (Emilia-Romagna) had started hiring additional staff.
← 35. A general process for implementing subsidiarity principle was agreed after the current analysis was conducted, during the Committee of Active Labour Market Policies in December 2018.
← 36. The problems with hardware involve for example that there are not enough computers in the office, the computers are too old and slow, and the printers are not functioning. The internet functioning is sometimes compromised also by malfunctioning telephone lines. Furthermore, some offices lack software (in addition to lacking IT systems for core functions).
← 37. In fact, it is lower than the number of personnel in local employment offices during the previous years as the number of personnel has continued a decrease already through several years [see for example Mandrone and D’Angelo (2014[77])].
← 38. It means that a non-negligible part of the staff have not even completed the compulsory part of the education system.
← 39. Data for 2016 from ANPAL (2017[58]) compared with data for 2014 from ISFOL (2016[59]).
← 40. In the end of 2016, 26.1% of employees on permanent contracts had tertiary degree, while this share was 75.1% among employees on fixed-term contracts (ANPAL, 2018[32]).
← 41. So far, the communication of the change agenda has been fragmented, involving webinars about the legislative changes, but not reaching all local offices or front-line staff. Additionally, trainings on specific measures such as reintegration voucher have been conducted, but again not reaching all staff. A structured and systematic communication of the strategy of ANPAL and the overall change agenda has not taken place.