6. Governance and funding
Ministries, public bodies, local governments and the social partners share responsibilities for adult career guidance policy in Latin America. Where strong coordination mechanisms are in place, they facilitate policy development as well as the provision of high-quality services. This chapter sketches how the actors governing career guidance in Latin America coordinate with one another. It also discusses how costs for career guidance are divided between government, employers and adults. It suggests ways to reduce the cost of career guidance services for those individuals who cannot afford them.
The governance of career guidance for adults is often distributed across different levels of government. To ensure good co-ordination between them, strong mechanisms need to be in place that facilitate the exchange of information and the complementarity of guidance services. The cost of services is typically shared between individuals and public authorities. The main findings from this chapter are:
The Ministry of Labour has the lead on governance of career guidance for adults in Argentina, Brazil and Chile, whereas in Mexico it is the Ministry of Education. In all four countries, there is close cooperation with the national public employment service (PES).
In most Latin American countries, legislative and policy design powers lie within the respective national ministry but given their decentralised systems, regional or local governments have certain autonomy in implementing and adapting regulations to the local context.
Several countries have set up tripartite bodies or councils that engage the social partners in policy making processes and the governance of career guidance programmes. They may be responsible for the recognition of prior learning, the validation and certification of skills, or the development of strategies to meet training needs in line with employment demand.
Adults are more likely to pay out-of-pocket for career guidance in Latin America compared with other countries in the SCGA. In Argentina and Mexico, almost half (45%) of users reported having paid for the service they chose. In Brazil, 40% bear the cost themselves, as does a third of users in Chile. This compares with only 31% of adult users in all countries covered by the survey.
Those who are unemployed, inactive, self-employed or on temporary contracts are more likely to pay out-of-pocket for career support in Latin America compared with in other countries in the survey, This suggests that cost is a larger barrier for the inclusiveness of career guidance in these countries.
As in other countries, employers, especially bigger companies, provide career guidance free of charge in certain contexts in Latin America. Employers may provide support for key talent groups to organise their career development and at the same time promote productivity and employee retention, or they may provide outplacement services to laid off workers in order to meet legal requirements.
Responsibilities for adult career guidance are shared across ministries, specialised public bodies, levels of government as well as social partners and other stakeholders. Good co-ordination mechanisms can help to implement coherent career guidance policy, facilitate seamless and high-quality service delivery, and avoid gaps in provision. As career guidance has both public and private benefits, different measures of cost-sharing between government, employers and individuals can help to establish a sustainable model of funding.
The first section of this chapter reviews how career guidance is governed in the Latin American countries under study. It examines horizontal co-ordination across ministries and other public bodies, vertical co-ordination across different levels of government as well as the involvement of other stakeholders. The next section looks at the role of career guidance strategies at promoting co-ordination. Lastly, the chapter discusses how the costs for career guidance are shared among adults, employers and governments.
Responsibility for governing public career guidance is often divided across different ministries and levels of government, so good co-ordination between these stakeholders is key. Social partners and professional associations are also involved in decision-making on career guidance. This section describes the co-ordination mechanisms used in the Latin American countries examined, horizontally and vertically within government, as well as with social partners.
Horizontal co-ordination between ministries
Career guidance for adults is at the nexus of employment and education policy, and responsibilities tends to be split between ministries and public bodies. This is different from career guidance for young people, which generally falls under the responsibility of the Ministry of Education. Across the Latin American countries in the SCGA, most often it is the Ministry of Labour, in co-operation with the PES, who is involved in governing career guidance policy for adults. Together, these public authorities have jurisdiction over the career guidance services directed at unemployed people or at-risk workers to help them find a job or improve their employability. Mexico is an exception, where the Ministry of Education has the main responsibility for career guidance. In Chile, the Ministry of Social Development (Ministerio de Desarrollo Social, MIDES) is additionally involved in specific career guidance programmes targeted at vulnerable populations.
Good horizontal co-ordination between ministries and other public bodies with responsibility related to career guidance is key. Co-ordination can be enforced by legislation, be delegated to a permanent national-level advisory body or take place in less formal working groups. In some countries, there are specialised bodies, usually subordinated to a ministry, with particular responsibilities in the area of training, skills and employability, where co-ordination of guidance services is part of the mandate. In Chile, the National Training and Employment Service SENCE (Servicio Nacional de Capacitación y Empleo) runs different training and employment programmes, supervises the municipal employment offices (Oficinas Municipales de Intermediación Laboral, OMIL) and steers activities related to career guidance in Chile. The Mexican National Council for Educational Development (Consejo Nacional de Fomento Educativo, CONAFE) is a public body of the federal government dedicated to the educational and skill development of people from marginalised communities, including indigenous youth and adults, migrant workers and those living in rural areas.
To date, however, there is no dedicated working group, permanent advisory body or public authority responsible for career guidance as a separate policy area in Latin American countries. Such a body exists in the Czech Republic, for example, where the Ministry of Education and the Ministry of Labour jointly established the National Guidance Forum (NGF) as an advisory body in 2010. Through working groups and project partnerships, the NGF promotes inter-ministerial co-ordination on the career guidance policy. Ireland has a dedicated National Centre for Guidance in Education (NCGE), with responsibility to support and develop guidance practices and to inform national guidance policy. The centre works with key stakeholders to promote quality standards, innovative approaches, and professional development for career guidance advisors. In a similar vein, Germany’s National Forum for Educational, Vocational and Employment-oriented Guidance (Nationales Forum Beratung, Beruf, und Beschäftigung) provides a national platform for knowledge exchange, co-operation and quality development (OECD, 2021[1]). Experiences from these and other countries show that a co-ordinated, systematic approach can strengthen the quality of public services and avoid gaps in the provision of career guidance.
Vertical co-ordination between levels of government
Typically, central, regional and municipal levels of government share responsibility for the governance of career guidance. Three out of four countries, including Argentina, Brazil and Chile, have decentralised systems. In these systems, the national government has a steering role and designs the policy, while the regional or local governments are responsible for implementing career guidance. Mexico is an exception, where the national government is responsible for both the design and implementation of career guidance.
Each approach comes with advantages and disadvantages. Centralised career guidance systems benefit from clear responsibility and leadership, but might experience a gap between national and local priorities or poor local implementation. More decentralised systems often have a better alignment of policy planning and application, which can lead to effective career guidance provision adapted to local need. The pitfall of a decentralised approach is a lack of co-ordination, e.g. due to a slow or absent information flow, or to diverging political priorities between the different levels of government. Decentralised career guidance systems generally entail a greater risk of asymmetries in funding and quality of public providers across the country.
Countries have different ways to co-ordinate career guidance activities across national, regional and municipal levels of government. One approach is to pair centralised policy steering with local implementation. Some countries choose to have working groups or steering committees that support and overlook vertical co-ordination of career guidance across all levels of government. In addition, formal pathways to share information on career guidance can support co-ordination across different levels of government. Argentina, Brazil and Mexico do not have strong mechanisms in place to promote vertical co-ordination, but Chile provides a good example of a well-co-ordinated system of governance with integrated service provision (Box 5.1).
In Chile, the National Training and Employment Service SENCE (Servicio Nacional de Capacitación y Empleo), under the authority of the Labour Ministry, is responsible for the design and monitoring of the country’s career guidance activities. As part of the larger strategy on labour intermediation and employment policy, local governments are responsible for implementing career guidance activities through municipal employment offices (Oficinas Municipales de Intermediación Laboral, OMIL).
SENCE maintains a close relationship with the OMIL based on a collaborative system of financial incentives as well as legal agreements. SENCE provides funds according to a number of indicators, such as the number of counselling sessions, successful job placements or trainings provided. The OMILs receive regular technical assistance through Regional Directorates, which, in turn, are monitored by the SENCE head office. The regular two-way information exchange helps the central government to understand local needs when designing policies for career guidance.
In addition, the National Jobs Portal (Bolsa Nacional de Empleo, BNE) is SENCE’s digital system for managing labour intermediation services. It provides labour market information for jobseekers, employers and institutions. Moreover, individuals can retrieve online advice about employment programs, training opportunities as well as career guidance. All clients of the OMIL have to register on the portal and receive instructions on how to use it. Some challenge remain, such as a lack of funding and staff in the OMILs, inequalities in service provision across municipal employment offices, as well as a strong focus on job placement rather than the sustainability and quality of job matches. Nevertheless, SENCE, the OMIL and the BNE together form a good example of a well-co-ordinated system of governance with integrated service provision of career guidance in Chile.
Source: OECD Secretariat, OECD 2020 Policy Questionnaire ‘Career Guidance for Adults’.
Engaging stakeholders in setting career guidance policy
Latin American countries employ different approaches to engage key stakeholders in career guidance policy. A common way to engage social partners, is to include them in advisory bodies to co-ordinate and steer employment policy, which often includes responsibility for career guidance. An example in Latin America is the tripartite Advisory Board of the Worker’s Support Fund (Conselho Deliberativo do Fundo de Amparo ao Trabalhador, CODEFAT) of the Brazilian Ministry of Economy, which involves representatives of government, labour unions and employers. The CODEFAT is the competent body for labour intermediation and employment policies. It is responsible for allocating resources, designing guidelines for programmes, monitoring and evaluating their social impact, as well as proposing improvements in policy legislation (Ministério da Economia, 2021[2]).
In several countries, independent, tripartite public bodies have specific responsibility for the certification of skills and setting competence standards. Examples are CONOCER in Mexico, ChileValora in Chile as well as the Sectorial Councils for Job Skills Certification and Training (Consejos Sectoriales de Formación y Certificación de Competencias Laborales y Formación Profesional) in Argentina. These are institutions that develop strategies to meet training needs in line with employment demand, and to strengthen vocational training institutions for particular sectors. The councils are organised by the Ministry of Labour and involve state, business, and labour union representatives (Bertranou, 2014[3]).
The governance of these bodies is tripartite, and consists of representatives of workers, employers, as well as government. In addition, employers and chambers of commerce are consulted about the skills necessary in each sector in order to develop competence standards and to better align training and standards of certification of skills with local and sectoral labour market demand. While these bodies may only partially be involved in career guidance as such, they are important stakeholders in national skills development systems. Their activities interlink with career guidance providers as they provide important information, set standards and create the connection between training, education and certification.
There are also examples of sector-specific stakeholder engagement in career guidance. The UOCRA Foundation in Argentina, to name one, brings together the Union of Construction Workers of the Argentine Republic (UOCRA) and the Argentine Chamber of Construction (CAC) to promote training, education and competency standards for construction workers. Other stakeholders involved in the UOCRA Foundation are the Statistics and Records Institute, the Sectoral Council for Certification of Competencies and Vocational Training as well as the Argentinian Government. While not focusing on career guidance in particular, the aim of the initiative is to promote a strategic, sector-level approach to the skills development of construction workers (EFT, CEDEFOP and ILO, 2016[4]).
In addition to the social partners, professional associations are important stakeholders in the governance of career guidance in many countries. They can support professional training of career counsellors, exchange best practices, develop guidelines and standards and provide expertise to governments. Although some professional associations exist in Latin American countries, for example the Fundación OCIDES in Chile or the Brazilian Association of Career Guidance (ABOP) in Brazil, to date they have little influence on the governance of career guidance. The knowledge and resources these actors have developed warrants their inclusion into decision-making on career guidance policy, for example as part of national stakeholder groups or advisory bodies.
The Fundación OCIDES is a Chilean organisation that promotes the practice of career guidance and implements projects and activities to strengthen the community of guidance professionals in Chile. Its activities include institutional capacity-building, workshops and trainings for career guidance advisors, the dissemination of publications and other resources on career guidance, as well as advocacy for public policies on lifelong learning, such as a national strategy on career guidance.
The Brazilian Association of Career Guidance (ABOP – Associação Brasileira de Orientação Profissional) connects guidance professionals, and promotes research in the field. While not providing career guidance as such, they also organise different activities to share knowledge and raise awareness about its value in the Brazilian context. ABOP is affiliated with the International Association of Educational and Vocational Guidance (IAEVG).
Source: Fundanción OCIDES (2021[5]), https://www.ocides.org/ (accessed on 15 January 2021); ABOP (2021[6]), Associação Brasileira de Orientação Profissional, https://abopbrasil.org.br/ (accessed on 15 January 2021).
A career guidance strategy sets out the vision, objectives and priorities for action in the area of career guidance. Ideally, it describes career guidance across different contexts, including who is responsible for providing career guidance, eligibility, quality mechanisms and funding. In those OECD countries that have career guidance strategies, they are often embedded in a wider lifelong learning or skills strategy, as career guidance is often viewed as crucial for the success of lifelong learning and employment strategies (Barnes et al., 2020[7]; OECD, 2017[8]). Only a few countries have stand-alone career guidance strategies (Greece, Italy, Korea, and Turkey). The success of such strategies is supported by the involvement of all relevant stakeholders during their creation, by defined sources of funding for career guidance, as well as quantitative targets that allow the evaluation and monitoring of outcomes (OECD, 2021[1]). A national strategy that specifically considers career guidance provides leadership to all actors in the system, and can help to build policy coherence.
Career guidance strategies are not common in Latin American countries. None of the Latin American countries studied has a coherent and dedicated guidance strategy to channel and co-ordinate career guidance activities. Mexico has a career guidance strategy for youth, with the aim of helping young people to take career choices after high-school graduation, but there is no career guidance strategy for adults. Service provision in Argentinian PES follow a larger government strategy on employment policy that covers matters of labour policy, occupational qualifications, and training programs, without a particular focus on career guidance. While it does not have a dedicated national career guidance or skills strategy per se, the Chilean National Training and Employment Service SENCE sets out policy priorities for labour intermediation services, with specific guidelines for local PES, and monitors indicators such as the number of counselling sessions, successful job placements or trainings provided.
The discussion about who benefits from and thus who should pay for career guidance is ongoing (see OECD (2021[9])). In Latin America, there are two main sources of funding: public funding and out-of-pocket payments by individuals. Career guidance provided by the PES is mostly publicly funded and free of charge for all eligible individuals. The more time- and resource-intensive career guidance by private providers is fully paid by the individual. To a more limited extent, there are private non-profit organisations and universities that provide career guidance free of charge, for instance to vulnerable or low-income populations (see Chapter 4). Employers tend to provide guidance to their employees as well, but little is known in the Latin American context. As private providers are the most frequently used providers in Latin America (see Chapter 4), taking up career guidance services might be prohibitively costly for many individuals.
Career guidance serves adults, as it supports their progression in learning and work. Guidance also yields public benefits, however, and firms can profit from the skill development of their employees as well. Although cross-country data on the funding of career guidance is scarce, there is a wide range of examples for policies in OECD countries that support adequate funding and cost-sharing between individuals, firms and the government. In Flanders (Belgium), employees receive training vouchers that can also be used for career guidance sessions. Individuals can purchase up to EUR 250 in training vouchers per calendar year, and the Flemish Government funds half of it. In certain cases, additional financial support can be requested. In France, employers fund the compte personnel de formation (CPF, Individual Training Account) via a levy on medium and large-sized firms (OECD, 2019[10]), which can also be used to pay for career guidance services, such as conducting a skills assessment. In the Netherlands, a pilot programme targeted subsidies for career guidance at vulnerable groups of employed adults. The subsidy was available for career guidance services to persons aged 45+ who worked at least 12 hours per week (Ontwikkeladvies). The pilot is currently under evaluation.
Adults’ out-of-pocket spending
Career guidance can generate private returns for individuals depending on their individual situation and prospects for their professional life. Users may value the positive psychological effects of career guidance, such as higher self-esteem, self-confidence or insight, awareness of opportunities, and motivation (Kidd, Jackson and Hirsh, 2003[11]; Bimrose and Brown, 2019[12]). They may also value the opportunity to learn new skills, such as decision-making and information-seeking skills (Maguire, 2004[13]).These benefits motivate many adults to invest in guidance, and explains the substantial level of individual contributions.
None of the Latin American countries in the study offer any schemes to promote co-funding of private career guidance between individuals and the government. This lack of co-funding schemes is a notable difference compared with other countries covered by the SCGA, where either public career guidance is used more or private career guidance is subsidised. In Latin America, the full cost of private services is thus often borne by the individual, which hinders access for those who cannot afford it. This concerns not only the direct costs for the guidance services, but also the opportunity costs associated with taking time away from work to speak with a career guidance advisor. Career guidance provided by the PES is free of charge in all Latin American countries, but as outlined in Chapter 3, it is not used as much, and not all adults are eligible for it.
The share of adults who paid for career guidance services is consequently higher in Latin America than the overall SCGA average, except for Chile (Figure 5.1). In Argentina, Brazil and Mexico 40-45% of adults paid for their guidance services, compared with the overall average of 31%. In Chile, this percentage is slightly below average (30%). The lower percentage of users paying for guidance in Chile may be due to the higher offer of free career guidance services compared with the other three Latin American countries. These findings are not surprising given the prevalence of private and fee-based career guidance services in Latin America (see Chapter 4).
The findings are problematic for inclusiveness, however, as vulnerable groups, such as the unemployed or low-skilled adults, face barriers to access quality guidance services (see Chapter 3). Figure 5.2 shows that even though unemployed adults are less likely than employed adults (permanent, temporary, self-employed or informal) to pay out-of-pocket for career support in Latin America, they are much more likely to pay compared with other countries in the survey.
Note: Average includes Argentina, Brazil, Chile, France, Germany, Italy, Mexico, New Zealand and the United States. Data refers to the last time the respondent spoke to a career guidance advisor.
Source: OECD 2020 Survey of Career Guidance for Adults (SCGA).
Note: Average – Latin American countries includes Argentina, Brazil, Chile and Mexico. Average includes Argentina, Brazil, Chile, France, Germany, Italy, Mexico, New Zealand and the United States.
Source: OECD 2020 Survey of Career Guidance for Adults (SCGA).
Government contribution to funding
Governments have an interest in contributing to well-functioning and effective career guidance for individuals and companies, considering the substantial benefits of guidance for economies and societies as a whole (OECD, 2004[14]; OECD, 2021[1]). Public funding is crucial for broadening access to vulnerable individuals who are less likely to seek guidance on their own initiative, or who could otherwise not afford the costs. Public funding of career guidance during economic crises, such as the current COVID-19 pandemic, can help to smooth the business cycle and facilitate structural adjustment by helping individuals to transition to new jobs and sectors.
With no financial incentives in place that go directly to an individual or company, all public funding for career guidance in Latin America is invested directly in the services provided by the PES or other public guidance providers. Most funding comes from the Ministry of Labour (Argentina, Brazil,1 Chile) and is then distributed to the PES offices in the different municipalities or regions. In Mexico, public funding comes from the Secretariat of Labour and Social Security, which co-ordinates the national PES in co-operation with the federal states.
Some countries have public funds dedicated to employment policy, parts of which can be used for career guidance activities or programmes (Fondo Nacional de Empleo in Argentina, Fundo de Amparo ao Trabalhador, FAT in Brazil). The Brazilian FAT’s resources come from taxes paid by individuals and firms.
Estimates of national PES funding in each of the four countries are difficult to obtain, often out of date and not directly comparable. A large share of PES funding is usually dedicated to services other than career guidance, including training provision or passive benefits such as unemployment insurance. Furthermore, definitions of career guidance vary, and public providers focus on different types of services, programmes as well as target groups. Nevertheless, available data suggests that there is considerable variation in public funding across the countries in this review (see Table 3.1 in Chapter 4). As a result, funding levels for public or publicly subsidised career guidance services are also likely to differ.
Employers’ contribution to funding
Little is known about employers’ contribution to the funding of career guidance activities in Latin America. Companies’ interest in investing in the skills of their employees include increasing productivity, maintaining competitiveness and fostering innovation. When legally required, such as for instance in Mexico, employers must finance outplacement services to help laid-off employees find a new job or start up their own business. In some sectors, employers’ associations offer career guidance financed through companies’ contributions.
The primary responsibility of public career guidance for adults tends to be with the Ministry of Labour or the Ministry of Education in Latin American countries, with co-operation from the PES. The social partners are often involved in the governance of public bodies with general responsibility for training and employment. However, in none of the Latin American country studied is there a dedicated policy strategy on career guidance. Ideally, such an approach would involve all relevant stakeholders; that is, the public authorities, the social partners and professional guidance associations. The knowledge and resources of each of these actors is valuable and could be better integrated into decision-making. Efforts to enhance the quality of services, and to develop competence frameworks for career guidance advisors, for example, would greatly benefit from a broad, collaborative approach.
Consider forming a working group with all relevant stakeholders to improve career guidance policy and provision.
Typically, regional governments are responsible for the implementation of career guidance in Latin America. In some of the countries in this review, co-ordination between the different levels of government and other public bodies responsible for career guidance could be improved. An established flow of information in both directions can create accountability, and helps to keep track of outcomes. This has the potential to improve career guidance services, and entrench good co-operation mechanisms that work independently of the political leadership in place. It may also be useful to organise regular international exchanges of good practice and promising initiatives across Latin American countries.
Develop a system of regular reporting standards between local employment offices, national ministries and other relevant public bodies, and facilitate international exchanges of good practice.
Compared with other countries, in Latin America adults are more likely to pay out-of-pocket for career guidance. This hints at a limited availability of subsidised or free guidance, which is particularly a challenge for unemployed, informal and inactive workers, who tend to be more vulnerable in the labour market and are less able to afford these costs. To support the accessibility and uptake of career guidance services by these adults, adequate funding for public career guidance services – such as those delivered by the PES – is needed. This is especially the case during a period of major economic disruption, as with the current COVID-19 crisis.
Adults could benefit from support to cover both the direct and indirect costs of public and private career guidance services. Measures could take the form of vouchers, subsidies or income support to account for opportunity costs associated with taking time away from work to speak with a career guidance advisor. Another way would be to review the unemployment support system to enable jobseekers to invest time in career guidance, without feeling pressure to quickly find a job to feed their families. Designing such a policy requires a comprehensive analysis of factors that would improve take-up, taking into account the provider landscape as well as social security provisions.
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Note
← 1. In Brazil, there is no Ministry of Labour, but rather a Labour Secretariat linked to the Ministry of Economy.