Raising the bar: Designing and implementing innovative contracted-out employment services
in OECD countries
Two out of five OECD countries contract out some of the job brokerage and counselling
functions of publicly financed employment services using outcome-based payment models.
This paper examines several important aspects related to the design and implementation
of such outsourcing. First, innovative payment models can improve incentives for external
providers to offer training and more effective services for hard-to-place clients.
Second, providing forward guidance to providers and accounting for contingencies can
mitigate their risks, e.g. of being underpaid relative to expenses incurred, thus
lowering service costs. Third, letting individuals choose a provider can result in
services that are better tailored and foster ongoing competition between providers.
Finally, automating data exchange can, somewhat paradoxically, improve data privacy
and data protection while enabling new payment models. These and related findings
are discussed with country examples based on desk research and interviews with stakeholders
in several OECD countries. The paper builds on work conducted in the project “Reforming
the Swedish Public Employment Service”, which was carried out with funding from the
European Union via the Technical Support Instrument and was implemented by the OECD
in cooperation with the European Commission's Directorate-General for Structural Reform
Support.
Available from November 22, 2023
In series:OECD Social, Employment and Migration Working Papersview more titles