Public-private project to integrate unemployed people into job market

The structure of unemployment in Luxembourg has changed insofar as many people experience difficulties in integrating or reintegrating into the labour market regardless of the economic situation. Thus, traditional tools for promoting employment are insufficient; individual support and monitoring are indispensable complementary measures. A pilot project launched in January 2009 aims to evaluate the effectiveness of public-private cooperation in helping jobseekers.

Characteristics of jobseekers

Statistics show that unemployed people who have been registered as jobseekers for more than 12 months with the National Employment Administration (Administration de l’Emploi, ADEM) are the largest group among all those in unemployment. According to ADEM’s Luxembourg Employment Bulletin (Bulletin luxembourgeois de l’emploi) for November 2008 (in French, 975Kb PDF), out of the total of 10,801 unemployed people who were registered at that time, 3,640 persons had been on the register for more than 12 months. Furthermore, about 66% of these are over 40 years old.

Some 33% of jobseekers look for manual or blue-collar positions in various economic sectors, according to a classification based on the preferred area in which the jobseeker is looking for work. Such positions might, for example, relate to mechanical, electrical, timber, building, food, chemical or general production occupations. Around 70% of jobseekers in this category have less than nine years of education, which is the compulsory minimum in Luxembourg.

Office jobs are also in demand from jobseekers; slightly over 15% of jobseekers are looking for such jobs. Among those who are looking for this type of job, about 60% have average qualification levels.

Public-private cooperation

A new initiative launched at the beginning of January 2009 considers new solutions based on linking the activities of ADEM with those of private service providers operating in the field of placement and recruitment. The new project aims towards the sustainable integration (intégration durable) of unemployed persons into the labour market and is known as ‘Indura’. The social partners agreed to the principle of a public-private partnership during the meeting of the Tripartite Coordination Committee (Comité de coordination tripartite) on 28 April 2006 (LU0606019I). In addition, the legal basis for covering the costs resulting from this type of cooperation through the Employment Fund (Fonds pour l’Emploi) was established by the Law of 22 December 2006 introducing various measures to promote employment (LU0707039I, LU0707049I).

The first phase involves setting up a cooperation agreement with temporary work agencies. This industry has useful experience in supporting and placing workers, and also has customers who take on workers regularly. The second phase involves working with recruitment agencies, which have experience in dealing with supply and demand in the labour market, and – above all – in providing the kind of personalised support that is at the heart of the project.

Sustainable labour market integration

As noted, the project objective is to sustainably integrate or reintegrate unemployed people into the labour market, through the eventual conclusion of an open-ended employment contract or a fixed-term employment contract of at least 12 months. The Minister of Labour and Employment, François Biltgen, believes that the initiative does not aim to place jobseekers in temporary work; rather, it is trying to use the skills of private service providers to achieve the long-term integration of candidates in the workplace. The partner temporary work agencies will be asked to set up a distinct legal entity to manage this project, so that a clear separation is made between this activity and their work as temporary employment agencies.

Project stages

ADEM will select the people to be supported by the project and direct them to the temporary work agencies. Each agency will be allocated a mixed group of 15 unemployed people, that is, with different characteristics in terms of qualifications, age, health, gender and nationality. The partner agencies will have to provide a number of services, including:

  • receiving the candidate;
  • providing technical and/or social training to improve the candidate’s skills level;
  • supporting the candidate in carrying out a ‘personal project’ with the aim of improving their employability;
  • placing the jobseeker with employers.

However, the partner agencies will retain some autonomy in terms of the methods that they use. Their payment, which will come from the Employment Fund, will depend on the difficulty of getting the particular candidates back to work. Thus, the fee will reflect both the duration of the support provided to the jobseekers and also the actual results.

This pilot project will undergo continuous evaluation by an external body. If its assessment is positive, the partnership will be extended to recruitment agencies.

ALEBA criticises project

The Luxembourg Association of Bank and Insurance Employees (Association Luxembourgeoise des Employés de Banques et Assurances, ALEBA) disapproves of the Indura project, highlighting that temporary work agencies can profit from three premiums as a result: for basic expenses, for any concluded employment contract and for an open-ended employment contract. One of the criteria for the agencies’ remuneration is how quickly they can get the unemployed person back to work. The trade union is critical of this target and fears that jobseekers would systematically be oriented towards temporary work solutions, as this form of employment contract constitutes the quickest way to find a job.

Trade unions emphasise that temporary work does not tend to lead to a permanent job and they point out that temporary workers live in permanent uncertainty. Therefore, ALEBA demands that the placement of unemployed people should remain the exclusive prerogative of the public administration, avoiding the possibility that it becomes a ‘lucrative business for temporary work agencies’.

Odette Wlodarski, Prevent

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