Job Bank Trial
From 2009 to 2016
The initial project has ended, but the job banks continue to operate, with possible changes to the concept. The job bank trial was focused to renew the concept of social enterprise, and the rationale was that job banks would go on as profitable companies on their own after the trial. The project was based on extra funding that is no longer available.
It was a strategy for Social and Health Policy and on the National Development Programme for Social Welfare and Health Care.
The Job Bank Trial aims to find employment for persons at a potential disadvantage in the labour market, such as partially disabled persons, youth without education and the long-term unemployed.
The emphasis is on those who have problems with labour market integration. This may be due to a lack of skills, but also to other limitations.
Aim of policy instrument
A strategic government project.
Main responsible body
Ministry of Social Affairs and Health
The funding is national and is project based. When the model was running, there was project funding from two ministries, but after the project phase, the funding is based on existing labour market subsidies. That means that Job Banks are paid subsidies according to their success to find employment for long-term unemployed people.
From 2012 - 2015, the Ministry funding has been €8.2 million in total. In that phase, the project was expanded country-wide from the piloting phase 2009 - 2012. After the project phase, the idea is that the Job Bank could keep on going with their own business model and revenues.
The intended beneficiaries are those who have difficulties in finding employment. Those can be partly disabled people, long-term unemployed or young people without education. Job Banks serve also other unemployed, but they are not the core beneficiaries. The expected benefits are that people get employed. The Job Banks also develop skills and educate the unemployed.
Use of labour market intelligence
The use of LMSI is limited. The core of the instrument is to help those with problems getting employment in the open market, for instance using financial incentives and subsidies. The project itself conducted some market research to support the operations. The insight is mainly based on the Job Bank companies own insight on the labour markets issues.
The revenues are partly based on different wage subsidies and other similar public funding. During the project the Job Banks were paid bonuses based on the performance. These bonuses are no longer paid.
The project phase has been a learning process and the model and rules have been adjusted modestly. The main concern is that due to being subsidised, Job Banks, like other social enterprises, may compete with advantageously low prices. There have been a need to review the different subsidising instruments to make sure that the companies are not competing with "normal" companies by selling their products under the market price. The other learning challenge was to find the right level for the employment subsidy.
The major barrier was to communicate the model for the target group. For that reason Job Banks failed to have as many targeted job-seekers as they intended to. The other barrier was the availability of the wage subsidies necessary for the model. Due to the high rate of unemployment in general, funding was inadequate whilst the project was operating.
The close collaboration between other actors taking care of unemployment, like municipalities and employment officials. The ministry was flexible allowing adjustments in the project.
The main indicator to be followed are number of people employed through the Job Bank trial. Another indicator is that how the career of the employed person is developed after they have worked in the Job Bank. Those indicators are not regularly monitored, especially now, when the Job Banks are operating on their own and the project has ended.
The policy brings together private and public resources. The core idea is that companies that are renting staff have good connections and are in a good position to find at least short-term jobs for people having difficulties to find a job in the open market. Those companies are backed with financial incentives, including wage subsidies (available to other employers as well) and bonuses (targeted only to the Job Banks). Another innovative factor is that Job Bank educate people when there are few short-term jobs available. This improves their employability in the open job market.
Evidence of effectiveness
The Research Institute of Finnish Economy has evaluated the model. They found evidence that working for the Job Bank improved the labour market prospects for that individual, indicating that the model has worked. By the beginning of 2016, almost 10,000 people had become employed through the Job Bank. The beneficiaries have been the expected ones, mainly for the long-term unemployed. The expected number of employed persons was not achieved and it was difficult to find employment for partially disabled people. An unexpected difficulty was that fewer than expected long-term unemployed people were interested in the trial. For that reason it took more advertising and marketing costs than expected. This was the case especially for those municipalities and Job Banks that had a contract for employing long-term unemployed.
Engagement of stakeholders
For success, sufficient wage subsidies are required to make Job Banks competitive in the staff rental markets. The Job Banks may be entirely social enterprises or companies seeking profit, but they need to cover their costs.
The core of the model is to use social enterprises in a more efficient way, as a channel for people with difficulties to find jobs. In other European countries where there are social enterprises, it will be most feasible to introduce such a model.
The instrument is likely to continue in some form into the future.