Developing Public Private Partnerships to tackle world of work challenges in Latin America

14, September

By Denis Pennel for staffingamericalatina When the economic recession hit, labour markets around the world were ...

By Denis Pennel for staffingamericalatina

When the economic recession hit, labour markets around the world were thrown into disarray. Businesses failed and employers could not afford to hire and develop employees. Unemployment, underemployment and informal work became the norm in many countries. There are lessons to be learned from this turmoil but I don’t believe there are any ‘quick fixes’ or ‘one-size-fits-all’ solutions. Recovery will be a slow process with government, education providers and businesses learning to collaborate and work towards the common goal of achieving a sustainable and secure workforce.

Unemployment and the lack of a sustainable workforce across Latin America is pushing individuals, particularly the young, into informal work. The ILO recently reported that 8 million young people are unemployed in the region but, equally worrisome, 27 million more young people work in the informal sector with no rights or benefits.[1] The Private Employment Services (PrES) can help. Ciett research, as well as a recent report from Randstad, indicate that countries with a higher penetration of PrES have a lower share of undeclared work leading to greater competitiveness and job creation.[2] In other words, restricting the PrES industry unnecessarily drives companies and workers looking for flexibility towards the black economy.

One way to tackle undeclared work are partnerships between public and private employment services. Such partnerships are an emerging trend around the world, which can help address the need to end informal work and help young people find lasting careers. Successful Public Private Partnerships (PPPs) acknowledge the relative strengths and weaknesses of each party involved, allowing a targeted approach to help people find a job. This can be particularly effective when addressing demographic specific unemployment, such as youth unemployment, which requires a tailored approach. This approach, when implemented successfully, helps countries to achieve sustainable levels of public expenditure, creates a valuable source of job candidates for PrES and ultimately gets more individuals into work.

Peru is a great example of a country successfully implementing PPPs. In 1996, a study revealed that Peru’s public employment services were suffering from high costs, long registration waits, inflexibility and a poor reputation[3]. Since then, the Ministry of Labour has been able to develop PPPs and as such reach more people with a better quality service through a combination of public and private providers.  In this region, the Peruvian Network of Centers of Intermediation and Labor Information (CIL) partnered with PrES to promote employment. With Government approval, the PPPs helped to match the supply and demand of labour using PrES guidance and contacts. Within two years, the number of job placements increased by 27.5%.

Informal work leaves workers, businesses and economies vulnerable and to protect them we must encourage well regulated labour markets. I have talked about the ILO’s Convention 181 previously in this column and its importance for labour markets cannot be underestimated. Unfortunately, in South  America only Panama, Surinam and Uruguay have ratified the convention, while many other countries are not creating the most favourable labour market environment within their countries.

Yet it is easy to understand why PrES has such a positive effect against undeclared work. PrES grants people a choice when organisations are not offering the traditional full time, permanent, location specific jobs. PrES also act as intermediaries to match the supply and demand of talent in an increasingly complex environment. This is vital for both job-seekers and employers. Public employment services don’t always have the resources or structure to be able to do this effectively and PrES must look to work more closely with them to eliminate informal work.

At Ciett we are proud of the meaningful and productive relationships that exist between the public and private employment services. These partnerships are integral to support people in finding work and to fight unemployment, underemployment and informal employment. How can we ensure that our labour markets are strong, well regulated and adaptable for the future, protecting businesses and individuals from the uncertainty that the global, technological business landscape brings? The answer is not simple but with collaboration, hard work, time and commitment between all influential parties, it is possible.

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About Denis Pennel

Managing Director of Ciett and Eurociett, Denis Pennel is a labour market expert with deep knowledge and years of experience relating to employment at global and EU levels. He recently published “Travailler pour soi”, a book about the new realities of work.

Follow Denis on Twitter @PennelDenis

About Ciett, www.ciett.org

As the International Confederation of Private Employment Services, Ciett is the authoritative voice representing the interests of agency work businesses. Founded in 1967, Ciett consists of 51 national federations of private employment agencies and eight of the largest staffing companies worldwide. Its main objectives are twofold: to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive; to gain recognition for the positive contribution the industry brings to better functioning labour markets.

Follow Ciett on Twitter @ciett_waytowork