Knowledge-based performance management

Marie Hansen, Director General of the Danish National Labour Market Authority

2

Agenda

1. Where are we - facts about the Danish labour market

2. Institutional framework for labour market policy

3. Knowledge-based performance management

4. Challenges for knowledge-based performance management

3

Share of population in jobs (%) Public deficits if no reforms (share of GDP)

Demographic challenges ahead – when 5 people retires, 4 people enter the labour force. Reforms are needed.

1. Where are we – facts about the Danish labour market

4

1. Where are we – facts about the Danish labour market

Source: Jobindsats.dk

Note: Permanent benefits: Early retirement, flexi-jobs and people waiting for a flexi-job. Ready for jobs: Unemployed benefit recipients and social benefit recipients who are ready for a job within three months (match 1). Not ready for a job or an active effort are: Social benefit recipients not ready for a job within three months (match 2) or not able to take part in activation (match 3). All series are in full time persons.

Focus on reducing the number on permanent public benefit

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

jan-04

apr-0

4jul-0

4okt-

04jan

-05

apr-0

5jul-0

5okt-

05jan

-06

apr-0

6jul-0

6okt-

06jan

-07

apr-0

7jul-0

7okt-

07jan

-08

apr-0

8jul-0

8okt-

08jan

-09

apr-0

9jul-0

9okt-

09jan

-10

apr-1

0jul-1

0okt-

10jan

-11

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

Permanent benefit recipients Ready for jobNot ready for job or an active effort Sickness benefit

5

From public benefits to jobs

Youth education

1. Where are we – facts about the Danish labour market

6

Minister for Employment

National Labour

Market Authority

Regional

Employment

Councils

91 Integrated job centres for all job-seekers (insured and uninsured)

Local

Employment

Councils

National

Employment

Council

98 municipalities

New structure since AugustNew structure since August 2009 2009

4 Employment regions

Full responsibility of the municipality, State subsidies

External service

providers

29 unemploymentInsurance funds

98 Social

Welfare offices

- Cash benefits

The Danish

Pensions Agency

2. Institutional framework for labour market policy

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3. Knowledge based performance management

Today: ”It must be legal and financed”

Future:

“1. It must work”

“2. It must be legal and financed”

It works

-Legal

-Financed

10-15%

It is legal and financed

70-80%

(It does not work)

10-15%

1

1

2

3

8

3. Knowledge based performance management

Social benefit recipients Unemployment insurance benefit recipients

Share of people on public benefits for at least one year without an active effort, %

Source: National Labour Market Authority

An active effort has an effect on the labour supply

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3. Knowledge-based performance management

Source: Ministry of Finance

An active effort has an effect on the labour supply

0

2

4

6

8

10

12

14

1990

1995

2000

2005

2010

Pro

cen

t

Faktisk ledighed

Strukturel ledighed

Per

cen

t

Structural unemployment

Actual unemployment

10

3. Knowledge-based performance management

Goals can only be achieved through combined national, regional and local effort

11

National management tools:

1. Legislation

2. Economic incentives

3. IT-systems

4. Dialogue

3. Knowledge-based performance management

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3. Knowledge-based performance management

Examples: Legislation

National rules on job interviews: If age 30+: A job interview within three

months of unemployment and at least every three months

National rules on activation: If age 30+: A period of activation within 9

months of unemployment

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3. Knowledge-based performance management

Municipality expenditures to public benefits

Examples: Economic incentives

Revenue depends on municipality tax

70 %

50 %

-40

-20

0

20

40

60

80

Passive unemployment and activationin guidance and upgrading of skills

Activation in work places/ordinary education

In a job

-40

-20

0

20

40

60

80

Municipality expenditures

14

3. Knowledge-based performance management

Examples: It-tools www.jobindsats.dk The information is available on internet

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3. Knowledge-based performance management

Examples: Dialogue The Employment Regions are in continuous dialogue

with the job centres about goals, strategies, results and efforts. Social partners also discuss the local employment policy with the job centres.

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4. Challenges in the near future

Reduce bureaucratic rules

On-going adjustment to make sure that the economic incentives are working

Need for more knowledge about what works

Increase ownership among citizens better and more user oriented it-tools? increased use of free choice? economic incentives instead of legal rules?