Context and objectives

In May 2019, the Swedish Government commissioned the Swedish public employment service (PES), Arbetsförmedlingen, to prepare for a major reform of publicly funded employment services through the creation of a new labour market authority. The centrepiece of the reform is to redefine the mission of Arbetsförmedlingen from the major provider of employment services towards contracting out the majority of such services to independent providers.

In addition to Sweden’s long-standing experience with contracting out employment services on a smaller scale, a larger trial supported through European Social Fund funding, called rusta och matcha, began in March 2020. This project provides an opportunity for further evaluating contracted out employment services and will provide lessons for the planned reform. Creating a market where employment services are largely contracted-out requires carefully considering many factors such as achieving a fair competition among contracted providers, ensuring the provision services at the local level, and creating a suitable outcome-based compensation model.

In order to learn from other OECD countries’ experiences with contracted-out employment services, Sweden requested technical support to the European Commission through the Technical Support Instrument. The OECD and the European Commission’s Directorate-General for Structural Reform Support (DG Reform) are providing support to Arbetsförmedlingen for the duration of the project, from July 2021 until March 2023 (under framework delegation agreement REFORM/IM2021/009). Within the OECD, the project is being conducted by two directorates: the Directorate for Employment, Labour and Social Affairs (ELS) and the Centre for Entrepreneurship, SMEs, Regions and Cities (CFE). The broader objective of this project is to enhance the capacity of the Swedish authorities to design and implement an effective system of contracted-out employment services, ultimately resulting in improved labour market outcomes for the unemployed.

Activities and topics examined in outputs 

The work is supported by:

1. Semi-structured interviews and consultations with Arbetsförmedlingen staff, national and international experts, and other relevant stakeholders in Sweden.

2. A workshop and study visit to another OECD country to examine lessons learnt in the course of that country's implementation of contracted-out employment services.

3. An online survey of Swedish municipalities and regions on how to reorganise Arbetsförmedlingen’s services at the local level.

4. Five workshops intended to identify useful examples from other countries, exchange knowledge and expertise from international experts, and disseminate the results of the project to relevant stakeholders.

5. A final dissemination event intended to generate understanding and facilitate dialogue among stakeholders about key reform issues.

Useful links

Note on options to strengthen employment services and activation programmes in Sweden, accompanying presentation 

Summary and presentations of the workshop on the “Participation of social economy actors in the delivery of employment services”

Background information and presentations of the workshop on facilitating data exchange to support contracted-out employment services

Report on creating a competitive market for employment services in Sweden

Summary of workshop on the organisation of employment services at the local level

Report on addressing the legal and IT challenges of data exchange

Organisation of public employment services at the local level in Sweden

Participation of the social economy in the provision of Sweden’s public employment services

Report on study visit to the Netherlands

Note on the design of the compensation model for contracted service providers

Final event – Presentation on key findings of the project for Swedish stakeholders

Final event – Presentation on key findings from the project and relevance of similar work for other countries

Relevance for other countries

This type of support could be relevant for other countries who may want to consider complementing or reforming their existing provision of publicly-provided employment services through the use of contracted providers (possibly, with a pilot programme trialling such a scheme). Contracting out employment services to outside providers offers the promise of many potential benefits: an increased flexibility to scale capacity in line with unemployment, the possibility of offering services more cost-effectively, the option to better tailor services through the use of specialised service providers and the possibility to offering jobseekers a choice of providers. At the same time, reaping these potential benefits requires carefully considering several important factors. This project builds on ongoing work the OECD has conducted on the topic, including on a project conducted jointly with DG Reform which included a planned pilot programme in Slovenia and a working paper on the topic.

Contact: [email protected]