Ukrainian State Employment Service has far more to offer than unemployment benefits

Out of the 45 million Ukrainians, 1.7 million are unemployed, says the Labour Force Survey of March 2018. Less than 21% of them are registered with the State Employment Service (SES). But where are the rest?

Article | 17 December 2018
by Valli Corbanese

©Dmytro Muravynets

In the last 25 years I advised a number of countries throughout their reforms in the employment sector. In Ukraine I have seen a higher level of service delivery and attention to the client than in many Eastern European countries. Yet, there is room for change.

The key feature of the public employment service reform, currently taking place in Ukraine, is to free staff from administrative tasks and devote their attention to the needs of clients. My observation is that State Employment Service employees spend so much time on paperwork that they have barely any left for clients. The unemployed do not need tons of paper generated, but something more substantial. My mission with the International Labour Organization (ILO) in Ukraine is to make the work of SES more client-oriented and less bureaucratic.

The fact that SES penetration of the unemployment market is less than 21% is not something unique to Ukraine. Unfortunately, a majority of the unemployed across Europe do not get jobs thanks to the public employment services, but rather to their informal contacts. How does that usually work in Ukraine? You ask a friend, your parents give you a hand or, perhaps a brother of a sister of your father knows somebody with a vacancy. People rely more on informal channels than public employment services all across Europe. We need to improve the reputation of SES and show that it can actually help to attain a job. Word of mouth works perfectly in this regard. But not only that. In the frame of our project, funded by the Danish Government, we help SES to build partnerships with employers and civil society. Strong collaboration on the local level should bear good results in terms of service delivery and improved reputation. It is not something that will happen overnight though, it requires time and patience. 

Making SES work more efficiently is vital. Unemployment is very costly both for Ukrainians and for the state. Being without a job leads to a number of negative consequences that very often go unaccounted for. The longer you are without work, the more likely that your physical and psychological health will suffer. A job gives you a sense of meaning and fulfillment. Thus, not having one often leads to loss of motivation, depression and isolation. It also weakens economic growth. Unemployed people are unable to consume like an average citizen does.. For instance, they cannot afford to have a car. Will a car industry grow in such circumstances? Not really. 

Unemployment has a scarring effect,, which can be monetized. Back in 2013, during the financial crisis, we had 30 million young people unemployed across Europe. We made a calculation of how much governments were losing in terms of economic growth, loss of productivity etc. The amount we arrived at was absolutely shocking – it was equal to 1.5% of GDP in the whole EU. The very same methodology can be applied to Ukraine to calculate the costs of unemployment. 

Resolution No 792, adopted by the Council of Ministers this autumn in Ukraine, has introduced a brand new service model for the State Employment Service. It is now based on profiling individual needs, individual employment planning and case management approaches. Before the law, all attention of SES staff was directed towards collecting data and filling out forms. The new service model introduced a position:  that of the career counsellor. The career counsellor works with each client individually. They will be able to see barriers that one faces in the labour market and help to overcome them. The counsellor talks, observes and listens actively instead of wasting time on putting information into a database. This person will be your reference point whenever you come back to SES. I believe, that as a client, you are more likely to trust somebody who you have already talked to and who has been supportive to you.

Yet, regardless of a number of free services and programs, the majority of clients will still come to SES solely for receiving their unemployment benefits. But then SES can give them something additional and even more valuable. After all, it is up to the competence of a career counsellor to explain that financial aid will not last forever and the State Employment Office has far more to offer. That means, of course, that career counsellor competencies need to be built up, which is what we do within the frames of our project.

Valli Corbanese is an external expert working with the International Labour Organization on a 5-year project «Inclusive Labour Markets for Job Creation in Ukraine», funded by the Danish Government.