EFFICIENT ACTIVITIES OF PUBLIC EMPLOYMENT SERVICES OF LATVIA DURING ECONOMIC DOWNTOWN State Employment Agency of Latvia Oktober 20-21, 2011

2 Republic of Latvia Area: 64,5thsd km² Population: 2,25 millions Population per 1 sq.km: 36 persons GDP drops pct in 2010; expected to grow 3-4 pct in 2011 Capital city: Riga Regions: Kurzeme, Zemgale, Vidzeme, Latgale Ethnic groups: Latvian 59.2%, Russian 28.0%, Byelorussians 3.7%, Ukrainians 2.5%, Poles 2.4%, Lithuanians 1.3%, others 2.9% Official language: Latvian Currency: Latvian Lat (LVL) Most popular languages: Latvian, Russian, English, German Independence Day: 18 November

Facts about NVA ● NVA is under the supervision of the Ministry of Welfare of the Republic of Latvia and works in accordance with the Public Agency Law. -Founded on April 17, Structure: Central Office, 28 Local Employment Offices -Staff: ~ 800 employees ● Mission: to become a bridge connecting employers and employees reducing unemployment and stimulating employment in Latvia. ● Functions: working with clients – employers, unemployed, job seekers; career counseling; international relations and EURES; provision of public awareness; improvement of the NVA services; European Social Fund; improvement of normative documents; capacity building; budget planning and control of financial expenditure.

Impact of crisis in Latvia As a result of the crisis - - the economy of Latvia went into deep recession – during the crisis the GDP decreased by ¼ - Latvia has returned to the level of 2006, but the decrease in employment was even higher; Unemployment in numbers – - has grown rapidly from just over 50,000 in mid-2008 to nearly 130,000 in June 2009; - in the first quarter of 2010 unemployment was higher than in any other country of the European Union; - the unemployment rate in 2010 reached it highest level since 1996.

Registered unemployment in Latvia at the end of period Total number of registered unemployed – August 2011 Total number of registered vacancies in PES 4508 – August 2011 Source: State Employment Agency of Latvia percentage

Target group unemployed ( )

7 Portrait of a Structural Unemployment registered unemployed 2010/ Structural unemployment:  Labour force skills does not meet economical needs  Regional disparities  Lack of qualitative information about available vacancies on the one hand and lack of labour force with definite skills on the other 2.Future risks:  Now crisis consequences are observed and cyclical unemployment is continuing, number of new vacancies remains limited  The high risk of structural unemployment is existing for the future 3.Decisions:  Identifying labour demand in close cooperation with employers  Investments in human resources – skilled workforce, raising motivation and economic activity

8 Portrait of a Registered Unemployed 2010/2011 Low-qualified worker previously Without a profession (especially young unemployed) Aged years with vocational education With a trend to a long-term unemployment With insufficient work skills (possible risk of structural unemployment)

Services provided by NVA (to Overcome Economical Crisis) 1. Training for unemployed and job-seekers: Vocational training Training by employer Modular (informal) training Measures to raise competitiveness Support for business start-ups Acquisition of higher vocational education for unemployed persons 2. Training for persons under risk of job-loss: Vocational training for persons who work reduced working hours Lifelong learning program 3. Employment measures: Subsidized employment Complex support measures Work practice measures in municipalities Youth work practice 4. Career consultations

Work practice measures in municipalities (1) Special large-scale measure “Workplaces with Stipend Emergency Public Works Programme” was launched in September to diminish the social consequences of the crisis and its impact on the labour market; -with the aim to activate the unemployed, providing simultaneously the means of subsistence to those who need it most;

Work practice measures in municipalities (2) Aim: To support measures of rising of employment level and unemployment reduction by involving unemployed in work practice measures in local municipalities. Target group: Unemployed registered in the NVA who do not receive unemployment benefit ( unemployed (~45% of the total number of unemployed), unemployed (~75% of the total number of unemployed).

Work practice measures in municipalities The total cost - 54 million LVL with the bulk of the funding coming from the ESF The total number of workplaces Supported persons

Vocational training for persons under risk of job-loss Aim: during Economic Downturn to improve professional skills for employed persons with reduced working hours in programs related to their employer new professional activities. NVA issue a voucher to employed persons, who work on part-time basis, to involve them in professional training. Person has a right to choose educational institution and training program.

Vocational training for persons under risk of job-loss Vocational training for persons who work reduced working hours: Period: Supported persons – 5.8 thsd. Due to changes in economics the program is transformed to LLP Lifelong learning program: Period: – Supported persons – 12.6 thsd. (until )

Vocational training for persons under risk of job-loss Maximum value of : –over qualification program voucher is up to LVL 500 ( EUR 350) –professional improvement program voucher is up to LVL 300 (EUR 210) During training period person receive financial support – 70 LVL (EUR 49) monthly training allowance – a stipend) Maximum duration of professional training is 6 months

Vocational training for persons under risk of job-loss Employer Benefit –Employees are retrained or their qualifications are raised in line with changes at the enterprise –Opportunity to adjust to market fluctuations –Opportunity form fast return to full workload Employee Benefit –Unemployment risk caused by economic factors is reduced and jobs are retained –Professional qualifications are acquired or professional skills and abilities are improved –Competitiveness is facilitated

Lifelong learning program Aim: to provide people at risk of unemployment with an opportunity to promote and develop knowledge’s, skills and competences through vocational development and informal education programs. Target group - employed/self-employed persons at risk of unemployment (excluding state civil service employees) and self- employed persons in the whole territory of Latvia within the age group of 25 to 64.

Lifelong learning program NVA issue a voucher to employed persons, to involve them in training. Person has a right to choose educational institution and training program. Maximum value of : –professional improvement program or informal education program voucher is up to LVL 250 ( EUR 175) During training period persons don’t receive financial support (monthly training allowance – a stipend). Co-payment for participation 30% of training price.

Next steps after crisis (1) Making the work of the SEA more efficient By introducing new working methods in the SEA, thus ensuring faster inclusion of unemployed into the labour market, by offering the customers timely and qualitative services and ensuring efficient cooperation with employers By developing new labour market supervision and service provider monitoring system (2011–2013); By developing new and improving existing methodologies (instructions) for work with each of the customer groups to enhance the possibilities of unemployed to enter the labour market (2011–2012); By enhancing the quality of job search assistance and career guidance services, by further developing of methodologies and requirements for service providers and diversifying the range of these services (2011–2013).

Improving active labour market policy measures by gradual transition from crisis-related measures to traditional active labour market policy measures The aim is to carry out ALMP measures reforms to increase their efficiency and quality of the unemployed training process (2011–2013): – By introducing the “training voucher” (i.e. “money follows the unemployed”) system in the unemployed training; – By making more efficient the measures of subsidized employment (wage subsidies) and on-the-job training for the disadvantaged unemployed; – By introducing new measures targeted at young unemployed for a practical work trial and for voluntary work; – By supporting small scale financial investments in self-employment and business start-up, by expanding the range of persons able to submit a business plan for the business grants ‟ competition (see also Chapter 3.1.); – By introducing training of unemployed on request by the employer based on the needs of the sectors. Next steps after crisis (2)

THANK YOU! Further information: State Employment Agency of Latvia Ministry of Welfare of Latvia Sandra Šimkus Hed of Employment Measures Division Eva Lossane Hed of Training Division Eva.