1. Employment Service Reform in Korea Young Soo Kim November 2011

2. Korea at a glance Reform of public employment service Job center facilities overview

3. Korea at a glance Population: 49 million Per-capita GNI: $20,759 Economic growth rate: 6.2% Economically active population: 25million Employment rate: 63.3% Unemployment rate: 3.8% Major industries: shipbuilding, electronics, automobiles, construction

4. Ministry of Employment and Labor Headquarters (600 employees) Employment: Labor Market, Manpower, Job training Labor Relations: Labor standard, Occupational safety Subsidiary organizations (5,000 employees) 47 Local offices (81 Job Centers) 15 Committees: Labor Relations Commissions etc. 10 Affiliated public organizations (10,678 Employees) Korea Employment Information Service Korea Workers’ Compensation and Welfare Service

5. The Advent of Public Employment Service 1998 financial crisis as a turning point Globalization(IMF) called for a more flexible labor market - Therefore established: Lay-Off system Worker dispatch system

6. Increase of UI beneficiaries Appearance of Job Centers 199819992000200120022003 Job centers99122126168156155 Employees2,0502,6612,4622,4922,3642,367

7. Challenges of Public Employment Service Weak infrastructure - Most job center offices are rented (2 year contract) and small - All job counselors (2,000) are contract employees Lack of function - Market share of PES is less than 5% - Average counseling time per person is only 6 minutes Weak link with relevant systems and organizations - 9 employment information networks - Schools and local governments

8. Reform of Public Employment Service Strengthening Infrastructure - Secure job centers’ own buildings and make them integrated - Make Instructions for Organization, Staffing, Budget, Appraisal, etc. (2007) - 1,400 contracted job counselors Public officials (2007) Improving the Quality of Services - Introduce individually customized employment services called Individual Action Plan (IAP) (2006) · Each job seeker’s abilities are examined through In-depth counseling · An employment service plan is established for a job seeker · Various services are provided at a certain stage Year200320042005200620072008 Job Center155118112858482

9. · The flow of Individual Action Plan ▪ Job referrals ▪ Accompany- ing job interviews ▪ Meetings of job applicants and offerers ▪ Job referrals ▪ Accompany- ing job interviews ▪ Meetings of job applicants and offerers Orientation Orientation ▪ Initial consulting ▪ Individually customized information ▪ Initial consulting ▪ Individually customized information ▪ In-depth consulting ▪ Type classification ▪ In-depth consulting ▪ Type classification Type A Type B Type C Draw up IAP ▪Achievement program, Job hope program, Employment programs for the aged ▪ Social service activities ▪Achievement program, Job hope program, Employment programs for the aged ▪ Social service activities ▪ Short-term special courses ▪ Vocational training ▪ Job camp ▪ Job experiences for vulnerable groups ▪ Short-term special courses ▪ Vocational training ▪ Job camp ▪ Job experiences for vulnerable groups Make job counselor education system: Employment service specialist programs at 3 universities Each Job Center equips its own programs for the youth, the aged, women, the long - term unemployed, etc.

10. The integration of employment information networks - Establish The Central Employment Information Office (2006) · Manages 9 labor market information systems such as Job information(work-net), Employment insurance, Vocational training, Foreign workers, Wage/Labor hour, Data warehouse system, etc. · Fulfills Employment information analysis, Job research, Career counseling material development, Employment service monitoring - Combine job opening information from both public and private employment portals · Work-net + Local Gov. + 3 major private portals (2011) · The number of average daily job openings in Work-Net increased 100,000 200,000

11. Strengthening schools’ employment service capacity - Assign an employment support official to each school - Help schools to make employment & business start-up service centers · 150 colleges, 50 vocational high schools (2010) Implementing locally customized employment policies - Organize Regional Employment Councils (2007) - Encourage Public announcement of job creation targets by region (2010) Flow of the public announcement of job creation targets · Build statistical infrastructure: Surveys are conducted periodically to find out the number of jobs by local government · The head of each local government announces a job creation target and employment plan during his term of office/ The MOEL provides support · Evaluate outcomes and give incentive * 181 local governments (out of 244) participate

12. · Local governance for employment To establish and implement local employment plans, and allocate budgets differently according to their outcomes ▣ Composition: Governor or mayor (chairperson), regional labor administrator (or chief director of district labor office), employer and employee representatives, specialists in employment issues, and relevant public officials ▣ Meeting: Once or more every quarter ▣ Function: Discuss how resources are distributed for local job creation and skills development and reviews major programs Regional Employment Council Structure of the local governance for employment Specialist Committee (local employment forum) Employment Council in basic local governments (chaired by heads of basic local governments) Regional Employment Council (chaired by Mayor or Governor) Working Committee (regional labor administrator or chief director of district labor office)

13. PES Roles Thousand Number of PES Users

14. Number of Placement & Placement Rate

15. 9th 6th 5th 4th 3rd 2nd 1st

21. Under - invested PES Infrastructure France Germany U.K.SpainJapanU.S.Korea PES6458301,5007666002,84182 Employees22,50087,22080,0008,49918,00070,0002,859 Population (000s)63,75082,25760,11444,630127,770307,82548,607 Economically Active Population 27,84341,77130,72022,19066,690153,12423,709 EAP/Employees1,2354793842,6103,7052,1878,293 PES Expenditures/ GDP(%) 0.240.270.370.130.140.03 When compared to advanced countries Korea’s PES infrastructure still falls behind in every aspect *Source : WAPES(World Association of Public Employment Service) Country Comparison of Public Employment Infrastructure (2008 )

22. Employment Service Development Trends Phase 1: The advent of employment service Phase 2: The ban on private employment service agencies & monopoly of public agencies Phase 3: Partial deregulation of the ban on establishing private employment service agencies, development of public employment service centers Phase 4: Division of roles and strong link between public and private agencies Now Korea needs to activate private employment services by relaxing regulations and fostering leading job placement agencies