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2016 Annual report Volume I No. 34 – Providing more thorough placement advice is inefficient

The Federal Employment Agency deployed additional staff for better supporting certain customer groups without providing evidence of added value of this additional staff deployment. It was unable to cover the respective expenditure by savings in unemployment benefit and additional contribution revenues as planned.
Nov 15, 2016

The Federal Employment Agency deploys additional job placement staff for better supporting certain job seekers. The target group includes persons who return to the labour market after a longer period of absence or who did not apply for a job for a long time. The Agency expects better service to help integrate more job seekers into the labour market. As a result, it intends to save unemployment benefits and receive additional contributions for unemployment insurance thus offsetting additional expenditure incurred.

However, the Agency failed to achieve the expected effects. Additional expenditure is not matched by the savings made. The Agency’s calculations reveal methodological flaws and do not provide evidence for the efficiency of the additional staff deployment, e.g. they did not take into account a part of the personnel costs incurred due to the enhanced support service offered.

We calculated a deficit of €33 million for 2014. We hold that deploying additional agency staff is inefficient. We asked the Agency not to assign additional staff to this service task if it is unable to ensure that costs will be matched by an equivalent amount of savings in the long run.

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