Manpower agency reform fails due to lack of boldness, interest

Public employment services in Greece seem to have missed the train of modernization and Greek working people the opportunity to acquire a credible such agency. The restructuring of the Manpower Organization (OAED), as implemented about a year ago, had failed in its purpose even before it began, and the agency’s politically appointed heads are not willing to clash with the entrenched interests and mentalities, or the intertwined ruling party and administrative mechanisms which have made OAED one of the most ineffective public departments. Instead of creating new opportunities for jobs, the agency seems bound to remain for a long time to come a field for the exercise of welfare policy through programs which, despite their high cost, have failed to demonstrate a positive impact on employment. Resistance to change The restructuring scheme attempted to separate from OAED’s main, battered body the functions that required more modern approaches to the problems of the Greek labor market by creating three subsidiaries for the sectors of employment, training and research. OAED staff never looked on the changes favorably, and effectively undermined the staffing of the most important of the three companies, the one that would be responsible for the employment promotion centers (KEP). This subsidiary was supposed to be the heart of the restructuring as it aimed at the «individualized approach» toward the unemployed. Today, the company, which only has a formal existence, is on the verge of being shut down and local KEPs will come under a special department of the agency, to be personally supervised by its head. The question being raised is what answers the Labor Ministry will provide during the interim inspection by EU authorities next year, when the restructuring scheme is due for completion. Lack of boldness The failure of the scheme is primarily due to the fact that it was not as bold as it should have been. The new company was only nominally independent, without its own resources and specialized staff. One may recall the Federation of Greek Industries’ (SEV) deputy chairman Nikos Analytis, who, testifying before a parliamentary committee, had predicted that the new companies were nothing but clones of the old OAED, and insisted on making them truly independent. The government, backing down under pressure from the trade union and party establishment, and shying away from creating a truly new structure, adopted the compromise solution of setting up a new agency with staff transferred from OAED’s main body. «Staff took an unfavorable view of the new companies, expressing unjustifiable fears,» says OAED’s governor, Giorgos Nikolaou, noting that the «situation might have been different» had there been a willingness among staff to move to the new company. Ultimately, for the 250 positions only 40 applications were submitted and the labor consultants hired for the individualized approach were considered a luxury and staffed KEP information desks, which continued to perform all other OAED functions. At the same time, it was found that the necessary preparatory work had not been done to make it possible to distinguish between the truly unemployed and those registered as such, those that really needed help and the programs that could give that help. «Given the unwillingness of existing staff to join, a large number of new staff was needed. But these would have had to be trained to operate the programs already under way,» notes Nikolaou. Overall, OAED’s performance is quite disappointing. According to a European Commission study evaluating the programs implemented in the 1998-2001 period, 142,000 jobs were subsidized, of which 78,000 were new positions and 50,000 for the newly self-employed. In the same period, 180,000 unemployed people received further training. Nevertheless, according to Eurostat, the EU’s official statistical service, total employment fell by 46,000 jobs while unemployment also fell by 36,000, probably showing that a large number of the registered unemployed ultimately gave up looking for work and took their names off the lists. Credibility problem It seems that the agency has a big credibility problem, plagued by organizational and administrative problems and the «stigma» (justifiable or not) of favoritism. Even after the improvement of the image of KEPs, the service remains problematic and personal interest in jobless people’s requirements is lacking. The situation has been made worse as OAED has occasionally been burdened with additional tasks, such as the legalization of immigrants, when its human and technical resources seem tired and outdated. As a result, OAED has a much worse record in attracting the unemployed and making work placements than most other corresponding European organizations. According to a study conducted by the Labor Institute of the General Confederation of Greek Labor (GSEE) in the 1999-2001 period within the framework of the European program TSER, only 6 percent of the newly unemployed found work through OAED. By far the largest number (73 percent) consider family connections and friends the basic sources for finding work. The same conclusion was reached by Metron Analysis in a sample survey in the largest cities, ordered by OAED itself. It showed that only 14.4 percent of all unemployed people found work through the agency, and only 9.2 percent of formerly unemployed workers retrained by OAED found work again through the agency. About half (49.3 percent) were re-employed through friends and family, 21.5 percent through newspaper ads and 13.8 percent through public sector hiring announcements.