The processes by which people get back into work (Arbeitsförderung) are managed by the German Federal Employment Agency (Bundesagentur für Arbeit, ‘BA’) and its local employment agencies (Agenturen für Arbeit). Their main tasks are: vocational guidance and orientation; advice on the job market in general; job and traineeship placement; improving people’s chances on the job market; income replacement benefits; and guidance for employers.
Job Placement and Counselling
Along with administering benefit payments, the BA’s core function is to support job-seekers to find work through activation. Activation measures include: profiling a client’s skills and identifying their barriers to work; agreeing a plan for helping the client to get back into work; conducting job searches; arranging job interviews; and providing motivational support. When necessary, targeted action is also provided, such as placement into labour market programmes or commissioning specialist support (for example, health-related or psychological counselling and debt advice).
As with most active labour market policies, the agreement between the BA and job-seeker is based on reciprocity: in return for the financial and advisory support the state offers, the client is required to actively look for and to take the necessary steps back into work. Further, it is the obligation of placement officers to monitor jobseekers’ activities and to impose sanctions in cases of misconduct or a lack of cooperation. This agreement, or contract, is drawn up as an “Integration Agreement” which a client agrees to when he or she applies for unemployment benefit. It sets out what the BA will provide, and, in return, what actions the job-seeker will take to look for work.
As in other European countries, the evidence from Germany suggests that the costs of employing placement staff are outweighed by the benefits provided to the job-seeker and taxpayer: placement advice results in faster integration back into the labour market. However, there is also evidence that claimants with severe and multiple problems could benefit from more intensive counselling.
Benefit sanctions are one of the more contested elements in modern “welfare-to-work” systems. In Germany, those job-seekers in receipt of non-means-tested unemployment insurance who fail to comply with the job-search requirements set out in their Integration Agreement can be sanctioned at a rate of 100 per cent for a period of two to three weeks (depending on what they have failed to do); or longer in the case of repeated failures to comply. Those claimants receiving means-tested unemployment benefits (SGB II) can be sanctioned at a rate of 10 to 100 per cent of their benefit, usually for three months. Furthermore, a “total sanction” may be imposed on job-seekers under the age of 25 in the case of repeated non-compliance.
Evidence suggests that the use of sanctions improves integration rates and speeds up placement processes. Sanctions should, however, only be used as a measure of last resort, as they may have negative impacts on vulnerable job-seekers and household dependants.
Innovations in job counselling
In the German Federal Employment Agency, placement services and job counselling are centrally regulated by a four-phase model (“4PM”): ‘profiling’, ‘goal-setting’, ‘selection of strategy’, and ‘strategy implementation’. In 2009, 4PM was supplemented by the advisory concept “Beko” (Beratungskonzeption) which sets out methods, techniques and so-called “standard sequences” which structure the counselling process. The purpose of Beko is to allow for a flexible, client-oriented service. Evidence suggests that Beko allows for more discretionary freedom, enhance participation between the client and advisory officer, and strengthen the role of clients in managing their transition back to work.
Measures to promote vocational training
Supporting jobseekers to take up further vocational training (Förderung beruflicher Weiterbildung, FbW) is one of the BA’s key active labour market policies, both in terms of numbers of participants, and in terms of the funds invested. However the number of persons participating varies greatly over the course of time.
Almost all recent scientific impact analyses show that further vocational training improves the chances of the unemployed on the German labour market.
Fairly short qualification measures lead to quicker reintegration into the labour market with lower costs. Having said that, the highest and most sustainable reintegration effects are observed as coming from long-term training measures for low-skilled workers, which result in a recognized educational qualification.
For female participants, measures aimed at the attainment of a recognised educational qualification raise the likelihood of employment by more than 20 percentage points. For men, the effects are somewhat lower.
Young adults and further training
At present, there are about 1.3 million young adults aged 25 to 34 years living in Germany whose maximum qualification is an intermediate school-leaving certificate (Mittlere Reife) and who do not have vocational training (persons with formally low skills). An intermediate school-leaving certificate, or Mittlere Reife, is awarded when pupils have completed the first stage of secondary schooling (e.g. at the age of 16).
Even during periods when the labour market is strong, this group is particularly vulnerable to unemployment and welfare dependency. Despite this, only one in seven formally low-skilled people over the age of 25 have made up for a lack of school-leaving qualifications by obtaining a vocational qualification in work.
Vocational preparation courses
The subsidizing of vocational training represents an essential part of the BA’s assistance measures for (disadvantaged) young people. In particular, preparatory pre-training measures (Berufsvorbereitende Bildungsmassnahmen) for young people with learning difficulties and for socially disadvantaged young people have been a component of the subsidy policy of the BA for many years. In the wake of strong demographic changes and an easing of demand for training positions, the number of participants has decreased distinctly over the last years. While, for instance, roughly 120,000 young people still entered a BvB measure in 2006/2007, in 2012/2013 this figure was only about 61,000.
Overall, findings show that participation in a BvB measure clearly increases participants’ chances of transition into in-firm training. On the other hand, the high proportion of people dropping out of such measures shows that a not insubstantial proportion of these young people require further assistance even after the BvB measure has finished.
Structural Change Support Initiative
Further vocational training has been a well-established measure of active labour market policy in Germany for many decades. It encompasses a range of different types, which can be broadly classified into short qualification programmes providing professional and practical skills; and long retraining programmes generally lasting up to 2 years, which aim to provide a certified vocational training degree.
The Structural Change Support Initiative (Initiative zur Flankierung des Strukturwandels, IFlaS), is one of a range of ‘special BA training programmes’ (Sonderprogramme) available to employment advisors. This initiative is targeted at jobseekers who do not hold a vocational degree, and aims to give candidates a “second chance” on the labour market. This is intended to cushion the threat of skills shortages within specific regions, qualifications, or occupations. To this purpose, jobseekers are encouraged to participate in measures which will result in the attainment of a formal qualification.
Research on IFlaS shows that the initative is seen by BA employment advisors as an overall positive and useful measure. It is viewed as helping to support low-skilled unemployed; developing a skills base in the region, and seeking to meet the needs of local employers.
Further training of low-skilled jobseekers and older workers in enterprises
Though the special programme “Further training of low-skilled jobseekers and older workers in enterprises (Förderung der Weiterbildung Geringqualifizierter und beschäftigter älterer Arbeitnehmer in Unternehmen,WeGebAU), the BA is subsidizing the further vocational training of low-skilled unemployed people as well as of older workers who are employed in small and medium-sized enterprises. The aim is to boost participants’ qualifications and thus their future employability. The programme’s aim is also to keep older employees in gainful employment for a longer period of time. Furthermore, the intention is to raise the involvement of small and medium-sized enterprises in further training.
Improving the language skills of migrants
Knowledge of the German language along with recognition of vocational qualifications gained abroad are the most important factors determining the successful labour market integration of migrants.
The employment chances for a person with very good knowledge of the German language are 15 percentage points higher than the employment chances of a person with poor or no knowledge of German. Furthermore, the likelihood of a migrant who speaks very good German having a job commensurate with his/her qualifications is 20 percentage points higher than for those with poor German skills. In addition, his/her wages rise by 22 per cent.
Economists and linguists generally agree that language is not learnt via compulsory measures but through incentives. For this reason it is primarily a question of lowering both the costs of, as well as inhibitions against, language acquisition through good-quality offers of support.
Supported Employment (‘Social Labour Market’)
Supported employment (also referred to in Germany as the ‘social labour market’) is a concept that can be defined as employment subsidized over a long period of time for the long-term unemployed, whose barriers to entering regular employment are very high. Such schemes are intended to improve the social participation of this vulnerable group. In selecting a target group, it is crucial to apply strict eligibility criteria: these may include barriers to work such as poor health, age, psychological or social problems, or a lack of a vocational training.
The demands of the supported employment should be adapted to fit the individual abilities of participants, in particular to avoid perverse incentives such as ‘creaming’ more able participants into the available positions – thus undercutting the whole purpose of the measure. In addition, it may be necessary to offer medical, psychological or socio-pedagogical support alongside the placement.
Participants in subsidized employment programmes generally display higher levels of commitment when participation is voluntary and the placement is as similar to regular employment as possible. As such, working hours of between three and six hours a day should be offered where possible. If this is ensured, subsidized employment can boost a sense of social inclusion in participants. Furthermore, in order to develop the competencies and employability of participants, additional support should be offered alongside the supported placement, with the aim of ultimately leading to regular employment.
In order to reach its goals of increased social inclusion and improved employment prospects for severely disadvantaged individuals, supported employment should be stable, and as similar to a regular employment relationship as possible. Supported jobs do not, however, need to run indefinitely. Instead, the support should be divided into fairly long stages, at the end of which a participant’s attachment to the programme should be reviewed. It may, for example, be appropriate for the individual to receive further training, move into regular employment at this stage, or to stay in subsidized employment for a further period.