Download Employment rate

Employment Service Reform Plan
in Korea
Presenter: Jung, Tai-Myun, Director of Employment
Policy Division
Ministry of Labor, ROK
Overview of the Presentation
1. Recent Trends in the Labor Market
2. Major Challenges and Policy Directions
3. Background of Employment Service Reform
4. Current Status and Challenges of Employment Service
5. Trends in Other Countries and Implications
6. Action Plan
7. Expected Outcome and Strategies
1. Recent Trends in the Labor Market
Overall capacity to create jobs has fallen due to the decrease in
the potential growth rate
Growth rate(%) : 8.7(80s)  6.3(90s)  5.4(’00~’04)
Employment coefficient(persons/100 million won)
: 5.64(’90)  4.37(’95)  3.66(’00)  3.34(’03)
1. Recent Trends in the Labor Market
Employment rate was 63.6% in 2004, still lower than the precrisis level (63.7% in 1997)
※ Employment rate (%)
: 63.7(’97)  59.6(’99)  63.3(’02)  63.6(’04)
The number of employed decreased in 2003(by 30,000) but rose by
420,000 in 2004.
Employment increased in manufacturing(84,000) and service(455,000),
while it decreased in agriculture, forestry and fishing (125,000)
1. Recent Trends in the Labor Market
Unemployment rate for 2004 was 3.5%(813,000 persons), while
the youth unemployment rate was 7.9%(391,000 persons)
Despite high youth unemployment, SMEs are experiencing labor
shortages (a job mismatch)
Labor shortages in SMEs (1,000 persons) : 67(’00)  139(’02)  168(’04)
Non-regular workers continue to rise in number
3.79 million (’02.8)  4.60 million (’03.8)  5.40 million (’04.8)
2. Major Challenges and Policy Directions
Government’s goal is to create 2 million jobs between 2004
and 2008.
To promote new growth engines, and enhance corporate employment
capacity through deregulation
To implement measures such as job creation in social services, job sharing
and filling vacancies in SMEs
2. Major Challenges and Policy Directions
The government also plans to advance employment services.
To reduce mismatch in labor supply and demand, provide customer-oriented
employment services, strengthen linkage between employment information
networks, and strengthen local employment networks
2. Major Challenges and Policy Directions
Innovating vocational ability development for lifelong learning
system
To expand vocational training opportunities for workers in SMEs and nonregular workers
To build a lifelong vocational training system to satisfy the needs of each
region and industry
2. Major Challenges and Policy Directions
Strengthening social safety net
To raise compliance rate of small firms and daily workers, and to design
measures to expand coverage of employment insurances for small selfemployed workers
To link unemployment benefits to employment support measures and to link
industrial accident compensation insurance to early return to work
To establish a 5-year plan to improve employment conditions of non-regular
workers
3. Background of Employment Service Reform
Minimize a job mismatch and skill mismatch by developing
and smoothly supplying human resources
Enhance support for employment security of the vulnerable
Address polarization of the labor market and improve flexibility and
stability
Expand labor market participation of untapped potential labor
4. Current Status and Challenges of
Employment Service
Current status
Established 9 employment networks
Public employment service centers (ESC) began to be created in earnest
from 1998 (118 employment security centers and local centers)
Private employment service agencies : 7,900 job placement agencies, etc.
4. Current Status and Challenges of
Employment Service
Challenges
Employment information infrastructure : quite advanced in terms of
quantity but weak in functions
Lack of function and link between public ESCs (market share of ESC is
less than 5%)
Private agencies are small and mostly for unskilled labor jobs
High college enrollment rate (81.3%) but insufficient employment service
at college
5. Trends in Other Countries and Implications
Development of employment service
Phase 1: advent of employment service
Phase 2: public monopoly of employment service
Phase 3: partial permission for private employment service
Phase 4: enhanced role of private employment service
5. Trends in Other Countries and Implications
Recent trends and implications
Building an integrated employment network
Enhancing the network of local employment organizations
Innovating and expanding public employment service
Strengthening public-private partnership in Korea along with the public
employment service reform that began in 1998
6. Action Plan
Employment information infrastructure
Establish an integrated labor market information system that connects 9
employment networks together
Build employment information analysis system to enhance production and
analysis of labor market information
Set up user-centered on-line information system
Expand expert agencies that integrate and manage employment information
infrastructure
6. Action Plan
Improve ESC capability
Introduce a ‘One-stop Individual Case Management’
System’ that covers from counseling to adjusting to workplace
Enhance service for companies: vocational training and labor supply for
firms with labor shortages
Provide localized employment service through local employment networks
centering around ESCs
Strengthen customer-centered service by improving expertise and
promoting a performance-based organization and operating system
6. Action Plan
Establish a municipal employment service system
Enhance employment service for the vulnerable linking employment with
welfare programs
Expand exclusive employment service systems of municipalities
Support employment-related localization projects through partnership
6. Action Plan
Private sector
Support the development of private employment service agencies through
deregulation, private entrustment, financial support, etc.
Enhance the role of universities through employment support compact
between universities and ESCs and strong university-company networks,
etc.
7. Expected Outcome and Strategies
Expected outcome
For individuals, better access to employment information and service that
meet individual demand
For firms, competitiveness improvement by efficiently obtaining human
resources
Nationally, efficient development and use of HR contribute to securing
sustainable growth engine
Strategies
Designate a pilot center for employment service reform to create and
diffuse success models
Promote active policy exchanges with international organizations and
advanced countries