WHAT PUBLIC-PRIVATE PARTNERSHIPS AND HR CAN DO TO HELP LABOR

1호 (2008년 1월)

A version of this article was originally published by IESE Insight(http://insight.iese.edu)

Looking for work? In Japan you can scan the vacancies via your mobile phone or head to your nearest Job Cafe. These are among the services offered by "Hello Work" -- an initiative in which Japan's public-sector employment office network is supplemented by private-sector services. Under pressure to innovate and improve further, Japan is now seeking bids from potential private-sector providers of job introduction services. This is just one example of Japan's growing use of the private sector to help deliver a broad range of public services.
 
These days, it's fairly routine to see the private sector contracted to deliver services once traditionally provided directly by the state. That's particularly the case with health care and infrastructure such as public transport. But for employment, vocational training and so on?
 
Employers are demanding greater flexibility of their labor force; at the same time, workers need job security and a stable source of income. In balancing both these demands, a new paper from IESE's International Research Center on Organizations (IRCO) and the Foundation for Applied Economic Research (FEDEA) turns to public-private partnerships (PPPs) and finds they yield untapped potential to provide the best of both worlds.
 
The authors -- Jose Ramon Pin and Angela Gallifa of IESE-IRCO and Alfonso Arellano, Florentino Felgueroso, Pablo Vazquez and Enrique Gonzalez of FEDEA -- studied labor market PPPs in various countries. In doing so they discovered some common factors for their success, and they suggest how the HR sector should respond to the changing business landscape.
 
Forget the traditional notion of a job for life. In the context of globalization, firms demand more flexible staff structures so they can react faster and more effectively to market opportunities and competitors' threats. Consequently, modern employees are being told to think more in terms of lifelong employment, but with ongoing retraining and a fair social security safety net.
 
"Flexicurity" is now an umbrella term for recent attempts by the European Commission to promote both more flexible labor markets -- thereby maintaining and improving competitiveness -- and a high level of employment and income security.
 
The authors say PPPs are just the ticket for the kind of service innovation necessary if flexicurity is going to bend with the winds of change.
 
The paper looks at how PPPs have achieved positive results in the labor sectors of the United Kingdom, Germany, Japan, Australia, Spain, the Netherlands and the United States.
 
In Australia, for instance, public employment services were outsourced under a process that started in 1998. A national network of private and community organizations now helps unemployed Australians find jobs.
 
In Japan, the government and private sector are also working together in the provision of skills training for the SME sector. The government provides the facilities and training equipment for community-based vocational training centers, and the private sector provides the training according to local business needs.
 
Drawing on these beneficial experiences as well as relevant literature, the authors set out some common factors for successful implementation of PPPs in relation to the labor market. Among these are:
-- guarantee of the quantity, quality and duration of the resources necessary for the particular PPP project.
-- full and publicly declared support and commitment from the procuring government.
-- clearly defined and universally agreed objectives and means of evaluation.
-- performance monitoring, to ensure partners honor their responsibilities.
-- openness to experimentation with new ways of working in partnership, to keep striving to meet society's changing needs.
 
In looking to the future, the authors also address how the HR sector should respond to globalization and the resulting push for flexicurity.
 
"Personalization -- the provision of services in a way in which users want to receive them, as opposed to the way service providers want to deliver them -- must be a leitmotif of any service provided by the HR industry," they say.
 
Specifically, they recommend the following:
-- Focus on matching demand and supply of skills, not on matching workers with jobs. Accordingly, labor market training should be planned and carried out in close cooperation with recruiter companies.
-- Do more to help small and medium firms adapt to the challenges of globalization. Big firms have high capacity for rapid change and innovation, and they have been helped by the HR sector already. Now it is the SMEs' turn.
-- Propose initiatives to the public sector that target specific groups of workers -- minorities and unskilled laborers, for instance -- whose transition into employment could be improved.
-- Provide placement services for specific groups of workers trying to enter the labor market, including increasing the participation rate of women and young people. Also, prevent unnecessary early retirement of older workers, particularly in areas where the work force is aging.
-- Help educate employers about the benefits of a diverse work force. This is important for promoting job and training opportunities for disadvantaged groups of workers.
-- Approach projects in a spirit of partnership. Any successful outcome is best achieved by authorities and the HR sector balancing contractual and relationship issues together. This overall objective -- commonly found in PPP management -- should be translated into practice by balancing flexicurity and personalized objectives, to achieve better value and mutually successful outcomes.
-- Take into account ongoing changes concerning specification of responsibilities, new services or performance measurement. Appropriate procedures for dealing with change should be built into the PPP management process. This includes procedures to ensure value in job promotion is achieved and training opportunities are maintained when changes occur.
-- Have staff with the right skills. Early attention needs to be given to staffing and training HR professionals, who must be qualified to coordinate and manage ongoing issues, and also to how the relationship between the authorities and the HR agency will be developed.
 
Quoting the political economist and philosopher Adam Smith, the authors essentially wish the HR industry might be transformed into "an invisible hand to promote an end which was no part of (workers' or employers') intention."
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