The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Department of Labour is finding work for just 2 per cent of its registered job-seekers, a ratio that is exacerbating low workforce productivity and inequality in Bahamian society.

The Inter-American Development Bank (IDB), in a report on the planned $20 million initiative to overhaul the Bahamas’ job training and matching systems, said the Department of Labour’s ‘placement’ success rate was exceptionally low compared to the regional average.

While the Bahamas was able to find work for one out of every 50 registrants, the Latin American and Caribbean average for similar employment exchanges was a placement rate slightly greater than one in every four applicants.

The IDB report, lifting the veil on another issue impacting the Bahamas’ 30 per cent ‘youth unemployment’ rate, said the Department of Labour was catching job vacancies from only 12 per cent of listed Bahamian businesses.

It added that this ratio paled when compared to the 20-40 per cent of companies captured by European Employment Exchanges “at a similar stage of development”, and warned that these problems meant job opportunities were not going to the most qualified and ‘best matched’ Bahamians.

They were instead being seized by “the well connected”, resulting in lower workforce productivity and a society that was far from a meritocracy.

Calling for the Department of Labour’s Employment Exchange to “reach international best practices”, the IDB said the facility was currently well short of attaining them.

“Its limited capacity – in terms of personnel, soft and hard infrastructure, and articulation with the private sector – does not facilitate an adequate response to the demands of current and potential employers,” the report said.

“It also forces workers to search jobs through inefficient informal channels, which reinforces inequality of opportunities. Currently, the [Employment Exchange] capture vacancies of about 12 per cent of listed businesses, and places about 2 per cent of registered job-seekers.

“The strengthening of the [Employment Exchange] is thus critical in ensuring a labour intermediation system that facilitates better employment opportunities for everyone. Therefore, there is a need for institutional strengthening and modernisation of its services.”

Explaining the implications for the Bahamian workforce, economy and society, the IDB said: “In this scenario, job opportunities do not necessarily go to the better prepared or the ones that better match the vacancy, but to the well connected, lowering the quality of the matches worker-jobs, and with it, labour productivity.”

The Latin American and Caribbean job placement rate of 27.1 per cent includes the Bahamas, suggesting that other countries are even further ahead, because this nation’s 2 per cent will have dragged down the regional average.

Even Jamaica, with an 11 per cent job placement ‘success rate’, is achieving a ratio five times’ greater than the Bahamas, with one in 10 work seekers placed in positions. Barbados is even better placed, its 25.7 per cent being in line with the regional average.

“The Bahamas’ placement rate of 2 per cent compares to the Latin American and Caribbean regional average of 27.1 per cent, corresponding to an average of 2013 figures for Honduras, Jamaica, Peru, the Bahamas, Mexico, Brazil, Nicaragua, Barbados, Guatemala, Guyana, and Ecuador,” the IDB said.

When it came to the fact that the Department of Labour captures vacancies from just 12 per cent of companies, the report added: “This compares to 20% for 40% of public employment services in Europe that are in a similar stage of development as those of the Bahamas.

“The Department of Labour currently resides in a building that is not consistent with the 21st century public employment services environment that it envisions, whereby the unemployed can have access to high quality and well- targeted services that can help them find formal and productive job opportunities.”

The Government is moving to address this by moving the Ministry of Labour and National Insurance, and the Department to new premises.

However, the IDB report illustrates just how much work remains for the Bahamas to address its structural long-term unemployment problems, especially among young Bahamians aged between 15 to 24 years-old, where almost one in three cannot find work.

Taking the cue from Prime Minister Perry Christie’s call for more apprenticeship initiatives to train young Bahamian workers, between $6.4-$9.4 million of the IDB loan proceeds will be employed to design such a programme for 1,500 to 3,000 young Bahamians.

The report said the programme would provide 80 per cent “on-the-job” training, with just 20 per cent of the time spent in the classroom.

“This is targeted to the unemployed and school leavers between the ages of 16-29 years,” the IDB report said. “[It] will seek to fulfil two main objectives.

“Firstly, to increase the employability, and thus the probability of youth employment in three strategic sectors for the economy, and second, to promote formal and systematic feedback mechanisms between training providers and employers in these three sectors, so as to ensure the development of programmes that promote higher labour market productivity.”

The existing National Training Agency (NTA) will be used to deliver a pre-apprenticeship programme, involving literacy, numeracy and soft skills, while “employer-led skills councils” will also be created to develop training standards and courses.

The three industries targeted include tourism and financial services, with the final one set to be selected from construction, energy, logistics and information and communications technology (ICT).

A ‘matching grant facility’ is also intended to link the apprenticeship programme directly with the productive sectors in the Bahamian economy.

Elsewhere, between $8.3 million to $11.3 million of the IDB loan proceeds will be targeted at upgrading the Department of Labour’s employment exchange and job matching capabilities.

This will help “to provide targeted quality services to the unemployed (with special emphasis on youth services), and more closely engage with employers within a 21st century setting”, the IDB added.

“Currently, the Department of Labour is promoting the concept of one-stop- shops, where its clients receive centralised information about the array of services available to improve their prospects of employment.”

The final $1.5 million component will be used to boost the Department of Statistics’ ability to generate and analyse “labour market intelligence”.

“This operation will contribute to the reduction of unemployment by increasing and improving access to quality jobs,” the IDB report said.

“The programme will have the following specific objectives: Increase employability and productivity of programme beneficiaries; improve the effectiveness of public employment services; and enhance the capacity of the labour market’s intelligence and monitoring and evaluation systems.”