Policy Instrument:
Definition
Placement services are employment support services that match jobseekers to suitable vacancies by assessing profiles and skills, identifying openings, and facilitating recruitment through referral, shortlisting, and follow-up with employers.
Rationale
In today's labour market, job placement/intermediation services are key to strengthening national economies - connecting job seekers with employers, improving employability and job retention, and supporting enterprises. As technological advancements and multiple crises reshape labour markets, job placement/intermediation services help individuals and businesses alike to effectively cope with, and build resilience for, labour market disruptions. From providing support to workers when they lose their jobs or navigate career transitions, to assisting employers in recruiting talent and reskilling staff, effective placement services help advance equal access to job opportunities and are at the very foundation of efficient, inclusive, and well-functioning labour markets.
Key interventions
What placement/intermediation services can include:
- Outreach and registration of jobseekers, including verification of identity/eligibility where relevant
- Initial assessment and profiling to understand skills, work history, constraints and support needs
- Career guidance and job-search assistance (CV support, interview preparation, job-search plans)
- Vacancy intake and employer services (employer outreach, vacancy posting, job description support, screening criteria)
- Matching and referrals (shortlisting candidates, arranging interviews, referrals to employers and/or job fairs)
- Facilitation of work-based learning placements (internships, apprenticeships, traineeships)
- Referral to complementary services and supports (childcare, transport, psychosocial support, language training, disability support)
- Post-placement follow-up to support retention and address early job challenges (e.g., check-ins at 1–3 months).
Employment services are the institutions that deliver placement/intermediation and other active labour market policies (ALMPs). Public Employment Services (PES) are government bodies (or contracted providers under government oversight) that register jobseekers and vacancies, provide counselling and referrals, and coordinate active and passive labour market measures. PES often work alongside private employment agencies, NGOs, training providers and employers.
Strong placement/intermediation services require clear service standards, staff capacity for profiling and case management, proactive employer engagement and vacancy intake, and data systems to track results (referrals, placements and retention). With a strong gender focus, these services should prioritize youth and older workers as well as groups facing multiple barriers, including persons with disabilities, migrants, and forcibly displaced people.
Placement/intermediation sits within a broader ALMP package, alongside labour market trainings, entrepreneurship/self-employment support, employment subsidies and public works programmes. Clear coordination between these measures helps ensure that clients are referred to the right support and matched to suitable opportunities.
Population groups affected by job displacement, unemployment, and inactivity. They target especially the youth and older workers, including disadvantaged groups such as the disabled, migrants and forcibly displaced persons while also paying particular attention to include women from these groups in the labour market.
Overview
Meta analyses (Card, Kluve & Weber, 2015) indicate that placement/intermediation services - such as job-search assistance, can improve employment outcomes, especially for disadvantaged jobseekers. Evidence from country-level studies (Colombia, Ethiopia and Brazil) suggests that public employment services can improve matching and employment outcomes by strengthening vacancy information and referrals/placements, with stronger gains for disadvantaged jobseekers.
Country evidence:
Colombia: Using household survey from 2008–2014, Pignatti (2016) evaluates the Public Employment Service (APE) comparing 5,809 PES-placed workers to a large pool of controls (779,626) who found jobs via other channels. PES placement increases the likelihood of being in a formal (vs informal) job by +9 percentage points (pp) (vs classified ads), +5 pp (vs direct employer contact), and +31 pp (vs relatives/friends). About two-thirds of the formality gain is explained by PES placements into larger firms, and the positive formality effects are much stronger for face-to-face matches than for online-only matches.
Ethiopia: Witte et al. (2025) evaluate a government PES upgrade in Addis Ababa that provided up-to-date vacancy information through local employment offices. The study uses a cluster randomized trial: some districts received weekly vacancy booklets for 14 weeks plus an awareness campaign, while control districts continued with status-quo services. Impacts are concentrated among lower-skill women: in comparison to lower-skill women in control districts, they submit >50% more applications and receive 33% more job offers, increase paid employment by +5.4 pp, and raise earned income by +22.1%, alongside changes in expectations and search behavior.
Brazil: O’Leary et al. (2019) use linked administrative data for 2012–2016 to evaluate job-interview referrals through Brazil’s Public Employment Service (SINE). They note SINE’s overall placement rate is about 12% over the period (about 3.28 million placements from 27.21 million referrals). Using monthly propensity-score matching with difference-in-differences, they estimate that receiving a SINE referral increases the probability of formal employment within three months by 19.7 percentage points and reduces time until reemployment by ~0.9 months - illustrating the potential gains from scalable vacancy intake, referral, and follow-up systems when paired with strong data infrastructure and employer engagement.
References
Card, D., Kluve, J., & Weber, A. (2015). What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations. IZA Discussion Paper No. 9236 (July 2015). Available at: https://ftp.iza.org/dp9236.pdf
O’Leary, C. J., Cravo, T. A., Sierra, A. C., & Justino, L. (2019). The Effect of Job Referrals on Labor Market Outcomes in Brazil. IDB Working Paper Series No. IDB-WP-948. Available at: https://publications.iadb.org/en/effect-job-referrals-labor-market-outcomes-brazil
Pignatti M., C. (2016). Do Public Employment Services Improve Employment Outcomes? Evidence from Colombia. ILO Working Paper. Available at: https://www.ilo.org/publications/do-public-employment-services-improve-employment-outcomes-evidence-colombia
Witte, M. J., Roth, J., Hardy, M., & Meyer, C. J. (2025). Reaching Marginalized Job Seekers Through Public Employment Services: Experimental Evidence from Ethiopia. IZA Discussion Paper No. 18005. Available at: https://ideas.repec.org/p/iza/izadps/dp18005.html
There is solid empirical evidence of the positive effects of ALMPs, though this evidence also shows that their effectiveness depends on their design, duration, and delivery mechanisms. Specifically, on there being sufficient institutional capacity and resources, on ensuring the participation of vulnerable groups and on strengthening the attachment of participants to the activation measures. ALMPs are likely to have a greater impact on labour market outcomes when implemented as a package, in combination not only with income support but also with other activation measures, such as counselling and training, depending on the observed barriers and aspirations of the individual. For certain individuals ALMPs can provide access to employment while also reducing family dependency and/or dependency on social security schemes. The institutional set-up of ALMPs is a key enabler for effective responses.
A major challenge on the labour markets today is the one of mismatch, including the need to transition from the informal to the formal economy. Inactive people, long-term unemployed and/or persons within vulnerable groups need specialized support, which has increased the need for PES and other support organizations to collaborate. Increased capacity demands, enhanced customer expectations from an expanding client base, and better connectivity between stakeholders are increasing the importance of governmental agencies developing and participating in partnerships. This is also driven on by the megatrends of technology, climate change, demographic shifts, and globalization with sometimes persisting lack of labour force and skills in an expanding number of countries.
Social security systems play a key role in reducing income security. In efforts in reducing the impacts of crises, effective governmental policies would include to encourage people to invest in skills development to improve their job prospects, particularly for people in occupations facing structural change. Governments should accompany this with financial support (social protection) to people experiencing financial hardship or unemployment. It’s important for benefit systems to provide adequate and accessible support (timely), while maintaining incentives for people to return/enter in to work/the labour market. This balance needs to be weighed in when making policy priorities within ALMPs and in the coordination and information exchanges between labour market policies and social security policies.
The ILO's Employment Service Convention, 1948 (No. 88) calls on governments to maintain a free nationwide public employment service, promoting a human-centred approach based on decent work principles and by standing for inclusiveness in the labour market.
To support optimally functioning labour markets, and to help prevent abusive and exploitative practices in labour recruiting, the ILO encourages Member States to ratify and implement the Private Employment Agencies Convention, 1997 (No. 181). Private employment agencies can offer critical support to employers and workers in adapting to economic crises and changes, assisting them in redeploying resources and navigating job transitions.
SDG 5 - Gender equality
- Target 5.4 - Recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies and the promotion of shared responsibility within the household and the family as nationally appropriated.
SDG 8 - Decent work and economic growth
- Target 8.3 - Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
- Target 8.5 - By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
- Target 8.6 - By 2020, substantially reduce the proportion of youth not in employment, education or training.
SDG 10 - Reducing inequalities
- Target 10.4 - Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality.