2002 Annual Report

0. Introduction

In 2002 the Employment Service of Slovenia (ESS) again compiled its Annual Report, which is in essence an overview of the fulfilment of the ESS 2002 business plan as adopted by the Administrative Board. The ESS signed a Contract of Funding of ESS Operations and Programmes for 2002 with its home ministry, the Ministry of Labour, Family and Social Affairs.

In 2002 the ESS continued to perform the tasks laid down by law, with an important segment of tasks also being defined for the year by the Strategy of Labour Market Development Up To 2006, the Active Employment Policy Programme for 2002, and a number of other special documents. The basic law defining the powers and tasks of the ESS is the Employment and Insurance Against Unemployment Act (the Act), although there are several other laws closely related to the work of the ESS (Employment of Aliens Act, Training and Employment of Disabled Persons Act, etc.).

ESS activities are conditional upon the economic situation as it affects the labour market. In the 1990s the link between economic growth and unemployment was characterised by sharp increases in the latter during periods of recession or slow economic growth, with reductions in unemployment occurring after a delay of several years, i.e. once stable economic growth had already been achieved.

In 2002 basic expectations regarding labour market conditions of continued (albeit slower) economic growth were fulfilled, although the assessment and forecasts of basic macroeconomic aggregates by the Institute of Macroeconomic Analysis and Development (UMAR) for 2002 had to be slightly corrected during the year due to less favourable worldwide economic projections for 2002. Economic growth in Slovenia was subsequently lower (around 3%, with UMAR’s projection for the autumn standing at 3.2%).

In the sphere of employment, it was established that employment growth and reductions in unemployment slowed more than originally expected; this was the result of slower economic growth and only sluggish improvements in operating conditions. Companies adapted to the worsening economic situation by cutting costs (lower investment, lower wage growth, fewer new jobs, etc.) and by laying off workers and moving operations abroad. In view of the situation on the labour market, the ESS adapted the application of active employment policy and strove to improve the unfavourable unemployment structure, which only partly corresponded to the actual demand for labour. The transition of 10,887 redundant workers into open unemployment (24% more than in 2001, when 8,754 redundant workers became unemployed) needs to be mentioned here.

At the end of December 2002 there were 99,607 unemployed people registered with the ESS, which was again below the magic 100,000 mark.[1] On average, 102,635 unemployed people were registered with the ESS in 2002, which was a rise of 0.8% on the

year before. The number of newly unemployed people in 2002 was 87,380, which was a fall of 0.3% on 2001. By improving cooperation with employers, and despite the lower demand for labour and the unfavourable unemployment structure, the ESS succeeded in achieving better-than-planned job placement results, with 47,026 people finding employment in 2002. A total of 52,178 people left unemployment, of whom 5,152 found work on public works programmes.

The ESS was flexible in adapting to changes on the labour market, performing activities aimed at preserving its position as one of the most important players on the labour market. By adjusting to the regional specifics of the labour market, the ESS consolidated the role of regional and local offices. By introducing organisational changes, the ESS strengthened areas of work with the unemployed, employers and other users of its services. The ESS also successfully continued with its cost-control activities and the drive for cost-effective use of available resources; great attention was given to achieving greater transparency of operations. The application of the Quality Project, which is helping the ESS to improve its business processes and to adapt them to the expectations and demands of users, made a major contribution to this.

During the year the ESS actively collaborated with the Ministry of Labour, Family and Social Affairs on the drawing-up of active employment policy for the next year, and its cooperation with partners at the local and national levels can be described as fruitful. In 2002 the ESS continued to intensify its international ties, which are helping it to consolidate its profile among similar institutions in Europe and to prepare it for the new conditions on the labour market once Slovenia joins the EU.