Public Employment Services Face Growing Pressure, New Report Finds

Researchers found that only 38 per cent of countries currently offer a complete package of public employment services that combines income support with active labour market programmes.

Public Employment Services (PES) are playing an increasingly important role in helping workers and businesses navigate economic uncertainty, yet many countries still struggle to provide the full range of support needed to build resilient labor markets, according to a new international report.

The World of Public Employment Services 2026 report, produced by the Inter-American Development Bank (IDB), the Organisation for Economic Co-operation and Development (OECD), and the World Association of Public Employment Services (WAPES), examined employment systems across nearly 80 countries.

Researchers found that only 38 per cent of countries currently offer a complete package of public employment services that combines income support with active labour market programmes. The finding highlights a significant gap between the responsibilities assigned to employment agencies and the resources available to deliver those services effectively. The report calls for stronger investment in employment systems that can respond quickly to economic disruptions while helping workers secure long-term opportunities.

Digital progress continues but adoption remains uneven

Employment agencies have expanded their digital capabilities in recent years, making it easier for jobseekers and employers to access services online. Despite this progress, the report shows that many organizations are still at an early stage of digital transformation.

Around 40 per cent of employment services have developed formal data strategies, though only 31 per cent actively measure progress through performance indicators. Experts say stronger use of data could help agencies improve decision-making, target resources more effectively and deliver better outcomes for jobseekers.

Emerging technologies such as generative artificial intelligence are also beginning to attract attention within the sector. Yet adoption remains limited, with only 4 per cent of public employment services currently using AI-powered tools such as chatbots to support clients.

The report suggests that wider use of technology could help employment agencies manage growing demand while improving access to services for people living in remote areas or facing barriers to employment.

International mobility and partnerships becoming more important

Public employment services are increasingly involved in labour mobility programmes as countries look to connect workers with opportunities across borders. Around 74 per cent of agencies now provide support related to migration planning, international employment or migrant integration, marking a substantial increase compared with a decade ago.

Researchers say stronger international cooperation, improved data sharing and closer collaboration with private recruitment agencies will be needed as labour mobility continues to expand.

The report also highlights the growing contribution of organisations operating within the Social and Solidarity Economy, including social enterprises and cooperatives. These groups are helping employment agencies reach disadvantaged communities, strengthen links with employers and expand access to training programmes.

Nearly half of employment services reported working with such organisations to provide job placement assistance, while almost 70 per cent rely on them for training delivery. The findings suggest that partnerships are becoming an increasingly important tool for extending employment support to people who may otherwise struggle to access labour market opportunities.

According to the report, stronger collaboration, improved digital capacity and more inclusive services will be essential as employment agencies face a future marked by economic shocks, technological change and shifting workforce demands.