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Artificial Intelligence (AI) is the practice of making machines exhibit human-like, mostly cognitive intelligence to perform tasks like prediction, classification, and the identification and exploitation of relevant trends and patterns. This is typically achieved through a broad range of techniques, including automated reasoning and logic, inference, and machine learning.

In Part 1 of this blog, we will explore what are the opportunities for Public Employment Services (PES) related to the use of AI. As the adoption of AI has been rapidly growing in multiple industries, PES across the world are also utilizing AI technologies to further enhance their services and operations to their customer segments, jobseekers, and employers. In this phase of digitalization in advancing their Labor Market Information System (LMIS), PES have been exploring, experimenting, and experiencing AI-powered tools combined with advanced analytics to provide an efficient and effective framework to improve their service deliveries to their customers. 

This phase of digitalization is crucial for PES to find the sweet spot on how to develop AI appropriately to result in sustainable practices. AI presents numerous opportunities for PES resulting from the self-learning nature of AI systems and the possibility to better target PES services, however, the use of AI also poses several risks for PES as there are growing concerns about the ethical use of AI, the risk of bias, and the need to foster transparency and explainability of the AI results. Therefore, any PES utilizing and/or planning to develop such tools should view this holistically to capture all the potential benefits while proactively addressing and mitigating any associated risks in using AI. 

Opportunities for PES in adopting AI

According to a paper from OECD published in June 2024, the OECD together with the PES in each country member, concludes that AI has the potential to provide opportunities and benefits for PES in aiding their goal to connect jobseekers with jobs. These potential benefits include: 

Self-improving and dynamic PES system and tools 

Some types of AI systems have the ability to self-learn. In the Public Employment domain, such application with self-learning presents various advantages including the ability to improve their performance over time as they encounter various situations and data. Tools such as AI-powered chatbots have been utilized by PES to interact with larger volumes of users. Continuous learning and improvement can be integrated into AI systems by incorporating feedback that mimics the learning process of the human brain and iteratively adjusting the results as needed. Thus, AI systems are equipped to operate in such a dynamic environment and can be employed efficiently as they can identify and flexibly respond to changes in real-time. 

Enabling a more personalized and inclusive digital PES service 

As public services’ stakeholders are progressively demanding more responsive and personalized services, AI can allow PES to tailor their offerings to meet both user and individual client needs, especially when provided through online and digital self-service channels. AI-enabled digital platforms achieve this by using information input by clients alongside their usage history and patterns to tailor content and offerings to their individual needs, thus, resulting in a more efficient client experience for users of PES service. 

Aiding the targeting of PES services and measures 

To provide effective services to its customers, PES must understand their customer’s individual needs. One specific example that has been a challenge for PES is to understand the needs of those vulnerable groups that are facing barriers to employment. AI tools can assist in these activities, facilitating more advanced analysis of data to enhance the understanding of the different segments of jobseekers and their associated needs. For many PES, the first key step before providing counselling and assessment to its clients is to segment their jobseeker profiles into groups of people with similar labor market challenges. Profiling tools allow PES’s caseworker to identify both jobseekers who need limited assistance and those who require more intensive support. The result of these tools helps the PES and caseworkers to efficiently target Active Labor Market Policies (ALMPs). Furthermore, as AI allows more data-driven and systematic assessment, it improves the personalized recommendation for each individual and potentially improves fairness and avoids bias and discrimination. 

Enabling PES to make better use of available data

The opportunities in AI are also enabling PES to manage, process, and use data more efficiently. With vast amounts of data, AI enables real-time analytics allowing for agile decision-making for PES. As AI can analyze a wider range of data such as unstructured data and big data, this capability broadens the analytical horizon for PES and presents opportunities for PES to improve data management, which considers labor-intensive tasks, across the areas of data classification and quality. AI-powered analysis can help PES gain deeper insights into understanding their customers’ experience, both jobseekers and employers, within their services. By enabling PES to make better use of data, AI can increase efficiency by conducting analysis more frequently and on larger customer samples and it can lead to transforming PES in assessing and evaluating their measures and services provided. PES have also been experimenting with the potential uses of AI in producing predictive analysis to foresee events or trends that are made based on historical data. OECD mentioned that predictive analysis can be applied to some use cases, such as to profiling exercises (predicting a jobseeker’s likelihood of becoming long-term unemployed), targeting individual jobseekers on what measures will work best for their needs, and in job-matching, to predict successful matches between a jobseeker and a vacancy. At the strategic level, predictive AI has the potential to assist PES to be more agile and proactive in its decision-making and planning to align its service offered that take into account the needs of its customers and also, the labor market conditions. 

Boosting the administrative capacity and efficient use of resources 

Applications of AI within the public employment domain present the potential for more efficient and effective use of PES resources, including its human resources capacity. As AI powered tools can take over administratively heavy or repetitive tasks, PES can allocate its human resource capacity to focus more on those jobseekers who need extra assistance in the labor market, e.g., vulnerable groups, Not in Education, Employment, or Training (NEETs). As AI solutions have the potential to help caseworkers with time-intensive and tedious administrative tasks and might reduce the potential for errors, caseworkers can focus their time on more important and high-value work that cannot be delegated to AI or any form of technology. This collaboration between AI tools and caseworkers has the potential to yield numerous benefits including staff empowerment and increased productivity. 

Read Part 2 of this blog, where we explore what are the risks and challenges that PES can encounter in utilizing AI.