Giving people better opportunities to participate in the labour market is a key policy objective in all OECD and EU countries. More and better employment increases disposable income, strengthens economic growth and improves well-being. Well-tailored labour market and social protection policies are a key factor in promoting the creation of high-quality jobs and increasing activity rates. Such policies need to address pressing structural challenges, such as rapid population ageing and evolving skill needs, driven by digitalisation and the green transition. They should also foster social inclusion and mobilise all of society. In addition, labour markets have been buffeted by temporary crises like the COVID‑19 pandemic and the cost-of-living crisis brought about by Russia’s war of aggression against Ukraine.

The State Employment Agency (SEA), Latvia’s public employment service, plays a crucial role in connecting people with jobs, but tight budget constraints make efficiency a priority. Many public employment services in OECD and EU countries are increasingly harnessing digitalisation to meet the needs of their clients better and more efficiently. This report assesses the SEA’s existing digital infrastructure and makes key recommendations for how the SEA could make better use of digital technologies.

Latvia’s State Employment Agency (SEA) plays a crucial role in connecting people with jobs. However, the SEA faces tight resource constraints, with Latvia spending little on active labour market policies compared to other countries. Modernising the digital infrastructure of the SEA could help it to better meet the needs of jobseekers, people at risk of unemployment and employers. The SEA should develop a clear digitalisation strategy to guide its modernisation pathway, fine‑tune its operational IT system especially with respect to cyber security, and develop a modern data analytics system. Learning from other countries, the SEA could additionally increase the effectiveness and efficiency of its specific digital tools, such as those to profile jobseekers and their skills to generate a better understanding of their needs for support, as well as the algorithm to match jobseekers and vacancies to better meet the needs of a changing labour market.

The purpose of this chapter is to give a brief overview of the Latvian labour market and the role of the State Employment Agency (SEA), the public employment service (PES) of Latvia. The chapter briefly presents the latest labour market trends and highlights challenges that the SEA will need to address going forward. The chapter also discusses spending on active labour market policies (ALMPs) and needs for further investments in the SEA in order to address the labour market needs.

The State Employment Agency in Latvia (SEA) recognises its IT backbone as a key prerequisite to deliver good services to its clients and has been able to develop an IT system that meets most of its current vital needs despite limited resources. The IT backbone supports the main tasks of the SEA, such as registering jobseekers, managing services and measures, registering vacancies, and matching jobseekers and vacancies. However, the system is not fully efficient and modern, for example in terms of solutions for data analytics, quality, exchange and protection. The IT architecture of the SEA is not entirely future‑proof regarding the potential needs to develop new functionalities.

Digital tools can allow public employment services (PES) to be more effective and efficient. Such tools can enable PES to better meet the needs of their clients, including employers, jobseekers, and those at risk of unemployment. Indeed, such tools can free up resources for PES to support other areas of active labour market policies (ALMPs). This is particularly important in Latvia’s context where spending on ALMPs is low compared to other OECD countries. This chapter describes and assesses the current digital tools used at Latvia’s State Employment Agency (SEA). It focuses on the SEA’s jobseeker profiling tool that helps identify jobseekers’ distance from the labour market, the vacancy matching tool that supports employers and jobseekers, and the plans to introduce skills profiling tools.

The State Employment Agency (SEA), the public employment service of Latvia, plays a crucial role in using active labour market policies (ALMPs) to connect people with jobs. This includes meeting the needs of jobseekers, as well as persons at risk of employment. This chapter assesses how the SEA’s services and measures reach people in need of ALMPs and provide them with appropriate support. The chapter does this by analysing rich administrative microdata including detailed information on ALMP participation, unemployment histories, social insurance receipt, and earnings histories.

The State Employment Agency in Latvia (SEA) needs to modernise its digital backbone to better support jobseekers, persons at risk of unemployment and employers in Latvia. Key priorities for the SEA are to develop a comprehensive digitalisation strategy to establish the objectives and relevant frameworks, and develop a dedicated analytics system consisting of a data warehouse and a Business Intelligence tool. In addition, the SEA should consider to gradually improve the design and implementation of the jobseeker profiling tool, continue co‑operating with other organisations to find feasible solutions for skills profiling, and move towards competency-based job matching. While the SEA does not have an urgent need to fundamentally change or replace its main operational IT system in the near future, some fine‑tuning will be necessary, particularly concerning system and data security, and data quality management.