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Case study May 26th, 2016

The information system that increased employment in Estonia

EMPIS, the Employment Information System commissioned by the Estonian Unemployment Insurance Fund, has completely transformed how unemployed people are handled in Estonia.

Taking a leap forward from the old, paper-centric system that relied on manual work and the ability to navigate dense legislation, EMPIS provides back-office automation that pre-fills forms, creates reminders and notifications, follows complex acts of law to reach the correct decision in each unique case, and cross-checks all data entered into the system, thus taking a large burden off of the Fund’s specialists.

End users – the unemployed – are seeing a system that helps them with career and training choices and guarantees that various unemployment subsidies are always paid on time.

By overhauling the customer’s business processes and building a bespoke information system to streamline the procedures, Nortal has enabled the Fund to significantly improve the speed of, and capability for, service delivery while supporting end users every step of the way. The result is a decrease in client’s operating costs and a boost to their image as a trustworthy partner.

People in the streets of Estonia

Challenge

In 2009 the Estonian Unemployment Insurance Fund, which hitherto only managed insurance funds and paid insurance benefits, was tasked with providing the entire range of employment services to the unemployed. At the time of the deepest economic crisis in history, with more than 100,000 unemployed people in a country of 1.3 million, the work seemed positively Herculean.

Compounding the problem were outdated business processes that, if left unchanged, would have rendered even a new information system unusable; inconsistent procedures across state employment offices, which prevented fair and equal treatment; poor data quality that made the Fund an easy target for fraud; frequent human errors in deciding the eligibility of applicants caused by not understanding the finer legal points of applicable laws, and much more.

With 15% of the entire Estonian workforce lining up for unemployment benefits and services, a crisis seemed imminent.

 

Focusing on two key areas

Yet what could have been a disaster became an opportunity for Nortal to design and develop a solution that, in one fell swoop, gave the Fund the capability to manage the enormous workload and offer even more personalized services, all without increasing the staff. After consulting with the customer, we decided to focus on two key areas:

 

Automation of all critical business

All critical business processes one word more and all instances where acts of law needed to be interpreted, to avoid human errors. The initial high cost of developing sophisticated algorithms proved to be negligible compared to the value of improved efficiency and decreased fraud.

 

Extensive usage of X-Road

X-Road, the electronic backbone connecting all national databases and registers, is extensively used in EMPIS and in other related information systems of the Fund. In addition, to eliminating the need to obtain and process any paperwork about an applicant, it also provides a fast and accurate method of determining someones’s eligibility for benefits by cross-checking the person’d data, in real time, against the Business Register, the Register of Taxable Persons, the Health Insurance Register, etc.

10

minutes of registration time on average

6.4€

million additional value-added tax

850+

unemployment insurance fund employees

Result

The result was an information system that provided all-round services for the labor market and collected statistical data for sound management decisions and high-quality labor market forecasts. The impact on the work of the Fund’s officials has been equally profound: for instance, the system now guarantees that the law is followed precisely, avoiding subjective human interpretation, and keeps track of the 120+ open cases that a consultant typically has.

Gone is the hour of paperwork typically needed to register a person as unemployed. With automated data retrieval, the average registration time is now down to 10 minutes.

In the first 2.5 years since EMPIS was put to use, the subsidies for starting a business were used to create 1,292 unique companies, resulting in an additional €6.4 million of value-added tax collected per year.

By now EMPIS is used daily by the Fund’s employees for customer service and various in-house procedures, with end-users – all the unemployed people and those at risk of becoming unemployed – numbering in tens of thousands.

 

The fully automated online application process was recognized in 2019 by the Estonian Association for Quality with an Estonian Excellence Award.

Key features of EMPIS

Automatic matching of job offers

with people looking for employment, combined with automatic retrieval of job offers from employment portals and the delivery of electronic job alerts;

Automatic verification of data

to avoid fraud and ensure that a person qualifies for unemployment services and benefits;

Automatic cross-checking of data

against valid records from national registers to prevent the entry of conflicting information into the system;

Use of algorithm-driven decision logic

in compliance with the Estonian Administrative Procedure Act to make automatic decisions, which consider the particularities of each individual applicant;

Automatic generation of more than 50 different types of decisions

with over 300 differ- ent decision texts;

Facilities for managing and monitoring service procurements

(e.g. trainings for truck drivers or group English lessons), contracts and budgets.

Closeup of EURO BILLS

Impact

Automatically paid subsidies

Each month, employers eligible for wage subsidies had to send their employees’ printed payslips to the Fund for payment calculations. With EMPIS, it’s done automatically on the basis of the applicant’s declared taxes, so that thousands of employees can rest assured their taxes are paid legally and correctly.

 

Fund handling large volume of payments

The Unemployment Fund compensates the minimum social tax rate on behalf of employers who employ people with reduced working ability. In December 2019 approximately €4.3 million for nearly 27,000 employees was reimbursed.

 

One application for the entire subsidy period required

Instead of compulsory monthly applications for social tax reimbursement, you can do everything with one application. Considering the one hour save per applicant, the new process brings more than €218,000 worth of savings per month.

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