Party leader Stefan Löfven, who also on Tuesday welcomed British Labour Party leader Ed Miliband to Stockholm, said ithat the agency (Arbetsförmedlingen) was too "rigid" in its structure. His party is hoping for a 2014 election win to put its reforms into action.
"The government has managed the agency so badly that it has lost the public's trust," Löfven said, according to the TT news agency.
The former trade union heavyweight said he wanted to give the agency staff more freedom to find work for job seekers by increasing their cooperation with would-be employers, rather than diverting resources to checking that unemployed Swedes are trawling through the official vacancy listings.
One solution was to develeop industry-specific outfits within the agency, he said.
Labour Market Minister Hillevi Engström had little time for Löfven's criticism, which in part said the agency's mandate was so curtailed it had forced Arbetsförmedlingen to return 18 million kronor ($2.9 million) to the Swedish state.
"I find it odd that Löfven chooses to turn this into a financial question," Engström told TT.
She instead said the main challenge for the agency was finding companies willing to give Swedes stuck in long-term unemployment a chance.
Neither did she agree that policing job-seeking efforts was an ineffective use of the agency's resources.