The job-specific training, known as arbetsmarknadsutbildning, has been one of the more costly initiatives to get job seekers into work, the agency (Arbetsförmedlingen) noted in its annual report.
"It's serious that the most expensive measure no longer increases the chance of finding work," head analyst Mats Wadman told the TT news agency.
Finding jobs through friends, families and business connections still trumped all other ways of finding work. Seven out of ten jobs in Sweden were found through a job seeker's personal network, the report noted.
The agency analyst said there were several reasons why the labour-market training was no longer as effective.
In 2007, the government removed the requirement that 70 percent of job seekers enrolled in labour-market training ended up in employment after 90 days. The reform could have made agency workers less selective in picking job seekers who would get the most out of the training, Wadman theorized.
"It has meant that individual agency workers might not be as careful with the selection," Wadman said.
The demographics of labour-market trainees have also changed, he noted. The measure has been put in place for people who have not completed high school, job seekers older than 55, immigrants born outside the Nordic region, and unemployed people with disabilities – all job-seeker categories deemed to face particular obstacles in finding work.
Wadman said the government had in part instructed the agency to offer the measure to people in vulnerable categories.
"They've put a lot of pressure on the measure being targeted to those who are very far from the labour market," Wadman told TT.
Last year, the agency spent 1.3 billion kronor ($200 million) on buying classes, training courses, and giving job seekers enrolled in the project some financial support (aktivitetsstöd).
The dwindling success rate for labour-market training has also coincided with tough financial times, noted trade union economist Ola Petersson at LO, the umbrella organization for blue-collar unions in Sweden.
"The jobs agency has to work with a lot of people," Petterson said, pegging the current unemployment figures on the centre-right government. "It's not new tools we need, it's new ambitions."
Agency analyst Wadman said Arbetsförmedlingen should review the way it picks people who are offered the training, especially if the measure has become ineffective.
"If it doesn't have an effect we should naturally stop putting tonnes of people in the programme," he said.