opinion piece

New approaches needed for labour market activation

Activation policies need to focus on those people already in employment and take life-long approach supporting them throughout their working lives, writes Denis Pennel, managing director of the World Employment Confederation.

Published on 30th January 2020

One of the many challenges facing the world of work today is the prospect of increasingly tight labour markets. A range of factors including ageing demographics in many parts of the world, the development of more flexible and diverse forms of work, and the increased pace of job creation and destruction, have resulted in higher labour market participation ratess and a shortage of candidates and skills in many areas.

Simply put, finding and securing talent has become a full-time job in itself and a growing focus for employers. We see this across the whole labour ecosystem – not only in corporations but also in the public sector, municipalities and NGOs. Organisations are having to anticipate their labour needs more carefully. They must consider not just their current requirements, but what competencies they will be likely to need in five years’ time so that they can plan for the future and seek out the talent they need.

In many ways this same challenge faces workers too. Technological advances, automation and the rise of AI mean that we are all having to embrace lifelong learning and the need to acquire new skills throughout our working lives in order to maintain our lifelong employability.  We need to take control of our careers, recognise where growth areas are emerging and identify how we can get the training we will need in order to access them.

One way to address the lack of talent is to bring people back into the labour market. Indeed, maintaining people in employment is in everyone’s interests as research confirms that long periods of unemployment have a significant detrimental impact on people’s economic wellbeing and on their future employability. Economies need effective activation policies that give more people access to the labour force and train them to do the work that is available.

However, for activation policies to play a really effective role in transforming labour markets, the focus needs to shift away from jobseekers and displaced workers and the traditional, ‘curative’ activation policies. Instead, in order to better anticipate change and transitions, we need activation policies that focus on those people who are already in employment and take a lifelong approach that supports them throughout their working lives.   Activation policies need to shift from being reactive to become proactive and consider how we can best  support people at every stage of their employment journey: from first-time labour market entrants; to people  navigating  the coexistence of diverse forms of work and looking to identify which best meets their situation and needs;  to accompanying workers in taking career breaks; and finally to supporting older workers in gradually withdrawing from the labour market.

If we are to meet UN Sustainable Development Goal 8 of ‘promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’, then we need better planning and cooperation among the different labour market actors. Public private partnerships present an interesting opportunity but do not work optimally in most countries. As intermediaries, specialised in matching supply with demand in the labour market, the private employment services sector has a strong track record of bringing people into work. In 2017 the global industry found jobs for 53 million people worldwide and it is well placed to support both organisations and workers in smoothing transitions.

The temporary agency work sector offers an effective route to work for many people – including those more vulnerable groups such as young people, migrants and those who were previously inactive.  The sector has also expanded its service offering to include more tailored products that support both organisations and individuals in securing talent and jobs. Recruitment Process Outsourcing (RPO) – where companies outsource their recruitment and HR needs to a specialist supplier – grew 15% globally in 2017, and 33% in Europe, the Middle East and Africa. Career Management services are also diversifying, supporting organisations in upskilling internal talent to fill skills shortages and offering outplacement support to transition laid-off employees to new opportunities.

As the jobs landscape continues to evolve in line with societal, technological, demographic and economic shifts, so intermediaries such as private employment services will be vital in supporting both organisations and workers thereby reducing labour market friction and maintaining high levels of participation.

Icons Icons Icons Icons Icons Icons Icons Icons-40 Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icons Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Icon Asset 5 Asset 6 Asset 1 Icons_FINAL
We use cookies in order improve your browsing experience on, not to collect personal information. By continuing to use the site, you agree that that is OK.