Back from Porto – making the Action Plan on the European Pillar of Social Rights a reality

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Stakeholder Opinion

European Union, 2021 - Source: EC - Audiovisual Service

The Porto Social Summit has set new ambitious employment and social targets for the European Union. Ambitious but achievable, especially if the EU and its Member States set an enabling environment for the private employment services industry to contribute, writes Michael Freytag from the World Employment Confederation-Europe.

Dr. Michael Freytag is a Public Affairs Manager at the World Employment Confederation-Europe.

The Porto Social Summit on the Action Plan on the European Pillar of Social Rights agreed on a new, 10-year strategy for EU employment and social policies, including updated headline targets. Reaching an employment rate of 78 percent of people aged 20 to 64, raising the participation of all adults in training every year to 60% and reducing the number of people at risk of poverty or social exclusion by at least 15 million are ambitious, but appropriate, targets – especially in the context of the Covid-19 pandemic and its economic and social implications.

The private employment services industry can provide an important contribution to the headline targets agreed by the Porto Summit. The private employment services industry is already an important driver of job creation in Europe, offering work opportunities to about 11 million people. By facilitating the transitions to rising sectors, it is also contributing to the digital and green transformation of European economies which is at the heart of the European Commission’s mandate. Equally important, the private employment services industry effectively helps managing risks for workers, companies and the economies, especially by buffering economic shocks and ensuring the continuity of employment for workers. In such volatile context, securing career path and guidance becomes even more important and the career management branch of the private employment services industry provides an important contribution in that respect.

But for this contribution to actually serve the achievement of the employment and social targets agreed at the Porto Summit, we need the establishment of an enabling economic and social environment that will unlock the potential of the private employment services industry. Several aspects are of key importance in that respect:

Firstly, the EU institutions and Member States should build the implementation of the Action Plan on the European Pillar of Social Rights more strongly on the need to value and capitalise on diverse forms of work. Alongside with open-ended contracts, part-time work, fixed-term contracts and temporary agency work, as well as the more recent phenomenon of online talent platforms all contribute to dynamic and inclusive labour markets – if national and European labour market regulation is appropriate and does not impose unjustified restrictions. For temporary agency work, there is a clear need to review and lift existing, unjustified restrictions. Overly strict national regulation, for example imposing severe maximum length of assignment or narrow reasons for use, should be prevented. At the same time, the private employment services industry strongly supports the adequate enforcement of existing rules for temporary agency, especially with regard to cross-border activities.

Secondly, there is a need to drive social purpose and innovation. Social protection schemes and safety nets need to be reformed during and after the Covid-19 pandemic, ensuring the adequate and effective coverage of diverse forms of work by social protection and ensuring the transferability and portability of rights. The EU Council Recommendation on access to social protection for workers and self-employed provides the relevant and appropriate framework for fostering reforms at the national level. Practices of the private employment services industry, such as the establishment of portable and transferable rights through bipartite training or social funds are examples which could provide guidance for other sectors and countries. In the Netherlands, an initiative has been established by the training fund of the agency work industry in cooperation with training funds of other sectors to provide workers an exhaustive and complete overview of transfer and transition options on the labour market. Fostering labour market transitions is especially important to give confidence, labour market opportunities and hope to young people.

Thirdly, one of the fundamental challenges uncovered by the Covid-19 pandemic is the management and mitigation of risks. The private employment services industry plays a key role in this field. In a “stop & go” economy, agile workforce solutions will play a central role for employers to address current risks quickly and to pre-empt future risks. We are moving from ‘just in time’ to ‘just in case’ HR solutions. This in no way seeks to ‘commoditise’ workers – it simply reflects the fact that it has become harder than ever for employers to pre-empt what skills and staff they may need to access. Addressing immediate workforce challenges at speed was the main reason for using the private employment services industry even before the current volatility. For example, 82% of companies responding to a survey by swissstaffing flagged short-term HR needs as the mean reason for using temporary work.[i]

The “stop and go” economy and more volatile economic environment also implies a change in the policy approach for employment and social policy at EU level. While focus should be laid on fostering new solutions for working, learning and social protection, it is equally important to refrain from too burdensome or strict European regulation. The proposed EU Directive on adequate minimum wages for example is based on the European Pillar of Social Rights and its main objectives are fully supported by the private employment services industry. At the same time, a strong focus could have been put on ensuring adequate minimum wages through collective bargaining and by strengthening the role of social partners, rather than setting strict conditions for statutory minimum wages through the proposed EU Directive.

The three main dimensions and chapters of the European Pillar of Social rights, equal opportunities and access to the labour market, fair working conditions and social protection and inclusion remain highly relevant, and these are in the DNA of the private employment services industry. The key challenge will be to find the right policy mix to respond to current and new challenges, building labour markets based on reform, resilience and recovery.

[i] Swissstaffing white paper (2019): Temporary Work. Between Labour market integration and skills shortage

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