Europe needs to better integrate young people into the labour market if it is to address youth unemployment effectively, writes Denis Pennel.
Denis Pennel is managing director of the World Employment Confederation-Europe, whose members every year find work for 11 million people in Europe – 3.7million of them under the age of 25.
While we are no longer witnessing the extreme levels of youth unemployment that followed the 2008 crisis, the challenge of how to successfully integrate young people into the labour market still remains.
There are a number of issues that we need to address urgently:
Firstly, we need to take action on skills. In a 2016 global survey by Manpower, 40% of employers said that they experienced difficulties in finding people with the right expertise. In Europe, the figure was 36%.
Employers in Romania, Turkey, Bulgaria and Greece had the most problems in finding qualified people while those hiring in Norway, UK and the Netherlands had the least. So it’s clear that we need to foster policies that help to bridge the divide between academic and technical education and the skills that people actually need in the workplace.
I see our new digital age as having a significant impact on skills requirements and creating a range of opportunities and challenges for all sectors. These will not just be related to hard skills and technical knowledge, but also to wider social skills that will be needed
These will not just be related to hard skills and technical knowledge, but also to wider social skills that will be needed in the jobs of the future. The skills needed in today’s job market are already vastly different from those required 10 years ago and the pace is only likely to accelerate. We need to be ready for this.
Indeed CEDEFOP, the European Centre for the Development of Vocational Training, estimates that some 26% of adults in the EU have significant skills deficits, but meanwhile 29% of graduates are overqualified for their job. This points to a severe skills mismatch.
Furthermore, it is predicted that 65% of children in schools today will be working in jobs that currently don’t even exist. These new jobs will require soft skills like emotional intelligence, creativity, logical reasoning and problem solving. They will need to be taught and to become a part of an individual’s core skill set so we need to take action now.
The second area to be addressed is training. We need to ensure that people have the skills they need to carry out the jobs available. The European Bipartite funds, managed by the social partners, invest over 600million in improving worker skills and are a good example of public-private cooperation on skills. They optimise resources and outcomes by determining goals, specific training needs and the main target groups in advance.
Another area we need to fix is ongoing learning. Steve Bainbridge of CEDEFOP has been very vocal on the need to reintegrate learning and work and argues that it is not technology that makes business competitive, but the people building and operating it.
The fact is that only 5% of people participate in formal further education while 33% participate in non-formal learning. By making ongoing training and learning more visible we would validate it. Perfect candidates for jobs don’t always exist, so we will need to train them and as only one-quarter of EU companies offer apprenticeships we need to rethink the value of human capital and make ongoing training and upskilling a lifelong pursuit.
Thirdly, we need to consider the range of contractual arrangements in place. Research proves that efficient labour markets operate with a wide range of different contracts – more than 30 in Belgium, France and Italy for example. By offering a multitude of different contracts, including part-time, self-employed, fixed-term etc, we will be helping young people get a foot in the labour market door.
The workforce solutions industry is skilled in providing these services and helps people to transition from school into work, from part-time work into full-time work and then from job to job, ensuring that they always remain employed.
Respected research centres like IZA acknowledge the industry’s stepping stone role into permanent employment, particularly for vulnerable groups such as labour migrants and those younger migrants who have arrived in Europe recently.
Lastly, I believe we need specific policies which focus on NEETs (men and women under 25 years of age who are Not in Employment, Education or Training).
OECD figures for this NEETs group show a mixed picture across Europe, and while the average is some 15% of youngsters, there are some markets where under 25s in neither employment, education nor training lie around or above the 20% mark, such as Portugal, France, Greece and Spain
We need to find creative solutions such as the ‘Movement to Work’ initiative in the UK, a voluntary collaboration of employers including M&S, BT, Tesco, WPP and the NHS. The scheme aims to tackle youth unemployment by helping NEETs into training and work, and has had much success to date with more than 50,000 young people having taken part.
I am convinced that by embracing such schemes across Europe we can effectively address the problem while people are young, and turn the situation around before it leads to long-term, chronic unemployment, which is far more difficult to fix and has a hugely detrimental impact on individuals and society.