New Employment Commissioner must eliminate labour market imperfections in order to boost job creation across Europe, Pennel writes.
Denis Pennel is managing director of Eurociett, the European Confederation of Private Employment Services.
Marianne Thyssen, Europe’s newly-appointed Commissioner for Employment, Social Affairs, Skills and Labour Mobility, has no time to lose in maximising the potential to create jobs across Europe.
While the economic situation is improving slowly, the pre-crisis days of double-digit growth will not return any time soon, and the new Commissioner must introduce policies to drive job creation in the new reality of a low growth environment. A key opportunity is to iron out labour market imperfections and create a properly functioning employment market for all EU citizens. I see five areas where the new Commissioner could make a real difference.
The first is the mismatch and bottlenecks that result in an inefficient allocation of labour. There are currently 26 million people unemployed across the EU28, but also one million unfilled vacancies. Why? Because we are not effective in the way we match people with jobs. Labour markets are in perpetual motion with 20% of jobs created or destroyed each year and we need more and better cooperation between public and private employment services to deliver innovative, demand driven solutions to deal with unemployment, identify job openings and train workers to carry them out. This is particularly crucial when it comes to young people.
The next is the lack of transparency, where many job vacancies are hidden and remain unfilled. In particular the promotion of services has the potential to create millions of jobs – particularly services to individuals such as home cleaners, childcare and elderly care. It is simply unacceptable that despite a strong demand for labour opportunities from EU citizens, nothing is done to help transform this potential work into jobs! The situation is the same for services to businesses, like tax, legal, IT, and recruitment where EU industrial policy neglects these industries. We urge the creation of a strong ‘Business Services’ focus during the term of the next Commission.
Low work mobility also needs addressing, so it is good to see this reflected in Ms Thyssen’s official title. Currently, there is no such thing as an EU labour market, but rather 28 different labour markets with very different characteristics. Unemployment ranges from 4.9% in Austria and Germany respectively, to a whopping 24.7% in Spain and 27.2% in Greece. Jobseekers should be supported when looking for work opportunities outside their native land.
Without delay, the Commission should open up its European job portal (EURES) to the private sector in order to collect more job vacancies and develop a better understanding of cross-border recruitment. Private employment services are ready to jump in here. They have 58,000 branches across the EU with 248,000 HR consultants able to smooth and secure cross-border mobility of workers. The posting of workers must be controlled, but not to protect markets and hamper EU labour mobility – many posted workers are legal and able to develop their skills in decent working conditions. A quick glance around the Brussels job market serves to confirm this.
Another issue the new Commissioner needs to tackle is the low rate of labour market participation. By promoting active labour market policies with a diversity of properly regulated employment contracts – for example, fixed-term, part-time, temporary agency work – we will attract more people into the labour market, including those who are furthest away from employment such as the long-term unemployed, disabled, or women returning after maternity leave. In tandem with this, we must better support workers in making transitions within the labour market – from unemployment to work, from education to work, and from declining sectors to growth sectors.
The final area that needs the Commissioner’s attention is the outdated regulation and red tape that holds back Europe’s businesses from creating jobs. The recently published World Economic Forum 2014-15 Global Competitiveness report studied 144 economies and found red tape and labour market regulation to be among the key factors hindering competitiveness in Europe. In today’s volatile and unpredictable economic climate companies need to be agile and able to adapt their workforce according to demand.
By encouraging a simplification of the rules, and revisiting outdated regulation of some labour contracts, the Commissioner should favour non-traditional labour contracts that provide a real stepping stone to stable employment, compared to those which may represent a trap to poverty and exclusion. We urge her to push for full implementation of the Temporary Agency Work directive, and focus on fighting against undeclared work. We also encourage a new approach to multi-activity where workers hold down several jobs at the same time and the lines between education, work and pension are blurred as students and pensioners both look to be a part of the labour market while also devoting time to their studies and leisure.
Labour markets and the global economy have changed unrecognisably in the past 20 years. The new Commissioner has the opportunity to set in place a labour market framework fit for the twenty-first century. We wish the new Commissioner success in her new job, and we want her to know that we are ready to cooperate to unlock the potential to drive job creation right across Europe.