“Labour market shortages in a period of unemployment”Panel 2: Best practices and possible solutions

EESC / Labour Market Observatory

Hearing , 16 November 2011, Brussels

Dr Lieven Desmet Belgian National Employment Office (ONEM/RVA)

OECD employment outlook 15/09/2011

Unemployment remains stubbornly high (well above the level before the crisis).

Job creation will remain anaemic.

Long term unemployment on the rise.

Steep rise in USA, Germany is an exception.

Effective labour market policies can make the difference.

Well-designed hiring subsidies

Focus on most vulnerable groups, such as the young.

Evolution of the Unemployment Rate in Belgium (Eurostat)

7,5

9,79,6

7,9

10,2 10,2

7,9

8,4

6,86,8

6,0

6,5

7,0

7,5

8,0

8,5

9,0

9,5

10,0

10,5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2007 2008 2009 2010 2011

EU27 Euro zone Belgium

Reasons for the Positive Evolution

ECONOMIC REASONS Good financial health of the Belgian companies The sectors employing a lot of workers (for example the

construction sector) were less affected Impact of the good performances of Germany, its main trading

partner

EMPLOYMENT POLICIES Partial unemployment Reintegration measure :

• The service voucher• The win win plan• The plan for guidance and follow-up of the jobseekers• …

Labour market in Belgium

Evolution of vacancies received by the regional institutions:

Number declined steadily through 2008-2009.

Rising again during 2010, reaching levels well above level of 2007.

A measure of shortage (Herremans et al., 2011)

Tension-ratio = (supply of candidates) / (demand of labour)

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Total Highly skil led

The ratio is declining since 2003, meaning that the tension increased, except during 2008-2009 when we saw the labour market loosening a bit.

The ratio always is smaller for highly skilled personnel.

A labour market paradox ?

Even in current times of high unemployment, many vacancies remain open for a long time and there is significant shortage in certain professions.

This shortage can be: Quantitative: not enough candidates. Qualitative: candidates have insufficient skills. Due to structural conditions: candidates unwilling to work in given labour

conditions.

In relation to this phenomenon, a variety of terminology is used: Shortage professions (FR: métiers en pénurie, fonctions critiques) Tensions, bottlenecks in the labour market (NL: knelpunten, krapte op de

arbeidsmarkt) Talent gap

Causes of shortages Demand side

Negative image of the job (contents and conditions) Failing recruitment (recruitment channels, too high requirements)

Supply side Unemployment or inactivity “traps” Lack of mobility (including interregional mobility) Withdrawn jobseekers insufficient or inadequate skills, lack of application skills

Intermediary level Inadequate counseling Mismatch between training opportunities and employers needs

External factors Economic climate Demographic evolution (ageing population) Education lagging behind with respect to evolving needs of employers School failure and school dropout

Belgian context

Federal level: National Employment Agency

Administration of unemployment benefits

and federal employment measures.

Regional institutions: VDAB,FOREM en ACTIRIS

Counselling of jobseekers (including training).

Publishing of vacancies and monitoring of shortage professions.

NEO gathers the data from the regional institutions and publishes an annual list of shortage professions: under certain conditions a jobseeker can resume full-time education or training preparing for professions on this list, while receiving unemployment benefits but without the obligations of being a jobseeker.

General policies (1)

Training in open competence centres (centers of excellence).

In partnership with employers, trade representants, schools, …

Addressing regional bottlenecks.

Flexible and complementary to existing training programmes.

Blended learning and mixed trajects.

Better counselling, at an earlier stage.

Enhanced entry in education of shortage professions.

Raising employment rates in specific groups (older than 55, lowly skilled, migrant workers, …)

General policies (2)

Focus on “green” professions (related to renewable energy and sustainable development).

Exchange of vacancies between the regional institutions.

Incentives for language and skills training.

Jobdatings: meetings between jobseekers and employers from a certain trade.

What’s next: some examples of good practices (based on a report from the Research Institute on Work and Society from KULeuven university).

Case study: Manpower Logistics Academy

One week training programme fork lift truck and reach truck operators. Free of charge, no delay. Hands-on, oriented to the job. Candidates screened and guided through the agency network.

Very successful project and Win-win situation: Employers see their vacancies filled rapidly. Candidate gets a free training and a job at the end of it. For the agency an excellent opportunity to gain market share. Extended to other related professions and 3 sites (2010). 971 candidates trained in 2010, 75% were placed successfully.

Private training initiative from a temporary employment agency specialised in the logistics sector.

Case study: Brussels Airport Community

Several companies located at the airport face shortages of various nature:

Jobs that require specific skills or training.

Blue collar jobs with heavy manual labour in an irregular time schedule.

Brussels Airport Company takes a coordinating role:

Detection and inventarisation of bottlenecks.

Gathering and publishing of vacancies on the airport website.

Communication strategy based on the attractive image of the airport.

Initiatives for improving accessibility of the airport.

Job events at the airport, in-house temporary employment agency.

Creation of “Metropolitan Brussels Community”.

Comprehensive strategy and coordinated actions in a specific working environment

In the nursing sector

Structural bottleneck

Enhance attractiveness through additional benefits

Increased function differentiation

(take certain tasks out of the nurse’s duties)

Hiring of students for limited beginner’s jobs

Temporary employment agency:

Solves temporary shortages

Helps guiding candidates towards permanent positions

Increases the pool of available personnel by allowing extremely flexible schedules

Specific issues in labour-intensive sectors

Fruit picking:

Consultation between industry, local authorities and employment agencies to create a pool of available workers.

Official recognition of shortage allows legal hiring of foreign workers and more transparancy in the sector.

Low wages and a bad image of certain sectors create shortages, e.g. in the cleaning sector and in fruit picking.

Cleaning sector:

collaboration between a hospital and RESOC in a “diversity plan” (intensive coaching and training of candidates from “opportunity groups”).

Making the threshold as low as possible: information meeting at a breakfast session, no need for cv, letter or phone call.

Some conclusions

No general solutions: strategy (and its potential success) depends largely on the type of problem.

Many stakeholders but many hopeful initiatives, often with public-private collaboration.

Dedicated counsellors with sectoral expertise can enhance guidance of jobseekers.