By Glenda Quintini.
During its presidency of the G20, China decided to focus the G20 Labour and Employment Ministers Meeting (LEMM) on the theme of “Innovation: Decent work, Enhanced Employability and Adequate job opportunities” (IDEA). To inform discussions around this topic, the international organisations were asked to prepare background reports on relevant themes and the OECD was asked to take the lead in preparing a paper on “Enhancing Employability”. The result is a report setting out the challenges confronting G20 economies and a proposal for a set of concrete actionable policy principles (see box) that are needed to improve the employability of each economy’s workforce by making skills more transferable and workplaces more adaptable. These policy principles were endorsed by G20 Labour and Employment Ministers at their meeting in China on 12-13 July.
The paper prepared by OECD argues that all G20 countries stand to gain from increasing the employability of their workforce in the face of ongoing and future structural changes. The speed and nature of globalisation, technological change and innovation, changes in work organisation and demographic trends take very different forms across G20 countries. However, in all G20 countries, they are affecting what kind of work is done, who carries it out and where and how it is carried out. These transformations are changing traditional jobs and employment relations while creating new job opportunities in emerging economic activities. In this context, policies that enhance workforce employability can help foster innovation and the adoption of new technologies as well as boost productivity by speeding up the reallocation of labour from less productive activities to more productive ones, improving the well-being of workers and supporting labour force participation.
The paper highlights the risk of rising skills mismatch and shortages, particularly in the presence of slowly-adjusting education and labour market policies and institutions. In most G20 countries, large shares of employers complain that they cannot find workers with the skills that their businesses require. At the same time, in many countries, a number of college graduates face difficulties in finding job opportunities matching their qualifications and their competences and many lower skilled workers find increased competition for employment (Figure 1). While genuine skill mismatches do not explain all of these imbalances, skill demand and supply policies have a role to play in ensuring a better balance between skills of workers and the needs of employers.
The paper also discusses weaknesses in work-based learning systems and stresses how G20 countries stand to gain from improving opportunities for initial and lifelong training opportunities in the face of changing skill needs. This will require strengthened public policies to support lifelong learning, but employers also have a responsibility for ensuring that economies are responsive to change. Work organisation and management practices – including employers’ involvement in training provision and financing – are instrumental in making the most of existing skills through retraining and upskilling if required. Finally, labour mobility – geographical as well as across occupations and industries – is essential to enhance adaptability and make the most of ongoing economic changes.
Policies to enhance workforce employability
Anticipating emerging skill needs and adapting policies accordingly:
Reinforcing the role of training and work-based learning:
Enhancing the adaptability of workplaces:
Promoting labour mobility:
These policy actions should be embedded in strong labour market activation strategies that motivate and help jobseekers to find work in new and emerging occupations and industries. They should also be implemented in the context of balanced labour market institutions, including employment protection regulations that encourage rather than discourage mobility while providing adequate employment security for workers.