Labour market resilience is highest in Western and Northern Europe, said Whiteshield, a global strategy and public policy advisory firm, which released its Global Labour Resilience Index (GLRI) 2023 during the World Government Summit. 

 

The ten most resilient nations are developed economies that had the institutional capacity to quickly and effectively introduce policy measures that prevented labour market outcomes being much worse than anticipated. Countries in Europe and Asia are becoming more resilient, whereas resilience in North America, albeit high, is stagnating. Other nations are however regressing and only high-income nations across all income levels are exhibiting increased resilience.

 

According to the report, there is an uneven recovery in the global labour markets taking place, with some - mostly developed - rapidly returning to pre-crisis levels of employment while others - mostly developing countries – still suffering from relatively large and persistent employment deficits. 

 

Asymmetric labour market

These asymmetric labour market outcomes can be partly ascribed to different health and economic support measures that governments have introduced. The other part is attributed to structural factors that have either facilitated or impeded recovery.

 

The report also finds demand for high-skilled workers has increased during the Covid-19 pandemic at the expense of middle-skilled jobs. This is an on-going global trend that has already affected 95 countries out of the 136 that the GLRI covers.  This trend is more pronounced in countries with higher labour market resilience. 

 

Top performing countries have successfully equipped their labour force with the right skills and capabilities. Such improvements need to be maintained especially considering mounting challenges such as skills shortage. In contrast, low-performing countries are witnessing a shift from high- and mid- skills jobs to low-skills jobs. 

 

This points to the need for policy to address structural changes in the economy lest low and medium skilled workers continue to face displacements, the report added. 

 

Citizen-centricity

The report states that the traditional approach of formulating policies in isolation of the individuals they are meant to impact can only have a limited influence on building resilient markets. Instead, citizen-centricity must be embedded by design. To support with this, Whiteshield introduced its Labour Navigator tool that helps identify the latest trends in labour markets.

 

Fadi Farra, Founder and Partner at Whiteshield, emphasised: “Post-pandemic, nations have been making tremendous efforts to gain semblance in their labour markets. The past two years posed grave challenges worldwide, resulting in numerous crises in the labour global labour market. In light of this, regular reviews of skills, and assessments of the relationship between skills development, employment support, labour market and the economy have been undertaken relatively frequently. As the world has recovered from the pandemic, policymakers must turn temporary or short-term solutions into structural reforms. By doing this, systems will be more resilient in the event of future disturbances.”

 

Nobel Prize Winner in Economics Sir Christopher Pissarides, Special Advisor & Director at Whiteshield, said: “The GLRI assesses labour markets across nations and offers insights and guidelines to strengthen resilience. Though there has been a global recovery from the adverse effects of the pandemic, there are still areas that need to be worked on and other challenges that need to be mitigated. It has come necessary for the governments, employers and workers organisations to work in unison to address these challenges. The necessity for collaboration between the public and commercial sectors in creating and enacting comprehensive policy reforms to address long-term effects of any disturbance in labour markets is a major priority.”

 

Limiting fluctuations

The index is a first-of-its-kind measurement tool that assesses the capacity of an economy to limit fluctuations in employment and quickly rebound from setbacks. The index ranked 136 countries for their resiliency in labour markets, policies, and key capabilities to face crises such as pandemics, technological disruptions, and transition to a green economy. 

 

The report was released in collaboration with CEMS, the Global Alliance in Management Education, comprising leading business schools, multinational companies and NGOs that together offer the CEMS Masters in International Management. The GLRI is an annual report that ranks countries for the resilience of their labour markets and offers guidelines on its enhancement. -- TradeArabia News Service