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OECD Employment Outlook 2020: clear role for private employment services in post-Covid labour markets

On July 7, the OECD released its annual outlook on jobs and employment with a strong focus on the impact of the Covid-19 crisis on labour markets and the policy responses needed to put the economy on the recovery path. The Employment Outlook 2020 clearly recognises the role and potential of the private employment services sector during and beyond the crisis.   

Published on 14th July 2020

“The Covid-19 pandemic has triggered the worst jobs crisis since the great Depression […] and wiped out the progress made over the past decade in terms of employment,” said Angel Gurría, SecretaryGeneral of the OECD, presenting the Outlook’s key findings. The picture of labour markers after Covid-19 crisis is indeed grim. Unemployment rate reaches 8.4%, a 60% rise compared to February. The OECD’s latest Economic Outlook foresees it to reach 9.4% by the end of the year before starting to decrease gradually.  

In view of the magnitude of the challenge, Gurria insisted that policy responses need to be “timely, ambitious and sustained” and that government programmes should be “jobs-rich”. The OECD urges job retention schemes to now be deployed in a more targeted wayto incorporate a higher employer contribution and to integrate measures for transition to jobs that are viable in the medium/long term. 

The OECD Employment Outlook 2020 explicitly acknowledges the  private employment services sector’s efforts (including agency work, training and career guidance) in mitigating the labour market fallout of the pandemic and in bringing people (back) to the labour market, as well as its potential for (re-)activation of employment. It quotes several examples of actions by WEC members and refers to the Joint Recommendations agreed between WEC-Europe and UNI Europa on the handling of the Covid-19 crisis and recovery.

“This positive assessment allows the sector to rise to the occasion and play its role in economic recovery. There is a clear call to private employment services to scale up their capabilities to help jobseekers, and we’re ready to support the economy to get on the road to recovery” says Jochem de Boer, Global Public Affairs Manager at the World Employment Confederation“The Outlook’s findings also highlight the importance of social protection reform to better and more adequately cover accessible to all workers, irrespective of their work arrangement. It aligns with our call for Social Innovation as put out again recently in our Social Impact Report 2020”. 

The Outlook also offers interesting insights on Employment Protection Legislation (EPL). The new EPL Index integrates more extensively collective dismissals versus personal dismissal, and the ability for workers and business to agree on dismissal while sustaining unemployment benefits. Countries that restrict dismissal of open-ended contracts tend to also be more restrictive for temporary employment. In comparing to the previous index, the OECD finds that – on average – open-ended contracts have loosened, while fixed term contracts have been evenly loosened and restricted across OECD member countries. The EPL ratings on agency work overall increased very slightly by 0.02 points (e.g. overall regulations for firms contracting an employment agency became slightly stricter) between 2013 and 2019. Extensive increases are observed in Italy, Slovakia, Iceland, Denmark and Germany, while decreases occurred in Slovenia, Turkey and Lithuania. 

“This crisis offers an opportunity to put the economy and society on a more resilient, sustainable and inclusive path, concluded Gurria. The Employment Outlook is the OECD’s annual report on jobs and employment in OECD countries. Each edition reviews recent trends, policy developments, and prospects. It also provides ample data on various labour market issues.   

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