Employment Policies

‘A New Skills Agenda for Europe’ focus on equipping Europeans with the right skills in order to increase Europe’s workforce employability and to respond to changes in labour market requirements. The agenda is grounded on the evidence of the existence of skills gap and mismatch across the Union and within countries. There is a shortage of basic, digital, transversal, and entrepreneurial skills. A common understanding of key competences on the job is missing. Vocational education and training (VET) is undervalued and its attractiveness and opportunities may be enhanced. Overall, skills intelligence allowing for more informed choices is indispensable for skills policies to make a difference in addressing the extent of mismatch of supplied competences and the occurrence of gaps. All these aspects are relevant at the territorial level. In fact, the outlining of policies and/or interventions in the domains of education and training as well as of youth, employment and migration is not solely a prerogative of national governments. It also occurs at the local and regional level. Furthermore, it is at this same level that labour market needs meet the skills supply and that future trends of job opportunities as well as cooperative approaches among different stakeholders of the labour market are shaped.

Citizens’ expectations of the European Union vary widely across policy areas. A Eurobarometer survey of the European Parliament – Europeans in 2016: Perceptions and expectations, fight against terrorism and radicalisation – seeks to identify those areas in which EU citizens want to see the Union doing more. Having identified areas in which there is a gap between the EU’s current action and citizens’ expectations of the Union, the next step is to look at the potential – within the constraints of the EU legal foundations – for the EU to do more to meet citizens’ expectations.

The core long-term structural demographic change in Europe is ageing: the current ratio of working age population to old dependent population below 4 to 1 will, according to Eurostat projections, be replaced by a ratio of 2 to 1 by 2050.
Demographic change in individual Local and Regional Authorities (LRAs) will depend on their capacity to attract the working-age population. However, concentrations of seniors in specific localities and regions do not necessarily constitute a challenge or handicap, insofar as this population’s income from retirement schemes provides the basis for the development of a wide range of economic activities.

The industrial structure of European economies and the types of occupation that they support are changing. This change takes many forms in different national contexts, but there are some common themes. There has been an increase in service-sector employment, both in low-skilled customer service work and in high-skilled ‘knowledge’ occupations, and a corresponding drop in manufacturing employment. This has contributed to a ‘polarisation’ of the workforce in many countries, with more high-skill and low-skill jobs but fewer requiring mid-level skills. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time, permanent contracts has shrunk.

Some of the changes are cyclical, the result of recession followed by a stuttering recovery. The rise in temporary work, for example, might be expected to recede when European economies are again growing strongly enough to bring unemployment down towards its pre-recession level. Other changes, however, are the result of major structural forces operating in the global economy: the rapid pace of technological innovation, globalisation and demographic change. These forces are likely to continue to cause dislocation and disruption in European labour markets for the foreseeable future. As a result, there will be a fundamental shift in the types of jobs that are available for workers and in the skills demanded by employers across Europe. Understanding the likely changes in the European labour market over the next decade is essential if policymakers and firms are to set Europe onto a path towards permanently lower unemployment through the creation of many more well-paid jobs.

Based on original polling across five European countries, this report explores employers' views on a range of issues related to long-term unemployment – their attitudes towards the unemployed, especially on skills and employability, and the effectiveness of their contact with public employment services.