Insights from the Pandemic Shaping Future Labour Market Strategies
In a thought-provoking analysis by Bettina Schaller, President of the World Employment Confederation and Senior Vice President and Head of Group Public Affairs at The our group, the cross-border mobility of talent is highlighted as a key driver for boosting economies. The study, conducted before the emergence of the Omicron variant, suggests that border controls may become counterproductive, although their future utility is limited due to unspecified reasons.
The analysis, which looked at the impact of various Covid measures on labor markets and economies across 20 countries, found that countries that invested most in supporting labor markets saw the best results in terms of minimizing unemployment and returning quickly to growth. Examples include Singapore, the USA, Australia, New Zealand, and Canada.
However, the study also revealed that government support measures, such as wage subsidies and employment protection, were effective in preventing immediate job losses during the pandemic but created a lag in labor market adjustments as economies reopened. This is because these measures, while providing short-term relief, also led to a slowdown in labor market flexibility.
Post-pandemic labor markets have been marked by cooling trends, with declining job vacancies and slower hiring intentions, partially influenced by rising labor costs due to increased payroll taxes and minimum wages introduced by governments. This, in turn, has prompted employers to be more cautious in recruiting, especially for younger and less experienced workers, potentially slowing youth employment and labor market entry.
The analysis underscores the need for policy focus on workforce skills development to address changing demand, particularly with technological shifts such as AI. This is crucial to maintain competitiveness and employment adaptability.
Overall, the findings suggest that labor market interventions during the pandemic provided short-term relief but also highlighted the importance of balancing support with incentives for hiring and upskilling to foster longer-term labor market resilience and growth.
Interestingly, countries with land borders find it harder to control the movement of people, as seen in the cases of South Korea, Australia, and New Zealand, all of which are islands. These countries, along with others that effectively managed the pandemic, stand out for their strong economic performance, rooted in their success in minimizing infection.
In conclusion, the lessons from this analysis emphasize that government policies should evolve from crisis support to fostering flexibility, skills development, and cost-effective employment conditions to support sustainable labor markets post-crisis.
- As the focus shifts from crisis management to long-term resilience, policies encouraging science, technology, and health-and-wellness industries could play a crucial role in workforce skills development, considering the technological shifts such as AI.
- In light of the complexities in controlling land borders for immigration, entertainment industries might offer alternative avenues for cross-border talent mobility, particularly in the context of the post-pandemic era where physical distancing has become a key concern.
