The labour market is changing very rapidly. Prior to the onset of the COVID-19 pandemic, the labour mar- ket across Europe was performing strongly overall, and across most member states. Nevertheless, high levels of employment co-existed with some important problems such as inequalities of skills, employment, conditions and pay in relation to gender, ethnicity, disability and partic- ular challenges faced by specific social groups such as migrants or ex-offenders or some ethnic minorities (Eu- ropean Commission, 2020a). Young people have been particularly negatively affected by changes in job security and wages in the so called ‘gig economy’.
The current COVID crisis is adding to these vulnerabili- ties, increasing unemployment generally and particular- ly among the insecurely employed, temporary workers, young people and the low to medium skilled. It has in- creased youth unemployment, and the rate of those Not in Employment, Education or Training and households have lost considerable income, especially at lower lev- els of the income distribution (European Commission, 2020b).
Further, the range of anticipated future changes that go under the banner of ‘The Future of Work’ may further compound inequalities and insecurities faced by sections of the population. The OECD predicts that around 14% of jobs are at risk due to automation, with signifi- cant variation of this risk between OECD member states, between sectors and occupational roles, with workers in manufacturing, agriculture, food preparation or commu- nications occupations (postal, courier etc) most at risk (Nedelkoska, & Quintini, 2018). While new waves of au- tomation over the last decade have not yet led to signif- icant employment losses in any country, it is influencing" "employment growth between occupations and the skills demands within them. The lowest skilled are becoming more concentrated in the most vulnerable sectors and occupations (OECD, 2021). On the upside, technology acted to protect large numbers of jobs in the Covid 19 crisis, enabling workers to continue even when lockdowns prevented them physically going to work. The uptake of telework will likely lead to accelerated use of new tech- nology after the crisis.
While recent job retention schemes have been effective at reducing and slowing redundancies and sustaining employment and business viability, they come at a cost to fiscal balances. The likelihood of slow output growth for several years and the need for further restorative public spending (for e.g., on physical and mental health and education services) will put public finances under considerable pressure for several years to come.
All this will have an ongoing impact on PES and acceler- ate pressures that they were already experiencing and responding to. PES will need to continue to demonstrate increasing effectiveness and efficiency and deliver re- sults in helping the workforce and employers to adjust and ‘build back better’. One means of PES responding to the multiple challenges that they and the labour market face is through further development of partnerships. This will involve review of existing partnership arrangements and further learning from the many strong examples of PES facilitating closer working across organisational boundaries. By sharing good examples and best practice PES can highlight and encourage further positive en- gagement between stakeholders in enhancing social and labour market inclusion through delivery of increasingly citizen centric services.