The World of Work in Upheaval
An interview with Dr Johannes Kopf, Chair of the European Network of Public Employment Services (PES Network).1
The world of work is undergoing a far-reaching and, in some respects, fast-paced transformation. Digitalisation is a very important driver of this development. For example, 1.3 million jobs could be lost in Germany alone in the next six years – although 2.1 million new jobs could be created over the same period. What challenges does this pose for the European public employment services?
Kopf: Besides the fact that people will lose their jobs as a result of digitalisation – but also as a result of necessary statutory measures against climate change, for example – the major trends in the labour market are leading to constant changes and increases in the skills that companies require of their employees. This means that our task is not only to assist people who have been made unemployed to the best of our ability and to help companies to find staff, but also to ensure that existing jobs are secure in the long term. We are therefore already supporting companies today by offering our expertise and support in the field of human resource development.
The current Labour Market Bulletin published by the PES Network states that the unemployment rate for people with low qualifications in Europe as a whole is 13.3 per cent, compared to just 4.1 per cent for persons with a higher education degree. You are quoted as having said that work for unskilled people is disappearing faster than the supply of unskilled people, and appealed to policy-makers to place more value on education in nursery and primary schools2. Why?
Kopf: In all EU countries, the unemployment rate for low-skilled people is higher than for people with a higher level of qualification, usually several times higher. The difference is only smaller in countries with lower wages, where automation is not yet as widespread. What is concerning in this context is the fact that the position of low-skilled people – despite a general trend towards higher qualification levels – is continuing to deteriorate. The unemployment rate for low-skilled people has risen across Europe since 2005, while the rate has declined for people with a medium or high qualification level.
„We therefore need to significantly reduce the proportion of young people who do not continue in education or training after the end of their compulsory schooling.“
We therefore need to significantly reduce the proportion of young people who do not continue in education or training after the end of their compulsory schooling. That is exactly the purpose of the European Youth Guarantee – and we are also working hard to achieve this aim. We know from a number of studies, however, that providing more intensive support for children is even more effective. In particular, targeted support at nursery and primary school age enables more children, including those from hardto-reach households, to achieve higher levels of educational attainment. In all honesty, the best insurance against unemployment is not unemployment insurance, but a good education.
Digitalisation is not only transforming the world of work and the labour market. It will also lead to major changes to information, communication and transaction structures between the public and companies on the one hand, and between the public and the authorities on the other. What challenges do you believe these trends pose for the public employment services?
Kopf: Digitalisation has already had a significant impact on all European public employment services. We process huge quantities of data using complex IT systems. Technology also offers a great deal of potential to boost our organisations’ effectiveness. Furthermore, we already offer many services in digital form, ranging from the option of registering online and a Europe-wide job search site to e-learning services. Many customers are already comfortable using these services. Experience shows, however, that this approach is not suitable for some people and specific situations. Generally speaking, the right mix is needed.
What are the special characteristics of the individual Member States, and what are the shared labour market challenges they face?
Kopf: There are many shared challenges, but of course the situation also differs a great deal from country to country. In some respects, the individual national public employment services are organised in very different ways: they have different resources and in some cases, different tasks. There are also significant differences between the national labour markets: for example, some countries are facing huge emigration trends – a brain drain – while in other countries the labour supply is rising significantly. What we all have in common, however, is that we want to match supply and demand in the labour market to the best of our ability.
We are not going to run out of work in future. But in many cases, it will be a different kind of work requiring different skills and qualifications. How important will skills development (have to) be for jobseekers and employees?
Kopf: Continuous learning is becoming more and more important. This means that both employees and jobseekers need to be willing to undertake continuing education and training, but also to engage in self-reflection: what can I do, what are the areas where I need support? In the case of employers, meanwhile, more consideration and planning are needed with regard to their workforce’s need for continuing education and training. Only by working together in this way will we all succeed at keeping Europe’s economy competitive and securing jobs for the long term.
„Employees and jobseekers need to be willing to undertake continuing education and training, but also to engage in self-reflection: What can I do, what are the areas where I need support? “
How can public employment services and labour market policies help to design technology and work in a way which ensures that employees can lead a self-determined working life and do not lose out from digitalisation?
Kopf: The simple answer to this question – and to many of the other urgent problems facing us these days – is skills development. However, the public employment services also have the task of drawing attention to the emergence of structural problems in the labour market and offering our expertise and advice to policy-makers. A task which, as Chair of the PES Network, I wish to fulfil to the best of our ability at European level as well.
Austria now has more than two decades of experience with its model of educational leave for individual promotion of continuing education and training. This instrument, was significantly improved in 2008 and saw part-time educational leave added as an option in 2013. It is becoming more and more popular and has made longer programmes of skills development and continuing education and training more attractive to the general public.
What can other countries learn from Austria’s experience?
Kopf: We have indeed had some interesting experiences which can certainly serve as a model for other countries. Yet we too need to continue to re-examine our approach. Our educational leave mainly reaches more highly skilled people and younger people. Conversely, this means that the rate of uptake is still too low for low-skilled people and older people. That is why we are also offering other types of support. Nonetheless, it is often no easy task to encourage low-skilled people and older people to embark on the process of obtaining a fully-fledged vocational qualification. Good ideas on how to achieve this are still very welcome throughout Europe.
Platform work is increasingly present in our day-to-day lives: in the form of food delivery services, transport services and household services, for example, but also in the form of online work such as content writing, coding and creative work. In your view, what influence do platforms which act as intermediaries for work have on the development of the labour market in general? Could such platforms potentially even lead to structural changes to the labour market?
The data available shows that platform work plays a fairly limited role at present. Nonetheless, the number of people offering their services via platforms is rising, and so public employment services increasingly need to engage with this trend. At the moment, however, I believe it is more urgent to clarify unresolved questions in this context, for example in connection with labour law and the social insurance systems.
How is the public employment service responding to the emergence of platforms which act as intermediaries for work? Is it possible to report on what experience has been gathered so far?
Kopf: Very little experience has been gathered so far, as in such cases the matching of labour supply and demand takes place outside the purview of the public employment services. Several initiatives have already been launched by Member States regarding the labour law issues or the development of collective agreements, for example. The public employment services intend to focus more on this issue in 2020 and 2021.
What trends are you observing in Europe? Do you see any regional priorities or differences?
Kopf: In the Netherlands, Spain and Ireland, platform work has already reached a certain level of importance. Finland, the Czech Republic and Slovakia are the countries where platform work plays the smallest role at present. In general, however, it is important to take a nuanced view of the situation. There are actually still very few people who offer most of their work via platforms. For most people, platform work represents an additional source of earnings.
Would a rise in (self-employed) work on platforms have an impact on social insurance systems? What options for action could exist in this context?
Kopf: That will ultimately depend on what legal provisions are created. What is clear is that social insurance systems can only be effective for as long as they receive appropriate funding from contributions. Governments and the social partners need to take appropriate steps in this regard.
Platform work is a relatively new phenomenon with far-reaching implications for the economy and the labour market. What potential and challenges do you think it holds in general?
Kopf: Again, it is necessary to take a nuanced view. For people who are earning additional income, platform work can be an interesting option. In highly skilled fields which offer good earning opportunities, this type of work brings with it a certain degree of flexibility and freedom. Whereas the poorly paid activities which are often carried out by low-skilled people are less attractive and often problematic.
In November 2018, the German government published an Artificial Intelligence (AI) Strategy which explores issues such as AI’s impact on the world of work. In March 2020, a German AI Observatory will begin its work at the Federal Ministry of Labour and Social Affairs. It will help to assess the opportunities and risks of artificial intelligence and to ensure political control over this issue. Particularly in public institutions, AI- and algorithm-based systems have to meet strict requirements. What is your view on the use of AI and algorithms in public employment services? What are the opportunities and risks?
Kopf: Some public employment services are already using algorithms to improve their services. This takes place mainly when it comes to the “profiling” of jobseekers and the “matching” of jobseekers to vacancies. If systems of this kind can help us to support jobseekers in finding a suitable job, then there is a lot to be said for using them. However, the use of genuine artificial intelligence is not much of an issue in the individual public employment services at present. In Austria, we are already using algorithms to assess the future job prospects of each individual jobseeker. It is a tool which helps our job counsellors to identify the right support strategy. The use of such systems will play a major role in many areas of our lives in future and offers a great deal of potential, but it is important to make a distinction between useful and improper applications.
Do we need binding, uniform rules for the future use of automated decision-making processes and AI- and algorithm-based systems in public employment services, for example?
Kopf: Developments are currently moving at a fast pace, and whenever such systems are introduced it is important to make sure that we do not focus solely on technical issues and forget ethical questions, for example. To this end, a broad political and public debate is needed. When we introduced our system in Austria, we engaged with such discussions intensively and on multiple occasions, and I think that is justified given the significance of such systems.
„There are a wide range of challenges. Climate change and digitalisation, but also Brexit and its consequences, will continue to occupy the EU for a long time to come.“
What would you like to see in terms of a European labour market policy?
Kopf: Cooperation within our European network functions extremely well. In recent years we have worked very hard to develop a wealth of knowledge about the individual public employment services and used this knowledge to improve together. We also now know a great deal more about the European labour market, individual labour market policies, and what works and what doesn’t. We want to offer this expertise to our European partners and support the European Employment Strategy to the best of our ability. We hope that many partners will be willing to listen.
What are your hopes and expectations for the German EU Presidency?
Kopf: Germany is assuming the Presidency at a very exciting time. The new Commission has been in office for half a year and has begun implementing its first projects. There are a wide range of challenges. Climate change and digitalisation, but also Brexit and its consequences, will continue to occupy the EU for a long time to come. European solutions need to finally be found in the field of migration, and the economy is stuttering a little. All of these things have implications for the European labour markets. Expectations of the German EU Presidency are accordingly high. I wish Germany every success and I would be delighted if our network can contribute to a successful Presidency.