The modern world changes in a vertiginous way and labour markets must adapt to be more attractive for productive ...
The modern world changes in a vertiginous way and labour markets must adapt to be more attractive for productive investment. Labour contracts diversity, flexibility and proper training enable productivity, a key element for economic growth.
By Martín Padulla for staffingamericalatina
What is work nowadays? Is it the same for young people than for those getting close to end of their careers? What do employers representatives mean when talking about labour? And employees representatives? What do governments refer to when developing policies linked to labour? Are representation parameters revised?
A few days ago I had a conversation with a young Argentinian professional who works independently. He defined himself as self-employed. When I asked him who represented him, his answer was: “myself”. A month ago I had a chat with a young Chilean entrepreneur. He told me his goal was to change the world and that he was working on a quest that included a sustainable business with high environmental impact, which is currently local but, according to him… will become global.
Young people move in collaborative platforms and make decisions based on recommendations of their peers. They are sceptical with current forms of representation. They question traditional education forms as they have immediate access to knowledge without needing intermediaries. Many are aware of the fact that permanent training that will make them competitive is within reach. Others are not and they need help to visualize that.
According to the latest report of the Ibero-American Organization of Youth (OIJ), there are over 157 million millennials in Latin America, comprising around 26% of the entire population. By 2020, 50% of the world’s workforce will be millennials and five years later the percentage will rise to 75%. Today, the unemployment rate among young people is three times the rate among adults.
Are policymakers aware of the fact that 75% of jobs in 2025 have not been created yet? Are we working to develop the jobs of the future?
We know for a fact that these jobs will be interdisciplinary and that we need to train young people with skills to adapt to an environment that has not been created yet. Another thing we know, as it has been checked by several researches, is that human capital development is directly related to the rise of productivity and has an impact on economic growth. These are markets where regulatory frameworks change and find proper ways to tend to citizens’ needs. Staffing Industry Analysts has classified solid Workforce Solutions Ecosystems with companies that provide different types of specialized services.
In Latin America, regulatory frameworks are disconnected to labour realities. The rigid regulatory frameworks neither fit the needs of the business world nor satisfy workers wishes. Furthermore, tools to strengthen young people are insufficient: the result shows high levels of informality rates, skills gaps, exclusion, high levels of youth unemployment and a disturbing number of NEETs.
While in the Northern Hemisphere there is talent scarcity, here the problem is of qualitative nature. If we manage to solve it, quantity will not be a problem for development. Simultaneously, we need to adjust rules to reality. Working on these two variables will get us closer to a future of work that can include us in a leading role. As it was said in a previous column, capital will go after talent, and not the other way around, as it used to be in the times of our parents and grandparents.
Once and for all, we need to leave behind the labour model based on Fordism and start paying attention to the new forms of labour, such as uberization, human cloud, self-employment and its evolution: entrepreneurship. These are all responses adjusted to young people’s needs.
Technology and digitalization have crossed every labour market. This is the largest generation to ever enter the labour market. For them, mobile devices were not a technological advance, but a part of their everyday lives. This means that a radical evaluation of the learning methods and the design of apprenticeships is needed. Education and Work must adapt and, most importantly, become interrelated.
As GAN4Youth claims, countries with the highest rates of young apprentices in comparison to the employed population – such as Switzerland, Austria and Germany- show lower levels of youth unemployment. Labour training programs include apprenticeships, trainings, or internships and they are key to create jobs for young people and skills for companies as they make sure that training is adjusted to the needs of companies and industries; these programs combine lectures with labour training, enabling young people to learn relevant abilities; they provide young people with critical skills such as problem solving, teamwork and communication. In addition, they grant an income source while training young people for the labour market. Training, work and inclusion. The German Dual Vocational Training might be the most paradigmatic case. Successful cases such as The Netherlands, France, UK, and Germany itself, in the articulation of private and public employment services also show interesting results.
These are essential systems to help young people overcome the obstacle of having no working experience, an impediment that prevents many graduates from getting their first job. In numerous cases, the programs are combined with tools that strengthen entrepreneurship skills.
The most modern labour markets are characterized by the growth of scattered and diverse workforce and the increase of flexible work schedules. Companies no longer offer the security of a job for a lifetime and people have more freedom to choose how to work. In these markets, working spaces are changing (in some sectors they have already changed dramatically) and social benefits are portable, protecting workers regardless the status they have as formal workers. Benefits are not attached to an organization. In these markets, employers are focused on attracting and retaining talent using a wide range of labour contracts for an extended workforce. These markets seek to innovate as they understand that countries that invest in innovation show greater productivity.
Latin America must take a lot of steps to modernize its labour markets. According to a survey developed by the Latin American Development Bank, only 43% of companies train their employees. Among those that provide formal training, only 58.5% of workers receive any training. The main cause is costs; the second, the risk of employees leaving, which is quite a paradox. It seems like a poor interpretation of the Fordism model we need to leave behind. The following quote is said to belong to Henry Ford: “The only thing worse than training employees and losing them is not training them and keeping them”.
What are the scarcest skills in the region according to employers? Languages, scientific-technological thinking, mathematics, digital skills, autonomy (learning to start something on your own) and social skills. Not just technical training, but soft skills as well.
Does every country have training for labour programs? Some have deficient offers, others have institutions that are not mature enough and a small number of countries have long history organization, like SENAI in Brazil, which was created in the 1940’s, SENA in Colombia (1950’s) or SENCE in Chile (1970’s).
When analysing deficit, what is the common denominator? Relevance. Countries with strong institutions, tax credit systems to prevent costs being an issue and a culture that nurtures training, there still are relevance deficits, as people are trained in skills not based on demand. Proactive work is needed, surveying and understanding future demand.
As regards innovation, investing and encouraging disruptions is key to close the productivity gap we have with the most developed countries of the world. Advances on this issue are directly linked to economic growth and, most importantly, the distribution of “new” jobs. In the knowledge economy, this means lots of jobs.
During the presentation of GAN4Youth Colombia, ILO’s Regional Director José María Salazar Xirinachis named six areas to solve the skills deficit:
The future of work is already among us. If we manage to connect Education, Work and Entrepreneurship with modern regulatory frameworks, we shall be able to change history.
It does not look like a utopia.
About Martin Padulla
Founder and Managing Director of staffingamericalatina. Martin Padulla is Sociologist (USAL), MBA (UCA) and labour markets expert. He published “Flexible Work in South America” and “Regulatory framework for private employment agencies in Latin America” two books about the new realities of work in Latin America.
mpadulla@staffingamericalatina.com
About staffingamericalatina
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