Firms and their workers need to adapt more quickly to changing world of work

Governments need to do more to help workers and firms adapt to the fast-changing world of work and drive inclusive growth, according to the new OECD Jobs Strategy. New evidence in the report claims that countries that promote job quantity, quality and inclusiveness – such as Denmark, Iceland, Norway and Sweden – perform better than those which focus predominantly on market flexibility. While flexibility and adaptability are essential to stimulate the creation of high-quality jobs in an ever more dynamic environment, the gains and costs need to be fairly shared between businesses and workers, according to the OECD.

“Countries must step up their efforts to adapt policy and institutions to the challenges of a rapidly changing world of work,” said OECD Secretary-General Angel Gurría, launching the report in Paris with France’s Minister for Labour Muriel Pénicaud. “Technological progress, globalisation and demographic change are creating many new opportunities, but not for everyone; policymakers should focus on helping those at risk of being left behind through well-targeted education and training, labour market and social policies as part of inclusive jobs strategies to help everyone get ahead.”

While in the 1990s the OECD Jobs Strategy stressed flexibility in response to widespread unemployment, and in the 2000s it advocated different policy mixes to advance full employment, the new OECD Jobs Strategy provides a comprehensive policy framework to promote not only more but also better jobs and a more inclusive and resilient labour market. This will be increasingly important in light of the digital transformation and rapid technological change that our economies and societies are undergoing. The most recent OECD analysis suggests that nearly half of all jobs are either at high risk of automation or likely to see significant changes.

The new OECD Jobs Strategy argues that a shift in emphasis is needed from remedial to preventive policies, which would boost efficiency and equity at the same time. Wage-setting rules and the tax-and-benefits system can be combined to make work pay and protect workers rather than jobs.

Focus on education

Countries need to invest in an effective education and training system, which gives workers the skills needed by employers and offers opportunities and incentives for education and training throughout their working lives. Social partners also have a key role to play in fostering inclusiveness, protecting workers and making effective collective bargaining systems.

The Strategy stresses the rise in various forms of non-standard work, including temporary jobs and self-employment. Despite currently representing only a small share of employment, “gig work” is also on the rise and it may expand significantly in the near future. The challenge for governments is to accompany innovation in the creation and use of non-standard employment arrangements, while avoiding abuse, creating a level playing field between companies, and providing adequate support to all workers.

Since non-standard forms of work are likely to increase, governments need to ensure that everyone has access to social protection and is covered by key labour market regulations, regardless of contract or employment type. Social protection can be made more effective by extending coverage and adapt or create specific schemes, consistent with the principle of a universal social protection floor, while promoting portability of benefits.

Equality of opportunities also needs to be strengthened, so that socio-economic background does not become the key determinant of success in the labour market, including through targeted interventions during (pre)school years and in the transition from school to work.

Working conditions should be adapted to make it easier for people to combine work, care and social responsibilities. This will increase labour force participation among both men and women, narrow gender gaps and reduce the risk of poverty and exclusion.

Building public support for reforms is vital, according to the new Jobs Strategy. This will require winning a mandate for reform and effective communication, as well as complementary reforms to cushion short-term costs. Once reforms are passed, they must be fully implemented, effectively enforced and rigorously evaluated.