PM+: Public-private partnerships can help drive down unemployment

EU policymakers should support measures to enhance cooperation between public and private employment services argues Eurociett's Denis Pennel.

By Denis Pennel

22 Apr 2015

Recent data confirming that economic growth has returned to Europe is welcome news.

However, we must not allow ourselves to become complacent. There are still some 22 million unemployed Europeans and youth unemployment levels remain stubbornly high, particularly in southern Europe.

Now is the time to move ahead with policies to drive growth and job creation in the years to come.

Employment, or more accurately the lack of it, emerged as a key issue on the doorstep with voters during last year's European elections. Six years on from the economic crisis there are few people who have not experienced some direct fallout as a result of worsening economic conditions and a fragile employment market.


EU employment ministers have acknowledged the need to prevent and reduce long-term unemployment and to foster further structural labour market reforms.  Meeting recently they referenced a flexicurity based approach to labour market policy and also spoke of the need for an individualised approach to the unemployed.

So how can the institutions respond to these points and set about getting Europe back to work?

One key priority should be to push all member states to modernise their labour market regulations to meet the new realities of work. This includes developing appropriately regulated forms of flexible work that promote job creation as well as removing unjustified restrictions on temporary agency work.
The European commission’s recently released report on employment and social developments in Europe confirms that those countries which have reformed their labour markets - such as Sweden, Germany and the UK - withstood the impact of the economic crisis recovering more quickly than markets such as Spain, Portugal and Greece which persisted with outdated labour regulations.

Another immediate action that would enhance labour market participation and also boost youth employment would be to allow for a broader diversity of labour contracts. Agile labour markets today embrace many different forms of contract and reflect a changing attitude to work/life balance among both employers and workers.

In the Netherlands for example, less than 50 per cent of people work under a standard, full-time contract, while in both France and Belgium there are over 30 different types of employment contract.

High unemployment tends to go hand in hand with high levels of undeclared work which damage economies, companies and workers. Driving more inclusive labour markets will serve to stamp out undeclared work by bringing more people into the formal economy and pushing up tax revenues as a result.

Addressing unemployment among the under 25’s presents a specific challenge. We need to consider policies for young people just leaving education and entering the workplace as well as for those who have been unemployed for some time.

To avoid creating what has been termed a ‘lost generation’ the EU needs to lean on national governments and support them in developing tailored strategies for young people, offering them job search, career guidance and effective training to equip them with the skills they will need in the workplace.

The employment and recruitment industry as represented by Eurociett is experienced in supporting job seekers in adapting to change. The EU would do well to push further member states in implementing cooperation between public and private employment services in order to reduce labour market segmentation and facilitate cross-border mobility.

The European commission’s own partnership between employment services (PARES) initiative prompts public–private partnerships (PPPs) and the sharing of best practice among private and public employment services. It has been successful at EU level, but needs further follow-up at national level.

Encouraging PPP would enhance the support available to all unemployed people - and at no extra cost to the tax payer. It would also facilitate transitions within the labour market – transitions from unemployment to work, from short assignments to longer careers, and from slowing industries to growth sectors.

Successful examples of PPP already exist across Europe. In the UK for example, job seekers that have not secured employment after six months of signing on with the public employment services are transferred to the private employment sector for a more tailored approach.

In the Netherlands, the opposite approach is taken and those newly seeking work are sent immediately to the private employment sector to find them a job.

Expanding labour market participation and job creation in order to drive down unemployment levels across Europe must continue to be a key priority. The European parliament needs to support strategies to stimulate growth and give companies the confidence to take on new employees.

Evidence from both the European commission and the OECD confirms that efficient labour markets actually drive growth. The institutions must maintain pressure in order to drive labour market reforms across the EU28, thereby supporting job creation, even against a background of relatively modest growth.

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