Labour market policies and employment services are critical ingredients of the COVID-19 policy responses

This article presents highlights of the new policy brief on “COVID-19: Public employment services and labour market policy responses”.

Article | 18 August 2020

Summary

The COVID-19 pandemic and the ensuing crisis have severely disrupted economies and labour markets in all world regions and has exacerbated existing vulnerabilities for workers already at risk of poverty. Labour market programmes have been part of policy responses that governments have put in place to protect jobs, enterprises, and incomes from the fallout of COVID-19. In developed and emerging economies public employment services (PES), along with others, have played a central role in the execution of these policies to support jobseekers, workers and employers. The policy brief “COVID-19 : Public employment services and labour market policy responses” documents the policy responses to promote peer learning and provides insights for policies for recovery.  

PES: operational and policy responses to the crisis 

Policy responses designed around existing labour market interventions have been adjusted to reflect the different stages and containment measures for reducing the virus transmission. The massive disruptions in the global economy and labour markets have compelled PES to increase their agility and flexibility by adapting delivery and operations to maintain service and scaling up capacity to cope with soaring demand for critical services.

At the operational level, putting in place effective service continuity plans in a timely manner has been instrumental to ensuring operational continuity, maintaining staff morale and safety, and coping with additional demand from essential services sectors. The plans enabled timely adjustments in human resource and systems capacities.

Furthermore, technology-based delivery channels have proven necessary to ensure PES offices could continue to provide core services. PES that had already embarked on digital transformation before the COVID-19 crisis were in a better position to ensure remote access to services while physical distancing protocols were enforced. Investing in service digitalization should be considered a priority for PES along with necessary measures to ensure inclusivity.

Policy responses to the crisis

Active labour market policies (ALMP) and employment services played and continue to play an important role in cushioning income losses, protecting existing jobs and facilitating employment and promoting labour market attachment. Since the beginning of the crisis, national policies have given priority to channeling income compensation for workers and reducing the risk of more job losses mainly through:
  • Job preservation programmes - In the context of COVID-19, short-time work compensation has been used primarily as a massive transfer programme for workers affected by the resulting sharp reductions in economic activity. Measures in this domain mainly focused on expanding coverage and relaxing eligibility criteria; 
  • Supported recruitment in essential sectors - For those sectors still recruiting during the pandemic, PES provided dedicated job-matching services, delivered for the most part through web-based job-matching systems, telephone and call centres, online chat and video conferences, along with some limited face-to-face interaction; 
  • Employability-oriented services to maintain labour market attachment - Some countries have reinforced support for target groups in need of improving and/or acquiring digital skills and have used digital technology in order to ease access to free skills training, online learning tools and resources. 

Policy implications for return to work and recovery

Given the critical role labour market policies and employment services have played in this and past crises, countries should maintain or increase funding for PES and ALMPs providers as lockdowns are eased and recovery begins, to support effective transitions in the labour market. For many developing and emerging countries, however, this has to be done amidst increasing debt and reduced fiscal space.

The COVID-19 crisis has also revealed gaps in the institutional capacity of countries to deal with massive lay-offs, particularly where the informal economy accounts for a large proportion of the labour market. Governments and social partners should invest more in building the capacity of PES to extend services to the informal economy.

Finally, the crisis experience has emphasized the importance of integrated design and implementation of social protection and active labour market policies. ALMPs are an instrument of critical importance in preventing further job losses during a recession and preparing the workforce to take up jobs in the recovery. Reinforcing the link between ALMPs and social protection measures should be a priority area for ILO support to its constituents.

The preparation of this summary was led by Michael Mwasikakata, Senior Specialist, Employment Services/ILO Employment Policy Department.