New ILO report on global employment policy tackles crisis challenges, charts path to hope and relief for millions of people

A new ILO report, the “Global Employment Policy Review: Employment Policies for Inclusive Structural Transformation” examines current and persistent challenges in the labour market and provides a blueprint for forging new and innovative solutions to policy design and implementation, both during the current crisis and beyond.

News | 31 March 2021
GENEVA -- The world of work is undergoing profound changes, driven by technological advances, demographic shifts, climate change and globalization, and over the past year, a pandemic that has injected new uncertainty into already volatile labour markets.

How can policymakers address these challenges? And are the solutions also relevant in the current context of the COVID-19 crisis? These and other critical issues are addressed in this ILO report that seeks to show how new, comprehensive and agile policy responses can tackle these new realities, based on new evidence and analysis, and with innovative solutions.

“This is precisely why the ILO decided to launch the Global Employment Policy Review,” says Sangheon Lee, Director of the Employment Policy Department. “The ILO plays a leading role in advancing employment policies around the world. In doing so, we do not shy away from very difficult policy questions, but instead admit shortcomings of our views and propose how we can improve our policies to better support workers and businesses.”

The report highlights how structural transformation and sectoral policies are central to inclusive and sustainable job-rich recovery and growth. In this context, it focuses on a number of pertinent issues, in particular:
  • Processes and institutions dedicated to the design and implementation of sectoral policies, including a comparative survey of methods for identifying potentially promising sectors for structural transformation and trade expansion;
  • Developing skills policies for promoting trade and employment;
  • The role of employment-intensive investment programmes in contributing to structural transformation and thereby to peace and resilience;
  • Developing policies that combine the creation of decent work with a just transition to environmental sustainability, particularly in the context of national employment policies (NEPs); and
  • A comparison of policy approaches for transitioning to formal employment in Africa, Asia and Latin America.
Mr. Lee acknowledges that at this moment in time, with the pandemic buffeting already volatile labour markets, time is of the essence.

“With the pandemic causing great pains on all aspects of our lives, quite understandably, our time horizon has become very short,” says Mr. Lee. “Nevertheless, it is also very important for policymakers to think about how to build resilience into the world of work against future shocks and improve the foundation of our economies and labour markets to create decent jobs in sustainable ways.”

“Sustainable solutions are all about inclusive structural transformation: how we can move workers and business to where there are better opportunities with higher productivity, for instance, to advanced manufacturing, or digital sectors. This is also about how to improve productivity and job quality within well-selected sectors, for instance, through better investment in production systems and skills policies and training,” Mr. Lee adds.

The report makes clear that policy development doesn’t occur in a vacuum and requires what it calls a “human centred” approach, especially in times of crisis.

“It is very clear that both developing and developed economies need to rethink their employment policies,” says report co-editor Dorothea Schmidt-Klau. We really need to shift employment policies towards a more human-centered approach, not only when we think of the future of work, but also in how that reality will look after this crisis.”

“To be able to do that, we need to get away from thinking that just one single policy can actually solve all problems,” Ms. Schmidt-Klau adds. “The challenge is to harness different targeted policies, including employment-centered macroeconomic policies on greening, transition from informality to formality, trade, skills development and public investment policies so that they pull together to address the needs of the people in specific countries.”

Such a comprehensive approach underscores the importance of social dialogue, the report says, with governments, workers, and employers working hand-in-hand on the design and implementation of industrial policies.

“The report concludes that social dialogue is an area where there's a need for improvement in the implementation, in particular, of industrial policies that will help them be more successful,” says report co-editor David Kucera. “You can think of industrial policy as basically a learning process. And learning means that you don't really know always what's going to happen, what's always the right thing to do. Therefore, adjustments are needed along the way and social dialogue is more key than ever before.”

“The Centenary declaration on the future of work, adopted last year, provides overall policy guidance,” says Mr. Lee. “It calls for investments in three areas: people, jobs and institutions. But the real question for now is how to deliver them. We know that the situation will continue to evolve rapidly with great uncertainty and new risks in the coming years. Now more than ever, our policies should be even more agile. What is more, they will need continuous adjustments. For that, we need to monitor labour market developments and policy impact in a very timely manner and use such analysis for policy adjustments. We know from experience that good policies at a difficult time can give hope and relief to millions of people.”