- From job and labour shortages, to declining wages, five key trends are impacting the world of work.
- Addressing these could create vast opportunities for countries to grow and businesses to thrive.
- The World Economic Forum’s Jobs Consortium, a coalition of CEOs, ministers and other leaders, is meeting at Davos to set forth a new vision for the future of work and to discuss a roadmap for action.
- Here, seven members of the Consortium explain how public-private collaboration can create a better future of work for all.
Global labour markets are on divergent paths. Low and middle-income countries have a growing working-age population amidst high unemployment; while advanced economies confront an ageing population, decreased labour force participation and tight labour markets.
Continued technological advancements, the green transition and the restructuring of value chains are all set to create vast opportunities for countries to grow and businesses to thrive.
But, they will also lead to increased job churn; significant growth and opportunity in some roles and sectors, at the same time as decline and disruption in others.
How can governments proactively tap into the opportunities for new and better jobs and minimize the downsides and how can businesses support a transition to a better future of work?
5 key trends impacting the world of work
1. Job shortages in low and middle-income countries
Global employment has still not reached pre-COVID-19 levels. The International Labour Organization (ILO) reports that in the third quarter of 2022, global hours worked were 1.5% below pre-pandemic levels – the equivalent of 40 million full-time jobs. This is particularly prevalent in low and middle-income countries and for low and medium-skilled occupations, showing a divergence in employment recovery. At the same time, the world’s working-age population is increasing significantly (by around 700 million people over the next decade), particularly in low and middle-income countries. The UN is aiming to create 400 million jobs including in the care, digital and green economies.
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2. Labour shortages in high-income countries
Conversely, many high-income countries are experiencing labour shortages. In the United States, for example, there were over 10 million unfilled job openings as of November 2022. This represents 1.74 job openings for every unemployed person. Industries, such as food services and manufacturing, are particularly impacted. Around 1.4 million people have left their jobs in the manufacturing industry since the start of the pandemic and the industry has struggled to bring entry-level and skilled workers in to fill vacant roles. Likewise, in Europe, almost three in 10 manufacturing and service firms reported production constraints in the second quarter of 2022 due to a lack of workers, according to the OECD.
3. Job churn is rising globally
The green transition, increasing technological adoption and geoeconomic shifts are transforming labour markets worldwide, increasing job churn globally. The World Economic Forum’s Future of Jobs Report predicts that by 2025, the changing division of labour between humans and machines could create 97 million new jobs, while displacing 85 million existing jobs. At the same time, the climate crisis is sparking a green transition in the labour market. As the Forum’s Jobs of Tomorrow: Social and Green Jobs for Building Inclusive and Sustainable Economies Report finds, this is leading to an increased demand for green jobs, for example, agricultural, forestry and fishery workers, advisors and life science technicians.
4. Global pressure on wages
Additionally,wages are a growing concern for workers. COVID-19 put downward pressure on real wages for many workers around the world. Three in five workers around the world live in countries where labour incomes have not returned to the level seen in the fourth quarter of 2019, according to the ILO. Post-pandemic gains in wages are being eroded by high inflation and the rising cost of living around the world. For the first time in over fifteen years, real wages have declined by 0.9%.
5. Quality of work is an issue
Similarly, issues around the quality of work have come to the fore. In the United States, a Gallup poll found that factors such as opportunities to learn and grow, feeling cared about and clarity of expectations, determine a worker’s engagement in their job and the ratio of engaged to actively disengaged employees is the lowest in almost a decade. Job quality is also affecting employee retention. In India, more than 60% of respondents to a McKinsey survey expressed a desire to leave their jobs, feeling confident that equal or better pay with equal or better benefits could be found elsewhere. Around the world, employees are renegotiating their relationship with work.
A better future of work is needed – and possible. The Jobs Consortium champions this agenda.
Introducing the Jobs Consortium
The World Economic Forum’s Jobs Consortium is a coalition of CEOs, government ministers and other leaders with a common vision for a better future of work for all. They promote alignment and action on three key areas: firstly, boosting foresight on labour market trends to prepare for the future, drawing and expanding on the insights developed at the Forum, such as the Future of Jobs report.
Secondly, they identify investments in key sectors leading to good job creation, bolstered by initiatives such as the Jobs Accelerators, national public-private collaboration platforms which improve employment opportunities, the Jobs of Tomorrow whitepaper series, which identifies the green and social jobs needed to drive social and environmental transformation, and the Global Future Council on the Future of Job Creation.
Thirdly, they support high job quality, fair wages and dynamic job transitions. This is supported by insights from a community of over 140 Chief Human Resource Officers, a Good Work Alliance, which drives action on ensuring good work by championing standards and metrics set forth in the Good Work Framework and a Refugee Employment and Employability Initiative
Members and special guests of the Jobs Consortium will meet at the Forum’s Annual Meeting in Davos in January 2023 to set forth a vision for the future of work and to discuss a roadmap for action. In light of this, the Forum asked seven members and special guests of the Jobs Consortium to share their thoughts on how public-private collaboration can create a better future of work for all. This is what they said:
People are the key driver of any successful transformation and the sustainability of its outcome. Everything we do is focused on empowering our people by equipping them with the evolving set of tools and skills and creating the opportunities for them to capture, grow and flourish.”
— Faisal F. Alibrahim, Minister of Economy and Planning of Saudi Arabia
The Guatemala Moving Forward Plan, a unique public-private partnership with the goal of generating 2.5 million quality jobs for Guatemalans in 10 years by attracting nearshoring investments and boosting SMEs, has set a regional precedent. These efforts can be shown in scenarios, such as the World Economic Forum’s Jobs Consortium, guiding other nations to create better jobs and enhance economic growth.”
— Janio Rosales, Minister of Economy of Guatemala
Amidst rapid technological developments in the world of work, creating an inclusive labour market where no one is left behind is one of the top priorities of the Dutch government in the coming years. By strengthening public-private cooperation through the framework of the Jobs Consortium, I am convinced we can take great steps towards achieving this goal.”
— Karien van Gennip, Minister of Social Affairs and Employment of The Netherlands
A vibrant and inclusive job market is the most important investment that all our societies have to make. It requires not only creating good jobs across a range of sectors and vocations, but deliberate efforts and partnerships between governments, employers and various social partners to orchestrate lifelong learning and upskilling, career agility and efficient matching of skills with future demand.”
— Tharman Shanmugaratnam, Senior Minister, Government of Singapore
At LinkedIn, our analysis of real-time labour market trends allows us to unlock unique insights that can inform decisions to make workplaces fairer, more inclusive and equitable. Through our collaboration with the World Economic Forum, we can leverage these insights to create a better future of work for everyone.”
— Allen Blue, Co-Founder and Vice-President, Products, LinkedIn, USA
Recruit is a growing technology company committed to connecting people to job opportunities around the world in a faster, simpler and more human way. We look forward to contributing to the World Economic Forum’s Job Consortium and sharing meaningful labour market insights that help drive toward a world where all may prosper together.”
— Hisayuki “Deko” Idekoba, President and Chief Executive Officer, Recruit Holdings
UNI Global Union is tackling unfair wages and poor working conditions by ensuring the minimum wage is a living wage and putting in place mechanisms to guarantee that the rights of workers, including the right to collective bargaining, are respected and adhered to. I am excited to join the Jobs Consortium to highlight the essential need for fair wages and good quality union jobs in developing strong labour markets.”
— Christy Hoffman, General Secretary, UNI Global Union
Republished from the World Economic Forum
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