CONCEPT PAPER

Public Employment Services Conference

"Labour market institutions in times of crisis: challenges & experiences"

Brussels, 14 - 15 May 2009

1. INTRODUCTION

At the end of the first decade of the XXI century, the European Union (EU) is at a crossroad
of transitional and structural changes affecting economy and society in general. The world
economy is facing an unprecedented financial and economic crisis over the last fifty years. As
events unfolded late last autumn, it became increasingly clear that the EU would not be spared
a recession and that the labour market situation would become worse in most Member States.
As a consequence, the unemployment rate is expected to increase to above 8% in the
European Union in 2009 (and to above 9% in the Euro area) - corresponding to approximately
2.5-3.5 million people - with a further increase in 20101. Furthermore, Europe is confronted
with a future of increased global competition, demographic change - ageing society and
migration flows - continuous technological development and environmental challenges.
Against this background, labour market institutions and in particular the Public Employment
Services (PES) have to endure an increasing pressure and deliver effective and prompt
responses to an unpredictable labour market. . Employment services are in the forefront of
policy implementation - the European Employment Strategy and other policy orientations
(please refer to the Annex "Policy context"). PES are thus expected to play a crucial role
in tackling the employment effects of the crisis and in addressing the core challenges in
the years to come: prevent the risks of structural and long-term unemployment and
address the rapid changes in economy and society in general.

2. OBJECTIVES OF THE CONFERENCE

The overall objective of the conference is to bring together the Heads of PES of the Member
States of the EU, Norway and Iceland2 and other employment stakeholders to discuss actions
to further foster inclusive labour markets in a rapidly changing and global economy, both in
the present downturn period and beyond 2010. The conference will benefit from the input of
labour market experts and PES staff on good practice and innovative ideas; it will encourage
the exchange of information and make reference to useful country information and practice.
Experts from Ministries of Labour and International Employment organisations, academics,
social partners' and NGO representatives will also participate in the conference.
The debate should put into perspective the short- and long-term challenges that
European labour market players will be confronted with. It should therefore contribute
to map tangible outcomes for PES immediate response to the crisis and to the post-
Lisbon Agenda period.

1
EC Interim forecasts 2009-2010 of 19/01/2009
http://ec.europa.eu/economy_finance/thematic_articles/article13727_en.htm
2
Switzerland has also been invited to participate

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 2.1. A forum for debate and exchange of practices & experiences
PES modernisation efforts over the past years have made a substantial contribution to
progress achieved with both prevention and reduction of massive and long-term
unemployment; it has also improved transparency in the labour market3. Unlike in the
past when PES only provided general administrative treatment to unemployment
spells, the labour market institutions, and in particular the employment services, are
challenged to provide early and effective responses to the economic downturn cycles
and to provide effective services to their target customers – jobseekers and employers.
In this context, the conference should not be held back by an approach focusing
excessively on policy processes and concepts with limited field applicability. It
should rather call for a pragmatic and operational response to the question "How
and with which instruments should labour market institutions address the
present and future labour market challenges?" The economic crisis risk to evolve
for a social crisis; yet, it should be grasped as the opportunity for ‘testing’ the
implementation of multiple or combined labour market measures to help regain the
path of growth and stability. What are then the short- and long-term vectors at stake?
A) The impact of the present economic crisis and future global challenges on the
mission and role of the labour market institutions.

B) The effectiveness of the tools, resources and leeway instruments already at the
disposal of the labour market institutions (mainly PES and other employment
services) to tackle the crisis effects – shorter working time, job redundancies and
mass dismissals, job destruction, businesses restructuring, migration flows,
exclusion of vulnerable people (in particular young and older people.

C) The good practices and pathways to bridge the gap between the present and the
longer-term (beyond 2010) challenges to help labour institutions better anticipate
and respond to different labour market contexts.

2.1.1. Labour market institutions in action: strategies to alleviate the impact

of the crisis
In different Member States, the economic crisis is generating mass
redundancies and large scale dismissals (lay-offs). The employment
services and PES in particular, need to be able to face the increased
volatility of the labour markets (i.e. increased inflow of jobseekers
combined with increased speed of transitions).
The creation of jobs is beyond their remit; but it is their role to intermediate
and bridge the gaps between labour supply and labour demand. As labour
market events unfold, they will: a) increase pressure on the PES capacity to
deliver efficiently, b) result in a massive increase of jobseekers' expectations
for 'integrated case management' (construction of personalised career paths on
the basis of tailor-made career and training guidance); c) enhance early
interventions (notably 'job retention' in case imminent job losses or massive
dismissals); call upon quicker, individual contractual-based services to manage
secure job transitions; d) require better service provision to employers (labour
demand) and e) need a more efficient labour market monitoring and
anticipation of needs.

3
Network of PES – mission statement, Lahti (FI), 04/12/2006

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Already now, a number of Member States have decided to reinforce their
resources to deal with the crisis and their interventions are anchored in a
combination of the aforementioned practices. These measures underpin other
macroeconomic measures decided at policy making level - reduction of
taxation or social levies on businesses securing and promoting jobs (UK, SE,
FR DE), increase of State aided labour contracts and salaries (FR),
prolongation of unemployment benefits.

Examples of PES interventions to address the effects of the economic crisis

over the labour market:

NL: To prevent unemployment by work to work mediation of persons threatened by

unemployment, the Dutch PES "UWV WERKbedrijf" will establish 30 mobility
centres. These centres are meant to support on a project basis, companies that make
use of the regulation to find new employment (secondment, temporary jobs) for the
employees who are involved. This approach will also be applied in case of mass
dismissals.

ES: Extraordinary Plan containing Orientation, Professional Training and Labour

Market Insertion Measures; the plan contemplates the hiring of 1,500 advisors who
will carry out support tasks in labour search departments.

DE: Improvement of the PES: it is planned to organize 5000 additional job

placement officers (part of Pact for Employment of 16 January).

AT: 35 million Euros yearly to increase the capital of the Employment Market
Service (AMS) for vocational training of the unemployed (especially for the
qualification of women). A general tool for retraining delivered under the new
scheme for automotive sector (combination of short-time work and internal
respectively external further education, training for redundant workers to be trained
in new qualifications) are the 'implacement foundations' which will now be
increasingly used again.

UK: An additional £1.3 billion for Jobcentre Plus to deliver support for
unemployed. £800 million is new money and £500 million will come from
postponing the closing of 25 JC+ offices.

IE: Increased provision of night class training from approximately 8,000 places to
24,000 places in 2009. Such places will be available free of charge to people who
are unemployed.

BE: In Flanders (Belgium) the Government took the initiative to offer training for
people who are temporarily unemployed. The system of temporary unemployment
cancels or postpones (for blue collar workers) dismissals based on economic
reasons.
________________________
Extracted from survey conducted by DG EMPL in February 2009 to Member States
to gather information on new employment and social policy measures to address the
economic downturn.

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 2.1.2. Labour market institutions in action: new impetus towards the future
Building on present effective practices, the labour market institutions have
henceforth the potential to strengthen their response capacity to address
unpredictable shifts in economy and society with a disrupting effect over
employment. PES in particular, in the frame of the initiative “New Skills for
New Jobs” (NSfNJ) will be called upon to combine advanced forecasting and
monitoring tools with already validated measures in order to better anticipate
the labour market needs and make better job matching.

2.2. Operational deliverables of the conference

A conference report will be drawn up for dissemination purposes. It will take stock of
existing good practices and/or innovative labour market approaches and service
delivery models (tangible outputs and recommendations) put forward by speakers and
other participants in response to the key questions above. The results of the meeting
are expected to help: a) decision-makers to fine-tune the European employment policy
framework; b) labour market institutions to reshape their role and mission as well as
the prompt and effective response capacity to change.
The conclusions will furthermore contribute to feed up the creation of a new European
programme "PES to PES dialogue on good practices of modernisation", which is to be
launched at the beginning of 2010. The aim of this programme is to assist in the
implementation of a systematic, permanent and structured dialogue process among
Public Employment Services regarding their modernisation, in line with the needs of
labour markets and orientations of the European Economic Strategy. This activity
should also facilitate the exchange of information on PES practices and service
delivery processes. With the background of the current economic situation in Europe,
PES to PES dialogue is more important than ever and should thus be systemised and
structured.
Moreover, the outputs of the conference will certainly have an impact on relevant
seminars planned for late May 2009: a) the WAPES 8th World Congress4 and, b) the
CIETT 2009 World Conference5.

3. THE VENUE
The conference will be held on 14 and 15 May 2009 at Hotel Bloom, rue Royale 250, B-
1250 in Brussels. Interpretation will be ensured in five languages: EN-FR-DE-ES-IT.
The conference will be divided into 3 thematic parts: a) the fist part will focus on the impact
of the economic crisis on employment and labour market institutions in Europe (analytical
outlook); b) the second part will look into and compare the measures and tools implemented
by labour market institutions to tackle the effects of the crisis (operational outlook), and c) the
third part will tackle the challenges to be faced by labour market institutions beyond 2010
(forward-looking perspective). The conference will end with a panel discussion focusing on
the two days debate topics, followed by a closing statement by a Commission representative.

Annex: "The European Labour Market: Policy Context"

4
Annual congress promoted by the World Association of Public Employment Services. The 2009 edition will
be held at Dubrovnik (Croatia)
5
Annual conference of the International Confederation of Private Employment Agencies, Lisbon, 27-29 May
2009

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 ANNEX

THE EUROPEAN LABOUR MARKET: POLICY CONTEXT

Present and future are interdependent dimensions: the present labour market situation
provides the opportunity to implement the most advanced policy and empirical responses to
address the crisis. It also creates the momentum to learn lessons and strengthen the role and
response capacity of public employment services to address the labour market challenges of
the next decade.

The present

In 2009 and 2010, employment and social policies will be at the centre of the efforts to deal
with the consequences of the economic crisis6. In Europe, in the United States as in many
other parts of the world, the crisis has seriously hit the financial services and the construction
sector, before extending its effects to the manufacturing and services sectors. This fact has
generated an impressive decrease of production, uneasy access to credits and massive lay-
offs.

United Kingdom: there was a 22 percent decrease in job vacancies in the forth
quarter 2008, compared to a year ago, especially in construction and
manufacturing with more than 40 percent reduction, followed by finance and
transport/communication. The number of people out of work could rise to nearly 3
million by 2010
France: as of January 2009, more than 2 million workers are reported as
unemployed
Germany: the jobless population is expected o increase by 500.000 in 2009
Spain: the number of unemployed soared by 0.6 million in the final quarter of
2008 alone, with Spain now having the highest unemployment rate in the EU (>
14%)
_________________________
Extracted from the European Commission labour markets Monthly Monitoring
Report, DG EMPL, January 2009

Actions should thus tackle unemployment through investment in human resources and
support to the most vulnerable groups which are usually more severely affected by economic
crisis. These groups – low skilled and redundant workers, workers in precarious employment
conditions, young and older people, minorities or disabled persons – risk to be particularly hit
with the economic downturn and the segmentation of the EU labour market. The European
Economic Recovery Plan clearly outlines the need to ensure that "employment services
are fully equipped and ready to provide people with personalised counselling and job
search assistance, intensive (re)training, apprenticeships, subsidised employment
schemes and grants for self employment and business start-ups".

6
In European Employment Initiative, which is part of the European Economic Recovery Plan adopted by the Commission
in November 2008

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The labour institutions have to focus on the modernisation of labour markets and implement a
coordinated combination of responses, especially towards the work force at its margins. As an
immediate response, the flexicurity approach7 provides a comprehensive policy
framework. Flexicurity, with its four components, aims at protecting employment and
long-term employability rather than particular jobs. The combination of contractual flexibility
and strengthened active labour market policies can provide a rapid policy response, by
facilitating quicker transitions after massive job losses or dismissals. In the current climate of
uncertainty, the flexicurity approach by demonstrably facilitating transitions through training,
active labour market policies and adequate social protection operates as a leverage mechanism
to alleviate the impact of the crisis. It also fosters citizens’ confidence and ensures rapid (re-
)integration of vulnerable or redundant workers into the labour market. Comparative data on
unemployment trends in the EU and in the US in December 2008 showed that its impact has
been lower in Europe. This is due to an increased use of internal flexibility (flexible working
arrangements within companies) allowing for workforce adjustments rather than reductions.
That is why most European employment services are now committed to find rapid,
flexible and effective solutions for people looking for suitable employment and for
employers looking for filling their vacancies (see item 4 hereinafter). Indeed, in times of
economic downturn, Public Employment Services in particular play a crucial role in
implementing flexicurity and in addressing the needs of priority groups with the greatest
difficulties entering employment: "By providing support and delivering services, our Public
Employment Services also actively contribute to the implementation of the common principles
of flexicurity. Our operations focus or organising and assisting successful labour market
transitions, and our services help to endure a balance between flexibility and fluidity of
employment on the one hand and security during job changes and career development moves
likely to occur during the life cycle on the other"8.

The future

Notwithstanding, the effects of the crisis over employment vary according to the country, the
region and the sector. Already today, as jobs are destroyed (e.g. construction and
manufacturing), there are other sectors where the creation of jobs prevails (services and
distribution).
In the longer term perspective beyond 2010, skills shortages will remain a feature of the
EU economy, competing in a globalised world. The European labour market is becoming
complex, namely with the emergence of new forms of employment and labour mobility as
well as atypical working arrangements. By the year 2020, almost three quarters of jobs in the
EU-25 will be in the services sector; there will be many jobs created in high-skilled
occupations and a rise in qualification requirements for low-skilled jobs.
The ageing population will also pose new challenges in terms of retaining, using, and
developing the skills of older workers and the proportion of migrants' population in the
workforce is expected to grow to offset demographic changes. The shift to a low carbon
economy and the development of new technologies will be a central concern for a sustainable
development. It will impact on skills needs and will call for new job opportunities,
particularly in the energy, construction and transport sectors.

7
EC Communication "Towards common principles of flexicurity: more and better jobs through flexibility and security",
COM(2007)359 final, 27/06/2007
8
"The contribution of PES to flexicurity", joint opinion of Heads of PES, 11/12/2008 (Nice)

6
That is why the "New Skills for New Jobs"(NSfNJ) initiative9 aims at promoting a better
matching of skills, so that as many vacancies as possible can be filled by the adequately-
skilled people (increased job matching and job adaptability to labour market demand). In the
medium- to long-term, NSNJ will enhance anticipation and forecasting of labour market
needs in the EU, a vital element for Member States' future structural and education reforms
(enhancement of lifelong learning education and training systems to respond adequately to
changing labour market needs). Improved forecasting (anticipation) is of key importance for
economy and in particular for tapping into all opportunities for job creation. Together with
active labour market policies (component 3 of the flexicurity), it will assist in easing
transitions, in tackling unemployment spells and thus in strengthening a sustainable social
model.

By pursuing an integrated flexicurity and anticipative approach in times of economic

downturn, employment services can address at the same time the long term
demographic and environmental pressures over the labour market. This argument is
sustained by Member States views on the future of the Lisbon Strategy as evidenced
hereunder:

The future of the Lisbon strategy (key ideas):

United Kingdom: the context has reinforced the Lisbon Strategy challenges. The
successor should reflect this, recognising the interdependence between economic,
social and environmental policy(…). It should promote opportunity by enabling
people and economies to adapt quickly to change

France, Czech Republic & Sweden: the EU and its Member States will need to
strengthen their economies by implementing structural reforms to better adapt to
globalisation change (…) pursue reforms of the labour market in order to ensure high
employment, adaptability and social cohesion

Portugal: to strive for a Lisbon Plus strategy catering for new models and
sustainable solutions for the post –crisis economy(…) promotion of widespread
access to qualification, jobs and labour participation

Finland: Strengthen sustainable growth, productivity and employment in national

economies; innovation policy to support growth and employment

_______________

Extracted from some Member States views on the future of the Lisbon Strategy
(January/February 2009)

* * *

Contact person at the European Commission, DG EMPL:

Alice SANTOS, alice.santos@ec.europa.eu, Tel: +32/2/295 56 55

9
EC Communication "New Skills for New Jobs – anticipating and matching labour market and skills needs"
COM(2008)868/6, 16/12/2008

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SELECTED BIBLIOGRAPHY:

European Commission (2008) Communication from the Commission – From financial crisis
to recovery: A European framework for action, COM(2008)706 final. Available at
http://ec.europa.eu/commission_barroso/president/focus/credit_crunch/index_en.htm#key

European Commission (2008) Communication from the Commission to the European Council
– A European Economic Recovery Plan, COM(2008)800 final. Available at
http://ec.europa.eu/commission_barroso/president/focus/credit_crunch/index_en.htm#key

European Commission (2008) Communication from the Commission to the European

Parliament, the Council, the European Economic and Social Committee and the Committee of
the Regions – New Skills for New Jobs, COM(2008) 868/3 . Available at
http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=431&furtherNews=yes

European Commission (2007), Towards common principles of flexicurity: more and better
jobs through flexibility and security, COM(2007)359 final. Available at
http://ec.europa.eu/social/main.jsp?catId=116&langId=en

European Network of Heads of public Employment Services, "The contribution of the Public
Employment Services to Flexicurity" – Joint Opinion adopted during the 23rd meeting of
European Heads of Public Employment Services, Nice, 11th of December 2008. Available at
http://ec.europa.eu/social/main.jsp?catId=118&langId=en

European Commission (2008), 3. Labour Market situation in the Member States in

Employment in Europe 2008 report, Chapter 1. Available at
http://ec.europa.eu/social/main.jsp?catId=119&langId=en

European Commission (2009), Monthly Labour Market Monitor - Directorate-General of

Employment, Social Affairs and Equal Opportunities. Available at:
http://ec.europa.eu/social/main.jsp?catId=120&langId=en

European Commission (2009) Communication for the Spring Council – Driving European
Recovery, vol.1& 2 COM(2009)114 final . Available at
http://ec.europa.eu/commission_barroso/president/focus/credit_crunch/index_en.htm#key