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Home arrow Communication arrow Labor Intermediation Services in Developing Economies: Adapting Employment Services for a Global Age

Labor Mobility and Migration

Particularly in developing countries, the more global labor force is more mobile as well. As documented in Chapter 1, migration is an increasing feature of developing economies. Migration between developing countries is increasing more than from South to North. Chapter 4 detailed the range of ways that labor intermediation services have been developing to facilitate migration and, potentially, incorporate migration in a cycle of human capital improvements. This includes specialized temporary or curricular migration programs and return migration programs, particularly those linked with investments in migrant-sending communities.

Advancing Skill Content of All Work

Even more fundamental shifts are occurring in the skill content of work globally. Manufacturing employment has changed dramatically with a decreasing need for low and repetitive skills. The skill content of manufacturing as well as services is extended to higher-order skills, problem-solving and interpersonal skills, and greater levels of literacy and numeracy skills. These changes in employment come in the context of more technology and communications-driven economies. The key structural transformations needed in developing economies out of low-productivity agriculture require a human capital transformation via skills development, but for low-income developing countries the challenge is now even greater, given the higher skill content in future employment. The international consulting firm, Deloitte, estimates that the half-life of technology skills (the time period in which half the skills will become no longer marketable) is just 2.5-5 years, signaling the need for continual retooling in this key skill area.26

All the evidence to date is that the world economy is not adjusting well enough or quickly enough to the demands for higher-order skills. Surveys of skills mismatches demonstrate that mismatches are continuing to increase.27 The World Bank reports that in developing and emerging economies skills constraints to growth are considered more acute now than in the first half of the 2000s. As documented in Graph 1.3, skills mismatches are as acute in key developing countries as in the advanced economies. Peru and Hong Kong have skill shortages over 60% - that is, 60% of employers say they can’t find skilled workers to fill positions, similar levels to Japan (Chap. 1). Brazil and India, among the largest developing economies, have among the highest levels of skill shortages, which are great constraints to growth.28 In addition to the efficiency losses that come from skills mismatches, there are groups that are affected more disproportionately. Skills mismatches are particularly affecting the ability of parttime workers, the young, and migrants to adjust to the labor market.29

According to the Institute for the Future, in the coming decade the global work force will require ten higher-order skills that are less explicitly taught today:30

  • 1. Sense-making. The ability to determine deeper meaning or significance of what is being expressed (or the kind of skills machines are not good at).
  • 2. Social intelligence. The ability to connect to others in a deep and direct way.
  • 3. Novel and adaptive thinking. Proficiency at thinking and coming up with solutions beyond those that are rule-based.
  • 4. Cross-cultural competency. Ability to operate in different cultural settings.
  • 5. Computational thinking. Ability to translate vast amounts of data into abstract concepts and to understand data-based reasoning.
  • 6. New media literacy. Ability to critically assess and develop content that uses new media forms, and to leverage these media for persuasive communication.
  • 7. Transdisciplinarity. Literacy in and ability to understand concepts across multiple disciplines.
  • 8. Design mindset. Ability to represent and develop tasks and work processes for desired outcomes.
  • 9. Cognitive load management. Ability to discriminate and filter information for importance.
  • 10. Virtual collaboration. Ability to work productively, drive engagement, and demonstrate presence as a member of a virtual team.

The advancing skill content of work is clearly placing more demands on increasing the skills of employment counselors, far beyond the typical profiling of a job seeker’s skills to a more sophisticated measurement and detection of “soft” skills, interpersonal skills, including skills developed informally. It also depends on higher quality and more sophisticated labor market information systems and profiling and career guidance tools. Hungary’s public employment service advanced in creating a nationwide career guidance and development system only by cutting across institutional and policy lines (Box 5.2).

Box 5.2 Hungary: Advancing a Career-Development/Guidance System in a Skills-Driven Economy

A decade ago, Hungary faced institutional fragmentation across its various agencies responsible for education, employment and training; this kind of fragmentation is something that most countries, developing and very developed, can relate to. As in many other countries, disparate responsibilities along the lifecycle of any individual meant information and guidance for identifying and then carrying out careers was piecemeal and fragmented as well. As a result, both young people and adults in Hungary had few tools to really plan, consult, or receive guidance in building jobs, training and education into careers.

From 2008 to 2010, the public employment service of Hungary, Nemzeti Folalkoztatasi Sozlagala, invested heavily, along with support from the European Social Fund, in creating a nationwide career development guidance system. Using a new methodology, they built a consolidated career guidance system that crossed all the major sectors, providing both guidance, web resources and information. The Hungarian system built upon a range of European experience and also linked, via labor market information systems, to the European Union. The new career development/guidance system included the mapping of all current career guidance professionals across the myriad institutions - schools, vocational and technical education, adult education, universities, community-based services as well as the public employment service. It extended training for career development professionals, established a new career guidance network of professionals and established a life guidance portal,

Source: The World of Public Employment Services, 2015, p. 95-96

Labor intermediation in the new global economy goes well beyond a matching function, and extends to aiding more efficient transitions, to linkage with human capital and skill development, enhancing the ability of developing countries to advance skill development as demanded by current economic trends. The contribution of labor intermediation services to these growing demands will depend on if, and how well, developing countries can create basic employment services that can grow into labor intermediation services in a Stage 2 relevant for the specific developing economy.

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