The industry’s importance grows as the world of work changes: perceptions break down

For our grandparents, maybe even our parents, a job was a job for life. Japan’s ‘salaryman’ may have become a cliché. But the employee of the big corporation, offering loyalty in return for a secure, long term position, was stereotypical of much of the developed world.

That world has changed beyond recognition, especially since the ‘great recession.’ Global economic, demographic and social factors have had massive repercussions for mature economies and fast-industrialising countries alike. But if there is one common thread, regardless of location, it is that employment has become far less predictable and that flexibility has grown steadily more important — for both employer and employee.

I see four overriding trends defining how the world of work is changing, and how providers of human resources solutions have a crucial role to play.

Persistent unemployment. High unemployment in the developed world is here to stay, while even higher youth unemployment, which is more than double the average unemployment rate in mature economies, may also be permanent. Among the key causes is mismatched skill sets as globalisation has offered employers once virtually unimaginable opportunities to transfer not just blue collar, but even some white collar, jobs abroad. Further disadvantaging Europe and North America are demographics, with both regions set to have some of the world’s oldest median populations as the century progresses.

Unfilled vacancies. Higher unemployment in many mature economies has been accompanied by a significant number of unfilled vacancies, stemming from increasingly serious mismatches in skills and geography: some 4 million in the U.S. and 3 million in Europe.

Growing gulf. The unemployment issue in the U.S. has actually been somewhat mitigated. The U.S. economy has started to recover — albeit gradually — from the financial crisis, whereas unemployment in Europe may only just have peaked. The gulf between Europe that used to lag the U.S. by only six to nine months; is now more like 60-plus months.

America’s ‘return’ has been boosted by a few factors: more flexibility, lower average salaries, significantly longer working periods than in Europe, thereby helping competitiveness, compared with lower cost rivals. And, more recently, what can only be described as the shale gas ‘revolution’ that has greatly advantaged U.S. manufacturing competitiveness compared with many counterparts.

Changing hiring practices. All these factors have been reflected in significant changes in hiring practices, with profound consequences for the labour market. Significantly, U.S. companies have often been trendsetters here. Many quickly grasped the value of workforce flexibility in remaining competitive. While, years ago, all employees might have been permanent, the mix today between permanent and temporary labour has shifted beyond recognition. Economic data for the current U.S. upturn strikingly demonstrates this structural shift.

Such momentous changes in the labour relationship have, inevitably, affected popular behaviour and attitudes. Not only have former bonds between employee and employer become more flexible, ever more people, who may once have sought long-term company positions, have become self-employed — partly in reaction to the structural changes I’ve mentioned. Some have gone so far as to identify generational change, referring to Generation Y or Generation Me — a new cohort of people with a much more entrepreneurial, or even ‘happy go lucky’ attitude to long-term labour relationships.

It is here that global staffing companies including Adecco have an ever bigger role to play. As the classic working relationship evolves, our importance inevitably rises. We cannot, of course, resolve core policy issues, like dealing with demographics, assessing immigration, or even resolving national education and training policies. But we can play a major part in easing the frictions and changes the vast upheavals in the world economy are forcing on us all, helping to create new jobs and, for youngsters in particular, facilitating the move into the labour market by providing an initial taste of the world of work.