Labour market trends
Labour market trends is a tendency of labour market to move in a particular direction over time. The key to create effective policies for job creation is to understand labour market trends. Global employment estimates show the potential of different regions in the world to absorb growing labour force. Unemployment rates by sex group and age allow the identification of vulnerable groups most in need of support. Similarly, estimates of poverty help target efforts to promote poverty reduction strategies more precisely[1].
Changes on the labour market
One of the major determinants of changes on the labour market is the demand for labour. Changes in the demand for labour are analyzed in the field of both changes in numbers of jobs available in the labour market and structure of skills required in the workplace. In the current rapidly changing and globalized economy there are multiple determinants of labour demand[2]:
- the business cycle and business cycle fluctuations, which influences total demand for labour and so has an effect on the structure of the economy
- global trade, internalisation of the market as well as international division of labour
- changes in domestic consumption due to growing population income ( focusing on quality products) or other changes in consumption ( for example changing age structure of population, demand for healthy products)
- focus on some sectors as a result of international needs ( e.g. on renewable energy as a result of environment protection needs)
- technological development and innovations which change the nature of jobs
Labour markets trends as the key for future changes
Labour market trends are the focus of research. Numerous explanation for differences in those trends have been put forward. Changing patterns of work commitment, innovation in organization of working time are contributing to substantial changes in the nature of work and employment. The standard job offering lifetime employment is disappearing to be replaced by the portfolio job combining self-employment, part-time jobs and home-based work. The analyses of the market trends help to establish control of the national labour market and influenced the government labour market policy. The date enables to forecast the need for skills in developing countries and requirements of the future[3].
Labour market information and analysis - LMIA
Monitoring the balance of labour demand and supply is the key for finding the trend on the employees market. Providing the information about the labour market situation results in developing the wide range of changes. The current labour market situation and development trends are analyzed over time. Labour market information can be particularly important for a huge companies considering entering a new market where they do not yet have experience. LMIA system also identifies priority issues and target groups in the labour market to evaluate and help formulate appropriate policies[4].
LMIA system has three main functions[5]:
- Collection of labour market information and household information
- Analytical tools to evaluate and understand trends and challenges
- Institutional arrangements and networks
Examples of Labour market trends
- Increase of Automation: Automation is one of the most significant labour market trends in the 21st century. Automation involves the use of machines and technology to replace human labour in a variety of processes, including production, logistics, and customer service. Automation has increased the speed and efficiency of many tasks, but has also led to job losses in industries such as manufacturing.
- Rise of Gig Economy: The rise of the gig economy is another trend transforming the labour market. This refers to the practice of hiring temporary, independent contractors for short-term tasks instead of full-time employees. Companies such as Uber, Airbnb, and TaskRabbit have popularized this model, allowing people to pick and choose tasks to complete for a fee.
- Growing Demand for Skilled Workers: The demand for skilled workers is also increasing in many industries. This is due to the rise of new technologies, such as artificial intelligence and machine learning, which require workers with specific skillsets. As a result, employers are increasingly looking for workers with specialized knowledge and technical expertise.
- Increase in Remote Work: Remote work is becoming increasingly common, with many employers offering flexible working options to their employees. This includes telecommuting and work-from-home arrangements, which allow workers to complete their tasks from anywhere in the world. Remote work can also help to reduce the cost of overheads and boost employee productivity.
Advantages of Labour market trends
Labour market trends provide valuable information to policy makers, employers and governments to develop effective policies for job creation. The advantages of understanding labour market trends include:
- Labour market trends provide data on the potential of different regions in the world to absorb a growing labour force. This helps to understand the current and future demand for labour and the potential mismatch between labour supply and demand.
- Labour market trends provide employment estimates by sex group and age. This helps to identify vulnerable groups most in need of support, and to develop strategies to reduce gender and age-based discrimination in the labour market.
- Labour market trends provide poverty estimates, which enables governments to target poverty reduction strategies more precisely.
- Labour market trends provide data on wages, which helps to understand wage disparities and to identify the need for wage policy intervention.
- Labour market trends provide data on skills and qualifications, which helps to identify the need for training and education programmes to equip workers with the necessary skills.
Limitations of Labour market trends
Labour market trends have certain limitations, which need to be taken into account when formulating policies. These include:
- Lack of timely data: Labour market trends often rely on data from previous years, which can be outdated and not reflective of the current situation.
- Reactive rather than proactive: Labour market trends often focus on addressing existing issues rather than anticipating potential problems and working proactively to prevent them.
- Difficulty in predicting: Labour market trends can be difficult to predict due to their complexity and the variety of factors influencing them.
- Lack of regional focus: Labour market trends often lack regional focus, making it difficult to target specific areas and populations.
- Lack of disaggregated data: Labour market trends often fail to provide disaggregated data, making it difficult to identify vulnerable groups and target policies accordingly.
As a way to better understand labour market trends, there are a few other approaches that are being used. These include:
- Labour force surveys: These surveys provide information on the composition of the labour force in terms of age, sex, occupation, education and other characteristics. This data can be used to identify trends in the labour market and to inform policy decisions.
- Job vacancies: Information on job openings is another way to track labour market trends. Data from job vacancy postings can help to identify sectors with high demand for workers, as well as problematic areas of the labour market.
- Migration and labour flows: The movement of people in search of work, both within and across countries, can provide insight into labour market trends. The availability of work and the wages in different locations are two key factors that influence migration patterns.
- Labour productivity: Labour productivity is a measure of the amount of output produced by a worker or a group of workers. This can provide information on the efficiency of labour, as well as the productivity of the labour force in different industries or occupations.
By understanding the trends in the labour market, governments can create policies that create jobs, reduce unemployment and promote economic growth. The use of all of these approaches can help to identify the areas where policies need to be developed or modified to address labour market trends.
Footnotes
| Labour market trends — recommended articles |
| Technological environment — Measurement of innovation — External analysis — Project link — Employment — Technology scouting — Advantages of outsourcing — Macro environment analysis — International division of labor |
References
- Breen J. W (1997)., Labor Market Politics and the Great War: The Department of Labor, the States, and the First U.S. Employment Service, 1907-1933, Kent State University Press, Kent, OH
- Ekkehard E. (2009)., Labour Market Information and Trends, International Labour Organization, Switzerland
- Joll C. (red.) (2018), Developments in Labour Market Analysis, Routledge Library Editions Labour Economics, Routledge, United Kingdom
- Řihova H. (2016)., Guide to anticipating and matching skills and jobs, Publications Office of the European Union, Luxemburg
Author: Anna Marczyk
