A new report published by the European Political Strategy Centre examines the key European trends shaping the future of work in the Fourth Industrial Revolution and how they are accelerating labour market transformations, what people do for a living and where and how they make that living.
‘10 Trends Shaping the Future of Work in Europe’, published by the European Political Strategy Centre in November 2019, “zooms into some of the biggest opportunities and challenges facing Europe as it transitions into a new world of work”.
At the time of the report’s publication, the EU had a population of 513.5 million, 331 million of whom were of working age, and 241 million of whom were in employment. 60 per cent were in full-time, permanent employment, with 13 per cent part-time and permanent. The remainder were either self-employed or in temporary employment other than 1 per cent defined as “other”.
Services continue to dominate the job creation market, with an already dominant share of 68 per cent in 2008 having increased to 72 per cent by 2018. The shares of both industry and agriculture in job creation have fallen accordingly in the same time span, from 27 per cent to 24 per cent and from 5 per cent to 4 per cent respectively. Between 2012 and 2018, employment rates have grown in every age group from 15-19 to 70-74, for both men and women and across those defined as having low, medium and high levels of education.
The first of the trends identified is the redefinition of the “very concept of work”, with technology and new business models said to be fundamentally changing this area. The report says that “digitisation and automation, together with the sustainability imperative, are reshaping labour market needs across all sectors”, with job creation having been primarily driven by technological change in the 21st century.
The two largest growth subsectors from 2000-2016 were IT, science and engineering and “other high-skilled” jobs, both of which are predicted to have the highest growth rates until 2030. Skilled manual jobs, on the other hand, have suffered contraction and are predicted to continue to do so.
The online platform economy is also a notable disruption; non-existent 10 years ago, 10 per cent of the EU’s adult population have now used online platform as a source of income at least once. Despite this, EU enterprises have been found to be slow to integrate digital technology, with only three sectors (travel agencies, computer programming and telecommunications) having over 50 per cent of enterprises with a high digital intensity index score.
The second trend cited is that of non-standard work’s rise and the need for a new social contract to meet the challenges presented by it. Non-standard work (such as freelancing, contractors and zero-hours contracts) has accounted for almost 60 per cent of employment growth since the 1990s. 50 per cent of the European workforce is now engaged in non-standard work.
The report says that union membership being low among such workers means that their fundamental working rights are challenged, and that the monitoring of the implementation of the European Pillar of Social Rights will be “crucial” in this regard.
The third of the trends identified is the wage squeeze, the decline of “middle-paying” jobs. The proportion of employed people at risk of poverty in the EU has risen from 8.3 per cent in 2010 to 9.4 per cent in 2017, while “those in high-wage jobs and/or with other sources of income (property, capita) weathered the [post-2008 financial] crisis much better”.
Fourth in the trends cited is the state of constant transition workers now find themselves in, where lifelong learning is the expected norm. With higher levels of education in Europe than ever before, the school-to-work transition (employment rate of people who graduated in the last three years aged 25-39) is on the rise but still behind the levels seen before the brunt of the 2008 financial crash was felt.
Job changes have become more frequent than ever, while one-in-five people now consider it likely that their skills will be outdated within five years. The report says that a “significant conundrum” is now emerging: one where skills needs have never been more complex, requiring more training, but a more transient workforce means employers are less likely to invest in such upskilling.
The fifth trend is one which may be treated as a given by digital natives: that digital skills are now considered a basic skill. ICT skills are increasingly reported as a need in all jobs, with the percentage of workers reporting low intensity of ICT use having fallen from 64 per cent to 43 per cent from 2005 to 2015, but in 2017 35 per cent of the EU’s active labour force still lacked basic digital skills and over 10 per cent had no digital skills at all.
“One-in-three enterprises now supply a portable device to at least 20 per cent of their workers, which has led to a culture of ‘workism’, the expectation that people will always be available to answer work messages at the least.”
Over 70 per cent of European firms report that a lack of skill is “hampering” their investment strategies. The report says that not only is the lack of digital skills in Europe limiting current growth, the “repercussions down the road could be severe”.
Sixth in the trends is the increasingly overlapping nature of work and leisure time. One-in-three enterprises now supply a portable device to at least 20 per cent of their workers, which has led to a culture of ‘workism’, the expectation that people will always be available to answer work messages at the least. Fatigue, anxiety, stress and sleeping problems are all reported to be on the rise, whole “there is a growing recognition of burnout as a result of work pressures”.
Seventh in the trends is the prevalence of robots and algorithms in the workplace, with the human/machine work split projected to go from 71 per cent/29 per cent in 2018 to 58 per cent/42 per cent by 2022. The report warns that rules and guidelines will be needed to guard against the “risks and potential misuses of AI”, which could in itself create new human roles “such as algorithm bias auditors or chief trust officers”.
Eighth among the trends is the stalling of progress in addressing the gender divide. 67.4 per cent of women aged 20-64 are employed in the EU28 (this study was conducted at a time when the UK was still a member of the EU), a 5 per cent increase on the last decade, but still 11 per cent behind the men’s rate.
The average pay gap in the EU was 16 per cent in 2018, compared to 17.1 per cent in 2010. Women are far more likely to be in part-time, non-standard, and/or low-paid jobs; 38 per cent of women with two children are in part-time employment while just 5.4 per cent of men with two children are.
Ninth in the trends is the tendency now for people to work longer as life expectancy in Europe has increased to 81 years. 57.1 per cent of people aged 55 to 64 were in employment in Europe in 2017, with one-in-10 65 to 74-year olds also still economically active. The average retirement age still remains below the official age in most member states and significantly so in Belgium, Spain, Italy and Poland. There remains the worry that this will eventually place significant pressure on Europe’s social security infrastructure.
The final trend cited is Europe’s failure to attract the “world’s best talent”. The report states that, when compared with similar economies such as the US, Canada and Australia, the EU “attracts fewer highly skilled migrants”, although 40 per cent of the migrants in Europe are overqualified for the jobs they work.
The EU’s migration is also much more based on family reunions and humanitarian reasons when compared to those similar economies. “More rapid labour market integration” for these migrants is said to be key to addressing this issue, along with the key point thar arises over and over again throughout the report: investment in training and education.