How could Europe create jobs during the COVID recovery through the transformation of work?

Speakers: Kasel Antoine, Toom Yana, Keese Mark, Bart Menno, Kröpfl Stefan, Corbould-Warren Russell
Moderator: Shields Laura

On the 10th of June, PubAffairs Bruxelles organised an evening of discussion on how Europe could create jobs during the COVID recovery through the transformation of work with Mr Antoine Kasel, Head of Commissioner Schmit Cabinet, European Commission, Ms Yana Toom MEP (Renew Europe/EE), Mr Mark Keese, Head of the Skills and Employability Division, OECD, Mr Menno Bart, Public Affairs Manager, Adecco, Mr Stefan Kröpfl, Global Head of Life Business Analysis, Zurich Insurance and Mr Russell Corbould-Warren, Head of Insurance, Uber EMEA.

The debate was moderated by Laura Shields, Founder and Managing Director, Red Thread.

Laura Shields launched the event by highlighting the impacts of the Coronacrisis and the successive preventive measures regarding the economy as well as the resulting long-term consequences for jobs and work. She subsequently referred to the World Economic Outlook released by the OECD on the same day, suggesting that in the case of a second wave of Covid-19 infections, global economic output could fall by as much as 7.5% in 2020. While the eurozone’s economic output is currently expected to reduce by around 9%, another wave of infections could increase this contraction to 11.5%. The moderator explained that policymakers and businesses alike are concerned about the consequences that the pandemic is going to have on employment, social security systems and supply chains as well as on business-to-consumer and business-to-business demand. Ms Shields also clarified that several organisations have used the pandemic as an opportunity to foster their digital agenda. Indeed, analysts are predicting that the labour market will head towards more digital and flexible work models. She concluded her introduction by inquiring about the shocks the European job market has already experienced due to the Covid-19 crisis and how new work models can help to overcome the consequences of the Coronacrisis in terms of employment.

Mr Antoine Kasel began his remarks by emphasising the gravity of the current situation for both European society as a whole and the EU’s welfare systems. According to the European Commission Economic Forecast, the GDP of the European Union is expected to drop by 7.4%, while the unemployment rate is set to rise to 9%. The speaker pointed out and elaborated on the case of France, where recent figures indicate the loss of around 800’000 jobs. Mr Kasel explained that the current recession does not just imply a macro-economic shock, but also affects the micro level, namely jobs which are lost and/or are becoming increasingly precarious. He consequently highlighted the immediate response to the crisis from EU member states and institutions which has provided the necessary liquidity for the markets to support companies and preserve jobs to the maximum extent possible. The speaker subsequently explained how the European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) is expected to be implemented from July 2020. Mr Kasel stated that SURE will provide 100 billion euros in easily accessible loans for companies. In this connection, Mr Kasel went into detail about the upcoming recovery phase. He underlined the efforts made by the European institutions which put forward several initiatives that should provide the necessary instruments for a successful economic recovery. The speaker also added that the recovery should be determined by a fair and just transition, as indicated in the European Pillar for Social Rights. He subsequently listed the main goals of the European Pillar of Social Rights, namely creating opportunities and jobs for all, enabling better working conditions, providing decent wages and minimal income to the most vulnerable while strengthening social protection, fighting the structural causes of poverty, strengthening social dialogue, fostering collective bargaining and facilitating access to social and essential services. The speaker also underscored the importance of guaranteeing gender equality and preventing any kind of discrimination. Mr Kasel explained further that following the adoption of the European Pillar of Social Rights, the European Commission will initiate an action plan in 2021. He consequently highlighted the importance of social dialogue in the EU’s social market economy. He continued to explain that due to the concern that the social dialogue in some member states is at times stagnating, the European Union is also planning several other initiatives to foster a pan-European social dialogue. The speaker subsequently explained how collective bargaining works, as well as its fundamental function in setting wages and working conditions in Europe. Additionally, he emphasised the importance of skills and life-long learning by pointing out the fact that 50% of the EU’s workforce needs to reskill or upskill to remain competitive in the job market. Owing to this fact, Mr Kasel remarked that the European Commission is going to present an updated Skills Agenda in July 2020. Mr Kasel also explained that this would allow for a deeper understanding of what the necessary skills are for employment in different sectors. He went into detail by connecting the European Skills Agenda to the concept of industrial eco-systems, as presented by the Commissioner for the Internal Market Breton. According to the speaker, this would allow for developing more customised skills for the needs of individual industrial sectors. The panellist subsequently described this mechanism as crucial, to facilitate a fair and green economic transition in the course of the recovery, on the one hand, and on the other hand, to guarantee Europe’s strategic autonomy in terms of medical supply chains. He added that the Commission is planning an agenda on vocational education and training to boost apprenticeship, create incentives for companies to hire more and encourage young people to join the job market thorough a youth employment support scheme. When it comes to setting up a framework for growth and jobs for the economic recovery, Mr Kasel suggested coupling the EU’s social agenda with a strategic approach that includes all sectors. The panellist continued by remarking that the management of the crisis in the EU has to be judged by acknowledging the fact that the European institutions do not have all the necessary competences to deal with the all of the questions emerging in the current situation. As lessons for the next crisis, the speaker mentioned how it will be necessary to increase resilience. He reiterated the example of medical supplies and pointed at the difficulties experienced during the crisis regarding trading medical equipment among some EU member states. In addition, Mr Kasel referred to the problems for cross-border workers, as borders were closed as a measure to prevent the spread of the virus. As a result, Mr Kasel explained, the European Commission brought forward several recommendations. However, he added, it should be taken into consideration that the EU executive body has also addressed several domains which are not included in the Union’s exclusive competences. He subsequently elaborated on the need for higher flexibility of EU funds and concluded his remarks by urging EU member states to both cooperate while financing the recovery and work together on providing an EU budget fit for purpose.

Ms Yana Toom began her remarks by referring to the figures provided by the International Labour Organisation (ILO), suggesting that lockdown measures are affecting 80% of the global workforce. She explained that the shift into short time contracts or the complete loss of jobs creates high social precariousness which particularly affects employees in the so-called “gig-economy”. She continued by explaining that Eurostat defines precarious jobs by a contract length of less than three months, while remarking that the level of this employment model in the EU between 2015 and 2019 was at 2.5%. While permanent contracts become less common, the MEP said, holders of permanent contracts below minimum wage standard, freelance workers and the self-employed are becoming at higher risk to fall into even more precarious working conditions. Indeed, she stated that the jobs in sectors that are sensitive to the volume of demand in the short term have already experienced a decrease in contract periods and lower wages. Furthermore, she elaborated on how previously successful SMEs are facing financial constraints due to the crisis and how larger and more resilient companies can take advantage of this situation by hiring for lower wages. In this connection, the speaker urged for improved social protection. Ms Toom consequently highlighted the question of collective bargaining and explained that a large share of workers were not benefitting from it before the Coronacrisis emerged. By referring again to the figures provided by the ILO, she revealed that informal economy workers, temporary workers, micro-entrepreneurs and the self-employed are disproportionately affected by a lack of social guarantees. Even though the European Pillar of Social Rights and the minimum wage scheme can provide solutions for this problem in theory, Ms Toom focused on the question of the implementation of EU law as a result of the subsidiarity principle. She subsequently elaborated on the competences of member states in social policy by sharing her experience as rapporteur on the implementation of country-specific recommendations of the European Commission. The speaker stated that the implementation rate of these recommendations has valuably decreased across the EU and exhorted the Commission to continue to find a solution for this issue. She exemplified her considerations by elaborating on the proposal of a European minimum wage and stated that the European Parliament is willing to support this measure. Ms Toom brought her intervention to an end by remarking that the recovery measures will show positive effects if they follow a common European approach and urged European citizens to engage with their respective representatives to put pressure on EU policymakers.

Mr Menno Bart started his remarks by stating that the crisis has had a highlighting effect on the problem of uneven social protection for people in diverse forms of work. Indeed, he explained that social protection was originally designed to fit the needs of full-time work contracts and he expressed the opinion that the current crisis is a unique phenomenon and incomparable, to a large degree, with previous downturns. The speaker subsequently named currents which are underpinning the course of the Coronacrisis such as unprecedented government involvement in the labour market, an extraordinary use of short-time work, a trend from globalisation to localisation, an imminent disruption of supply chains, as well as an acceleration of digitalisation and an increased focus on sustainability and equality. He then raised the question of how work is going to be when the crisis is over and urged for the finding of a “better normal” way of working as defined by a paper published by the ILO Global Commission on the future of work in 2019. A new social contract, the speaker explained, should indeed consider the rights and duties of all stakeholders in the labour market as well as new organisational models. Even though the overall income of a given person does not necessarily have to come from a single employer alone, he stated, enhanced social security should be guaranteed. The speaker also mentioned an analysis conducted by the Adecco Group that compares twelve countries according to their reaction to the crisis in terms of economic measures. The results of this study indicate that Switzerland, Sweden and Germany can be considered as doing fairly well due to high investment in skills and the widespread practice of reducing employee working time. Reduced-time work models, Mr Bart explained, allow companies to reduce their financial burden, as the workers’ full salary is partly covered by public authorities, while being able to keep their workforce employed. Drawing conclusions from these statements, Mr Bart emphasised four principles as crucial factors for a successful transfer to improved standards in the job market. Besides investments in education and training, he listed an open approach to the labour market in terms of flexibility, digital solutions and collaborations between public and private employment services as basic principles. Additionally, he highlighted the need for a strategy that protects the skills of the workforce rather than the jobs themselves. This, he specified, would enable a rapid reintegration of workers in already prosperous sectors instead of waiting for the recovery of domains with less potential for growth. Finally, the panellist suggested to foster a more open economy with regard to labour mobility from both within and outside the EU.

Laura Shields took up the question of how to facilitate social security for flexible employment contracts and asked how the industry has adapted to the current situation.

Mr Russell Corbould-Warren initiated his response by describing Uber’s core business as an intersection between digital and “analog” work. The impact of the Covid-19 crisis, he continued, forced Uber to lay off several thousand employees as a result of business adjustments due to lower revenues. The speaker subsequently emphasised the consequences of the health crisis for professional drivers, as the restriction of mobility was one of the most significant measures to prevent the spread of the disease. Mr Corbould-Warren subsequently pointed to the efforts deployed by Uber to deal with the crisis, namely emphasising safety and protection guidance and the rollout of a global campaign of financial assistance for driver and courier partners. He went into detail by emphasising that already 30’000 drivers and couriers have benefited from 8 million dollars provided by this program in Europe, while 20 million dollars of support was granted by Uber globally. With this program, the speaker added, Uber ensures that whoever is sick will be able to stay at home and not be forced to work, keeping the community safe and implementing social distancing. Moving on from these considerations, Mr Corbould-Warren contextualised the current measures taken by Uber. He referred to the partnership with the insurance provider AXA, initiated in 2018, to provide security and peace of mind, by providing, at no cost, a range of insurance coverages including sickness, injury and maternity & paternity payments for drivers and couriers across Europe when they are on and off the Uber app. The program set a global standard, the speaker said, while it has also ensured support for thousands of partners over the years since its launch. He continued by explaining how Uber took its share of responsibility in the global effort to reduce the spread of coronavirus and pointed out the communication campaign “Thank you for not riding”, which shows the importance of upholding confinement measures even for a company that is dependent on the mobility of people. Furthermore, Uber pledged 10 million free rides and food deliveries for health care workers to support communities and invested 50 million dollars globally in safety equipment and supplies for drivers and delivery partners hinting to a general shift in the way that mobility will be carried out in the foreseeable future. The speaker also remarked that a digitally based company such as Uber is in the position to act as flexible as possible to make timely adjustments. As an example, he elaborated on how Uber’s flexible model has allowed to create opportunities for driver partners to offer more delivery services of food and other goods, besides the conventional transport of people. In this way, Uber has acknowledged the fact that being part of an eco-system of flexible work creates opportunities for its drivers and couriers to cope with a reduced share of the mobility market. The panellist proceeded with his intervention by reiterating the focus on social protection throughout the recovery and the importance of creating new partnerships to facilitate new services. However, he added that the main social protection schemes are focused around traditional employment models and Uber would like to foster the discussion about new regulatory frameworks for flexible work. The speaker concluded his remarks by sharing his experiences from the ideas exchange within the platform economy sector, and confirmed that there is willingness for broader engagement in social security for independent workers, which is sometimes hindered by the current regulatory framework.

Mr Mark Keese began his remarks by highlighting the unprecedented impact that the Covid-19 pandemic has had on the job market, with falls in the number of people at work by close to 30% in some countries. He welcomed the massive intervention by governments to support jobs and incomes, which he described as much more rapid compared to the 2009 global financial crisis. Indeed, he pointed at the setup of major government programs for short-time working schemes and the expansion of existing social protections for workers who would not be covered under normal conditions. Nevertheless, as some workers had not received assistance, Mr Keese suggested there was an urgent need to fill these gaps in social security coverage. He subsequently raised the question of how to improve resilience in the long term to avoid people losing their jobs again by confinement measures if unable to work from home. As one possible answer, he mentioned online learning as a tool to improve skill sets and unlock new job opportunities. Nevertheless, he also warned of a possible increase in inequality, as data from before the crisis indicated that 23% of people who have good digital skills used online courses while just 14% with poor digital skills used them. He stated that giving greater access to training and enhancing the skills of the workforce would help significantly to cope with this kind of crisis and for building up resilience. Mr Keese also elaborated on the effects of the crisis on public employment services, which had to switch rapidly to the digital delivery of services because of restrictions on face-to-face contact with clients and the large inflow of jobseekers. He mentioned Estonia as a positive example, as its public administration is already digitalised to a high degree, and the example of the public employment service in the region of Flanders in Belgium that was successful in handling a four times higher volume of online training courses. The speaker stated that these examples show how crucial digital infrastructure and the digitalisation of public services are in increasing crisis resilience. He continued by highlighting flexibility as a crucial asset and referred to the potential of platform and remote work for coping with the confinement and isolation of workers. However, the speaker underlined the importance of social protection and access to collective bargaining for these types of employment. Indeed, he continued, in some countries, the organisation of platform workers is facing obstacles due to competition laws trying to prevent price collusion and similar practises. Finally, Mr Keese urged for an approach for Europe to “build back better”, rather than “building back as before”. He went into detail by stressing the problem of rising inequality in many countries in recent years, which has now widened due to the crisis. Typically, people in high paid jobs are also able to work remotely and participate in online courses, while workers in essential services are likely to be paid low wages and fall behind in vocational training. The panellist also revealed two contrary trends that are affecting young people especially. For those with low skills, entry jobs are disappearing because of automation, while Europe’s demographic shift is creating numerous job opportunities for high skilled workers. However, he remarked, the impact of the crisis postponed the entry of young workers into the job market, a fact that will create further issues in the foreseeable future. To compensate for these phenomena, the speaker urged for well-functioning public employment services and active labour market programs to ensure the engagement of the next generation’s workforce. Mr Keese also highlighted the situation of women, as this part of the population is facing a particularly high burden due to the current crisis. Additionally, he explained, women in Europe and around the world are still in charge of a disproportionate amount of housework and childcare, while facing a rise in domestic violence as well. He subsequently highlighted the severe situation of single mothers and their struggle to coordinate childcare and their job, especially when schools and day-care institutions are in lockdown. The speaker subsequently remarked that even though the gender equality gap in the labour market is on the way to being closed before the Covid-19 crisis, the pandemic has reopened it. Finally, he asserted the necessity of involving social partners to counter the decline in collective bargaining and suggested finding new social concepts to integrate “gig-economy” workers in social protection schemes.

Mr Stefan Kröpfl replied by pointing at the cooperation of Zurich Insurance with the University of Oxford that was launched in 2015 as an initiative for dealing with an income protection gap and was developed into a project for workforce protection. Additionally, he referred to a study from 2019, which unveiled that employees who are empowered to advance their career participate more often in training opportunities. The speaker also underlined that a survey conducted by Zurich Insurance with 18’000 workers has shown that a large share of platform workers and self-employed people made their occupational choice according to the freedom to organise their own schedule. In response to the first question of the moderator, Mr Kröpfl shared his considerations about the Coronacrisis and stated that from an epidemiological point of view there are several historical examples comparable to the current pandemic. However he highlighted the unprecedented swift reaction of governments all over the world, while highlighting the structural problems of Europe’s social security systems before the crisis. In the light of these considerations, the speaker expressed the urgency in increasing the resilience of Europe’s social systems as a whole. He elaborated on this matter by questioning the measures taken over the past five years in terms of strengthening social protection. Indeed, he remarked that resilience has been weak in wealthy countries as well, as the case of Switzerland has shown. However, the rapid decrease in liquidity that small and medium-sized enterprises experienced in the course of the crisis, he explained, gave proof of how crucial a fast government reaction was to save many businesses from bankruptcy. The panellist subsequently explained the impact of the Corona crisis on mortality rates in different countries. While in the United Kingdom 60’000 more people passed away than originally predicted, the mortality rate of the first half of 2020 is within the range of expectation for other countries. According to the speaker, these figures show that the pandemic was contained timely in some countries. Moving on from this topic, Mr Kröpfl remarked that the largest negative economic impact of the Coronacrisis has been on employment, which reacted with an increase of furlough schemes and short-time work. The speaker consequently went into detail about the measures taken by Zurich Insurance to prevent the spread of the virus in the form of lockdowns of office buildings and upholding service provision for clients. Furthermore, Zurich Insurance has offered breaks of premium payments for customers who are struggling from lower wages or recent unemployment. In addition, all Covid-19 related claims are getting paid, while contract clauses in existing Life insurance policies, that would exclude pandemic related claims, have been waived. The speaker brought his intervention to an end by stating that in some countries Zurich Insurance has even offered free extra coverage for Covid-19 related claims or, as in the case of Spain, it has enabled medical frontline workers to buy insurance for the same price as before the crisis.

Laura Shields then brought the discussion towards the topic of digital skills and how digitalisation enables the availability of talented professionals on a global scale.

Mr Bart started his response by explaining that employers from all sectors do not just value digital skills, but also soft skills such as agility or creative and independent thinking. However, he stated, the demand of skilled workers is a predominant global phenomenon. He additionally highlighted his support for the European Commission’s initiative for an Individual Learning Account (ILA) and explained that life-long learning opportunities are getting increasingly available in Europe and across the globe. Subsequently, the speaker warned of a generic classification of platform workers. Indeed, he explained, jobs in the platform economy are often very different in type, while highlighting that all forms of work need social protection according to their specific nature.

Ms Toom expressed her concern about the question of digital skills as a source of inequality. She exemplified this consideration with figures from Belgium, which show that the switch to e-learning in schools due to the Covid-19 crisis resulted in the disconnection of 11’000 students due to a lack of necessary technological means. The speaker continued by supporting a common European approach to education and highlighted how the crucial skills of tomorrow will consist of “the ability to learn”. She ended her statement by urging for an increase of investments in education, learning programmes, connectivity and digital skills.

Mr Keese began his reply by stating that, even though a global pool of talent exists, he doubts that these networks are sufficient to cope with the requirements of the labour market, with special regard to the need for labour migration in the EU. Although it is important to attract talents in Europe, Mr Keese stated that it would be more urgent to cover current employment gaps in critical services, such as long-term care. He subsequently raised the question of which regulatory framework should apply regarding the payment of platform workers, as their services are often received in other countries than the ones they are based in. Another point of relevance upon which Mr Keese elaborated was the impact of teleworking on general working conditions of employees, such as mental health, lack of creative stimulation and social inclusion. After raising these issues, the speaker urged companies to rethink their strategies towards remote working by highlighting the importance of face-to-face interaction and teamwork. Mr Keese subsequently brought attention to the situation of workers in critical services, which make up 40% of the overall labour market and underscored the importance of professionalising the workforce in those sectors by creating more opportunities for training. He concluded by highlighting the need for a transition agenda for a future that works for all, both with respect to the challenges posed by the Coronacrisis and new models of work.

Mr Kröpfl began his intervention by stating that Zurich Insurance had started to reduce outsourcing prior to the Corona crisis to guarantee reliability and efficiency in crisis situations. Concerning the matter of talents and the workforce, the panellist remarked that the flexibility created by working with freelancers all over the world should not overshadow how individual work performances can create value for companies. The speaker consequently explained that SMEs have the chance to grow from the moment when they have the necessary system and networks in place. Furthermore, he expressed his support for a new social contract, which on the one hand should guarantee social protection for the vulnerable and, on the other, should foster empathy and social engagement from the wealthier parts of society. He concluded his remarks by emphasising the need for incentives for individuals in order to further enhance citizens’ resilience.

The Q&A session covered the following issues: the management of the crisis in the EU compared to other parts of the world, the new social contract, essential skills in the future of employment, concrete measures for upskilling platform workers, the possibilities for sustainable business environment transformation, the globalisation of the workforce by digital means and the role of SMEs in the gig-economy.

Want to know more about the issues discussed in this debate? Then, take a look at the selected sources provided below!

Future of Work, OECD

Work for a brighter future, International Labour Organisation (ILO), Global Commission on the Future of Work

OECD Economic Outlook, June 2020

Summer 2020 Economic Forecast: An even deeper recession with wider divergences, European Commission

A European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE), European Commission

European Pillar of Social Rights: Building a more inclusive and fairer European Union, European Commission

European Skills Agenda, European Commission

Fair minimum wages: Commission launches second-stage consultation of social partners, European Commission

Risk Nexus: Income protection gaps: A rising global challenge, Zurich Insurance Company and Smith School of Enterprise and the Environment at the University of Oxford

People Protection: Insights on empowering an agile workforce, Zurich Insurance Company and Smith School of Enterprise and the Environment at the University of Oxford

Countries At A Crossroads: The Speed Of Future Recovery Will Depend On Today’s Decisions, Adecco Group

Resetting Normal: Defining the New Era of Work, Adecco Group

Towards a “Reset Normal” in the World of Work, Adecco Group