Profile of employment demand is changing, writes Gill South.
Although the Western world is experiencing daunting unemployment rates, especially among young people, there are still 3 million unfilled jobs in Europe and 2.3 million positions lying vacant in the United States, according to Patrick De Maeseneire, the CEO of Fortune Global 500 recruitment company, Adecco.
The reason for these vacancies, despite the numbers of unemployed, is that the profile of job demand is changing, said De Maeseneire, on a visit to New Zealand recently.
Now that manufacturing is done largely in Asia, what Europe and North America need is a bigger workforce in the healthcare area and in creative engineering, for "people who can put things together", said the CEO, based in Switzerland.
"There's a mismatch of what the schools produce and what the labour market demands," he said. "By the time people realise there are not enough doctors, we are 10 years down the road," he said.
One way to solve the problem is for greater job mobility, where people move to different countries or areas for jobs. However that's not happening in the United States because of the weak housing market, said De Maeseneire.
"People can't easily sell their house and if they can't sell their house, they are staying where they are."
In Europe meanwhile, it has always been part of the culture for people to stay in their hometowns though this is changing in some of the more beleaguered countries. Around 30,000 Greeks have moved recently from Greece to Germany for jobs. These were largely skilled workers, with Germany looking for higher skilled professionals, such as IT engineers.
Meanwhile it has been the youth of Europe who are really feeling the pain three years after the Global Financial Crisis, said the recruitment expert. According to the Adecco CEO, Italy currently has 30 per cent youth unemployment, while Spain is recording 50 per cent and across all of Europe there is a general 22 per cent youth unemployment rate.
"We are losing a generation here and there will be social unrest as a consequence," said De Maeseneire.
The recruitment expert says the European workforce is coming back to 5 per cent below the size of the labour force which existed before the GFC. "And we are more than 36 months down the road of the crisis. This is going to be a very slow and harsh recovery," predicted De Maeseneire.
The recovery in Europe is being hampered by the fact that it appears uncompetitive compared with Asia, he said. "Why are you going to build a factory now in Europe?"
Governments could solve a lot of their unemployment problems by creating the right skills, said De Maeseneire.
The unemployment among the youth tends to be for the less skilled. They have left school at 15 or 16 and the unemployment rates of these school leavers is around 16 or 17 per cent. "These numbers will stay at this level until 2020, because construction is not coming back."
Meanwhile three countries - Finland, Switzerland and Germany - are not experiencing bad skills shortages and this is because of their education and workforce planning, says De Maeseneire.
Germany has always been very adept at giving school students direct access to industry. Adecco's German-born CFO, Dominik de Daniel, started working with Deutsche Bank at the age of 16, for instance. "People are very young when they are introduced to business and are directed towards their interests and their capabilities," said De Maeseneire.
The US will benefit from the strong relationships that have always existed between universities and the private sector, he said. It is no coincidence that the big pharmaceutical giants are based in New Jersey due to its proximity to universities like Princeton. Other countries should be emulating this, said De Maeseneire. "The best motivation is you have to," he said.
Countries could solve a lot of the unemployment problems by creating the right skills, said the CEO. "The health sector, green energy, these are the industries of the future." And, as the global population ages, the pharmaceutical industry will be another area of strength, he predicts.
It is not all bad news from Europe. The German job market is in a relatively good state with unemployment there below 6.5 per cent, which compares with 3 to 4 per cent in better times. Germany has a large engineering workforce, and job openings tend to be in machinery, with the European country a successful exporter of luxury goods and luxury cars such as Audi and Porsche. "They are still doing very well because of the demand from Asia," said the Adecco CEO.
India and China will be creating enormous demand for the future and New Zealand and Australia will benefit from this, predicted De Maeseneire. India, with its very good education system and emphasis on speaking English will go from strength to strength, while for China, language will be a barrier and the quality of the education, he added.
For New Zealanders contemplating an OE to England, the UK has been terribly hit, with its economy dependent on financial services and consumption, said the Swiss-based CEO.
The UK does, however, have the chance of coming out of recession because it has kept its own currency as Norway and Sweden have. "Also the UK is still the financial centre of Europe," he added. He encourages the UK to create companies involved with the sciences.
For the global job market, the words mobility and flexibility will be the key words. Norway currently has a lack of construction workers and is bringing them in in their thousands from Poland, said De Maeseneire.
Temporary jobs will be the major trend in the next few years, predicted the CEO, whose company has a thriving temporary and contract staffing business helping employers with their changing needs. Thanks to this, despite the economic downturn, the global recruitment firm is growing by 10 to 12 per cent, while its Italian business is growing by 20 per cent and its German business by 40 per cent.
Companies are not recruiting permanent employees unless they have to, said the Adecco CEO. "They may be replacing those who are retiring but additional, permanent jobs are not being created. Companies have learned that it costs a lot to restructure," said De Maeseneire. Organisations have much stronger balance sheets and are only producing when the orders are there, says De Maeseneire.
The market will understand that there is nothing wrong with having a temporary job. It might be six to 10 months, but people are still building up their experience and they need to be pragmatic about it, said De Maeseneire.