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Labour flexibility is the future, if we learn to get it right.

25 January, 2016

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In nature, ecosystems prosper in a so-called "dynamic equilibrium", meaning that everything moves and adjusts itself to preserve complexity - and to make it grow. “Competitive equilibrium” is what worldwide labour markets are adjusting to, and the common answer is "flexibility". But what is flexibility? And what's the difference between "flexible" and "uncertain"?

Effective flexibility stems from the balance between market, workforce and law. European lawmakers designed the "Flexicurity" approach to provide flexible work arrangements together with training programmes to ease career changes and a generous welfare for the unemployed.

In an ideal world, Flexicurity provides a seamlessly liquid job market where:

  • Businesses hire resources according to actual needs, goals and budget;
  • Employees follow a result-oriented approach;
  • Employers can - and are expected to - end collaborations according to the firm's demands;
  • Workers capitalize experiences in their search for the next job;
  • Transition between jobs is secure and welfare systems help those few who are waiting for their next hire;
  • Job market stays competitive without compromising the well-being of the workforce.

In the real world, things tend to be more...unbalanced.

A concept born in Denmark, Flexicurity is a key point of nordic labour policies. And yet, nordic countries themselves can't seem to apply the model consistently. Workers avoid job mobility, long periods of unemployment are all but rare, and welfare coverings are subjected to variations depending on job category and even age.

The number of temporary workers in Sweden is growing, and so is workforce insecurity. Loans are not granted. Couples hesitate to have children.

Again, the key concept is dynamic balance: nordic governments are contrasting these tendencies with the elimination of pay disparities between traditional and non-standard employees, as well as with more focused job retention policies.

While Europe strives to manage its ever-developing market, United States are apparently facing the opposite trend, with an aging workforce less and less keen on career-hopping and a growingly difficult access to the higher training necessary to join some professions.

Productivity and wages are accordingly lower, with less-skilled Americans unable to land jobs, and positions that don't open due to jobholders' slugginess.

The love story between flexibility and asian markets is bringing about some surprisingly different outcomes.

After somewhat of a flexibility overdose in the 80s, the Chinese labour market has become more rigid than those in western countries.

On the contrary, despite a very rigid work culture, Japan's workforce is incredibly flexible, featuring a 40 per cent of non-traditional contracts. But there's a catch: Japanese flexible workers are poorly paid and very easy to fire, as opposed to the over-protected regular workers. 

And again, even if Japanese labour legislation is in need of a serious improvement towards flexibility, so is the very application of labour law in China, where factory workers see their theoretical rights constantly violated.

We live indeed in a time of all-around flexibility, something previous generations did not experience and have little to teach us about. Something workers, employers and governments are still learning to cope with.

And since no-one’s got it right yet, we’d better flexibly work on it.

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