Panel Discussion, GFMD Business Meeting: Matching skills supply and labour demand through public-private action - Current evidence-base, ongoing practices and trending initiatives
Bringing Businesses and Governments together for discussing proactive partnership in making migration policies more efficient to enhance economic growth, prosperity and global competition is key in today’s world.
Today we live in a globalised world with increased interconnections between countries and regions. The rising economic disparities between countries and regions make people move to other destinations to find better job opportunities and quality of life.
On the other hand, demographic imbalances with countries with very low fertility and high life expectancy rates, combined with countries with very high fertility rates, impact labour markets, dependency rates and the sustainability of social and welfare systems. For example, the decline of the working population in the European Union (EU) is foreseen to result in a 12 per cent contraction of the EU working-age population by 2030, and in a need of 48 to 50 million additional migrants by 2050 to keep the current level of active work force.
Technology and telecommunication revolutions have also shrunk distances between countries and facilitated communication and information exchanges among populations. New political and economic dynamics and the creation of supra-states or areas of free movement and circulation such as the European Union, the Mercosur, etc., have also facilitated human mobility.
High concentrations of human population living in cities, with over 50 per cent of the world population living in urban areas, and a greater number of women deciding to migrate as heads of family in search of better job opportunities have also impacted labour markets.
All these elements have resulted in an increasingly globalised labour market that creates a global competition for talents amongst states for enhancing their innovation and research capabilities. This struggle for talent and highly qualified migrants will become harsher as migrants are already choosing their destination and job offers based not only on financial considerations as before, but increasingly, in a variety of other considerations such as quality of life, security, job opportunities for spouses, integration opportunities, level of acceptance of foreigners, etc.
Migration flows have also become much more complex. Today South-South migration is as important as South-North migration and we are witnessing new North-South migration trends of young qualified people due to unemployment and lack of opportunities caused by the economic crisis in some developed countries. The so-called developed regions host around 136 million international migrants (approximately 59 per cent of the total migrants worldwide), while developing regions host about 96 million international migrants. There is no longer a simple bipolar division between North and South, or developed and developing countries, or indeed between “origin and destination” countries.
As a result, the global economy is increasingly geographically diversified. Many non-OECD countries and emerging economies offer new opportunities for high- and lower-skilled migrants. Employers in advancing economies could face a shortage of 16 to 18 million university-educated workers in 2020. There will also be a projected gap of 23 million university-educated workers in China, according to McKinsey Global Institute. Furthermore there will be 38 to 40 million potential manpower shortage with higher education globally and 45 million shortage of workers with secondary education in developing countries, including in South Asia and Sub-Saharan Africa.
The globalised labour market is also due to the need for skilled workers to fill in jobs that the national workforces do not want to undertake.
It is estimated that in the European Union, by 2020, most vacancies will be concentrated in the service, manufacture and agriculture sectors. A higher proportion of European workers are expected to achieve higher education, which, combined with low levels of job creation, may lead to an excess of qualified labour. Vacancies are likely to remain unfilled in these three sectors owing to their low attractiveness.
Moreover, European economic recovery has exacerbated labour and skill shortages, such as in skill-intensive sectors like ITC. Interestingly, it is forecasted that in 2010-2020, the demand for highly-skilled workers will grow at a faster pace compared with the previous decade. It is expected that during this decade the demand for highly-skilled workers will expand by 13.5 million people – and these are not replacements but new job openings.
Accordingly, it is crucial today to recognize that labour migrant workforce and international labour mobility are key elements in economic prosperity, particularly in the sectors of ICT, tourism, and food and drinks manufacturing and processing, not to mention in traditional sectors such as health and elderly care.
It is for the above reasons and within this context that the International Organization for Migration (IOM) calls for proper skills matching and mobility schemes which require joint efforts from both public and private sectors.
Skills Supply and Demand Matching Process: Existing Labour Migration Policies, Laws and their Enforcement
IOM recognizes that migration benefits migrants and their families, as well as the economies and the relevant social sectors in both their origin and destination countries. However, such benefits require appropriate international and domestic migration laws and enforcement processes in order to become a reality.
Despite the general recognition of the needs for mobility of workers and evidences that skills’ gaps could be filled by international labour force and migrants, there is proof in a large number of societies, that foreigners and migrant workers are significantly more likely to be unemployed, abused or underemployed than their native-born peers.
In order to ensure appropriate skills matching which would jointly benefit the migrants, Businesses and Governments, robust labour market policies are critical. Nonetheless, the majority of labour laws are developed with an exclusive focus on the national workforce and do not have the migrant workforce in mind.
As a consequence migrant workers continue to face barriers which prevent them to fully integrate the labour markets and benefit from labour mobility in most regions in the world. These barriers include among others the restrictive access to visas and work permits, as well as the lack of skills and qualifications recognition.
For those who are viewed as lower-skilled, limited legal migration opportunities exist – leading to sectorial demand being fulfilled by irregular migration. This, in turn, creates greater vulnerability amongst this category of migrant workers.
Labour laws must permit businesses to get qualified and skilled workers that fit their market needs, when they need them. At the same time, they must guarantee the rights of workers, both nationals and migrants, during the entire labour process.
Considering the importance of labour mobility, the needs to strengthen skills supply and demand matching, a review of the existing regulations is necessary in view of mainstreaming migration issues into national labour legal and policy frameworks. While doing this, public and private sector should work together and keep in mind that migrant workers should enjoy the same protections as their national counterparts if they are requested to fill in national labour gaps.
Notwithstanding the importance of the legislative frameworks, one of the observations from the recent IOM legislative mapping exercise in South and Southeast Asia is that despite the fact that the existing legislations on labour migration and mobility were good, the main challenge lies with their implementation and enforcement.
Without enforced appropriate regulations, labour migrants will remain vulnerable to exploitation throughout the labour migration process. This includes possible abuses in recruitment, deployment, employment, and return processes.
Fair Recruitment Mechanisms
When exploitation happens in the first step of the labour migration process (recruitment), this has knock-on effects throughout the whole cycle, making the worker more vulnerable to forced labour, for example due to debt bondage. Such weakened labour force will impact on its efficiency, engagement and motivation to prosperity and growth and hurt business interests.
Labour mobility has increased worldwide. According to the IOM recent recruitment monitoring study in the South Asian countries of the Colombo Process, there is a 42 per cent increase in men and women in South and South-East Asia living and working outside their own country. This situation has led to a highly profitable business of private recruitment agencies. Sri Lanka is a good example, with a five-fold increase between 1985 and 2005, from approximately 200 to 1,000 intermediaries.
With more people than ever migrating for work, the potential for recruitment exploitation and abuse is rising. Because labour international recruitment often consists of a complex web of intermediaries, employers often have no way of knowing neither what kind of recruitment practices are taking place overseas, nor what workers have been subjected to or promised by intermediaries.
Not only is fair recruitment essential to the protection of migrant worker rights, there is also a strong business case to support the commitment of companies to using ethical recruitment intermediaries.
By ensuring transparency in their labour supply chains, Businesses can mitigate the risk of unforeseen connections to forced labour and human trafficking that cause reputational damage. Ethical recruitment also helps to ensure that job vacancies are filled through competency-based processes and not according to who has the money to pay. This, in turn, prevents skills mismatches and increases work efficiency and workplace safety.
Particularly in higher skilled occupations where companies and countries are competing in a global labour market, this helps to ensure that businesses maximise labour mobility and get the workers they need, when they need them.
The issue of how to systematically address unfair and unethical recruitment practices involves a broad range of stakeholders and interests; by its very nature, it requires multilateral cooperation and is therefore prime for this discussion of public-private partnership. Government, business and civil society actors all have a role to play in addressing this complex problem.
Governments need to do more to regulate recruitment intermediaries in accordance with the international standards, and to vigorously enforce these regulations. Businesses need to ensure transparency and fair recruitment practice in their labour supply chains, and demand adherence to these values by their suppliers and partners.
IOM, through the Public Private Alliance for Fair and Ethical Recruitment, has initiated a dialogue aimed at combating unethical recruitment practices. This Alliance is a platform for employers, recruitment intermediaries, governments, civil society organizations and other organizations to promote fair recruitment internationally. To help build momentum, IOM has joined forces with the International Organisation of Employers (IOE), governments and civil society groups, to develop innovative tools that will help promote fair recruitment practice. This initiative incorporates the International Recruitment Integrity System (IRIS).
IRIS is a multi-stakeholder certification process that will help to create a community of good practice and enable migrants, employers and governments to distinguish those practitioners who are committed to ethical recruitment from those unscrupulous actors that exist.
IRIS partners with governments, companies, international organizations, NGOs and trade unions to create a multi-stakeholder certification system for international recruitment intermediaries. By certifying that these recruiters uphold ethical recruitment principles, employers can make better informed decisions regarding the procurement of recruitment services.
IRIS will serve to help bridge the regulatory and enforcement gaps that exist between states, and to eliminate a global business model that is often predicated on abuse and exploitation.
IOM calls for private and public partnership in rolling out the IRIS tool, as part of the legislative framework guaranteeing the protection of labour migrants in a dynamic and competitive labour market.
Public-Private Partnership and Communication to the General Public
Unfortunately, labour migration has become a very toxic political issue. The rise of xenophobic, anti-immigration movements bolstered by misunderstanding by the general public has led to a significant political resistance to policies that promote and facilitate labour mobility.
A series of misperceptions relating to migration generate this negative view towards migrants and migration. The most common is that there are too many immigrants that, in some countries, may go up to three times more than the real number of immigrants. Another common stereotype is that migrants take jobs away from local people, whereas evidence suggests that countries with high unemployment rates usually have lower, not higher immigration rates.
Very often, there is a perception that migrants are a drain on the welfare system of the receiving country, despite the fact that there are OECD studies that prove that in almost every European country migrants are net positive contributors to the welfare systems and they contribute to public finances more than they take out in public benefits and services.
Misunderstanding may be influenced by misleading links to smuggling and trafficking networks, workplace abuse and exploitation, as well as the compromised integrity of immigration and labour market programmes. These can lead to xenophobia and the social exclusion of migrants.
Notwithstanding the above, there is no doubt that migrants have significantly contributed to new job creation as investors, entrepreneurs and innovators, but also as additional workforce enabling employers to build and develop their businesses. Migration fuels growth, productivity, innovation and entrepreneurship in both the countries people come from, and in those they move to.
Patent applications in Europe are higher in countries with policies to attract highly skilled migrants, and evidence shows that immigrants increase patenting activity of natives too. The presence of high-skilled migrants and foreign students in higher education contributes to the creation of knowledge as well. Networks of diaspora members contribute to the diffusion of knowledge and the presence of a more diverse workforce makes innovation more likely.
Migrants file the majority of patents by leading science firms – 65 per cent at Merck, 64 per cent at General Electric and 60 per cent at Cisco, just to give a few examples. First-generation immigrants or their children had founder roles in more than 40 per cent of the Fortune 500. Immigrants are more than twice as likely as native born to found a company: they started 28 per cent of all new US businesses in 2011, despite accounting for just 12.9 per cent of the population.
Companies such as Google, Intel, PayPal, eBay and Yahoo! have all been co-founded by migrants. Migrants have started 25 per cent of US venture-capital-backed public companies and 40 per cent of venture-capital-backed technology firms. In two out of four of all engineering and technology companies established in the US between 1995 and 2005, there was at least one immigrant key founder. These companies were responsible for generating more than 52 billion dollars’ worth of sales and creating almost half a million jobs as of 2005.
But not only high or medium- skilled migrants contribute. Additionally, migrants usually take the “3 D jobs”: dirty, dangerous and difficult, that natives are unwilling or unable to do. Migrants complement the local labour force rather than competing with it by providing skills at all levels that are needed in most developed countries.
Migrants often contribute more, on average, to countries of destination than natives, because the country of destination has not had to bear the costs of training and educating migrants who arrive to work. This is particularly true for highly skilled migrants.
Finally, migrants, and especially skilled migrants, contribute to increased trade and investment flows between countries of origin and destination, in a way that is beneficial to both.
Improving access to information on the labour market for migrants is a key consideration in the process of matching between employers’ needs and migrants’ skills. But if we really want to use labour migration as a tool for matching skills supply and labour demand a real public-private effort is required to change the general publics' negative perception about migrants and migration.
In conclusion, there is an important need to change the mind-set and the way we think about migration. The economic argument in favor of labour migration is strong, but needs to be better framed in our messages to the general public and in order to do so, governments and international organizations need the support of the businesses.
At the global policy level, entry points for businesses’ inputs should be reinforced and public sector stakeholders should engage actively with the private sector in meaningful debates, as well as in designing legal and policy labour frameworks that support fair labour migration.
By supporting these efforts jointly with Governments, the Business community will not only benefit from the possibility of attracting better skills to the labour market, but also contribute in building a more positive image of the migration phenomenon and demonstrate its leadership in ensuring the safe migration of workers.
Growth and productivity rely on factors such as innovation and entrepreneurship, having the right mix of skills, and the full utilization of people’s talents and potential. A key policy priority should therefore be to fully create the conditions to make the most of migrants’ potential and remove the barriers to their access to labour markets. Further efforts are also required to form more cohesive, tolerant and diverse societies.
A joint action should be undertaken to have an active communication to the public on the merits of developing international labour migration frameworks and their advantages for home ad host societies. This will allow politicians to move from a negative rhetoric about migration and migrants towards a more information based and economic based policy making.