Labour Market Intelligence: Do We Need It?
Europe 2020

In line with the principle of subsidiarity, the employment and social policy, including labour law, welfare systems, skills, training education, etc., falls into the Member States’ competence. However, the EU Treaties also foresee a role for the EU to provide support to local activities and agendas.

The European Employment Strategy dates back to 1997, when the Member States recognized the need for common objectives and long-term efficient policies for fighting unemployment. It now constitutes part of the Europe 2020 growth strategy, and along with the integration of refugees and asylum seekers into the labour market, one of the Junker’s presidency top 10 priority guidelines.

Over the past years, Europe suffered the worst financial and economic crisis since World War II. The range of challenges and new prospective the European labour market and society in general are facing became wider and more difficult to address. Among these are, for instance, changes in society structures, family and work patterns, and in addition to that, the spread of new forms of work and the paradox between rising levels of education and widespread skills mismatches. The 2014 International Labour Organization brief for European Countries highlighted that “Between 25 and 45 per cent of workers in Europe are either over – or under-qualified for their job, leading to a substantial mismatch between supply and demand in the labour market”.

Labour market intelligence (LMI) refers to fragments of information that have been subjected to a more in-depth analysis. It is an interpretation of labour market information gathered using all forms of data, usually recovered by statisticians and produced by government agencies and different research centres and organizations. In general, the aim of LMI is to match the labour market demand with the labour market supply and finds its best usage in lifelong guidance and education to make up the best skilling decisions. When applied in both an educational and the local industry level, it could also be a very helpful tool for governmental and transnational use.

One may argument at this point is that new jobs creation is an important factor that will eventually help reduce unemployment or underemployment in many countries. On the other hand, promoting jobs without paying attention to the quality and to the skills required may only postpone the problem and ultimately prolong the job crisis. Unemployment policies should not only focus on the direct advantage of filling a job vacancy, but also recognize and deal with the long-term consequences of training and matching individuals’ skills with flexible and productive job placements.

As reported in the World Economic Forum Global Agenda Council on Employment back in September 2014, adopting a “matching skills” approach during the crisis means providing the right skills needed in the labour market, while generating the necessary economic dynamism to generate new jobs. Apprenticeships and the provision of workplace training can help both young people and the unemployed to build links with the labour market and gain useful work-related skills. Knowledge clusters, in which companies adopt innovative product market strategies and interact with educational institutions, can foster the creation of skill-intensive jobs and a better match with workforce skills.