16.12.2020

ADECCO GROUP ANALYSIS OUTLINES LABOR MARKET TRENDS IN 13 COUNTRIES, INCLUDING BULGARIA

Next year, the labor market will have an accelerated need for highly specialized staff: AI and machine learning, database analysis, the Internet of Things, social media. There will be less interest in hiring staff in: manual data entry, financial analysis, accounting and auditing, office management, due to the constant development of technology and automation.

This is predicted in the new analysis of Adecco Group - Inovantage. The report examines global trends in the labor market in 13 countries in Eastern Europe, the Middle East and North Africa, including Bulgaria. Its purpose is to track: 1) what pre-pandemic conditions facilitated each country's efforts and what accelerated their failures; and 2) what key knowledge can be learned and applied by both public authorities and individual companies in the coming years.

The main conclusions of the report are:

- The countries best prepared to meet the challenges of the workforce are countries with good social mobility and widespread professional and technical skills. Gender parity, the integration of ethnic minorities and the inclusion of the workforce play a key role in ensuring a smoother transition in the way we work in the challenging times in which we live.

- Improved ICT infrastructure and digital skills are essential to deal with possible future labor market shocks. Countries with public and private digital infrastructure and technically intelligent workforce show better results in managing labor disruption in the first lockdowns.

- Government social measures and the relatively lower interdependence with the global economy have helped Eastern European countries to perform better.

- Success in the future will belong to a constantly learning and digitally skilled workforce. With an energetic but aging population, countries in the region need to offer more growth opportunities and up-to-date lifelong learning experiences to improve the skills of their citizens.

As a starting point for the state of individual countries before the covid pondemic, the analysis is based on the Global Talent Competitiveness Index for 2020, looking at the percentage of young people who are not involved in either employment or education. With a European average of 12.5%, Turkey (29.5%), Serbia (19%), Greece (17.7%) are less likely to have a promising future in the labor market for young people. Bulgaria ranks 55th in the world in the Global Index of Competitiveness of Talents, as according to Eurostat data for 2019 the young people in our country who neither study nor work are 16.7%.

Almost all countries in the region face the same challenge, namely difficulties in finding qualified staff due to the mismatch between the knowledge acquired in the education system and the practical skills required by the labor market. This is a sign that companies are one step ahead of education systems and must help transform the education sector into a more practical program in the near future.

Lifelong learning is still not a priority for both policy makers and the private sector. However, if this does not happen, the effect of an aging population will be severely felt on the economies of countries.

Another indicator that the report addresses and is problematic for the whole region is the external openness of the market, including public-private investment, technology transfer, migrant stock, international students.

With few exceptions (such as the UAE and the Czech Republic), there is no visible effort in most countries to attract foreign talent or to integrate immigrants. One explanation for this is that wages are still lower than in Central and Western Europe, and immigrants prefer these countries instead.

Gender parity is an excellent marker of development for a better understanding of the region. The relative equality in the number and proportions of women and men is often seen as fundamental to social progress and stability. In terms of women graduates (especially for university graduates), the countries in the region have good results. Although the overall percentage of higher education graduates (aged between 25 and 64) is lower than in Western countries, the percentage of women graduates is higher than men in most Eastern European countries. This is seen in countries such as Poland, Slovenia, Hungary, Romania or Serbia. The pay gap between women and men is very low, but women have fewer career opportunities for leadership positions.

The development of the business ecosystem shows how economies manage aspects of employment, productivity and improvement through technology. And this is the thing that is most lacking in almost all countries, with Romania, Serbia, Tunisia, Hungary and Bulgaria receiving the fewest points on this indicator. The combination of low use of technology, small investment in emerging technologies, together with modest active labor market policies, implies dependence on a medium-skilled workforce.

Most Eastern European EU Member States have performed better in recovery efforts in the first pandemic wave. The reason for this is that their economies are less dependent on the global crisis. This, together with strong macroeconomic fundamentals, plus active financial sectors, has given local governments their resilience and flexibility.

"One of the key factors for the successful transformation of the work process in our country was that Bulgaria has one of the best internet infrastructures in Europe. This has allowed a very large number of companies to switch to teleworking very quickly. Working from home has always been denounced by local employers as synonymous with extra paid leave and low efficiency. Surprisingly, the reality proved otherwise. Bulgarian labor legislation is very traditional and needs to be adapted in terms of flexibility. However, local authorities responded very quickly to provide timely ad hoc solutions in support of business. Last but not least, the Bulgarian mentality is individualistic, not collectivist, and in addition to government measures, people are looking for alternative ways to maintain their income, taking care of their safety and health," said Dr. Irina Yoncheva, Chartered MCIPD, Human Resources Manager in Adecco Bulgaria.

Forecasts for the new normality

A key element that will forever change the work environment is the rapid adoption of telework, as labor productivity is not affected and even actually increases in some sectors. Preliminary estimates show that half of the active workforce can practice their work remotely.

Immediate workflow transformations (next 6 months)

As important as teleworking is, it does not solve the challenges for all sectors - much of the workforce will face relocations and redundancies. The combination of the pandemic and the ongoing process of automation increases the pressure on education, manufacturing, logistics, hospitality and entertainment.

This is beginning to affect the most indispensable categories of workers, namely older workers and young people. Countries such as Greece, Croatia, Turkey, Tunisia and Romania have unemployment rates above the European average. However, there are jobs in the affected sectors of the economy that can easily move to high-demand sectors and to which young people have easy access.

Rearrangement in the search for employees (next year)

Businesses are redesigning strategies, investing in automation and exploring new work methodologies. However, employees are more pessimistic about their job security and need to gain new skills, more than ever. There will be an accelerated need for highly specialized staff throughout the region: AI and machine learning, database analysis, the Internet of Things, social media.

On the other hand, jobs that involve repetitive actions and crowded places for human interaction will continue to be increasingly redundant. Next year will mean less interest in hiring staff in: manual data entry, financial analysis, accounting and auditing, office management, due to the constant development of technology and automation.

Skills that need to be improved (next 5 years)

In 2020, the Adecco Group conducted a survey to find out more about the workforce transformation and found differences in the perceptions of business leaders and employees of the skills that will be sought after over the next five years. Business leaders focus on data analysis, resilience, stress tolerance and flexibility. On the other hand, workers believe that artificial intelligence and machine learning, digital marketing and time management are more in demand in the near future.