Post-pandemic employment in LAC countries: how to make a difference
The COVID-19 pandemic has not only resulted in a global health crisis. The economic impact has led to dramatic consequences for employment too. Millions of people have lost their jobs, many in countries where unemployment was already high. In particular, data shows that the pandemic has accelerated the pre-pandemic trend of job transformation caused by increased automation, creating a skills mismatch in the workforce. Nowhere is this more evident than the impact on employment in LAC countries (Latin America and the Caribbean), where estimated job losses currently total 47 million. On March 4th, the Research Economist Guillermo Beylis published an article on the impact of COVID 19 on the LAC labor market. Our blog looks at the issues he raises and WCC Employment solutions’ role in labor market recovery in crisis-hit countries.
Employment in LAC countries – a bleak picture
Guillermo Beylis is a Research Economist at the World Bank’s LAC office. His research focuses on the effects of education and skill mismatches in LAC labor markets, the effect this has on poverty and inequality, and the impact of automation.
WCC closely follows labor market trends worldwide. Our blog takes you through the main points Guillermo Beylis raises in his recent article on the impact of COVID-19 on employment in LAC countries. Job losses in the region have increased dramatically. The International Labor Organization estimates that the pandemic has cost over 47 million jobs. His article also describes how the pandemic has accelerated the adoption of new technology and deepened inequality among workers.
Pre-existing labor market trends
The article outlines how COVID-19 is accelerating several pre-existing trends in employment in LAC countries, making an already challenging situation worse:
Software, robots, and digital solutions: Automatization and the use of new technologies were significant drivers of change in LAC labor markets, disrupting job opportunities even before COVID-19 hit the world stage. According to the World Bank, firms are responding to the COVID-19 crisis by adopting even more technology. Some 34 % of firms have increased their use of the internet, social media, and digital platforms, and 17 % have invested in new equipment, software or digital solutions in response to the pandemic. These changes are partly due to an acceleration of the trend towards remote and home-based working. Many jobs lost during the pandemic may never return.
Job transformation: As firms adopt new technologies, machines, automation, and software increasingly replace jobs. This transformation is well documented in advanced economies. The World Banks’s publication Going Viral: COVID-19 and the Accelerated Transformation of Jobs in Latin America and the Caribbean shows that these changes were present in the LAC labor market before COVID-19. Since COVID-19, the trend has accelerated.
Deepening inequality: The COVID-19 pandemic has exacerbated already high levels of inequality. A major contributory factor is that more than 244 million people in LAC countries have no Internet access – more than 32% of the population. As a result, large numbers of people in the workforce have no access to digital platforms. They are therefore unable to work remotely. Lack of internet is not unique to LAC countries. A recent survey by the Interamerican Development Bank and Cornell University showed that members of impoverished, less educated households were three times as likely to have lost their jobs than those in higher income, better-educated households.
Increasing employment in LAC countries
Government responses to the COVID-19 crisis in the LAC region have been generally strong, reaching millions of formal workers with income support. However, the jobs and incomes of informal and casual workers have not received the same protection. Also, underlying issues such as inequality, increased use of technology, and digital exclusion from the labor market remain. There is still more to be done.
Investment in digital infrastructure: Lack of access to digital platforms deepens inequality. Supplying internet services to more than 77 million people within geographically remote LAC regions is one solution. A solution that would create many entrepreneurial opportunities. It would also give workers new employment choices and new work options to supplement their income. However, poorer households would still need to receive financial support to cover the additional costs they would face.
Developing a digital economy: policymakers need to find ways to build a new digital economy that offers flexibility and job creation while protecting workers. A new digital economy needs clear rules and regulations to govern the labor market. Even in advanced countries, for example, discussions are still ongoing about the employment rights of gig-economy workers.
Addressing the skills gap: the acceleration of job transformation, together with the provision of greater digital access, means the workforce will need new skills and training.
WCC: a helping hand
Understanding labor market trends such as those described in the article has been crucial to our success in developing advanced IT solutions for Labor Market Management and Employment Services, large or small. Our detailed knowledge of the employment domain means we have developed software that provides robust solutions. Unique technologies for high-performance Search & Match, skill-matching, identifying education opportunities, and supporting Active Labor Market Policies are critical to the success of our solutions for both Public and Private Employment Services. As a result, WCC can help address many of the challenges posed by the COVID-19 crisis.
Perkeso – a success story
For example, in June 2020, Perkeso – the Malaysian Public Employment Service – launched the MYFutureJobsportal. The COVID-19 pandemic dramatically impacted the Malaysian employment sector. Perkeso needed powerful job brokerage capability and a means to highlight/address skills gaps. They also needed the use of local labor market data to formulate Active Labor Market Policies to support the economy.
WCC created MYFutureJobsportal for Perkeso using our customizable Employment Platform Portals solution. And it has been hugely successful. Perkeso subsequently used the platform to administer the Government’s COVID-19 Economic Recovery Package efficiently. It includes financial schemes to provide income replacement for workers who lost their jobs, together with wage subsidies. The program also covers employee retention and placement services, including counseling and vocational guidance.
A priority for governments in LAC countries
Increasing employment in LAC countries will be a priority for their governments in the post-pandemic world. How can WCC help? The acceleration of job transformation highlighted by the World Bank means that the workforce will need new skills. (Re)training workers will therefore be a key factor for any successful approach. Our Employment Platform can identify skill gaps between the job market and the jobseekers. It also helps jobseekers identify the skills/qualifications they need to fill jobs. As well as the steps they need to take to acquire these skills. What is more, our software can also help implement Active Labor Market Policies that will mitigate the effects of the COVID-19.
A wealth of experience
With more than 20 years of experience in the employment domain, WCC is a leading provider of knowledge-driven IT solutions. By understanding the demands of a rapidly changing labor market, we can help employment services respond to change, guide jobseekers to sustainable job opportunities, and reduce unemployment.
If you would like more information about our employment software solutions, please get in touch – wherever you are in the world.