The labour market is facing major structural changes mainly as a result of globalization and demographic, technological, ecological, climate and health developments.

In some parts of the world, namely North America, East Asia and Europe, the percentage of people aged 65 and over not in the labour force could reach approximately 50 per cent by 2030. Population ageing increases social security expenditure and the number of beneficiaries. Encouraging and retaining more people to work for longer is therefore essential to support the future sustainability of social security systems in regions with an ageing population.

The technological advancements and digitalization of the economy is causing some jobs to disappear and allowing new ones to be created, transforming the content of the tasks within many jobs. This rapid and fundamental change in occupations is also driven by climate and ecological challenges. Production and consumption patterns are therefore increasingly becoming more influenced by climate considerations and the requirement to be more sustainable. These developments require companies to create new products and innovative services and workers to continuously adapt their skills.

The above-mentioned changes are also giving rise to new forms of work (e.g. platform mediated work) and increasing non-standard employment. In addition, they are reducing the traditional boundaries between employer and employee as well as between paid employment and self-employment (including gig work). Platforms for the exchange of goods and services, for example, facilitate the emergence of new jobs, particularly in countries where informal employment is widespread, and provide new opportunities for the integration of workers who are excluded from the labour market. But they also raise several important issues, including the quality of jobs. These developments need to be regulated to ensure decent and sustainable jobs and effective social protection.

The coronavirus pandemic has required containment and health protection measures that have abruptly halted or sharply reduced the activities, working hours and income of many types of businesses, employees and self-employed workers. Social security systems, especially their unemployment branch, have been under massive strain to support workers’ incomes and the viability of enterprises. The organization of work has also been transformed and telework has accelerated dramatically. This crisis has led and will continue to lead to an increase in bankruptcies, job losses and unemployment. While the employment impact of the crisis needs to be managed in the best possible way, there is a subsequent need to support recovery and to rebuild labour market mechanisms in a better way, i.e. by learning from the past and increasing the resilience of systems and institutions so that they can deal more effectively with possible new similar crises or other temporary economic shocks.

Globalization is also causing structural changes in labour market and has an impact on various industries (e.g. manufacturing), also in combination with other trends like remote work. With the rise of remote work , globalization may have a greater impact on knowledge workers in the future.

These challenges call for adequate responses from the competent authorities and institutions. Some of them are already reflected in the guidelines in the previous sections.