There is something structurally broken in the labour marketplace in Spain. On one end, we have one of the most worker-protective legislations in the world (not yet as protective as the French or German, though …) On the other end, we have one of the worst unemployment rate in Europe, close to 20%. How are we going to fix this situation?
Reality is that regulations are not working and are not doing what they are supposed to do, which in this case is protect the employment. Companies that have human resources needs are not using salaried employees as their main sources. There are several items that have led to this point:
1. Corporations have taken advantage of the global economy situation to seek massive cost reductions through layoffs. It has been an opportunity for them to make those changes that were needed without taking social responsibility for it: It’s just the economy, fool! … and at the same time, they have saved the Social Image of the firm.
2. Once they have gone through this major relief and got rid of labour passives … who would want to make the same mistakes again? Why should they hire salaried employees and incorporate these so-difficult-to-eliminate-when-not-needed fixed costs?
General acceptance is that the less the salaried work force looks interesting to the employer, the more of a structural damage will be done to the labour force in the coming years … right! … Or wrong?
Officials mention that unemployment rate will probably not go down for a couple of years, but climb well up above 20%.
Well, the way I read those numbers is very different. Flexibility of the resources is a key strategy that main consulting firms are advising their clients. I’d add the flexibility of human resources to the mix. This strategy has been discussed in one post before.
Today, on the labour side, professionals are facing less opportunities on the salaried or traditional side and more and more on a temporary basis. These professionals would be willing to convert to temporary assignments in exchange for a better share of the profits of their work. Better retribution would also compensate them for the un-security of their career choice.
On the employer side, if there is no work, there is no fixed costs; and when there is work there is a benefit to be gained and employers will need to compensate for the flexibility and pay a premium, which should be seen as “sharing the profits”.
I also consider this mechanism to be more efficient in distributing the generation of wealth as well as a solution to the current situation of the Spanish labour dysfunction.
Potential roadblocks are sometimes self-imposed like the comfort of a permanent-job-for-life mind-set. Some others really have to do with the employability of the workforce. The brick and mortar policy of the last governments on power has not helped much in this sense.
For those with a good professional track, employability should not be an issue and, from my point of view, the sooner they embrace this job market change, the sooner they will start gaining from shared profits.
Thoughts?