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Interview: Denis Pennel – The labour market will never return to pre-crisis conditions

14 July 2014

Emerging from one of the longest periods of recession in history, businesses and the staffing industry will have to accept that we will not return to pre-crisis labour market conditions, according to Denis Pennel, the Managing Director of Ciett (International Confederation of Private Employment Agencies).

Speaking to Staffing Industry Analysts, Denis and his colleague Menno Bart, Ciett’s Communications & Economic Affairs Adviser, talked about the labour market and the challenges that lie ahead.

Denis said: “There is a new political environment in Europe after the European elections of last May. We don’t know what is on the agenda but jobs will certainly be there. We need to educate policy makers on the realities of the industry. Member states have to reform their labour markets, like Germany has. Spain and Italy, though, are heading in the right direction.”

Menno added: “Europe has been pushing member states to reform their labour markets. The European Commission in its country specific recommendations advised Spain to increase co-operation between public and private employment services for two years in a row.”

This bilateral cooperation is at the heart of the Five Eurociett Recommendations. Ciett’s European arm believes that strengthening public-private partnerships between employment services will create a better functioning labour market.

Denis explained: “In some countries [public employment services] are reluctant to co-operate as they view private employment services as competitors, which isn’t true. The most reluctant countries to co-operate tend to have worse unemployment.”

Founded in Paris in 1967, Ciett considers itself the authoritative voice representing the interest of agency work businesses, not only in Europe, but around the world. Despite its longevity, the industry that Ciett represents still faces strong criticism from those who fail to appreciate its function in the employment ecosystem.

Denis explained: “Private employment services play their role in the labour market. Other parties are too focused on negative aspects of the industry. People who think that agency work means fewer permanent jobs, greater insecurity, that temporary agency work isn’t a proper job. It doesn’t. Ciett doesn’t say that all jobs should be temporary, but that temporary agency work should complement other contractual arrangements that exist on the labour market in order to increase participation levels.”

Some critics, according to Denis, believe that agency workers take permanent jobs out of the labour market. However, 62% of companies in a recent survey responded that the agency work jobs in their company would not have been created as permanent jobs. Instead the work would have been absorbed by other teams or departments, or the work would just not have been done. 

Another criticism the industry faces is the belief that people do not choose to work as agency workers and only opt to do so because they have no alternative. Data from Ciett, however, shows that on average, 83% of agency workers are either ‘satisfied’ or ‘very satisfied’ with their work and the vast majority (80%) would recommend agency work to friends and family.    

Ciett also wants greater recognition that private employment agencies are improving the function of the labour market. To this end, Ciett is involved in two major global projects. The first is a joint effort with International Organisation for Migration (IOM) and also including the International Organisation of Employers (IOE) to promote ethical recruitment practices and increase the professionalisation of the recruitment industry in Asia. The other project is the ILO’s Work in Freedom campaign to fight against human trafficking in Asia.

Denis said: “The professional labour market in SE Asia is growing. There is huge potential for growth but [appropriate] regulation is needed.”

Menno added: “It’s important to develop fair recruitment initiatives to ensure basic quality standards to stop exploitation.”

Research from Ciett shows that the higher the penetration rate of agency work, the smaller the illegal economy within the country. To this end, Ciett is working with local and regional partners to standardise and professionalise the recruitment industry and support adoption of the Ciett Code of Conduct and ILO Convention 181, of which Article 7 stipulates that recruiters should not charge placement fees to workers.

“It’s important to include user organisations as well,” Denis added. “It’s important to convince and educate [them] about what recruitment agencies they use and what they pay for workers. If they’re getting too good a deal then there’s probably something wrong.”

Menno added: “It’s not just a moral issue, it’s also a question of [legal] risk management.”

Looking to the future, Denis suggests that, as the labour market enters what he calls a “third industrial revolution”, companies and organisations need to adapt to the new environment: “The rise of the self-employed is going to be important. Unions, for example, have always been suspicious of agency workers but now they are suspicious of self-employment and its development outside the traditional employment relationship.”

Menno continued: “Social protection schemes also need to be adapted to the modern labour market. Things like the portability of employment rights, pensions, education, social contributions, which maybe should be linked to the employee and not the employer.”    

Denis concluded by saying that in this changing world of work, the role of private employment services is also changing: “It is our responsibility as an industry to be a partner for workers and businesses alike, and help them navigate labour markets that are becoming more complex and opaque. At Ciett, we will continue to do everything we can to create the most favourable conditions for the Private Employment Services industry”.