How to switch to a more sustainable labour market in this rapidly changing world?
Specialist in employment law Filip Tilleman invited labour market specialist Fons Leroy for a lively discussion on the need for a sustainable labour market policy in our rapidly changing world. Because, according to the former head of the VDAB, there is a pressing need for it – and definitely in the midst of the corona crisis. The interview runs the whole gamut, from recruitment, a full career to the end of the employment contract, and also touches on some facets of employment law. Leroy’s latest book “Een vaccin voor de arbeidsmarkt” (A Vaccine for the Labour Market) already offers inspiration for this crucial question.
Covid-19 makes bottlenecks on the labour market painfully visible
Asked whether he is optimistic or pessimistic with regard to the corona crisis, Fons Leroy gets straight to the point: he believes in people and organisations to find solutions to the problems facing us. He has his concerns nonetheless, primarily regarding the policy framework promoted by governments and social partners. In Leroy’s opinion, there is often a lack of a long-term vision and sustainable initiatives that move the labour market in the right direction. “It’s all still very much focused on job security, while we should be focusing more on career security,” he explains. In other words: how can you get people to switch from job to job without them falling into unemployment? The biggest challenge here, in Leroy’s view, is how to adapt the existing systems – such as social security and labour law – in order to create overarching ‘career security’. This career security would encompass both the benefits (training, well-being at work, work-life balance, etc.) and burdens (unemployment, sickness, inactivity, etc.).
“The welfare state has worked well for 60 years, but the world has since changed dramatically and the formulas from those days no longer work today.” (Fons Leroy)
Unshackling from the dogma of the past
Filip Tilleman agrees with Fons Leroy. He believes that we need to unshackle ourselves from the dogma of the past, and choose solutions that are objectively better and more logical. Tilleman cites the example of working time: “the dogma is that you can’t work on Sundays, whereas the reality today is that many people, for all sorts of reasons, want to work on Sundays.” According to Tilleman, it would be better to give companies and employees more freedom to organise themselves. He recalls a case where a business was not allowed to open on Sundays, even though there was a tourist zone 300 metres away where Sunday work was permitted. “How can you objectively justify that 300 metre difference?” he wonders out loud. Tilleman finds it astonishing how often working time crops up in cases, even though companies should be able to organise this aspect themselves. “As lawyers specialising in labour law, even we get lost in the maze of pitfalls and conflicting rules governing working time or night work; whereas this subject should essentially be crystal clear to everyone in the workplace. Unfortunately, there is always potential risk lurking around the corner, because if after ten years it turns out that one of your working time arrangements was not by the book, you as an employer are liable to pay out retroactively for all those years”.
Well-being at work under pressure
Fons Leroy draws lessons from the widespread switch to homeworking due to Covid-19, as this demands a new reflection on the relationship between working time and free time. “We also need to give more autonomy and choice to companies and employees.” Leroy refers to studies showing that one in two employees today have to deal with unworkability factors in the area of mental and physical fitness: stress, burn-out, work pressure, lack of training, lack of career opportunities, etc. The health sector, well-being sector, food sector and logistics sector, which had to work the hardest during Covid-19, are particularly affected in this regard. The theme of well-being at work has long been neglected by social and labour law, Leroy believes. Keeping jobs workable is also a whole new challenge for HR departments and labour market actors. “All the research shows that more freedom leads to more well-being and fewer complaints at work. This is at odds with the checks that some companies made on their employees working at home, by having them call in on a regular basis or by exaggerated online time registration, for example. According to Leroy, this is a throwback from a time when we tried to cast everything in theoretical rules.
“Employees are trapped in the pigeonholes that we ourselves have created.” (Fons Leroy)
The dark side of freedom: the problem of absenteeism
Filip Tilleman agrees that more freedom of choice for employers and employees is a good idea. In Tilleman’s view, absenteeism is a hot topic these days. The problem is that a small minority take advantage of sick leave and risk ruining it for the vast majority, who do take responsibility in organising their work with the freedoms they have. Tilleman draws a comparison with hooligans at a football match: “a small minority causes more disturbance than 90% of the supporters who do behave”. He calls for more autonomy, but tough sanctions for those who abuse the freedoms. In his view, this is not only the responsibility of the employer or labour law, but above all of the health sector. “Everybody knows a doctor who issues sick notes willy nilly”, cautions Tilleman.
Fons Leroy retorts with a reference to Rutger Bregman’s book ‘Humankind: A hopeful history’, which argues that most people are good. Leroy is familiar with the discussion about sick leave abusers, from his time at the VDAB. He believes the problem is not as bad as everyone always fears, but there is a hardcore of offenders. “However, you cannot formulate policies that are based on abuse and checks, what you need is an empowering approach for everyone. As a mediator in the labour market, you only have something to gain if the candidates actually want to take a job. I think we need to guide people towards the job of their lives. But obviously, if they don’t seize those opportunities, you need to act decisively.”
Career security from recruitment onwards
Fons Leroy believes that job mediators are increasingly able to offer tailor-made jobs, thanks in part to artificial intelligence. “We will be able to work with extreme precision, but we can also be strict where necessary.”
“At the job fair of the future, the employee will sit behind the table and companies will come to introduce themselves.” (Fons Leroy)
One of the challenges Leroy sees is ‘mirror recruitment’. “That means constantly recruiting employees with the same profile, which gives you very homogeneous companies. While you need to look at the outside world and strive towards ‘window recruitment’,” explains Leroy. “We need many more different backgrounds, cultures, colours, generations and thus diversity in our organisations”, believes the labour market specialist. “The question is how to create more inclusive organisations, where the differences actually provide the added value”. Leroy mentions an economic study by Harvard that identified the 1,000 most successful American companies. The study showed that these companies have two characteristics in common: they excel in innovation and have a diverse workforce. “The idea is that your organisation is a reflection of the consumer base, and that automatically creates innovation and customisation within a company. However, the reality is that our country is one of the laggards in Europe in terms of diversity of employees with an immigrant background, and also in terms of keeping the over-60s in work. As a result, we lose an awful lot of talent, while we will need as much talent as possible in the future.” Leroy is convinced that we can set up and facilitate inclusion agreements at the meso level, without overlooking the fact that every organisation is different. In Leroy’s view, the food sector – with its acute shortage of manpower – has already taken significant steps in this direction, by hiring a diversity manager. Leroy believes that we still have a long way to go when it comes to inclusive organisations.
For Tilleman, the principle of diversity in recruitment is clear: “put the right man or woman in the right place, regardless of the candidate’s background, gender, colour or age. That’s pure common sense.”
Challenges during a career
Fons Leroy is a champion of the Finnish model, which advocates a holistic HR policy through ‘The house of Workability’. Johnson & Johnson and Janssen Pharmaceutica have already successfully applied this policy, Leroy enthuses. The model calls for a permanent match between company and employee. “This means a match of skills that you can acquire through training, but also a match of standards and values. If the standards and values of the employee and the company are also aligned, then you are more likely to have a sustainable employment relationship than if there is a mismatch”.
In recent years, Fons Leroy has observed that companies have also invested in healthy nutrition and physical fitness. This is new territory for an HR policy. Employees need to work longer, but they also need to be fit enough to do so. So the match with values and standards, learning new skills, mental and physical wellbeing, all of that together ensures that a sustainable working relationship also has substance. According to Leroy, the match with values and standards will become all the more important when the labour market picks up again in the near future. In the forthcoming ‘war for talent’, an employee who does not feel aligned with a company’s values and standards will switch to an employer who is more in line with their values and standards.
“Over the next decade, we will see 8 people joining the labour market for every 10 leaving it.” (Fons Leroy)
As regards careers, you can see the phenomenon of ‘ZZP’ers (self-employed people without employees) in the Netherlands. “There’s over a million of them working on a self-employed basis,” says Leroy. “And yet it seems that the Netherlands also wants to limit this status. They would like to have three statuses: the employee who opts for a sustainable employment relationship, the temporary worker for specific solutions, and the self-employed and entrepreneurs. The aim is to get more cooperation between these different statuses.” Leroy gives the example of economic unemployment due to Covid-19. Under the scheme, working people receive benefits, the self-employed receive recovery bonuses and the unemployed receive a different benefit, all of which comes from the same pot and has the same objective: to allow people to work (again) or do business”. As such, Leroy argues in favour of better coordination between the different statuses. “That way, you can also propose training and career opportunities to the self-employed, as is the case for employees. Because many ZZP’ers and self-employed people had a tough time of it during the corona pandemic”, confirms Leroy. “Everyone should be able to enjoy career development, education, training, etc. regardless of their status. The system of empowerment and training should therefore also be opened up to those with self-employed status,” Leroy believes.
Tilleman sees a major upheaval with regard to the self-employed status: “In the past, the employer used to impose on employees – sometimes categorically – that they would work for the company in a self-employed capacity, whereas today it is almost always a very conscious choice on the part of the of the person offering their services, to set up as self-employed”. He believes that the possibility of opting for a self-employed status should definitely be maintained, provided that it is applied consistently. Tilleman believes that there need to be stringent measures against bogus self-employment. From experience, he sees that there is a real need to enter the market in a self-employed capacity. Here too, it’s not because of the minority of cheats who abuse the status that the whole system has to be overhauled, in Tilleman’s opinion.
Leroy agrees that self-employed status should not be scrapped, although adds one important point, as a labour market specialist. “These days, school leavers are trained to become entrepreneurial employees. That entrepreneurship then takes precedence, but it’s not only entrepreneurs that we need, we also, and above all, need a lot of enterprising employees,” says Leroy. “At the end of the day, it’s about taking control of your career, whatever status you choose.”
Digital exclusion is another problem Leroy highlights, as he believes that this is a major challenge – especially for the low-skilled. “Digital exclusion was felt particularly hard by the low-skilled during the Covid-19 crisis,” explains Leroy. “People on low incomes or single-income families often suffer from the digital divide”. In addition, Leroy also works hard for people with disabilities on the labour market. In this regard, he focuses on the opportunities that technologies can offer to bridge the gap between people with disabilities and the labour market. Leroy is also an optimist in this respect, and sees the potential of digitisation in eliminating various sore points on the labour market.
“As a cycling enthusiast, I like to climb cols that I can get to the top of by myself, but on the job market I still see a lot of cols that people can’t get to the top of”. (Fons Leroy)
Leroy cites a study by the OECD which states that 82% of the working Flemish population do not recognise the advantage of continuous education. This appears to be the highest percentage among all OECD countries. The study highlights the fact that there is no real learning culture in Flanders. “This learning culture needs to emerge, and it can only emerge if people also have a desire to learn”, confirms Leroy. This already starts with education, which in his opinion is too isolated from society. Education should focus much more on dual learning and therefore be in contact with the reality of society. “We need to make people more agile and resilient,” asserts Leroy. From a pedagogical perspective, he believes that it is relatively straightforward to teach 21st-century skills through the regular curriculum, but then you have to use a different methodology. Less individual learning and more group learning, for example. In Leroy’s view, these are not exactly new or revolutionary ideas. “As a member of the STEM platform, I advocate teaching ‘computational thinking’ as a skill in our education, because digital is the new native language,” explains Leroy. He takes an operator as an example, as this profession also needs some knowledge of how robotic systems and cobotisation work. “Everyone should also have a basic knowledge of how algorithms work, because we’re going to see them cropping up everywhere in artificial intelligence,” Leroy continues. Unfortunately, he still sees a lot of doubt among the educational structures as to whether these are skills that we actually need to acquire. Moreover, Leroy does not think that we expect too much from young people, but that we should develop our educational system in such a way that young people learn these skills naturally, embedded in the standard educational curriculum.
A different end to the employment contract
Fons Leroy admits that he sometimes has to say something provocative in order to be heard. This once prompted him to come out with the term ‘reinstatement law’ as opposed to ‘redundancy law’. According to Leroy, we can only safeguard our prosperity and well-being in the long term if we give every talent a place on the labour market. So encourage even more people to work with passion, and work with this passion for longer. Investing a lot in redundancies is a waste of energy in Leroy’s view, which we would do better to invest in immediately employing that talent somewhere else. In shrinking sectors and shrinking professions, this means training people to move on to a growth sector or growth profession.
What particularly irks Leroy is that there are two separate statutes: those of the employed and those of the unemployed. Each status has its own framework with its own measures. In Leroy’s vision, everyone is potentially job-seeking and therefore always in transition. He cites as an example highly-skilled job seekers who are suddenly called into question following a restructuring and are not given career guidance like people in employment are. “And yet, that’s often the best way to get back to work quickly,” explains Leroy. “They then end up at the VDAB, which is more specialised in guiding low- and medium-skilled people”. Another example Leroy gives is outplacement offices, which, in his view, barely provide any training for employees, as this is not included in the outplacement costs. “In other words, you first need to be unemployed before you can enjoy free training from the VDAB. As a result, you lose six to nine months, as well as motivation and knowledge, etc. before you can be integrated back into the labour market. These structures are therefore not transitional enough and still far too focused on old systems”.
Filip Tilleman would like to know if Fons Leroy believes that severance payment should be scrapped, so that the funds can be used for training, for example. Leroy’s response refers to the Austrian model, where everyone receives their own career account, funded by the employee’s own contribution, a contribution from the employer, possibly also from the sector, and for vulnerable people also from the government. “With this account, you buy training for reintegration if a transition is imminent. So you build up an account for reintegration and not for income,” Leroy explains. He realises that compensation will always be necessary for the loss of income, but right now the emphasis is only on compensation at the end and not at all on rapid reintegration into the labour market.
Filip agrees that it would indeed be better to think about the future during the ride, and not wait until the end to set aside a budget for reintegration.
Fons Leroy recalls discussions in the courts, a long time ago, about compensation for engineers who had been made redundant, even though the engineers were able to work somewhere else the very next day. “The engineers weren’t asking for severance pay at all, but they wanted to get back to work as soon as possible,” Leroy points out. “Why so much focus on severance pay when there are people in strong professions who can get back to work straight away?”
Tilleman also sees the same thing from his law practice: “everything is crystallised around the day of redundancy and compensation – even if someone has already found a new job the next day”.
In Flanders, Fons Leroy is an ambassador for the United Nations’ Sustainable Development Goals. “Companies are going to have to invest in sustainability at all levels,” he says. “If in the future they still want to bid for public tenders or receive government subsidies, they will have to incorporate a sustainability strategy. The bottom line is that companies need to start thinking about how they can make a difference not only economically, but also socially”. Leroy sees this as a trend that we should wholeheartedly encourage, given the ecological changes that he sees coming our way.
Securibility as a recipe for the new world of work
“The world is demanding a lot more agility from people,” Leroy points out. “That’s why I want to enhance that agility in 21st-century skills, but at the same time, I want to focus the systems built around it on new certainties. This career security is then used for those uncertain situations and to build in springboards, that’s securibility,” Leroy explains. It is crucial to know that you can count on that security when you are temporarily unemployed. The fact that your income, career, education, etc. are safeguarded and you can get back to work and leap to a new job as soon as possible.
Leroy observes that politics today relies heavily on experts, in the context of Covid-19. In his opinion, the labour market would also benefit from a scientific council, which could then take a long-term look at how we can deal with the changes coming our way. Leroy and Tilleman conclude that this vision will eventually trickle down into social and labour law.
“I don’t want flexicurity, but securibility.” (Fons Leroy)
Fons Leroy was the managing director of the VDAB between 2005 and 2019. He holds a master’s degree in law and criminology with a special qualification in management and public administration. On 1 July 2019, his career took a new turn, namely “retirement”. He now lectures on HRM and labour market policy, supervises public mediation services on a strategic level, is an assessor for the European Network of Public Employment Services and chairman of the Beroepenhuis, the Round Table on Employment Care and the Red Nose Fund. In his most recent book “Een vaccin voor de arbeidsmarkt” (A Vaccine for the Labour Market), Fons Leroy offers inspiration for a vaccine to design and create a better world of work.
(For information: transitional labour market means transitions from work to work, job-to-job mobility, the transition from salaried to self-employed or vice versa, from temporary employment to permanent employment or vice versa, from more to fewer hours of work or vice versa).
Fons Leroy was the managing director of the VDAB between 2005 and 2019.
He holds a master's degree in law and criminology with a special qualification in management and public administration. On 1 July 2019, his career took a new turn, namely "retirement". He now lectures on HRM and labour market policy, supervises public mediation services on a strategic level, is an assessor for the European Network of Public Employment Services and chairman of the Beroepenhuis, the Round Table on Employment Care and the Red Nose Fund. In his most recent book "Een vaccin voor de arbeidsmarkt" (A Vaccine for the Labour Market), Fons Leroy offers inspiration for a vaccine to design and create a better world of work.