Page 12 - AEI Insights 2019 - Vol. 5, Issue 1

AEI Insights, Vol 5, Issue 1, 2019

Under this policy recommendation, the OECD suggests that all member countries should
promote higher flexibility of the labour market and recommend some policy reforms with
respect to “working time”, “wage and labour costs”, “employment protection legislation” and
“social security benefits” (Berg and Kucera, 2008).

The third characteristic of European labour market is the promotion of decent work. Other
economists view employment protection as an important labour market policy in Europe to
ensure decent working conditions for all workers. A number of international organisations,
such as the International Labour Organisation (ILO), have made recommendations to its
member countries to establish appropriate labour market policies and action plans to protect
the rights of workers. These recommendations are known as the “ILO Standards” (Berg and
Kucera, 2008). Thus, a most crucial challenge in the European labour market is to strike an
effective balance in the relationship between labour market flexibility and employment
security. On the one hand, policymakers need to ensure that the labour market is business-
friendly by making it more flexible. On the other, there is an urgency not to destroy the existing
high standard of employment security in the region. This is a fundamental paradox in labour
market dynamics. As a result of this paradox, there is a rise of ‘non-standard’ labour in Europe.
More precisely, during an economic crisis, European employers may face a difficulty to
decrease the wage level of workers. This is mainly because strong wage-setting mechanisms,
such as the employment protection laws, will resist any negative change in wages. In response
to this, European employers may try to increase the usage of part-time workers who are not
protected by employment protection laws. It means that the presence of non-standard workers
has played the role of a “cushion” during economic crisis in the region (Muffels, 2008).
The fourth characteristic of European labour market is a change in work value. There has also
been a tremendous change in work values across Europe. Current trends in demographic,
cultural, economic and legal environments have had an impact on many aspects of employee
recruitment and retention strategies globally (Idris, 2014; Vaiman et al., 2012). Specifically the
quest for work-life balance, considered nowadays as a basic requirement by an increasingly
enlightened workforce, has contributed to the demand for flexible working practices (Smith et
al., 2011). Although monetary factors such as salary, bonus, and allowance are still important,
non-monetary benefits including flexible working are increasingly being used as a tool in
managing employee turnover. More significantly, there are scholars (Arvanitis, 2005) who
argue that monetary benefits are not sustainable drivers of job motivation and commitment
since social value shifts have resulted in a greater concern for work-life balance among the
younger generations.
The fourth characteristic of European labour market is a decline in full-time job. There has
been a rapid decline in permanent, full-time employment within the region. The standard career
pattern in European countries is shifting toward a more diverse working experience with a
richer variety of the non-standard work forms, such as flex-time and flexplace, part-time
employment, temporary employment and labour-sharing. In the 1980s, only ten percent of
European workers were employed as part-time employees. By the 2000s, this figure had
increased to around twenty percent. With such a rapid increase in the number of workers
engaged in non-standard employment in recent decades, currently a fundamental question in
the European labour market is how to provide sufficient protection to this category of workers
(Muffels, 2008).
In the Nordic countries, part-time employment is a manifestation of ‘flexicurity’ (a
combination of flexibility and security) which allows women more options depending on the
stage of their life-cycle without having to opt for career breaks (Kinoshita and Guo, 2015,
p.16). The flexibility in work arrangements allows women to juggle their work and family

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