Whiteshield analysis reveals the world's most resilient labour markets

17 January 2024 Consultancy-me.com 4 min. read

International advisory firm Whiteshield has unveiled the Global Labour Resilience Index 2024, a yearly report on the resilience of labour markets worldwide.

The Global Labour Resilience Index (GLRI) measures the degree to which labour markets are capable of navigating both structural trends and temporary shocks. Long-term trends include technological disruptions or the green transition, while short-term shocks include developments such as the global financial crisis (2008-2010) and the Covid-19 pandemic (2020-2022).

The analysis by Whiteshield found that the most labour-resilient countries are predominantly European, with Switzerland securing the top position.

Whiteshield analysis reveals the world's most resilient labour markets

In fact, European nations continue to dominate the top 10 of the GLRI ranking, with nine European countries in the top 10. Denmark and the Netherlands complete the top 3, with also Germany and the UK in the top 10. Singapore, in fourth position, is the only non-European country included in the top 10.

The US ranks 14th, Japan 20th, while China comes in at 36th. At the bottom of the ranking stand countries such as Angola, Yemen and Chad – a total of 136 nations were assessed by Whiteshield.

“Labour market resilience, the ability to face and recover from disruptions to the labour market, is a cornerstone of successful human capital and talent in a nation,” said Fadi Farra, Senior Managing Partner at Whiteshield. “Countries not only must foster labour markets capable of withstanding temporary shocks but also must possess the capacity to navigate structural trends.”

Raed Safadi, Chief Economist at Whiteshield, added: “The GLRI 2024 underscores the need for targeted policies and effective institutions to catalyze the resilience of the labour market amid structural changes in the global economy. Acting in anticipation can improve outcomes and this is where the different metrics of the GLRI offer help in monitoring performance, benchmarking developments, and drawing lessons of experience.”

Enabling climate change

One of the key conclusions of the 2024 report is that labour markets play a critical role in enabling environmental progress.

Whiteshield analysis reveals the world's most resilient labour markets

“Labour markets prepare economies to endure climate change challenges and leverage the prospects of a sustainable, green future,” said the authors.

By plotting countries on two dimensions – labour market resilience and environmental performance – Whiteshield identified a clear relationship between the two. Countries with less resilient labour markets are often ill-equipped to handle structural changes, including those brought about by climate change.

Furthermore, their economies may miss out on opportunities to embrace green technologies and could encounter difficulties in nurturing green skills within their workforce.

To improve the ‘green resilience’ of their labour markets, policymakers must adopt a holistic strategy, said the authors. Key actions include strengthening social protection transfers, including provisions for unemployment benefits, disability allowances, child support, and pensions, and investing in education, training, and reskilling to equip the workforce for green jobs while addressing the potential broadening of inequalities.

Policymakers must also consider strengthening economic fundamentals for labour markets to capitalise on emerging green opportunities. Macroeconomic stability, trade resilience, and governance structures enable workers and firms to adapt quickly to changes brought about by greening the economy, the report said.

Further, public policy should work with the private sector to establish a “green skill agenda” for re-skilling and upskilling of workers and target the youth, who will be tasked to lead the green transition.

Whiteshield analysis reveals the world's most resilient labour markets

Global Labour Resilience Index

The Global Labour Resilience Index emphasises the capabilities required for countries to better prepare for short-term shocks as well as long-term transformations.

A resilient labour market is defined as one that generates sustainable demand for a wide range of occupations and supplies quality work. Resilient labour markets are inclusive, sustainable, and able to withstand shocks because of their flexibility and adaptability.

Late last year, Whiteshield released its Global Trade Resilience Index, the firm’s other annual flagship report.