Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

World Employment Confederation: Egypt "Attractive" for Investment ... Ingredients for Success "Available“

Tue 14 May 2024 | 06:14 PM
Taarek Refaat

Bettina Schaller, President of the World Employment Confederation (WEC) said that the Egyptian labour market is a very promising one, given its young population and the size of its working population.

These remarks come amid her visit to Egypt.

The president of the World Employment Confederation added that the labour market constituents in Egypt are ready to embrace the shifts in the World of Work. "With a workforce of around 30 million, more opportunities for youth and women, increased Labour market participation, and reforms for growth, opportunities are ripe."

Schaller pointed out that the Egyptian labour market also faces some challenges, including the level of unemployment, the high proportion of refugees, and the informal economy.

She emphasized that one way to move forward is to establish a regulatory framework that would allow for diverse forms of work to coexist in a sustainable way.

"Regulated and clearly defined types of labour contractual arrangements could deliver decent working conditions, including open-ended contract, direct fixed-term contracts, and temporary agency work," she said, adding that there is a need to clarify what Outsourcing/Agency work means.

As for the broader Middle East region, she pointed out that there is a need for appropriate regulation on diverse forms of work. "ILO Convention 181 on private employment agencies should be used as a standard to update regulation in those markets," she added.

Also, WEC president stressed that job seekers should not be charged fees to avail employment services provided by private recruitment agencies.

According to a WEC recent research, in which more than 700 senior executives were surveyed around the world, three major trends are reshaping the labour market, including digital transformation (AI in particular), flexibility in work, and compensation.

The research found that about 92% of senior executives said they would need a more flexible workforce in the next two years, and 88% of senior executives said increasing hiring of agency workers would be important for building workforce resilience in the same period. While half of the organizations want to source workers from under-employed groups.

According to the research, another strategy to make recruitment practices more efficient is using new recruitment platforms to access untapped talent (33%) or reducing formal education requirements when hiring.

Moreover, facilitating well-managed work mobility is essential. It was found out that Migration can play a vital role in increasing the talent pools available to employers. 81% of respondents say that increased labour migration has allowed their organisation to access talent with high levels of skills, while 78% said that workers from abroad help fill vital skills gaps at their organisations.

Schaller mentioned that AI creates strategic uncertainty and makes it harder to predict talent needs, but the technology can also transform how organisations analyse and anticipate skills gaps – and fill them.

She added that there are legitimate concerns about how AI will be used, and the risks that it could replicate or worsen existing workplace biases. She added that the WEC has developed a Code of Ethical Principles in the use of AI, setting out how employers can adopt AI responsibly.

"The Principles on AI also embody those set out in the WEC’s overall Code of Conduct, such as fairness, non-discrimination, diversity, inclusiveness and privacy."

"According to our survey, 81% of senior executives believe that AI will force organisations to radically rethink skills and resources across large areas of the workforce, and 78% are concerned that their organisation won't be able to train employees fast enough to keep pace with technology developments in the next three years."

Schaller emphasized that AI will not necessarily ‘replace’ a human worker, but it will serve as a hugely powerful aid to productivity.

"Randstad finds that more than half of working people believe that AI will lead to career growth and promotion, and the Adecco Group has likewise found that most workers are optimistic about AI in the workplace, while research from ManpowerGroup shows 58% of empowers believe AI and Virtual Reality will be job creators," she added.

"79% of senior executives say employing agency workers with knowledge of a new technology is an effective way to spread understanding to permanent employees, and 88% of organisations plan to increase the use of agency workers."

The President of the federation has two very important meetings on her agenda during her visit to Egypt, one of which is a meeting with Egyptian Minister of Labour Hassan Shehata, and the second with the International Labor Organization (ILO) office in Egypt.

Regarding her meeting with Minister of Labour, she said that she would provide an explanation of the capabilities and services of the World Employment Confederation, which operates in more than 54 countries.

"I will also exchange experiences and discuss work frameworks with the ministry, in addition to discussing International Labor Organization Convention No. 181, which falls under the umbrella of international labor law, and could be extremely beneficial for Egypt to ratify," Schaller said.

She pointed out that the WEC can work with Egypt on three axes, the first is to fight companies with bad practices, such as not providing contracts, salaries, and benefits to employees, and second, to enhance the capabilities of the Egyptian employee through skills development programs.

She added that she will also discuss how to support companies in the Egyptian market, which is home to many multinational companies, and by adding some regulations and exchanging experiences that can lead to more job opportunities and thus support the overall economy.

Regarding the green economy, she indicated that Egypt places renewable energy, especially green hydrogen, at the top of its priorities as the fuel of the future, by preparing development programs for cadres capable of using this technology on a large scale, which makes Egypt at the forefront of the world in this field.

She stated that the Egyptian market is a promising and attractive market for investment, in which all the ingredients for success are available, which explains why international companies are keen to invest in it.

WEC president indicated that Inflation ate into people's purchasing power, and there was less good/service for the buck, while the poorest were hit the hardest. She added that pressure for more social justice, plus, skill/labour shortages once the COVID pandemic started fading, became the elephant in the room.

She emphasized that in the year 2024, inflation witnessed a decline compared to wage growth, pointing out to the importance of the level of wages and the related labour productivity and the terms of trade.

The situation is normalising in the Western world," Schaller said, adding that the US has a higher level of productivity than before the pandemic while eurozone and UK performance has been pretty flat.

"The ECB forecasts suggest eurozone wage growth can be above 4.5 per cent in 2024, above 3.5 per cent in 2025. In the UK, the improvement in terms of trade makes the real growth of pay since 2019 sustainable, but there is little room for more catch-up."

President of the World Employment Confederation added that younger generations will represent a larger share of workers. "In 2024, Gen Z (anyone born between 1997 and 2012) is set to overtake the Baby Boomer generation in the full-time workforce, and Millennials will be the dominant generation in work for many years to come," she stressed.

Schaller pointed out that in many countries around the world, there's a representation gap between politicians and younger workers, and that legislators are underestimating the change in the mindset of many members of the workforce.

She added that there is a substantial evidence to suggest that younger people are particularly keen to secure flexibility in their working lives.

President of WCE pointed out that policymakers need to think about the particular challenges facing younger generations of workers, such as the high levels of anxiety and mental health.

"One way for organisations to support their employees’ mental health is through career support, which can help individuals feel in control of their careers and increase their sense of empowerment," she noted.

"Policymakers around the world could bring forward rules that support the development of more flexible job markets, which helps younger workers to find the diverse and rewarding opportunities they seek," Schaller concluded.