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Smart regulation of employment and recruitment industry makes countries more competitive

Research released today by Ciett reveals that countries that have adopted smart regulation of the employment and recruitment industry are more competitive. These countries enjoy better functioning labour markets with job creation, higher participation and inclusion rates as well as lower levels of youth unemployment.


Latest data from the Ciett Smart Regulation Index shows a clear, positive correlation between the World Economic Forum Global Competitiveness Index and markets that score best in terms of smart regulation of the employment and recruitment sector. By balancing flexibility with security for companies and workers alike, these countries enjoy higher levels of agency work penetration which supports job creation and a greater range of employment forms and contracts.


“It is no coincidence that our findings align with the WEF Competitiveness Index,” said Denis Pennel, managing director of Ciett. “Our industry is leading in a changing world of work, and we see that an appropriate balance between flexibility and security in employment regulation is essential if countries are to increase labour market efficiency and drive job creation and employment.”


The Smart Regulation Index was developed by Ciett and the Boston Consulting Group in 2011 as a benchmark to gauge the appropriateness of the regulation of the employment and recruitment sector in different countries around the world. Updated in 2015 to include 35 countries, the index looks at four key dimensions within the regulatory framework.


Strong performers fall primarily into two categories: markets with a high level of social dialogue, such as the Netherlands and Scandinavian countries; and countries with Anglo Saxon, market-driven economies, such as Canada, US, Australia and UK. Both models strike a good balance that delivers flexibility and security for both companies and workers.


Countries such as Italy, Greece, Spain, France and even Argentina, which have made significant labour market reforms over the past four years, have seen their ranking on the Smart Regulation Index improve. Meanwhile, legislator driven economies with relatively high levels of centrally-set regulation, and also emerging market economies, with little or outdated legislation, lie at the very bottom of the index. They are limited in their ability to create jobs and deliver inclusive labour markets that provide workers with decent, secure employment.


Ciett says that efficient labour markets are a crucial factor in global competitiveness and it is calling for smart regulation on the employment and recruitment industry to be implemented around the world. The company says this means upholding the principles included in the ILO Convention 181 on private employment agencies and removing unjustified restrictions on the sector in order that it can create jobs and support governments workers and economies in navigating a changing world of work.


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