Statements by Minister Kelleher in the Seanad on the challenges and opportunities to the Irish labour market in a globalised economy

Introduction

Here in Ireland globalisation is a theme which dominates our economic and social policy making, both at national and EU level. Globalisation has elicited different responses across the world. It has stimulated competition and brought opportunities to the doorstep of nations. It has also brought fears that intense competition will widen the gap between rich and poor countries. Globalisation, therefore, brings both opportunities and challenges.

In the context of the implementation of an appropriate agenda to meet the challenges of globalisation, I think that we are all aware that women and men throughout the world will see employment as the "litmus test" for the success of globalisation. As stated by the International Labour Office, work is the source of dignity, and is fundamental to the stability, peace and credibility of governments and the economic system.

Social Partnership

In order to optimise the benefits of globalisation, Ireland has had to focus attention on creating the environment in which employment is fostered and grows. We must also be fully aware that economic growth does not necessarily "lift all boats" and that we must ensure that we do not leave people behind in our push for growth.

Mechanisms are, therefore, required to provide confidence about decent standards and fairness, without compromising flexibility or adding unreasonably to the burdens of regulation of the labour market.   That delicate balance requires the active engagement of all of the parties to our employment market.  In striving to achieve outcomes which are fair to the wider society at large, a key aspect of our approach has been to foster, develop and ensure to the greatest extent possible, policy coordination and coherence across a wide policy remit in key cross-cutting areas of economic, employment and social policy. A core element of our approach has been to ground these developments within social dialogue. Social Partnership has become the fundamental element in the formulation and delivery of these core strands of policy in Ireland.

The outcome of the recent partnership negotiations in respect of employment standards, which includes new legislation as well as the establishment of a National Employment Rights Authority, will provide confidence for the future in a very rapidly changing labour market. It will also ensure that Ireland continues to provide an excellent environment for business and job creation.

The social partnership process in Ireland has, therefore, provided a good mechanism for balancing flexibility and security.  This has been recognised by the Commission and has been given as an example of how "flexicurity" policies can work. There are different models of flexicurity and much has been achieved in Ireland under the heading of flexicurity without us actually calling it that.  The Commission Communication emphasises the need for social dialogue in the development of flexicurity policies and the European Social Partners recently agreed joint recommendations on reconciling flexibility and security.  Our experience here has shown that social dialogue is essential and the well-established partnership process will, I hope, continue to provide the appropriate mechanism in Ireland to achieve the balance between flexibility and security.

Innovation and Change

In an increasingly global world, innovation is essential to safeguard and deliver high-quality jobs, successful businesses and better products and services. The quality of Irish workplaces and their levels of innovation and change are, therefore, critical to Ireland's ongoing transition to a more dynamic, highly skilled and knowledge-based economy. The Taoiseach launched The National Workplace Strategy in 2005 to focus on stimulating workplace change and innovation. The National Workplace Strategy is the Government's blueprint to transform Irish workplaces into 'Workplaces of the Future' with action currently being concentrated across five strategic priority areas - Commitment to Workplace Innovation; Capacity for Change; Developing Future Skills; Access to Opportunities; and Quality of Working Life.  The Strategy also recognizes the critical role that social partnership can play in this process.

The National Workplace Strategy identifies the need for greater innovation in products and processes but also the need for more organisational innovation and related improvements in internal workplace cultures. It also highlights the need for improvements in organisational culture that facilitate the delivery of higher quality services in private, public, community and voluntary sectors.  The Taoiseach more recently announced the establishment of a Workplace Innovation Fund, accessible to individual companies and the social partners, which is being used to enhance the capacity for strategic change across Irish workplaces.

National Competitiveness Council

Ireland’s Competitiveness Challenge outlines key policy recommendations that would help to restore Ireland’s international competitiveness. To support the continued availability of a well qualified workforce, the National Competitiveness Council suggests three priority policy areas that need to be addressed: participation, upskilling and attracting skills from abroad.

Participation Rates

As far as paricipation is concerned, it is both strategically important to the efficient operation of the labour market, and a key issue for Ireland’s competitiveness in a global economy, that we continue to increase participation rates in the workplace. This means increasing the rate of female participation, as well as that of excluded groups, while facilitating the ongoing contribution of older, more experienced workers. In order to achieve this, appropriate work-life balance policies and practices are essential. These will help us to accommodate diversity. We in Government are committed to a two-pronged approach to achieving the goal of making workplaces more family friendly by:

• the provision of statutory entitlements through legislative measures, and
• the voluntary approach at the level of the enterprise, which is encouraged at national level by the National Framework Committee for Work-Life Balance Policies.

I would like to acknowledge the activities of the National Framework Committee to-date and the work that they have done to support work life balance policies at the level of enterprise. Earlier this year, two initiatives were launched on their behalf :

• Firstly, a guide entitled Work Life Balance: A Planned and Systematic Approach at Enterprise Level. This guide provides practical advice aimed at assisting employers and their staff in developing a planned and systematic approach to work life balance. It recommends that employers should develop a policy on work life balance setting out the organisation’s commitment to flexible working arrangements for staff. It should ensure that there is no discrimination against staff availing of such arrangements and that work life balance arrangements are designed in such a way as to take account of staff diversity across the nine grounds covered by the equality legislation.

• The other National Framework Committee initiative relates to the availability of consultancy support to facilitate work life balance arrangements within firms. A panel of suitably qualified consultants will be established. Businesses will be able to benefit from their support and expertise, funded by the Committee, for training and advice in developing new work life balance initiatives and interviewing and further developing existing work life balance arrangements. Details of the planned panel will be announced shortly in the national press and will be available from the National Framework Committee. The aim of this expanded support programme is to enable organisations to put in place arrangements that suit the needs of business and employees alike. Everybody will benefit in the long-run from workplaces in which the correct balance is forged between work and life.

The National Competitiveness Council has also stated that further reforms of Ireland’s labour tax system are required, in addition to improved facilities for childcare and better incentives and enabling structures for lone parents to participate in the labour force should be improved.

Up-Skilling

As regards the national Competitiveness Council’s second priority area of upskilling, there is no doubt that the development of a knowledge intensive workforce is a key long term source of competitive advantage. Policy efforts aimed at improving the quality of the labour force are, therefore, essential.  Ireland has made substantial progress in this area in recent years, with significant increases in investment and improved outcomes in education and research and development. Our track record in education and skills investment has been one of the fundamental elements contributing to our recent economic success. However, we cannot rest on past success. Research by the Expert Group on Future Skills Needs has made it clear that Ireland must continue to invest heavily in constantly educating and upskilling our work force if we are to continue to attract blue chip companies – both domestic and foreign owned – to provide the quality jobs our people deserve. We must therefore continue to invest heavily in further education and training for those already in employment as well as on making those currently without employment “job-ready”.

The National Competitiveness Council (NCC) recommends that additional training targeted at workers with lower levels of educational attainment should be a priority and that greater use should also be made of industry led networks to support lifelong learning. The NCC has also called for the development of greater incentives for individuals to participate in, and educational institutions to develop services for, part time education.

In our National Development Plan, my Department will invest some €7.7 billion in upskilling the workforce in order to maintain access to the highest standards of education and training for all our people. Without such significant investment we will not be able to supply the labour skills required to compete in the knowledge-based, innovation-driven global economy of today.

This level of Investment in Human Capital is being targeted in two main strategic directions. Approximately €2.8 billion will be invested in upskilling people in employment - including new skills for those affected by industrial restructuring – as well as on an expansion and enlargement of the apprenticeship system and further training for school leavers. Approximately €4.9 billion will be provided to target employment and training services to groups currently outside the workforce, including the unemployed, people with disabilities, women, lone parents, Travellers and ex-offenders.

The Enterprise Strategy Group report also highlighted Ireland’s need to pursue a knowledge-based, innovation driven economy in order to maintain competitiveness into the future. A key “labour market” initiative is the implementation of a National Skills Strategy based on the findings of the Expert Group on Future Skills Needs report “Towards a National Skills Strategy”. The objective of this strategy is to ensure that we have, over the period to 2020, the skills required to remain competitive in the global marketplace. This Strategy involves a vision where, by 2020, 48% of the labour-force would have qualifications at NFQ Levels 6 to 10, 45% would have qualifications at levels 4 & 5. Within this objective, Ireland aims to build capability at 4th level and double its PhD output - Level 10 - by 2013. And this vision will be achieved by maximising the skills of the resident population through both education and training and at the same time continuing to attract a highly skilled migrant cohort from abroad.

To achieve the Vision, a little over half a million additional individuals will need to progress by at least one level of educational attainment above their current highest level. 300,000 of these workers will need to be trained up to Leaving Certificate level. The National Skills Strategy will encompass the One-Step-Up Initiative that had been endorsed by the Enterprise Strategy Group.

In response to these changing demands for training and up-skilling of workers, FÁS has already significantly increased its services to encourage and assist training for companies and people in employment. FÁS’s strategy statement, “Building on our Vision” focuses on the continued need to up-skill the workforce to meet competitive challenges of the future. It also addresses the need to ensure greater access by all groups to FÁS services by increasing flexibility and customising FÁS services to clients needs. In tandem, FÁS has developed a new Training Strategy identifying the nature and mix of FÁS training programmes and services required for the future. These Strategies jointly provide the framework within which FÁS is contributing to the achievement of a knowledge-based economy.

Skillnets has also responded to the changing upskilling needs by developing and focussing its enterprise-led training networks.

In addition, and in line with our commitment under Towards 2016 to engage with redundant workers and people facing the prospect of long term unemployment to ensure that the period out of work for a substantial number of people is kept to a minimum, FÁS has developed a process of engagement with redundant workers. This process is flexible and adaptable to meet the needs and circumstances of company closures. The process generally involves establishment of a task force and agreement with all parties as to their responsibilities, with particular emphasis on the role FAS has to play and how their services are to be provided. Information sessions in conjunction with skills audits and subsequent training provision form the backbone of interventions.

Investment in human capital will, of course, run in tandem with the many billions being invested in our education system at all levels – from primary to post-graduate – which, taken together, should make this country the place where indigenous entrepreneurs and foreign-owned enterprises look to set up base and grow their businesses, providing the employment opportunities for all..

Attracting Skills from Abroad

As regards the National Competitiveness Council’s third priority of attracting skills from abroad, there is increasing recognition in the EU that the mobilisation of skills across the EU is crucial to becoming the most dynamic and competitive knowledge-based economy within the new ‘global' economy. The labour market in Ireland is currently buoyant, with the total numbers of people in employment in the State reaching over 2 million for the first time in our history. However, it is important that we are not complacent and continue to work to maintain and develop a dynamic economy that responds effectively to the evolving demands of international competitiveness. Ireland is fully committed to playing our part in managing the EU transition to knowledge-based investment.  In May 2004 we, along with the UK and Sweden, opened our borders to the workers of the 10 new Member States. The success of this policy has been remarkable. Today, 240,000 in Ireland's workforce are foreign nationals and almost half of those are from the new member states. The presence of these workers has made a significant contribution to our economy and society, helping to maintain economic growth at rates way above the European average and addressing labour and skills shortages. A continuing challenge for the Irish labour market is to bring in from outside the European Economic Area (EEA) those skills which we cannot source from within the EEA and which we need to progress our economy to one that is knowledge-based and innovation-driven. Our implementation, earlier this year, of a new green card system for high skilled non-EEA nationals was an important initiative in this regard.

There is no doubt, however, that with labour mobility comes responsibilities. I am talking here about areas such as, education, public services and housing. The current economic climate offers Ireland opportunities to not only reform its immigration programmes, but also a key challenge in implementing a robust integration strategy. Our positive early experience of migration does not automatically mean that migrants will integrate sufficiently into Irish society or the Irish economy. A vibrant civil society is pivotal to successful integration. Therefore, in working towards integration we should be adapting our mainstream policies and services, rather than creating separate services for migrant groups. How do we successfully adapt social policy to the needs of a growing and increasingly diverse population? This growing scale and diversity provide the overarching context for future policy making. Integration is a process that is multi-dimensional.  We therefore need to deal with the economic and social issues which it raises in a way that is `joined up'.  We also need to be flexible in the way that we respond to changes and issues as they arise

Conclusion

In conclusion then, I would say that Ireland is now at an exciting moment of transformation which, if well managed, can deal with the challenges of globalisation and bring better, more adaptable services, provided by people who feel increasingly confident in their ability to address the needs of a more diverse Ireland. 

ENDS/LA259