Job creation balances job loss in restructurings
As labour markets recover across the EU, the number of jobs created in restructurings has converged with the number of jobs lost. Job losses have increased in retail and financial services, while the biggest gains have taken place in private and professional services.
Employment has been rising in the European Union since late 2013, reflected in falling job loss and increasing job creation arising from company restructurings. Since mid-2014, the total number of new jobs announced by employers has converged with the number of job losses announced, as shown by data from Eurofound’s European Restructuring Monitor (ERM), which records the employment effects of large-scale company restructurings announced in European media.
Manufacturing wanes further
Manufacturing is the sector responsible for the largest share of announced job loss (35% – see Figure 1) and job creation (30% – see Figure 2) in 2013–2015, as was the case in the crisis period of 2008–2012. This to some extent is an effect of an overrepresentation of manufacturing in the ERM database due to the predominance of large companies in the sector, whose restructurings consequently tend to be large scale. Nevertheless, the proportion of overall job loss and particularly job gain represented by the sector has been decreasing for many years, reflecting its falling contribution to overall employment.
The retail and financial services sectors accounted for an increased proportion of announced job losses in 2013–2015. The falling demand for labour in these sectors is due in large part to technological advances such as online banking, self-service checkouts and online shopping. Announced job losses fell sharply in public administration, however, reflecting an easing of public sector budget cuts (or ‘austerity’) in many countries and a return to a more typical level after an exceptional rise in 2008–2012.
Gains in professional services
New jobs announced rose sharply in the sector labelled ‘other private services’ – a broad grouping including legal services, engineering, consultancy, media, hotels and restaurants, as well as other professional and administrative services. This sector now represents over one in four new jobs recorded in the ERM database.
Promise of high-tech
Data from the EU Labour Force Survey (EU-LFS) on employment trends at sector level are in line with the ERM and provide more detail on subsectors. In relation to manufacturing, they show that job losses have been most severe in basic, low-technology subsectors such as basic metals; textiles, clothing and leather; and wood, paper and printing. The subsectors that have largely recovered employment lost at the outset of the crisis are predominantly high technology, involved in the manufacturing of cars, machinery and pharmaceuticals, for example; employment in these sectors has benefited from strong export markets.
The EU-LFS data also show that most service sectors added employment in the period, although with some notable exceptions, including public administration and defence – the sector covering core government functions – and the telecommunications sector, which shed over a fifth of pre-crisis employment. Growth was fastest in IT and information services; other professional, scientific and technical activities; and residential care and social work activities.
Further analysis of recent restructuring activity in the EU is available in the report Job creation in SMEs: ERM annual report 2015.