Over the last 40-50 years, the global labor market has changed substantially.

There are several factors having influenced it very strongly:

  • Knowledge and skills of active people have increased to a large extent.

  • Modern technology has impacted the labor market also beyond any expectation.

  • Global market has become decisive for the operations of national economies.

  • International institutions have a growing impact on economic transactions at all levels and are conducted by all economic actors.

  • National and international regulations have a decisive impact on the functioning of the labor market.

  • Labor organizations are more influential than ever in history.

As part of general progress, the productivity of workers has increased dramatically, which has contributed to higher profitability of entrepreneurship but also upgraded the purchasing power of workers.

Higher education, modern technology, and particularly automation with the introduction of artificial intelligence made workers' experience less unpleasant while more productive. Work from home is increasing—contributing to quality of life for numerous workers.

Trade unions and appropriate legislation—national and international—have managed to protect the interests of workers in most countries around the world.

Economists say the labor market is showing a divided picture, where the economy is continuing to create jobs while workers who have been laid off or are new to the labor force—such as recent college graduates—are finding it harder to actually discover one. Overall, the share of unemployed people who have been out of work for 27 weeks or more rose to 27.5% last month, up from 20.4% a year ago. Meanwhile, the unemployment rate for recent college graduates between the ages of 22 and 27 is 5.6% in the USA, higher than the overall unemployment rate.

Laura Ullrich, director of economic research at the job-searching platform Indeed, claims that "people are kind of hugging onto the jobs that they’ve got.” Therefore, “... the probability that anybody’s going to become unemployed today is really low. But if you do become unemployed, it’s a tough time in those sectors that have been losing jobs.”

Negotiations between trade unions and employers' associations about the conditions for working at home are rather complicated.

While the first argues that it helps to grow productivity and improves workers' satisfaction, the second argues that office presence is still crucial for needed communication among workers and their innovation and facilitates control and coordination. Of course, it all depends much on the nature of work being done—in some areas it is easier, while in others it is more complicated—if not even impossible.

At any rate, in many domains, the complex nature of the problems experienced requires professional communication between entrepreneurs and their workers, going well beyond the classical employer–worker framework. In such communication there are two sides addressing an issue professionally and searching for solutions serving interests on both sides. This is an advanced, democratic interaction—with a higher potential to produce optimal solutions, rewarding both sides.

Following such an approach, the two negotiating parties often engage a professional consultant—which can facilitate the search for a mutually acceptable solution, coming from an independent, neutral approach—viewing the negotiated issue professionally.

According to »Five Megatrends Shaping the Labor Market by 20301, these are the most important factors changing the labor market:

  1. Technological change: digitalization and AI are the most cited drivers of labor market change. Globally, 60% of employers expect major technological disruption, while in Europe this figure rises to 70%. European firms are slightly more likely to see robotics and autonomous systems as transformative (62% vs. 58% global), and nearly nine out of ten employers see AI and information technologies as key vectors of change.

    Moreover, the pace of change is faster in Europe: 42% of core skills are expected to change in the next five years (vs. 39% globally). Roles such as AI specialists and data scientists are growing faster in Europe than elsewhere, with a projected net growth of 109% till 2030. This figure is notably higher than the global average for the same occupation, which stands at 82%.

  2. Economic uncertainty: the global economy faces a slow recovery, with inflation, energy volatility, and interest rate shocks affecting productivity and hiring. Employers worldwide are concerned – half expect inflation to disrupt operations.

    Nonetheless, economic slowdowns remain a structural constraint. Globally, they are expected to cut 3 million jobs and create only 2 million. Economic growth remains slow in southern and eastern Europe, increasing the risk of worsening inequalities across the continent. In response, employers are shifting focus from expansion to efficiency—creating demand for supply chain optimization, business intelligence, and cross-functional roles.

  3. Green transition: globally, green jobs are growing by 12% annually, but the supply of skilled workers is lagging. Employers increasingly report a structural shortage of profiles such as environmental engineers, renewable energy specialists, and circular economy designers.

    Although Europe sets ambitious regulations such as the “Green Deal” and “Fit for 55," many member states struggle to align their training systems with these green objectives. This gap between policy goals and practical implementation threatens to create a labor shortage in the emerging climate economy unless significant investments are made in vocational training and lifelong learning.

  4. Demographic shifts: while Europe is aging rapidly—with rising demand for healthcare, care work, and automation—developing countries are experiencing a youth surge that far outpaces job creation. This global imbalance threatens to widen inequalities both within and between regions. In Europe, 54% of employers anticipate talent availability will worsen, far above the global average. This reflects both demographic shifts and persistent structural issues in talent acquisition and retention across key sectors. Internal labor market mobility remains low, and social models tend to prioritize employment protection over workforce agility.

  5. Geoeconomic fragmentation: rising geopolitical tensions and shifting trade dynamics are reconfiguring global labor flows. Worldwide, a third of companies are adapting their operations to new trade barriers and industrial policies. In Europe, the perception of this trend is more muted—but the impact is no less real. Supply chain reconfiguration, reshoring, and strategic autonomy debates are already affecting labor demand in manufacturing, cybersecurity, and critical infrastructure.

These five megatrends jointly demonstrate the multifaceted nature of labor market transformation we are currently experiencing.

References

1 EU-Almpo.