Category: Uncategorized

Financing Labor Mobility: Financial Modeling for the THAMM Plus Program 

Posted on July 4, 2024 by - Uncategorized

The THAMM Plus project (Towards a Holistic Approach to Labor Migration Governance and Labor Mobility in North Africa) operates under the EU Talent Partnership Initiative to promote sustainable development and demand-driven labor migration between North Africa and Germany. This initiative is led by the German-state development agency GIZ. 

During its initial phase, THAMM focused on enhancing the employability of individuals interested in migration, raising awareness about labor migration procedures, and fostering stronger partnerships between partner countries (Morocco, Tunisia, Egypt) and Germany. To institutionalize these processes effectively, the program recognizes the necessity of a sustainable financing model. 

LaMP has collaborated with the GIZ THAMM team since October 2023 to craft such a model for each country. The aim is to expand labor mobility and enhance private sector participation. Developing sustainable financing structures for transnational skills partnerships like THAMM represents a novel approach in development-oriented programming for labor migration. LaMP seeks to engage key stakeholders to create awareness and garner support for implementable solutions. 

Employing an impact-linked finance strategy, LaMP aims to bridge the gap between the public and private sectors to facilitate scaled labor migration. This approach leverages financial instruments to magnify the impact of public funds, driving more sustainable outcomes over the long term. 

Aligning stakeholders’ interests, understanding their constraints, and exploring innovative avenues to engage the private sector are central to integrating public and private financing. By harnessing public resources to catalyze the scaling process, both sectors can benefit from labor migration in innovative ways. 

The project is scheduled to continue until October 2024. 

 

For more information, contact:

Sophia Wolpers

swolpers@lampforum.org

 

 

 

Financial Solutions for Labor Mobility with German Stakeholders 

Posted on July 4, 2024 by - Uncategorized

On June 27, 2024, LaMP Germany hosted an interactive workshop with representatives from employer associations, recruiters, migration program experts, and key German ministries. This diverse group explored innovative approaches to cost and risk sharing among all stakeholders in the labor mobility process. 

The workshop was conducted with German stakeholders as the country is feeling the pinch of labor shortages, with many sectors experiencing high vacancy rates. Demographic shifts, particularly an aging population and a limited pool of younger workers, have exacerbated the challenge of finding local talent. This scenario opens up significant opportunities for hiring from abroad. 

However, international recruitment comes with its own set of hurdles, including lengthy visa processes, complex recruitment systems, and higher costs for employers. A major challenge is the German language proficiency required for traineeships or skilled work, which necessitates extensive and expensive training (averaging 9 months and costing between EUR 2,000 – 4,000 to achieve B1/B2 levels). 

While various pilot projects in Germany have subsidized language training, there is no long-term initiative capable of supporting such training on a large scale. To establish a sustainable influx of foreign workers to fill critical vacancies, we must address the following pivotal questions: 

  • Who should bear the cost of German language training, and at which stage in the process? 
  • How can we fairly distribute the financial risks of these investments among all actors, including workers, language schools, recruiters, and employers? 
  • What are the key differences in the recruitment processes for skilled workers versus trainees? 
  • How can we finance recruitment systems that are both fair and sustainable? 

The group delved into several critical areas, including: 

  • Innovative solutions to overcome financial challenges. 
  • Practical strategies beyond policy to remove blockers. 
  • Ways to address the issue of time and the unpredictability of bureaucratic process timelines. 
  • Financing recruitment adjacent costs such as language training and other unforeseen expenses. 
  • Supporting small and medium-sized businesses in their foreign recruitment efforts. 
  • Creating additionality and democratizing access to international employment opportunities. 
  • Enhancing the integration of foreign workers to achieve higher retention rates, (e.g. addressing technicalities of the EPP as potential retention blockers). 

For more information on LaMP’s initiatives in Germany regarding financial solutions for labor mobility, and to learn about our broader vision for supporting transnational skills partnerships and sustainable recruitment systems, please reach out to Sophia Wolpers at swolpers@lampforum.org. 

Creating Fair Recruitment of International Workers Through Transnational Skills Partnerships 

Posted on July 4, 2024 by - Uncategorized

LaMP Manger Sophia Wolpers was a key participant in in the Bertelsmann Foundation’s 18-month in-depth working group “Denkfabrik transnational Skills Partnerships” This initiative explored various aspects of transnational skills partnerships and promoted the exchange of best practices among program operators, recruiters, language providers, migration experts, and government stakeholders. 

Besides questions around best practice of language training and other programming improvements, the group focused on scaling and sustainable financing of transnational skills partnerships. Since LaMP is one of the global pioneers in the field of addressing financial challenges in the labor mobility process, the team shared valuable insights from our projects around the world and how we draw on principles from impact-linked and results-based financing (RBF) to find innovative solutions. 

One significant outcome of the working group was a collection of inspiring articles showcasing ideas on how to improve transnational skills partnerships for workers, sending countries, and receiving countries. These articles also explored innovative strategies to enhance the impact and scale of international recruitment. 

Sophia Wolpers and Elicia Carmichael co-authored an article titled “The Potential of Impact-Linked Financing for Scaling Transnational Skills Partnerships.” (only available in German). This article emphasizes the need to align Germany’s role and governmental ambitions on the topic of foreign recruitment. It delves into the complexities of risk and reward for various stakeholders in recruitment and skilling practices, highlighting the necessity for public discussion and policy development to create fair systems utilizing innovative financing approaches and involving new private and public sector actors in the world of finance. 

The article also presents a simplified example of a worker retention fund, designed to ensure fair participation for all stakeholders while adhering to responsible recruitment norms. 

For more information and to access the working group’s other publications (only available in German), click here. 

If you have any questions, please contact Sophia Wolpers at swolpers@lampforum.org. 

Unlocking Migration Through Finance: A Loan Product to Make Language Learning Accessible for Aspiring Migrants 

Posted on July 3, 2024 by - Uncategorized

LaMP is designing a financial solution with a consortium of financial institutions, recruiters, and an innovative finance advisory firm. Our solution will address the constraints that workers face in paying for migration-associated expenses, specifically the high cost of language training. LaMP is now raising funds for a First Loss Default Guarantee (FLDG) that will unlock access to finance for prospective migrants in the India-Germany corridor and demonstrate the borrower viability of the migrant segment to financial institutions worldwide. Please reach out if you are a funder or ally interested in exploring innovative financial solutions for labor mobility! 

The Opportunity  

Unemployment among India’s adult youth is estimated at 23% (73 million people).[1] At the same time, OECD countries face labor shortages costing $1.3 trillion per year (or $3 billion every day), with labor needs estimated to reach 400 million workers by 2050.[2] Countries where economic foresight and political will align have begun opening visa pathways to facilitate the migration of workers to fill these gaps.  

Germany, for example, has created a scaled visa route for mid-skilled workers with a goal of filling a 400,000 annual worker gap in its labor market. In 2022, the Indian and German governments co-signed the German-Indian Migration and Mobility Partnership. In the wake of this MOU, major recruitment agencies have reported an increase in worker demand for job opportunities across sectors and regions in Germany. However, barriers on both sides of the pathway have limited its viability to scale. 

Starting in July 2023, with grant funding from the Western Union Foundation, LaMP has been assessing these barriers and designing financial solutions to overcome them. Chief among the barriers we have noted on the sending side are a lack of foreign language skills among prospective candidates seeking livelihoods abroad. In Germany, migrants must demonstrate B1/B2-level proficiency to receive a work visa. Reaching adequate fluency requires an investment of full-time classwork, course fees, and exams, which, combined with up-front migration expenses or deposits, amount to a minimum of $2,000, and only in some cases will employers fully refund these costs post-migration. Few prospective migrants (typically people at the outset of their careers earning under $250/month) have this amount of capital on hand. Appropriate financial instruments targeting the needs of labor migration candidates are nearly non-existent in India.  

Currently, aspiring migrants who aim to travel abroad are not viewed as viable candidates for credit. Projected future cash flows are generally not considered in loan underwriting, despite the outsized income gains promised by structured migration programs. Candidates report being turned away from banks because no migration lending category exists for their needs. Those candidates who do access a personal loan must do so under the name of a blood relative co-borrower who has a high credit score and a job in the formal economy. These loans must also be paid back starting immediately, with no moratorium during the language learning and visa processing period. This restrictive approach creates a barrier for candidates from families in the informal sectors or from less privileged backgrounds. 

Talented young workers lacking the required language skills to migrate either forgo opportunities to work abroad or take on predatory or ill-suited debt to finance their migration expenses. 

 

The Solution 

LaMP, in collaboration with our partner KOIS, an innovative finance advisory firm, has designed a credit innovation to unlock financial inclusion for prospective migrants who strive to develop careers in trade and service sectors abroad. After exploring a range of financial products that could be offered to workers, employers, or recruiters (or a combination thereof), we decided to focus on designing a loan product for workers. The reasons are as follows: 

  • The quantum required for language training is relatively high compared with basic recruitment costs – employers are not obligated to pay for skilling costs in most contexts, even though they cover the majority of other costs associated with migration;  
  • The labor migration space is still nascent, particularly for newer corridors such as the Indo-German corridor – recruiters and employers are wary of taking on what they view as disproportionate risk for uncertain return (e.g. will the worker successfully complete language training? Is the language training relevant and high-quality?); 
  • A loan designed for the worker balances the dynamics of risk and reward for the primary stakeholder – the worker, who has the most control over their success in upskilling themselves; 
  • We are able to seek impact additionality by designing around the needs of workers – the ability to reach a wider demographic of workers who would not otherwise access finance has the dual benefit of nudging the financial sector to recognize the creditworthiness of a potentially enormous future segment. 
Designing for the migrant 

LaMP and KOIS anchored the design process on the following key features: 1) accessibility to an underserved population, 2) worker-centred design, 3) potential for scale and replication.  

Given the newness of this product, specifically for our target segment, we approached innovation incrementally – enhancing existing features of products to suit worker needs while also accommodating the risk management needs of financial institutions. Incremental developments will provide the data and comfort required for long-term innovation.   

Key elements guiding design process are listed in the table below.  

Objective  Challenge  Solution 
Design for quantum needed 
  • No customized product addressing worker funding needs 
  • Workers have reported receiving a partial loan to cover funding needs which necessitates heavy out-of-pocket expenditures or needing to apply for multiple loans 
  • Tailored loan to cover the costs of the language training program and common pre- and post-migration expenses e.g. living expenses while studying 
Include migrant potential/past record in underwriting 
  • No product incorporates worker characteristics in underwriting e.g. past track record, future employability.  
  • Eligibility for the loan product is solely dependent on characteristics of a blood-relative co-borrower, which limits access  
  • Expanded underwriting to include considerations related to the primary borrower – the migrant – such as projected future income, professional and academic track record, credit score (if available), etc. 
Reduce coborrower requirements 
  • Loans available in the market have stringent co-borrower or heavy collateral requirements, limiting access 
  • Loosened eligibility requirements for the co-borrower, including lowering threshold for credit score and income, and including access to new-to-credit borrowers 
  • Product is non-collateralized 
Incorporate moratorium 
  • Aspiring workers find it challenging to repay a loan during language training, as they have paused their careers to pursue full-time studies 
  • Incorporated moratorium which includes only payments on simple interest during ~12-month training and visa processing 
Offer financial education 
  • Workers reported they struggle to understand the technical features of the products available on the market 
  • A customized financial education program will be implemented to inform worker decision-making across financial options 

 

Derisking for lenders 

Financial institutions are often wary of entering new lending segments due to their inability to predict and manage risk in unknown contexts. Institutions we spoke with cited risk factors such as: lack of borrower experience with credit, uncertainty of migration success (due to unsuccessful completion of language training or job placement), counter-party risk introduced by recruiters and trainers (quality of instruction, ability to match workers with jobs, financial solvency, general management and competency), and cross-border collections. We have considered these factors both in the design of the loan product (e.g. timing of disbursements and payments), and in identifying supplemental derisking support that financial institutions would need to pilot the loan product – in this case, a First Loss Default Guarantee (FLDG) facility. 

Certain lending models take a chance on individuals based solely on their projected future earnings–e.g. the Prodigy loan provides educational financing for enrolment in universities of defined rankings or prestige. This approach could be replicated in the labor migration space, extending the model to migrating workers based on future employability and income. However, in today’s context, a co-borrower is as a crucial de-risking requirement for the primary borrower (the prospective worker) who will move overseas. This local co-borrower requirement provides lenders with legal recourse within the jurisdiction of the credit agreement, regardless of the primary borrower’s location abroad. 

We have also targeted recruitment models that secure conditional job offers for workers while they are taking language classes, thus reducing the risk of uncertainty of employment.  

Finally, we are establishing a 3-year FLDG to encourage financial institutions to offer the loan product at the terms and conditions described. This would mitigate risk for lenders, as losses up to a certain threshold could be recovered while still enabling lenders to test a new product in a promising market. As our proposed credit product is still untested, lenders are “data blind” when it comes to our target segment–unlike microfinance, higher education, or retail lending, there is little comprehensive or structured data related to lending to this segment; financial institutions need to learn and iterate before scaling. 

Our proposed design deploys between $381,000 and $690,000 in FLDG to activate $3.7 million in commercial capital. This design has the potential to leverage a relatively small credit enhancement for remarkable impact. 

Across our demonstration group, the expected value to workers could reach the equivalent of $294 million in additional wages earned over a period of five years, with expectations that approximately $44 million will be sent home to 1,850 families in India over that period. 

Looking ahead  

The loan product is now ready to be tested in the context of a specific geographical corridor. Two Indian financial institutions have agreed to be pilot partners for the loan product under our proposed FLDG program. We intentionally targeted small- to medium-sized non-bank financial companies (NBFCs) as lenders due to their appetite to lend to our target segment, offer flexible loan products, and ability to integrate technology in their systems (including underwriting and results modelling). With sufficient data and experience, we believe these financial institutions will be able to price risk effectively and scale the product while decreasing external support over time. 

We are now actively:  

  1. Fundraising for the guarantee facility that will unlock the deployment of this loan product; 
  2. Fundraising for programmatic support to enhance and scale the product including monitoring and evaluation, financial innovation, and developing the product for multiple sectors and corridors; 
  3. Developing a wider ecosystem of supporters and actors who understand labor mobility and can join us in designing and funding financial solutions that support cross-border livelihoods.   

We believe the time is right do develop financial products that serve low to mid-skilled workers prior to and during their migration experience. Doing so will help overcome barriers to migration that persist despite the formal agreements in place between sending and receiving countries today.  

 

You can download this blog as a PDF here.

 

[1]. “Youth Unemployment Rates in India,” Statista 2024

[2].  “Migration Matters: A Human Cause with a $20 Trillion Business Case,” BCG x IOM for UN Migration, 2022

LaMP Flight: A Promising but Complex Opportunity – Japan as a Destination Country for Labor Migration 

Posted on July 1, 2024 by - Uncategorized

LaMP visited Japan earlier this year to develop a deeper understanding of its labor migration system. We are now developing a pilot to provide opportunities for Kenyan workers in Japan, focusing on trade and services sectors (mechanics, manufacturing, construction, elderly care, hospitality, etc.) Please reach out if you are interested in learning more about the pilot program or want to learn more about Japan’s migration system!

 

FAVORITE QUOTE

  • “Japan is competing with the rest of the world to win the global war of talent” – Official, Japanese government  
  • “We need to promote our workers in Japan, just like we do our tourism and the caliber of our runners” Official, Kenyan government

 

LaMP team met for a dinner with Kenyan diaspora to understand worker perspectives and experiences with cultural integration.

 

DESTINATION JAPAN

The LaMP team traveled to Japan to meet with stakeholders across the public and private spectrum including employers, government, funders and foundations, Japanese International Cooperation Agency (JICA), recruiters, language schools, researchers, diaspora, and diplomatic representatives.  

The objectives of the trip were threefold: 

  • Understand the Japanese landscape for labor mobility and build strategic partnerships; 
  • Develop the design of a mobility project to send workers from Kenya to Japan while exploring initiatives to scale movement of workers between Bangladesh to Japan  
  • Meet with diaspora from Kenya and Bangladesh to understand employment opportunities and integration. The team’s trip coincidentally aligned with Kenyan President Ruto’s visit to Japan and LaMP had the privilege of joining a diaspora event for Kenyans in Japan held by the President’s office.  

Labor mobility is a priority for Japan as the country faces a growing worker shortage that will reach 3.4 million by 2030. These labor shortages are primarily caused by aging of the Japanese population (Japan has a median age of 49).  As one solution to this problem, Japan has created two key migration programs – Technical Intern Training Program (TITP) and Specified Skilled Worker (SSW) – that offer foreign-born workers employment in Japan across shortage sectors including but not limited to auto-repair and maintenance, manufacturing, construction, agriculture, nursing, hospitality and building cleaning.  

Despite these acute labor shortages, the LaMP team and partners have found it challenging to convince individual actors – especially small and medium enterprises (SMEs) or those servicing SMEs – to hire workers from a new sending country such as Kenya and Bangladesh. Employers remain cautious of being the “first mover” by employing workers from new source countries versus workers coming through historically established routes, such as the Philippines and Vietnam. However, Southeast Asian countries are slowly experiencing declining birth rates. On top of that, we learned anecdotally that Southeast Asian migrant workers find it more attractive to work in countries with more competitive wages and better economic prospects, such as the USA or South Korea, rather than Japan.  

However, LaMP’s conversations with members of the Japanese government, particularly the Ministry of Justice responsible for the strategic design of Japan’s migration program, demonstrated commitment to building a strong and reliable system for international workers in Japan, and recognition of labor migration as a win-win for both the sending and receiving countries. Japan’s labor migration system was revised in February 2024 to make it easier for workers to work and live in the country over the long-term by developing a pathway system allowing extensions and conversions of visas for a period of 3-8 years. The changes will go into effect in 2027. Efforts by JICA including the “Japan Platform for Migrant Workers Towards Responsible and Inclusive Society” – or JP-MIRAI – have led to increased transparency and worker protection in the labor migration system.  

Some large corporations in the mobility business in Japan are increasingly recognizing the need to diversify their source countries for labor.  Labor Mobility Partnerships (LaMP) is working with these actors to open up new migration pathways to Kenya and Bangladesh. This comes with its own set of challenges including language, bureaucracy, and cultural nuances – all while building a new migration pathway. LaMP is currently working on developing a pilot mobility program between Kenya and Japan by bringing together relevant actors, such as recruiters, employers, training institutes and government to facilitate movement and subsidize costs of migration such as language learning that would otherwise be unaffordable for a worker in Kenya.  

Japan’s demographic challenges and labor shortages present an opportunity for countries such as Kenya and Bangladesh, who are prioritizing labor migration as a national strategic priority and experiencing young and growing population (Kenya has a median age of 20; Bangladesh has a median age of 27). The governments of both countries are actively signing bilateral labor agreements with labor-scarce countries. However, there are a number of challenges to navigate when opening up a new or expanding an existing labor mobility pathway. These include generating demand for workers from a new source country for labor, jumping through bureaucratic hurdles, and sourcing and adapting workers to the needs of employers including ensuring language proficiency.  

Despite these challenges, the LaMP team were encouraged by the willingness of stakeholders to engage on the topic of labor mobility, across private and public sectors. 

 

KEY LEARNINGS

  • Some sectors in Japan–such as manufacturing, construction, and agriculture–face more acute shortages than others and may be more open to trying new sources of labor.  
  • Japan’s labor migration system is moving away from a circular model – offering workers temporary employment with expectation of return to home country – to recognizing labor migration as a solution to worker shortages in the country and the need to offer a longer-term career trajectory in Japan to foreign-born workers.  
  • There are small but mighty diaspora organizations who are organized, enthusiastic and committed to increasing the number of workers from their countries in Japan. Leveraging the strength of these organizations to support cultural integration and connections is something LaMP is working to include in our mobility pilot.  
  • We need to build systems in Japan and the source country–Kenya or Bangladesh–to build scalable and sustainable migration pathways. Bangladesh has signed a bilateral agreement with Japan to move workers between the two countries and is consequently slightly further along than Kenya. However, recruiters are still finding it challenging to persuade employers to hire workers from Bangladesh (as opposed to more established countries such as Vietnam). For Kenya, it is more challenging as there is no bilateral agreement in place – while this is not necessary currently, it will become a requirement by 2027 for any country seeking to send workers to Japan. Kenya should prioritize signing a bilateral agreement to ensure a long-term and scalable pathway.  
  • Other factors for scalability and sustainability include: 
    • Increasing language training infrastructure and verification of recognition of skills/qualifications 
    • Building a “brand” of workers–activating demand from employers for new sources of labor  
    • Building a network of committed actors across the private, public and non-profit sectors. 

 

The LaMP team met with a recruiter in Nagoya to learn about their recruitment model and system.

What Do We Know About Foreign-Born Workers in Aged Care? Not Enough.

Posted on June 27, 2024 by - Uncategorized

Labor mobility has potential to address worker scarcity in the aged care sector. In fact, providers around the world have been more actively looking into recruiting from abroad. However, lack of available and efficient labor mobility pathways prevents the sector from truly tackling the issue. As policy makers consider opening new and improving existing programs for international recruitment, it is crucial to better understand the experience of foreign-born workers currently employed in the aged care sector to propose actual “win-win-win” policies benefiting employers, workers and ultimately the people receiving the services and the sector overall. 

 

The Ongoing Worker Scarcity 

 

The long-term care (LTC) sector faces dire worker shortages, and the rapid aging in high-income countries stresses the need for more aged care workers even further to accommodate the increase in people needing services and supports. By 2040, the number of LTC workers in OECD countries will have to increase by 60 percent to address the employers’ need. At the same time, estimates show the number of people older than 65 will double from 703 million in 2019 to 1.5 billion in 2050. In other words, one in six people around the world will be at least 65 years old by that time. As a result, LTC providers will need over 13.5 million additional workers in the next 15 years to keep the current care-worker-to-elderly-people ratio. ​ 

Although increases in pay and improvements in working conditions could address some of the recruitment difficulties in the LTC sector, the changing demographics in OECD countries clearly point to another fundamental problem. As high-income societies continue to age due to declining fertility rates, their overall workforce shrinks. This trend makes it harder for employers to find enough workers to fill the gaps. Rather than “labor shortage,” they face “labor scarcity” that can’t be solved by higher wages or better working conditions. In the U.S., for example, the number of new jobs in the care sector alone will be higher than the total number of workers in the labor market by 2028 (Figure 1.). As a result, the quality of services provided by the sector is at risk of serious decline due to a diminishing pipeline and high burn-out rates among incumbent staff.  

 

Figure 1. The need for new care jobs in the United States

 

Labor Mobility as a Solution to Labor Scarcity

 

Effective labor mobility, allowing more workers to receive proper training and move across borders in a safe and reliable way, is one of the key tools to address the issue. On average, over  20 percent of the LTC workforce employed by providers in OECD is foreign-born. That is despite the fact that less than a handful of OECD countries currently operate labor migration streams dedicated to the sector. And those that do exist are either often operating at just a small scale or prone to issues around worker mistreatment and continuity of care.

Data shows well-designed labor mobility is mutually beneficial for both sending and receiving countries. It helps to solve worker scarcity in destination countries while promoting the development of low-income sending countries. For example, a recent study showed that enrollment and graduation of Filipino nurses had grown substantially in response to increased demand from the U.S. At the same time, the supply of nursing programs expanded. For each nurse that left the country, there were nine additional nurses who obtained their licenses. Additionally, effective labor mobility has proven to be the most effective tool to reduce poverty among people in low-income countries. It allows the workers to increase their income as much as 6 to 15 times for their wage in their home country, and the associated remittances and skill accumulation can lead to a powerful positive change on development outcomes in their communities.

However, to design effective labor mobility pathways for the sector, it is crucial to understand the issues and barriers faced not only by employers but also the foreign-born workers seeking better opportunities abroad. To map representation of foreign-born worker voice in immigration research so far, the Labor Mobility Partnerships (LaMP) conducted a literature review which brought a list of only about thirty relevant publications focused on service and trade industries. When it comes specifically to aged care, the literature review concluded that while the demand for foreign-born workers has been documented quite well, research available up to date has not thoroughly explored experiences of the individuals working for the LTC providers in destination countries. Although the lack of dedicated migration pathways discussed above may be complicating the data collection, it is necessary that any proposal for a new migration route for aged care workers considers experience of those currently working in the sector abroad.

 

What We Know About Foreign-Born Workers in Aged Care

 

To begin to close the information gap revealed by the literature review, LaMP partnered with the Global Aging Network (GAN) on a survey seeking to understand the foreign-born aged care workers’ experience in high-income countries. While the survey is designed to collect data over time to provide a full picture, the initial results[1] already tell an interesting story of how both the sector and the workers benefit from the ability to work abroad. So far, the respondents, who were mostly (86 percent) female and primarily (64 percent) within the 25-44 years old category, represented 19 countries of origin. Currently, they live in one of the seven represented destination countries, working in the aged care sector mainly as caregivers (63 percent personal aids and 12 percent nurses). 

The first round of findings suggests the foreign-born workers are quite happy with their experience in the sector. About 90 percent of the respondents said they are either “satisfied” or “very satisfied” with working in the aged care sector. An overwhelming majority (96 percent) seems to be paid on time and perform tasks they expected before starting the job (90 percent). Over 80 percent of the respondents plan to stay in the sector for at least 5 more years and 65 percent would like to remain abroad. 

This seems to be a good news also for the aged care providers. With the broadening workforce gap, employers are looking not only for workers who will take the jobs but rather for qualified well-trained staff, who will stay. The fact that foreign-born aged care workers seem to be quite happy in the job suggests the aged care providers could rely on this group of workers to remain in the sector over time. This is especially encouraging since it is often the employers themselves who invest in and train the new employees.

At the same time, the survey revealed a few unsettling points that the providers should address as they consider hiring from abroad.  More than half of the workers (57 percent) reported they work overtime, which 25 percent said is involuntary and for which 39 percent claimed to not receive extra pay. On top of that, some low numbers of the respondents (12 percent) reported they have felt mistreated at their workplace, while 22 percent decided to not directly respond to the question. While no conclusions can be drawn from these numbers alone due to the small sample size and different definitions and perceptions of “mistreatment”, it is worth acknowledging that it seems like not all foreign-born workers have a positive experience working in the sector abroad.  

 

The Need to Hear the Workers’ Voice

 

Well-designed labor migration pathways could provide mutually beneficial solution, addressing the workforce need of aged care providers in the receiving while supporting communities in the sending countries. The preliminary survey results show that besides helping the employers to fill their openings, a majority of the foreign-born aged care workers (over 60 percent) send money to family and relatives in their respective home countries at least monthly. More than 30 percent consider their family members and relatives to be the main beneficiaries of their experience working abroad. These findings complement the recent global studies showing that labor mobility holds vastly more promise for reducing poverty than anything else on the development agenda. Overall, it is safe to say that employing foreign-born workers in aged care could benefit not only the providers in high-income countries but also greatly contribute to communities in the sending countries.

Any effective labor mobility solution to the worker scarcity in the aged care sector must reflect the needs of not only employers, but also the workers in the industry. Therefore, it is crucial to collect reliable data that will help decision makers to better understand the experience of foreign-born aged care workers as they consider any changes to the current and opening of new pathways.

Therefore, LaMP and GAN will continue the data collection to conduct a broader study highlighting workers’ voice within the industry. Our vision is to assess the more robust information and deliver the final findings in 2025.

 

This blog was written with a significant support of the Global Aging Network (GAN). Special thanks go to Dr. Robyn Stone, a noted researcher, leading authority on aging and long-term policy and the Senior Vice President of Research at LeadingAge.

 

 

[1] These preliminary findings are based only on the first 49 responses to the survey. Due to the small size of the sample, data in this blog do not represent a full picture of the worker voice in the aged care sector. Instead, this blog paints an initial framework, on which GAN and LaMP will build in the coming months as we continue to gather responses to the survey on rolling basis.

The Recent EU Elections Won’t Change the Need for Well-Regulated Labor Mobility  

Posted on June 27, 2024 by - Uncategorized

Last month, over 200 million voters have casted their ballot to renew the mandates of the European Union (EU) Parliament. But the EU elections are more than just a moment to designate the new members that will take seat at the Brussels and Strasbourg hemicycles. The concomitance of other national, federal, regional and municipal races allows to take the pulse on many societal questions. To many, the June elections can be seen also as a referendum on migration, or better – on the dysfunctionalities of a system that has exacerbated asymmetries and polarized debates due to its perceived lack of control. Big countries like France, Germany and Italy have seen a continuous shift to the right, with the consolidation of large political fractions on anti-migration positions. In contrast, some progressive signs appear in Scandinavia or the Netherlands, where the rise of populist parties has been somewhat halted. But regardless of the political composition of the next EU Parliament as well as national governments, each leading coalition will still have to address unchanged global trends, with pragmatic and noncontroversial solutions which can reconcile different positions.  

The broadening of labor shortages due to the ongoing unprecedented demographic shifts will continue to dominate the EU and national debates. By 2050, the elderly population is projected to surpass the number of young people, creating significant challenges for social support systems, and shrinking the workforce responsible for tax contributions. Public and private actors will still grapple with the consequences of the lack of qualified workers (or sufficient labor mobility): in Germany alone, two million jobs are expected to remain unfilled, resulting in nearly EUR 100 billion of lost output. Permanent labor shortages and demand-supply mismatches will remain an acute concern for businesses and governments. A world of labor scarcity will mean having too few workers in industries with structural long-term needs. Despite persisting negative political attitudes and technical obstacles such as regulatory barriers, complex labor migration systems, and cumbersome skill recognition processes, most European countries will be forced to consider international migration as a solution to their aging national labor force. Labor mobility will be a realistic opportunity to at least partially address labor scarcity in critical economic sectors such as agriculture, transport, hospitality or long-term care.  

Existing legal channels for migrant workers remain unlikely to meet the actual labor market needs. And recent initiatives at EU level have been mostly small, fragmented, and costly, which complicates efforts to scale them up. As recently echoed at the 14th Global Forum on Migration and Development and in conversation with OECD countries on Skills Mobility Partnerships which LaMP has contributed to, large multi-national companies and highly qualified workers have the capacity to overcome the bureaucratic and regulatory hurdles of international labor markets. In contrast, small and medium-sized enterprises (SMEs), by far the largest employing category in the EU, along with workers in service and trade sectors, need support to access pathways. At the same time the outgoing European Commission in Brussels has outlined the way to implement the New Pact on Migration and Asylum, while the incoming one will have to take the necessary steps to making it a reality, starting under the Hungarian EU Council Presidency (announced by the Trump-inspired ‘MEGA’ slogan).  

It is striking that labor mobility has not been featured in any of the 10 ‘building blocks’ that will underpin the national implementation plans. Well-regulated labor mobility will increasingly play a crucial role: governments and employers will need to intensify their calls for policies allowing them to cover unfilled vacancies through international recruitment. They will also have to address the skepticism that often surrounds the idea that labor mobility can be a valid response to the challenges and needs of EU Member States. A narrative anchored around the concept of controlled migration – often monopolized by political parties with rather conservative stands on migration – gains more relevance here. With new evidence confirming that labor demand acts as a significant pull factor for migration, only a narrative embracing well-regulated and predictable migration can provide answers to skeptical fractions, ensure that migrants receive proper protections and meet the economic needs of many critical industries. Well-functioning and regulated labor mobility systems can also help countries achieve certain international development goals by balancing economic opportunities and brain drain concerns. At the same time, they can be beneficial for migrant workers, offering them alternatives to irregular pathways and adding to the advancement of their agency, rights and skills development. 

There is a clear need for more solutions than proclaims. Pragmatic, politically viable and sustainable approaches which look beyond EU economic interests while embracing international development can improve the economic prospects of sending countries and increase the agency of their citizens. For that to happen, labor mobility needs to be fully embedded among the array of EU and national strategies. Running the risk of falling short of the needed workforce will inflict significant harm on European economies and societies. Improving conditions and wages in certain sectors or extending the retirement age alone will not solve the problem. Mobilizing the domestic workforce alone or facilitating intra-EU mobility will not be sufficient either. Policy makers, demographers, economists, employers and other stakeholders must come together to design labor migration programs in contexts in which it is increasingly harder to attract workers. 

The good news is that Labor Mobility Partnerships (LaMP) is designing and testing a growing array of solutions for low-income workers to take the unfilled jobs in high-income countries facing broadening worker shortages. Co-creating approaches and tools that strengthen safe and efficient labor mobility and worker integration will be crucial to ensuring that new efforts can scale up into sustainable and effective migration programs that benefit all. Building effective and financially viable solutions will be key to reinforcing the sense of trust in a system that many voters and stakeholders currently perceive as broken. At the same time, it is crucial to scale structured coordination across countries of origin and destination: there is an undeniable need to develop infrastructure currently missing to prepare and source migrant workers and support them through the migration process. Based on evidence and learnings collected through the work carried out in various corridors and sectors, LaMP aims to address systemic issues, seeking to turn labor mobility into an opportunity – a choice for many – rather than an unpredictable journey with unclear outcomes.

H-2A Worker Voice Survey 

Posted on June 20, 2024 by - Uncategorized

Since 2021, LaMP has been implementing a project to strengthen responsible labor recruitment within the U.S. H-2A visa program for migrant agricultural workers. Our work, supported by the Walmart Foundation focuses on responsible practices in the earliest stages of H-2A recruitment, as the first step in a worker’s journey can have a cascading effect on their well-being throughout their migration and employment experience. A key aspect of this project is the development of a low-cost smartphone-based worker survey designed for easy deployment to an unlimited number of migrant workers.   

This anonymous survey provides visibility into recruitment experiences and can be deployed at scale. LaMP codesigned this tool in collaboration with CIERTO and two of the largest and most established industry actors and we aim to expand our collaboration to additional industry players.  

Please find a brief description of this initiative here and a comprehensive report on the methodology and survey results for 2023 here. 

 

For more information, contact:

Kim Geronimo

kgeronimo@lampforum.org

Annual Report 2023 – Worker Voices: Enhancing H-2A Recruitment through Migrant Perspectives

Posted on June 20, 2024 by - Uncategorized

This report offers a detailed analysis of the H-2A Worker Voice Survey, a project aimed at enhancing the recruitment process for migrant workers in the U.S. H-2A visa program. The survey engaged nearly 10,000 H-2A workers, over 32% of which participated, underscoring widespread worker interest in having their voices heard. 

Our findings highlight both successes and challenges within the program, emphasizing the importance of accurate contract information and the eliminating illegal recruitment fees. The survey leveraged WhatsApp for cost-effective and wide-reaching survey distribution, underscores the feasibility of large-scale worker engagement in the H-2A program. In addition to shedding light on current practices this report also sets the stage for future improvements, including the development of a smartphone application aimed at reducing reliance on intermediaries and fostering a more transparent recruitment ecosystem. 

We invite you to explore the full report to better understand the experiences of H-2A workers and gain actionable insights that can drive positive change in the recruitment process. 

 

 

For more information, contact:

Kim Geronimo

 

 

This Week in Immigration: Reducing Poverty by Making the Most of Existing Migration Pathways

Posted on May 21, 2024 by - Uncategorized

LaMP Strategy Lead Jason Wendle joined the Bipartisan Policy Center’s Senior Advisor Theresa Cardinal Brown and Associate Director Jack Malde for an episode of their podcast This Week in Immigration. They discussed how to facilitate migration from lower-income to higher-income countries by increasing the use of existing migratory pathways and how such initiatives can benefit all involved – those on the move, the countries that welcome them, and the countries they (often temporarily) leave behind, without the need to change immigration law.