Formulation of employment policies

What is ILO’s approach to employment policies? In broad terms, an employment policy is: 
  • An integrated policy approach to promoting full, decent and productive employment through measures that support: i) the creation of decent jobs; ii) improvements in job quality; and iii) transitions in the labour market to connect people to jobs
  • Based on a comprehensive analysis of the country’s employment situation and a “whole-of government” approach, which involves not only ministries of labour and employment, but also finance, planning, and other government agencies, along with representatives of workers and employers and other relevant stakeholders
  • Comes in different forms depending on the country situation, including standalone national employment policies, along with the integration of employment objectives in national/regional development plans, macroeconomic policies and sectoral strategies and other national policies and strategies, backed up by implementation mechanisms
Like all public policies, an employment policy process follows a series of steps over the policy cycle – from diagnostics to formulation followed by implementation, financing and monitoring and evaluation. The policy formulation stage aims to define the most-effective policy options based on the employment challenges identified in line with available resources and existing institutions.

Detailed insights on ILO’s approach to policy formulation can be found in:
  1. ILO’s employment-related conventions and recommendations, especially Employment Policy Convention, 1964 (No. 122)
  2. ILO resolutions on employment, such as the Resolution concerning the third recurrent discussion on employment, 2022
  3. ILO’s tools and publications, including the Guide for the formulation of national employment policies, National Employment Policies: A guide for workers’ organisations, report on Two Decades of National Employment Policies and the ILO Employment Policy Gateway
Check out lessons learned on policy formulation based on country experiences and good practices.
Employment policy formulation consists of different steps, including identifying challenges and issues, setting policy priorities, drafting the policy, and validation and adoption of the policy.

Setting employment policy priorities

No single government agency can, on its own, solve pressing and complex employment issues. Instead, a wide range of stakeholders need to coordinate their efforts, which is a key goal of ILO’s employment policy support. The creation or use of existing employment committees or other relevant bodies are important to secure stakeholders’ engagement throughout the process, coordinate their efforts and provide spaces where they can learn, share and explore employment issues from a variety of viewpoints.

More broadly, employment policy formulation is based on social dialogue that takes different forms, such as working groups, informal consultations or drafting teams.

Country examples

Policy drafting

The drafting of an employment policy requires translating the goals and objectives into a policy strategy (the “how”) and actions, which are the measures to be implemented in line with the strategy. Defining a realistic employment policy and set of actions should take into various parameters relating to capacity, coordination and resources.
  • Institutional capacity – Is there capacity to reach the goals and objectives? What can be done to strengthen capacity as part of the policy response?
  • Political leadership in tackling employment as a public policy priority  – Which ministry is in charge of formulating the policy? If it is the ministry in charge of employment, does it have the convening power? What coordination mechanisms are in place? Who is responsible for implementation?
  • Availability of financing and employment focus in budgets and resource mobilization – What budgetary resources are available to finance implementation? What support can be identified from development partners?
Policy formulation can be informed by a set of criteria or indicators, including employment targets and employment-related public expenditure reviews, etc.

Country examples

Identifying areas for intervention

ILO’s approach to employment policy encompasses different measures that promote job creation, improve job quality and support transitions to connect people to decent jobs, addressed within a single policy or framework in an integrated and coherent manner. It is gender responsive and prioritizes youth and other groups, while addressing the major transformations that are impacting labour markets, including climate change and digitalization.

Formalization measures and support for the transition to the formal economy is cross-cutting since it also requires efforts to create jobs and improve quality of employment. ILO’s approach here is articulated by Recommendation 204 on the Transition from the Informal to the Formal Economy adopted in 2015.

Similarly, ILO’s employment policy framework can help address labour market needs during and after crises (e.g. during the global financial crisis 2008-9 and the COVID-19 pandemic) and helping link the short-term needs and the longer-term development goals, as outlined by Recommendation 205 on Employment and Decent Work for Peace and Resilience.