Geopolitical tensions and trade disruptions have led the International Labour Organization (ILO) to revise down its global employment growth forecast for 2025, projecting the creation of 53 million jobs, 7 million fewer than previously estimated.
The UN agency said this translates into a reduction in global employment growth from 1.7% to 1.5% this year. The fall reflects the downgraded global economic growth projections from last month’s World Economic Outlook from the International Monetary Fund that predicted GDP growth of 2.8%, down from a previous projection of 3.2%.
The ILO’s World Employment and Social Outlook (WESO) Update estimates that nearly 84 million jobs across 71 countries are directly or indirectly tied to US consumer demand.
Around 56 million of these jobs are concentrated in the Asia-Pacific region, and are increasingly at risk of disruption due to elevated trade tensions. Canada and Mexico, however, have the highest share of jobs – 17.1% – that are exposed, according to the ILO.
ILO director-general Gilbert F Houngbo, said: “We know that the global economy is growing at a slower pace than we had anticipated it would. Our report now tells us that if geopolitical tensions and trade disruptions continue, and if we do not address fundamental questions that are reshaping the world of work, then they will most certainly have negative ripple effects on labour markets worldwide.”
ILO global employment growth forecast
Europe and central Asia is the only region where forecasted employment growth has not changed (0.6%), while the Americas predicted growth has fallen from 1.6% to 1.2%.
The ILO report also found that labour income share – the proportion of GDP that goes to workers – fell globally from 53.0% in 2014 to 52.4% in 2024. Africa and the Americas experienced the largest declines.
Had this share remained unchanged, labour income globally would have been US$1 trillion higher in 2024, or $290 more per worker. The ILO, based in Geneva, said this erosion puts upward pressure on inequality and highlights a disconnect between economic growth and worker compensation.
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The report also highlights a shift in employment towards high-skilled jobs, with women leading this trend. Between 2013 and 2023, the share of women employed in high-skilled occupations rose from 21.2% to 23.2%, while the proportion of men in such jobs grew marginally from 17.5% to 18.0%.
The ILO said the labour market remains characterised by significant educational mismatches. As of 2022, only 47.7% of workers held qualifications that appropriately matched their job requirements. The share of undereducated workers declined from 37.9% to 33.4% over the past decade, but the share of overeducated workers increased from 15.5% to 18.9%.
The report also found that nearly one in four workers may find their jobs transformed by generative AI. Based on the latest estimates, workers in medium-skill occupations face the highest risk of overall generative AI-induced impacts, with 38.1% employed in occupations with some degree of exposure. High-skill occupations had 35.3% exposure, while low/medium-skill roles had just 0.8%.
Houngbo added: “The findings of this report on the employment landscape are sobering, but they can also act as a roadmap for the creation of decent jobs. We can make a difference, and we can do so by strengthening social protection, investing in skills development, promoting social dialogue, and building inclusive labour markets to ensure that technological change benefits all. And we must do so with urgency, ambition, and solidarity.”
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