Labour shortages felt all over Europe

Labour shortages felt all over Europe |

On top of rising costs, Europe’s companies are facing another worry – the lack of skilled workers – which is becoming more prominent than ever before.

Companies all over the continent lament their increasing inability to find workers in a historically tight labour market. Some react by offering better working conditions while member states are considering relaxed visa requirements for workers from third countries.

“Skilled workforce is missing across Europe,” Gerhard Huemer, economic policy director at SMEUnited told EURACTIV.

Around 193 million Europeans were pursuing a paid job in the first quarter of 2022, while some 74.5% of those aged 20-64 were in some sort of formal employment – the highest employment rate since Eurostat started publishing it in 2009. And the most recent data suggests that the figure has risen further in the second quarter of 2022.

At the same time, more than 3% of all available jobs are vacant – more than ever since statistical records of this data started in 2006 – meaning that around six million jobs are up for grabs across the EU. Correspondingly, the EU’s unemployment rate sank to 6.0% in July – another record figure since at least 2001, when Eurostat began compiling this data.

Labour shortages wherever you look

In France, around half of the companies recently surveyed by the largest French employers’ association CPME were trying to hire. Of them, 94% say they struggle to find the right fit – or any candidates, for that matter.

Across the Rhine, the picture looks very similar. As many as 87% of German family businesses surveyed by the Munich-based Ifo Institute on behalf of the foundation for family businesses said they felt the effects of the workers’ shortage.

Hop on a probably understaffed Danube cruise ship and float down to Vienna, and you will hear the same complaint.

“With more than 250,000 vacancies, we have an all-time high and employees are urgently needed everywhere,” said Julia Moreno-Hasenöhrl, deputy head of the department for social and health policy at the Austrian economic chamber.

Turning north, all the way to Finland, companies are facing the same problem.

“All sectors suffer from a high incidence of recruitment problems and labour shortage.  Especially health and social services have a difficult situation, also food and accommodation sector,” said Heikki Räisänen, research director at the Ministry of Economic Affairs and Employment.

Even in Spain, where the unemployment rate is still rather high, at 12.6%, companies struggle to find workers, especially in gastronomy, tourism, and construction.

Intra-European migration

One of the reasons for the shortage of workers in the richer EU countries might lie in the disruptions that the COVID pandemic brought to intra-EU migration.

Gerhard Huemer of SMEUnited said: “What we see most of is Eastern Europeans having returned home during the pandemic and choosing not to head back to Western Europe now.”

However, the Eastern European returnees seem to be everything but idle in their home countries. In Poland, for example, the unemployment rate is at its lowest in 32 years and more than half of the companies are concerned about the labour shortage.

Polish companies most acutely feel the shortage in the construction industry. This industry had to face a very different kind of exodus of migrant workers when many Ukrainian construction workers living in Poland left to defend their country against the Russian invasion.

Eastern European countries like Romania, Bulgaria, and Albania, meanwhile, are struggling to staff their industries as many skilled workers leave the countries for more promising jobs abroad. A recent study from the European Training Foundation found that around 40% of Albanians with higher education have emigrated.

Workers benefit and struggle at the same time

For workers, the European labour market presents itself as a bittersweet paradox.

On the one hand, considering the desperation of employers and the number of job vacancies, things have never been better. On the other, however, the sharp rise in prices means that most workers currently earn less in real terms than they did before, with a bleak-looking winter ahead.

An analysis published by the European Trade Union Confederation (ETUC) found that minimum wages decreased in real terms in all EU member states that have them even though some member states nominally increased them quite considerably.

“It means that people who work long hours in tough jobs are struggling to afford food and rent never mind doing things many people take for granted like spending time with friends and family,” ETUC Deputy General Secretary Esther Lynch said in a statement.

Arguably, however, the tight labour market is what could make the rise in prices more bearable for workers than it otherwise would be, since it allows them to negotiate better conditions.

Indeed, some companies are already offering better working conditions. According to a survey by the Manpower group, for example, 64% of companies in Slovenia are planning to raise wages.

Likewise, Austrian companies are budgeting more for salaries and fringe benefits, according to Moreno-Hasenöhrl of the Austrian economic chamber.

Immigration reform

However, companies also expect the state to help them deal with the shortage of workers. While company associations in some countries call for a reform of social security systems to make it less attractive for people to stay out of the labour market, a number of member states see part of the solution in allowing for more immigration.

“We need to significantly increase the active population, because this is an extremely important asset for the development of the country,” Portugal’s economy minister, António Costa Silva, told journalists in August.

Acting on this need for more workers, the Portuguese government lowered visa requirements for Portuguese-speaking former colonies like Brazil, Angola, and Mozambique.

In July, the Spanish government passed a law that would make it easier to hire workers from non-EU countries.

Slovenia, meanwhile, is set to issue a record amount of work permits this year. In Germany, the government is expected to propose a new immigration law towards the end of this year, and in Austria, relaxed rules for visa access will come into force in October.

“This should make it easier and faster to recruit international talent,” said Moreno-Hasenöhrl of the Austrian economic chamber.

However, Europe does not only need the traditional “high-skilled workers”. Some of the sectors hit hardest by the labour shortage are the construction sector, as well as tourism and gastronomy.

Cristina Faciaben, migration secretary at the largest Spanish trade union, Comisiones Obreras, argued in a recent interview with El País that “we must be careful not to discriminate and only regularise the most qualified immigrants for the interests of the economy.”

*Laura Kabelka, Theo Bourgery-Gonse, Shrikesh Laxmidas, Bartosz Sieniawski, Fernando Heller, Spiros Sideris, Niko Kurmayer, Pekka Vänttinen, Aneta Zachova, Bogdan Neagu, Krasen Nikolov, Francesco Stati contributed to reporting.


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