As the European Union has grown and its economies have become more interconnected, the labour market shortage in Europe increased significantly. However, in recent years, a number of European countries have begun to experience a shortage of workers, particularly in certain industries and occupations.
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Causes of labor shortages
The European labor market is facing a shortage of skilled workers in various industries, including technology, healthcare, and construction. This shortage is caused by a combination of demographic, economic, and social factors. The major factors are:
Ageing population
One factor contributing to the worker shortage is the aging population in many European countries. As birth rates have declined and life expectancy has increased, the proportion of older adults in the population has grown, leading to a shrinking pool of available workers. This trend is expected to continue in the coming years, with the number of people over the age of 65 projected to increase by more than 30% by 2060.
Lack of Skilled Workers
Another factor is the increase in automation and the adoption of technology in the workplace. While these developments have led to increased efficiency and productivity, they have also reduced the need for some types of labor, particularly in manufacturing and other sectors that have traditionally been sources of employment for less-skilled workers.
This shortage is particularly prominent in countries like Finland, Croatia, and Poland. In these countries, there is a high demand for workers with skills in areas such as manufacturing, construction, and the oil & gas industry. However, there is a shortage of workers with these skills, which is making it difficult for companies to fill open positions.
Emigration
In addition to the natural decline of the population of working age, it may also decrease due to net emigration. If more people of working age emigrate from a region or country than migrate to it, the total population of working age may decline. For instance, workers from East Europe end up migrating to Germany for work. Germany generally has a higher standard of living and higher wages than many Eastern European countries, so people may move there to improve their economic opportunities.
However, while emigration reduces the number of available workers in the country or region of origin, it also reduces potential labour market shortages in the country or region of destination. While in the process of migration, the receiving countries like Germany are able to offset labour shortages and accumulate skills.
Current labour market shortage in Europe
Comparing vacancies and unemployment, those looking for work are not a good match for vacant positions in the country. Two in five companies claim to have difficulties recruiting people with the required skills and on the other hand, many employees have difficulties finding a job that matches their qualification level. Only a limited set of countries experience larger shortages now than before the crisis, namely Malta and the UK in the industrial sector, Germany and Hungary in the service sector, and Germany and Luxembourg in the construction sector.
Finland, Poland, Germany, Romania, and Croatia are all countries that have struggled to fill certain vacancies due to a lack of skilled workers.
- In Finland, there is a shortage of skilled workers in the technology and engineering fields. The country has a strong and growing technology industry, but there are not enough workers with the necessary skills to fill the available positions.
- Poland has a shortage of skilled workers in the construction and manufacturing industries. The country’s economy is growing, but the lack of skilled workers is limiting the ability of companies to expand and meet the demand.
- Germany is facing a shortage of skilled workers in various fields such as healthcare, engineering, and information technology. The country has a strong economy, but the aging population and lack of young people entering the workforce have led to a shortage of skilled workers.
- Romania and Croatia are facing a shortage of skilled workers in the fields of construction, agriculture, and tourism. The countries’ economy is growing, but the lack of skilled workers is limiting the ability of companies to expand and meet the demand.
Occupational Roles Most In Demand in Europe
- Nurses
- Teachers
- Social workers
- ICT professionals
- Doctors
- Engineers
- Sales and marketing professionals
- Business services and administration professionals
- Accountants and finance professionals
- Customer service representatives
Good practices to counter labour shortages
To address the worker shortage, several member states have implemented measures such as increasing immigration and offering incentives to attract and retain skilled workers.
Upskilling
These measures focus on changing the skill level of the labour population by either focusing on the (re)training of the active or inactive population or by securing the inflow into education which leads to specific occupations. The general aim is to bring the skills of the labour force in line with the
needs of the labour market. For example, in 2019, Germany introduced a new immigration law that made it easier for non-EU citizens with certain skills to obtain work visas. Other countries, such as the United Kingdom, have implemented programs to train and retrain workers in order to meet the demand for skilled labor.
Italy and Germany focus on young people by providing better matching services or by attracting young students from other Member States. In Ireland and the UK, employer-led initiatives were developed to counter shortages, allowing them to respond to specific local needs. Austria and Poland deal with shortages by guiding respectively (un)employed students towards specific technical training and educational programs. The Italian program builds a more durable matching system that can be applied in countries with weak transitions of young people into the labour market.
Increasing wages
Increasing wages is one way to counter labor shortages in Europe by making certain jobs more attractive to potential workers. This can be done by raising the minimum wage or offering higher salaries for certain positions.
Different countries in Europe have different approaches to increasing wages as a way to counter labor shortages. Some countries, such as Germany, have a relatively high minimum wage compared to other European countries. This is intended to make low-skilled jobs more attractive to potential workers. In other countries, such as the United Kingdom, employers are free to set their own wages and salaries, although there’s a national minimum wage for the country. However, some sectors such as the public sector are more likely to offer higher wages than the private sector, as a way to attract and retain workers.
In some countries, such as Denmark, there is a tradition of sectoral collective bargaining, where employers and workers in a specific industry agree on wages and working conditions through negotiations. This system is intended to ensure that wages are fair and competitive within each industry, and also to promote social dialogue, and avoid labour shortages.
Hiring from Overseas
Hiring from overseas is another way to counter labor shortages in Europe. This approach involves recruiting workers from other countries to fill open positions in a particular industry or sector.
Different countries in Europe have different policies and regulations regarding hiring from overseas. Some countries, such as the United Kingdom, have relatively liberal immigration policies that make it easier for employers to hire workers from outside the European Union (EU). In other countries, such as Germany, the process of hiring from overseas can be more complex. But with the help of recruitment platforms like Skillbee, the process of hiring from overseas has now become less complicated and highly convenient.
The role of recruitment platforms like Skillbee
Recruitment platforms and staffing agencies can help to address the shortage of workers in the EU. Skillbee can assist your company in many ways.
- Identifying and sourcing qualified candidates: Skillbee has access to a wide range of tools and resources that they can use to identify and recruit qualified candidates for open positions.
- Providing temporary staffing solutions: When companies are experiencing a temporary increase in demand, they can rely on Skillbee to quickly bring in temporary workers to meet their needs.
- Offering permanent placement services: For companies looking to fill permanent positions, Skillbee can help to identify and screen candidates and provide support throughout the hiring process.
- Providing specialized expertise: Skillbee has specialized teams that focus on particular industries or occupational areas and can provide valuable expertise and insights to companies looking to fill positions in these areas.
Skillbee’s success story
Skillbee is a top-rated recruitment platform that specializes in helping talented individuals and workers connect with trusted employers in Europe. Whether you’re looking for a welder or a painter in a major city or a more rural location, Skillbee has you covered.
But what sets Skillbee apart from other recruitment agencies? For one, we have an extensive network of skilled workers in our database. This means that we can find a candidate that is a perfect match for your company. But it’s not just about the skilled worker – Skillbee also takes the time to get to know the candidate and our team of experienced recruiters will work with you to identify the needs of the employer and tailor the candidates accordingly.
A leading shipyard in Rauma, Finland, was looking for spray painters for the last 12 months but was not able to find sufficient talent locally. We helped them by providing top-notch services by consigning 6 spray painters to Finland. Click here to read the case study on the same.
Conclusion
In conclusion, the shortage of workers in the EU is a complex issue that is affecting many industries and occupational groups. There are a variety of factors that contribute to this shortage, including an aging population, declining birth rates, and the increasing demand for skilled workers in certain sectors.
To address this shortage, it will be important for the EU and its member states to adopt policies that encourage immigration, promote education and training, and support the retention and advancement of existing workers. Additionally, it will be important for businesses to adapt to these changing workforce dynamics by offering competitive salaries and benefits, and by investing in the development and retention of their employees. Overall, finding solutions to the shortage of workers in the EU will require a combination of short-term and long-term strategies that address both the supply and demand side of the labor market.