Labor shortages are felt across Europe –

In addition to rising costs, European businesses face another problem – the lack of skilled workers – which is becoming more important than ever.

Companies across the continent are lamenting their growing inability to find workers in a historically tight labor market. Some are reacting by offering better working conditions while Member States are considering easing visa requirements for workers from third countries.

“Skilled labor is in short supply across Europe,” Gerhard Huemer, director of economic policy at SMEUnited, told EURACTIV.

Around 193 million Europeans were in paid employment in the first quarter of 2022, while some 74.5% of 20-64 year olds were in formal employment – the highest employment rate since Eurostat started reporting in 2009. And the most recent data suggests that the figure increased 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 recording of this data began in 2006 – meaning around six million jobs are up for grabs in the EU. . As a result, the EU unemployment rate fell to 6.0% in July – another record high figure since at least 2001, when Eurostat started compiling this data.

Labor shortages everywhere you look

In France, about half of companies recently surveyed by CPME, France’s largest employers’ association, were trying to hire. Among them, 94% say they have trouble finding the right person – or any candidate, for that matter.

Across the Rhine, the picture is very similar. As many as 87% of German family businesses surveyed by the Ifo Institute in Munich on behalf of the foundation for family businesses said they were feeling the effects of the labor shortage.

Board a probably understaffed Danube cruise ship and float to Vienna, and you’ll hear the same complaint.

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

As far north as Finland, companies face the same problem.

“All sectors suffer from a high incidence of recruitment problems and labor shortages. Health and social services, in particular, have a difficult situation, as well as the catering 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 quite high at 12.6%, companies are struggling to find workers, particularly in the gastronomy, tourism and construction sectors.

Intra-European migration

One reason for the shortage of workers in wealthier EU countries could be the disruptions the COVID pandemic has brought to intra-EU migration.

SMEUnited’s Gerhard Huemer said: “What we see most is Eastern Europeans who have returned home during the pandemic and have chosen not to return to Western Europe now.”

However, returnees from Eastern Europe seem to be anything but inactive in their country of origin. In Poland, for example, the unemployment rate is at its lowest for 32 years and more than half of the companies are worried about the shortage of labour.

Polish companies are feeling the shortage the hardest in the construction sector. This industry faced an entirely different type of migrant worker exodus 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. foreign. A recent study by the European Training Foundation revealed that around 40% of Albanians with higher education have emigrated.

Workers profit and struggle at the same time

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

On the one hand, given the desperation of employers and the number of vacancies, things have never looked better. On the other hand, the sharp rise in prices means that most workers are currently earning less in real terms than before, with a bleak winter ahead.

Analysis published by the European Trade Union Confederation (ETUC) found that minimum wages have fallen in real terms in all EU member states that have them, although some member states have nominally raised them quite significantly.

“That means people who work long hours in tough jobs struggle to afford food and rent, let alone do things that many people take for granted, like spending time with friends and their families,” ETUC Deputy General Secretary Esther Lynch said in a statement.

However, it can be argued that the tight labor market is what could make rising prices more bearable for workers than it would otherwise be, since it allows them to negotiate better terms.

Indeed, some companies already offer better working conditions. According to a survey by the Manpower group, for example, 64% of Slovenian companies plan to increase wages.

Similarly, Austrian companies budget more for wages and benefits, according to Moreno-Hasenöhrl of the Austrian Economic Chamber.

Immigration reform

However, businesses also expect the state to help them deal with labor shortages. While business associations in some countries are calling for a reform of social security systems to make it less attractive for people to stay out of the labor market, a number of Member States see part of the solution in allowing more immigration.

“We need to significantly increase the working population, because it is an extremely important asset for the development of the country,” Portuguese Economy Minister António Costa Silva told reporters in August.

Acting on this need for more workers, the Portuguese government lowered visa requirements for former Portuguese-speaking 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 expected to issue a record number of work permits this year. In Germany, the government is expected to propose a new immigration law later this year, and in Austria, relaxed rules for visa access will come into effect 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 traditional ‘highly skilled workers’. Some of the sectors hardest hit by the labor shortage are the construction sector, as well as tourism and gastronomy.

Cristina Faciaben, migration secretary of Spain’s largest trade union, Comisiones Obreras, argued in a recent interview with El País that “we must take care not to discriminate and to regularize only the most qualified immigrants in the interest 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 reporting.

Mary I. Bruner