How Europe plans to fix its labour shortage
By Pieter Cranenbroek, Senior News Editor, LinkedIn News
The Old Continent. It's what Europe has been called ever since Europeans started going to other shores to seek new fortunes.?
For a while now, the moniker is equally apt to describe the region's demographics.
An ageing population in combination with chronic labour gaps is threatening welfare systems and economic wellbeing. Europe, in short, is short of hands.
As a result, some policymakers across Europe are changing tack on migration and pushing forward policies intended to attract (skilled) labour.
Europe's future competitiveness, said EU Commissioner Margaritis Schinas recently, will depend on the continent's ability to staff its businesses.
So, what is the role of migration in the European economy and what kind of policies are emerging in this area?
The role of migration in numbers
The greying of the workforce means that the EU is losing about one million workers every year, the EU's home affairs chief Ylva Johansson told an audience in Athens earlier this month.?
That means Europe also needs more or less one million labour migrants per year to keep the economy running, she added.
"Europe is expected to face a labour squeeze," writes Sebastian Weber , deputy division chief of the International Monetary Fund 's Regional Economic Outlook Team for Europe, in an email.?
"This is because population ageing will advance more quickly in Europe, reducing working hours by 0.5% annually. Europeans’ preferences for working less hours compounds the squeeze."?
This is consistent with migration figures trending upwards across all OECD countries. Employment levels of migrants have never been higher, indicating there's real demand for their services.
"European economies rely on migration quite significantly," says Mariano Mamertino , an economist with The Burning Glass Institute .
"The contribution of migrant workers to EU labour markets is similar to the contribution immigration makes in the US, a country historically known as an immigration magnet.?
"Specific sectors (think hospitality, healthcare, or agriculture) are often the ones that most heavily employ workers born abroad."?
Migrants also represent a growing part of the overall labour force, says Mamertino. Foreign-born workers made up 17% of the total working population in the eurozone in the second quarter of 2023, up from 15% in the last quarter of 2019.
"For the five largest EU markets, foreign-born workers now make up a bigger share of the labour force than they did before the pandemic."
Europe needs a hand
Migration isn't the only way to counter the shrinking of Europe's working-age population.?
As we have seen in previous articles, improving women's employment rates, offering flexible work options that allow people to work until later in life, and pushing up the retirement age are all proven ways to increase the labour supply. Automation may also play a role in lessening the impact of a declining labour force.
But all of these measures will not be enough to meet Europe's needs, now or in the future. Not even the rapid rise of artificial intelligence will significantly reduce the need for human workers.?
In Germany and South Korea, two countries leading in automation, the use of robots has so far not reduced the overall amount of jobs, which means that the EU and the UK will still need tens of millions of workers by mid-century, according to the Center for Global Development , a think tank.?
It predicts that Europe will be short 44 million workers by 2050, if it doesn't allow for sufficient immigration to keep the working-age population at current levels.
"Higher labour force participation from women and older workers helps ease pressure, but it’s not sufficient," says Weber. "As in the US and other advanced economies, migration could provide an important upside.”?
Policymakers are 'changing tack' on migration
Concerns about a potentially unhealthy composition of the population are top of mind in Europe.
Dubravka Suica became the first European Commissioner for Demography in 2019. Spain, one of the world's fastest-ageing countries, appointed a minister for Ecological Transition and Demographic Challenge the following year.
The Irish government last month expanded its critical skills scheme, which makes it easier for employers to hire and obtain work permits for people from outside the European Economic Area. In addition to highly paid technical jobs, the list now includes bakers, mechanics, social care and construction workers.
On a European level, the EU launched its Talent Pool late last year, a platform that sets out to match EU employers with skilled job seekers from around the world.
"The Italian government has raised quotas for work visas for non-EU citizens to 452,000 for the period 2023-2025, an increase of nearly 150% from the previous three years," says Mamertino.
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"Various nations have streamlined the entry process for Ukrainian refugees too."
While this all seems to point to a general loosening of migration policies across Europe, there is an important caveat.?
"To balance between the rise in anti-immigration voices and the need of skilled workers, I see a trend of welcoming skilled immigration while restricting other immigrant groups," writes Michali Henig , Head of Global Mobility at HelloFresh , in an email.
"Germany recently liberalised the skilled worker immigration act, and in parallel made a law that makes it easier to deport immigrants who engaged in criminal activity.?
"The Netherlands continued a reduced version of the tax break offered to foreign skilled workers, but are increasing the hurdles for international students and suggested capping immigration to a quota of 50,000 per annum."?
In essence, countries are developing 'migration-on-demand' frameworks, not unlike the points-based system the UK introduced after Brexit that favours skilled applicants.?
In practice, however, tightening the screws on migration could have an adverse effect on short-term stays of highly skilled people as well, Henig warns.
"Immigration laws are often designed for long-term immigration, thereby putting hurdles for short-term international moves. In Denmark even an extended business trip often requires a work permit that has the condition of social security payments, making such an exchange difficult and unattractive.?
"Fixing this by making such moves easier, for example by introducing an exemption from social security or tax benefits for short-term expats, would be a game changer in the world of global mobility."?
Join the conversation in the comments, or in a post using #ShiftingPerspectives.
We asked professionals in Europe whether they would consider moving to another European country for work. With more than 2,500 votes cast, an overwhelming majority indicated that they are open to migrating for a job. However, some members shared tips for countries to make such a move more attractive.
Keenan Popwell, Advisor and Attorney, says:
If you want more migration amongst the member states, Europe needs more pan-EU, pan-EMEA, and global companies, that way EU nationals (and third country nationals) can work in [English].?In order to make a real impact, the EU and member states need to eliminate the bias for employment over entrepreneurship in immigration and a host of their other policies.?
Gina Swart, AgroEcosystem Technology Platform Lead, comments:
I think the most important thing is your mindset and willingness to be open and give things a try. The people I have seen fail the most often are people who only make friends and socialize with people from their home country or those who don’t make an effort to learn the local language. If you can’t integrate, it will be tough to make a go of it.
Matej ?tevuliak, Bioinformatics Engineer, adds:
I would like legislation that would allow me to stay employed with an employer based in one country but there would be no limits as per where in the EU I choose to live.?I know this would need to address matters as health care, pension, tax residency support of the region of my current residency etc. Maybe allowing companies to reside and pay taxes to an EU institution could be an option.
What about you? Would you move to another country, be it permanently or temporarily, for work? Join the conversation.
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See you next month!
Pieter Cranenbroek, Senior News Editor, LinkedIn News Europe
Matching best international talents with employers in Europe
9 个月Better late than never! I just came across the article, and I must say, it was exceptionally clear, and the comments were insightful as well. At Blu Selection, we hold a strong belief that the traditional boundaries of local and domestic job markets are gradually dissolving, making way for a pan-European "free job market" that is already evident in various aspects (think of a Polish plumber in the UK or an Indian Data Scientist in European banks). Rather than resisting this inevitable change, the EU would be wise to embrace and facilitate it by focusing on aligning legislation, harmonizing practices, and, most importantly, investing in comprehensive training programs to equip the new generation for this monumental shift. After all, adaptation and preparation are key to thriving in a rapidly evolving employment landscape.
Human Rights Lawyer & Humanitarian Aid Expert | Specializing in Migration & Refugee Protection | LLM
9 个月In order to enhance Europe's attractiveness to skilled migrants, policymakers should prioritize initiatives that streamline immigration processes, invest in integration programs, promote diversity, and foster collaboration between the public and private sectors. By creating an environment that welcomes and supports skilled migrants, Europe can continue to thrive and maintain its competitiveness on the world stage.
Ceo Cevra SG - enhancing intelligent business performance and value in hospitality 4.0 ,we are hiring!
9 个月I think this a major painpoint affecting people and countries accross the board and as such it must be addressed accordingly by institutions politicians and also by the private sector which might also play a core role figuring out solutions in the short-middle-long term. Global companies together with institutions have to leverage from eachother alleviating this issue there is just loads at stake, therefore, I believe enhancing a stronger blue and white collar job market is a winwin. Reducing unemployment rates, training and certifiying job seekers as well as foreigners who are prepared and willing to add value where vacancies need fillingin it needs to be on the table for the right policies to be implemented. Laws and regulations have to be followed by the book needless to say, however certain protocols can be handled differently in order to reduce where possible unnecessary frictions.
Change Management | Multilingual Communication | Public Relations | Photography | Employment Policy | Immigration Policy | Tactical Leadership | Strategic Design
9 个月Pieter Cranenbroek asked me to comment. There is no workforce shortage. The real issues are: 1) At one end, low-paid jobs. The solution is not immigration. It is paying salaries that one can actually make a living on. 2) At the other end, excessive requirements. Most well-paid jobs nowadays essentially expect one person to produce the worth of a whole department. This is reflected in job ads. The list of requirements keeps on getting longer and employers are notoriously unable to sort their list according to must-have, should-have, nice-to-have. They just treat everything as a must-have, but somehow expect to pay everyone entry-level wages. Until 10 years ago, someone who had all must-haves and one or two of the should-haves at least got an interview, in many cases, they even got the job or were offered a similar one. Not anymore. Employers would rather hire nobody than take what they can get. The solution to this is not immigration either. It is employers becoming reasonable about their requirements and settling for the talent they can get. 3) Applicants whose career never reached heights are routinely disregarded as if they were damaged goods, yet they are the most eager at applying for jobs they genuinely qualify for.
Communication & Institutional Relations
9 个月Migration is a sensitive, controversial, complex issue and a prime target for political campaigning. Migrants can help mitigate the effects of an ageing population, but their growth and presence contribute to a high level of insecurity among residents. On the other hand, migrants can fill gaps in the labour force and contribute to economic growth, the sustainability of pensions and the maintenance of the European way of life. A fundamental approach is to implement a communication programme to educate society about the importance of migration for the sustainability and future of the European way of life. Migrants and residents must be informed about migration policies and programmes. This is essential to manage migrants' expectations and reduce dissatisfaction among residents.