Europe’s businesses are concerned about growing expenses, but they also have to deal with an increasingly pressing issue: a shortage of competent labor.
In a historically tight labor market, businesses all over the continent bemoan their growing inability to recruit employees. Some are offering better working conditions in response, and member states are thinking about easing the visa restrictions for foreign laborers.
The head of SMEUnited’s economic policy, Gerhard Huemer, told a news portal that a “skilled workforce is missing across Europe.”
The first quarter of 2022 saw around 193 million Europeans seeking paid employment, and the greatest employment rate since Eurostat began reporting data in 2009 was found in the 74.5% of individuals aged 20 to 64 who were in some type of formal employment. Furthermore, the most current information indicates that the number increased even more in the second quarter of 2022.
Concurrently, there are more than 3% of open positions—the highest percentage since statistical records of this data began in 2006—which translates to around six million jobs accessible throughout the European Union. The EU’s jobless rate, in turn, plummeted to 6.0% in July, marking yet another record low since Eurostat started gathering statistics in 2001.
Lack of Workers Everywhere
Approximately 50% of French enterprises surveyed by CPME, the country’s largest employers’ association, said they were actively seeking new employees. 94% of them admit that it’s difficult for them to locate applicants who are a good fit or any candidates at all.
The image appears strikingly similar from across the Rhine, as per the poll conducted on behalf of the foundation for family businesses by the Munich-based Ifo Institute, up to 87% of German family firms reported feeling the pinch of the labor crisis.
The identical complaint will come up if you board a Danube cruise ship that is most likely understaffed and float down to Vienna. “We have an all-time high of over 250,000 vacancies, and there is an urgent demand for employees everywhere”, stated Julia Moreno-Hasenöhrl, the deputy chairman of the Austrian Economic Chamber’s Department for Social and Health Policy.
The issue is present for businesses as they travel north, all the way to Finland. The lack of workers and issues with hiring are widespread across all industries. The Ministry of Economic Affairs and Employment’s research director, Heikki Räisänen, stated that the food and lodging industries, as well as health and social services, are facing challenging times.
Companies struggle to recruit personnel, notably in the construction, tourism, and culinary sectors. This is the case even in Spain, where the unemployment rate is still quite high at 12.6%.
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Employees Gain while Facing Difficulties
Employees in Europe see the job market as a problem that is both sweet and sour. Things have never been better, given the desperate nature of businesses and the volume of open positions. Conversely, the substantial increase in costs implies that the majority of workers now make less money in actual terms than they did previously. The upcoming winter appears to be cloudy.
Even while several EU member states technically raised minimum salaries significantly, an investigation released by the European Trade Union Confederation (ETUC) revealed that minimum wages really fell in all of the member states that have them.
“It implies that individuals who put in a lot of overtime at demanding jobs are finding it difficult to pay for their rent and food, let alone enjoying activities that many people take for granted, like hanging out with friends and family,” an ETUC deputy general secretary stated in a statement.
In any case, workers may find the price increase more tolerable than they normally would since they have greater leverage to bargain for better terms. This is because there is a tight labor market.
Better working conditions are currently provided by certain businesses, in fact. Sixty-four percent of Slovenian businesses intend to increase wages, as per a Manpower group survey. Comparably, Moreno-Hasenöhrl of the Austrian Economic Chamber claims that Austrian businesses are allocating larger budgets for wages and perks.
Reform of Immigration
Still, businesses anticipate public assistance in addressing the labor scarcity. Although business associations in certain nations advocate for the restructuring of social security programs to discourage individuals from leaving the workforce, several member states believe that increasing immigration is a partial solution.
August saw Portugal’s Economy Minister, António Costa Silva, told reporters, “We need to significantly increase the active population because this is an extremely important asset for the development of the country.”
The Portuguese government granted Portuguese-speaking former colonies such as Brazil, Angola, and Mozambique a lessened visa requirement in response to their need for labor. The Spanish government passed a bill that would facilitate hiring non-EU laborers in July.
The number of work permits Slovenia will issue this year is expected to set a record. Relaxed regulations on visa access will take effect in Austria in October, and the German government is anticipated to submit new immigration legislation by year’s end.
The Austrian Economic Chamber’s Moreno-Hasenöhrl stated, “This should make it easier and faster to recruit international talent.” But conventional “high-skilled workers” are not the only people Europe needs. Tourism, gastronomy, and the construction industry are among the sectors most severely impacted by the manpower shortage.
“We must be careful not to discriminate and only regularize the most qualified immigrants for the interests of the economy,” stated Cristina Faciaben, migration secretary of Comisiones Obreras, the largest trade union in Spain, in a recent interview with El País.
In conclusion, labor shortages are becoming a common problem in many European job markets. As the competition for talent increases, it becomes essential for companies to have a strategic approach to recruitment. This is where Dynamic Staffing Services can play a crucial role.
We at Dynamic Staffing Services can help companies find the best talent by leveraging our expertise and network. We can also assist businesses in staying ahead of the curve by employing the newest tools and methods for hiring.
By partnering with us, you can overcome labor shortages and build a diverse and talented workforce. For more details, you can reach out to us at +91-11-40410000 or by email at enquiry@dss-hr.com.
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