Acute shortage of skilled workers continues

IF – 08/2023

The situation in the labour markets of the European Union is resilient and adaptable despite a few crises, such as the war in Ukraine and the current high inflation. The employment rate is at a record high of almost 75 per cent and the unemployment rate is currently very low at six per cent. These results are shown in the annual Report of the European Commission on Employment and the Social Developments in Europe (ESDE). The report provides an up-to-date economic analysis of employment and social trends in Europe and takes a look at possible policy options for improvement.

Employed, but qualified?

Despite the current figures, the reality is different from the numerical survey. Business and industry continue to complain about the acute shortage of skilled workers that needs to be addressed. Finding competent and qualified workers is the main problem. The construction industry, the health sector and especially occupations in the field of information and communication technologies (ICT) are strongly affected. The shortage could increase further due to demographic change, low birth rates and the decline in the working-age population.Accordingly, 2023 has been declared "the year of competences" by the European Commission. The German Social Insurance (DSV) had reported on this News 01/2023. October last year, measures were announced to address the shortage of skilled workers across Europe. More than ever, investment in adult education and vocational education and training programmes should provide long-term relief.

Recommendations of the ESDE report

The report focuses on various employment and social issues such as long-term unemployment, mobility and migration, people and their skills, and the modernisation of social security systems. It is important to the European Commission that the promotion of active inclusion in the labour market is strengthened in order to improve the labour market participation of employable people. Nicolas Schmit, EU Commissioner for Employment and Social Rights, sees the report as a guide to enable Member States to take concrete policy action to support upward economic convergence. An essential step is education and training and individual support towards inclusive participation in working life.

Distinct manifestation of the social situation

Across Europe, differences in schooling, pension systems or access to social services remain large. The report states that especially people with a low level of education, younger people and people with a migration background are more disadvantaged than other groups of people. The European economy and citizens should be better prepared for a future of ever faster structural change. Better training and retraining opportunities should be made more accessible and available, regardless of status and income. The EU and Member States should make better use of the opportunities that a transition to a greener, digitised economy is increasingly enabling.

Sustainable economic and labour market recovery is a key objective of the European Commission to also achieve social resilience in the EU. The ESDE report will continue to highlight shortcomings and improvements in Member States in its annual publications. However, the implementation of the recommendations is the responsibility of the Member States.