EU jobs crisis as employers say applicants don’t have the right skills

Skill shortages are increasingly becoming a serious problem for employers across Europe, as illustrated by different surveys. In 2023, 54% of Small and Medium-sized Enterprises (SMEs) in the EU reported that difficulties in finding employees with the right skills were one of their most serious issues,  according to Eurostat.

ManpowerGroup, a global workforce solutions company, also found that three in four employers in 21 European countries could not find the skills they required. This was 42% in 2018, corresponding to 33 percentage points or a 79% rise in the last five years.

The survey, published in October 2023, showed that talent shortage is a significant global challenge. “Figures in our annual Talent Shortage survey increased dramatically, as the need for skilled workers is becoming more and more acute,” Mara Stefan, VP of Global Insights at ManpowerGroup, told Euronews Business.

The shortage included European countries as well. On average, across 21 European countries, 75% of employers reported difficulty in filling job roles, ranging from 59% in Finland to 82% in Germany and Greece.

“In Europe, we see falling unemployment, meaning there are not enough skilled workers to fill existing or new jobs. To exacerbate this, Europe has an ageing population, with a global decline in birthrates further contributing to the skills and talent gaps we see today”, she underlined.

“This partly explains why Germany’s talent figure shortages are steeper than Finland. In 2023, Germany’s unemployment rate was 3.0%, whilst Finland’s was at 7.0%, resulting in a smaller pool for finding skilled labour,” Mara Stefan added.

In 2018, the average was only 42% in these countries, varying from 18% in Ireland to 81% in Romania. Except for Romania, the share of employers who could not find the skills they needed increased substantially between 2018 and 2023.

Significant spike in Ireland, the UK, Spain and France

This rise was more than 50 percentage points in Ireland, the UK, Spain and France. For example, it reached from 18% to 81% in Ireland, and from 19% to 80% in the UK.

The increase was also more than the European average in the Netherlands (47 pp), Norway (44 pp), Switzerland (40 pp), Belgium (39 pp) and Italy (38 pp).

European employers: Staff shortage is a serious problem

Eurobarometer survey, carried out in late 2023, provides comprehensive insights on staff shortage. Some 54% of SMEs in the EU identified difficulties in finding employees with the right skills as one of the top three most serious problems for their company.

It ranged from 28% in Turkey to 68% in Belgium. This figure was 50% or more in 20 out of 34 countries, indicating how much skill shortage is a common and serious issue.

This was, by far, the most-identified serious problem for companies, followed by regulatory obstacles or administrative burden (34%).

Technicians needed most

Technician roles existed in one-third of SMEs. However, they commonly encounter a shortage of technically trained staff, such as lab workers and mechanics. Nearly half (42%) of European SMEs reported facing shortages of technicians. This is, by far, the most-identified job role with skills shortages.

For SMEs with customer care experts, some 23% of respondents said there was a skills shortage for positions. This role includes sales professionals, client advisors, receptionists, etc.

Mains reasons behind the skills shortages

On average, 56% of employers in the EU replied that there were few or no applicants when queried about the main reasons for their skill shortages according to Eurobarometer survey.

This was the predominant factor, ranging from 18% in Sweden to 73% in Belgium. All Nordic countries reported lower figures than the EU average in identifying a lack of applicants, while Norway and Denmark were close to the average.

Among the EU’s ‘Big Four’, Spain, France and Germany there were slightly higher values than the EU average.

The main reasons given by employers were that applicants did not have the right qualifications, skills or experience, closely followed the lack of applicants at 54%. In the EU, it varied from 41% in France to 70% in Estonia, indicating how widespread the skill shortage issue has become. 

The UK had lower figures than the EU average in both indicators.

Why are staff and skill shortages increasing? Inter-linked challenges

The EU Commission has underlined that labour and skills shortages have been increasing in all member states for almost a decade. These shortages are mainly driven by

• demographic shifts
• the demand for new skills linked to technological developments
• challenges related to working conditions

“Across the board, the tight labour market in 2023 means many face challenges finding people with the needed soft and technical skills. Investment in upskilling, reskilling, and a focus on preparing people for tomorrow’s jobs has become–and will remain–more important and should be at the top of every business leader’s agenda,” Mara Stefan of ManpowerGroup explained.

The EU’s working-age population dropped from 269 million in 2012 to 264 million in 2021. Loss of an additional 35 million people by 2050 is expected according to Brussels based Business Europe’s “Analysis of Labour and Skills Shortages” report, which emphasises the challenges are inter-linked.

It found that the insufficient orientation of education and training curriculum relative to labour market needs is a further component leading to shortages of appropriately skilled workers.

The methodology of Talent Shortage Survey changed for 2022, moving it from a phone-based approach to an online one. While methodology changes can impact results, “The biggest upswing from 45% to 69% happened before this methodology change,” Stefan added.