Last Updated on September 26, 2023 by Robert C. Hoopes
Europe’s labour market is showing signs of recovery from the impact of COVID-19, but concerns about a broader labour shortage persist. While the job vacancy rate in Europe slightly decreased from 2.8% in the first quarter to 2.7%, employment rates increased slightly. However, the longer-term job vacancy rate across the EU has been rising annually, indicating a failure to meet demand.
The COVID-19 pandemic caused significant job losses and furloughs in 2020, leading to the current labour shortages and skill gaps in Europe. The European Commission predicts that these labour shortages will continue to increase as the working-age population declines.
Among EU countries, the Netherlands has the highest job vacancy rate at 4.7%, while Bulgaria and Romania have rates as low as 0.8%. In-demand positions include software developers, sales assistants, advertising and marketing professionals, manufacturing and engineering jobs, as well as research-related roles.
One significant factor contributing to the labour shortage in Europe is the lack of skilled labour. The current pool of workers often lacks the necessary qualifications and expertise required by employers. To tackle this issue, some EU countries are implementing measures to attract skilled workers from outside the EU to fill the vacant positions.
Despite these initiatives, there are still 27.5 million people in the EU’s labour force who are either unemployed, underemployed, or not actively seeking work. Although the EU has seen a decrease in unemployment rates, this is primarily due to an increase in the number of people available for work but not actively seeking it.
These factors, including the rise in longer-term job vacancy rates, the lack of skilled labour, and the presence of a significant number of underutilized workers, contribute to the ongoing issue of jobs remaining vacant in Europe’s labour market. As Europe’s economy continues to recover from the impact of the pandemic, addressing these labour market challenges will be crucial for sustained growth and development.