Employment and labour markets
Measures to tackle labour shortages: Lessons for future policy
Published:
28 March 2023
Research report
Abstract
As economies begin to recover from the COVID-19 pandemic, labour shortages are becoming increasingly evident despite the impact of the war in Ukraine on energy and commodity prices. These include shortages exacerbated by the crisis in some sectors and professions where they had been endemic for some time. This report looks at measures implemented at national level to tackle labour shortages in the health, care, and information and communication technology sectors, as well as those arising from the twin green and digital transition. It assesses what measures are effective and explores the contextual factors supporting or hindering effective policy implementation and outcomes.
Key findings
Labour shortages in the EU are limiting production and services delivery in several sectors and the fight for talent is particularly acute in countries such as Austria, Belgium, Czechia, Germany and the Netherlands. As drivers of these shortages vary by sector, occupation and region, measures to address them must respond in different ways, ranging from developing skills, making certain sectors and occupations more attractive, activating underutilised labour, and better matching supply and demand – Findings confirm that tackling labour shortages is not just about skills.
Labour shortages are particularly prevalent in sectors with challenging working conditions, such as health and long-term care. Low levels of investment coupled with the impact of the pandemic and a gender-segregated labour market are contributing to the shortage of health and long-term care workers in a sector where the EU’s ageing population and workforce is also set to exacerbate these shortages further in the coming years.
Many measures to address shortages in the health and long-term care sectors focus on pay and working conditions. While initiatives to tackle the issue of low wages in some central and eastern European countries have helped to slow the numbers considering working abroad, focusing on pay alone is often insufficient without other quality of life factors that make work more attractive, such as education infrastructure, greater autonomy over working hours, access to training and career progression and more meaningful work.
Measures to make use of existing labour are especially important in ICT and in the context of the green and digital transition where skills mismatch is the biggest driver of shortages. With rapidly evolving technological developments and the growing need to identify future skills needs in a greening economy, joint efforts between governments, social partners and training providers will be critical to identify existing skills needs and forecast future ones. The 2023 European Year of Skills is an important opportunity to promote effective and inclusive investment in training across Europe.
Measures targeting underutilised groups in the labour market need to provide holistic support that addresses factors preventing labour market participation, such as health issues and lack of access to affordable care, as well as training and work experience needs. This requires the close collaboration of social partners and other relevant bodies in the context of broader measures, such as work–life balance policies and tax and benefit incentives.
The report contains the following lists of tables and figures.
List of tables
Table 1: Categorisation of policies to address labour shortages
Table 2: Overview of 40 analysed measures by sector/occupation targeted
Table 3: Classification of greening occupations
Table 4: Overview of policy measures targeting labour shortages in the health and long-term care sectors
Table 5: Summary of working group activities and goals
Table 6: Overview of policy measures targeting labour shortages in the ICT sector
Table 7: Exit to employment rates from some of the training courses offered by Interface3
Table 8: Overview of policy measures targeting labour shortages in occupations affected by the green transition
Table 9: Skills gaps and projected labour shortages
Table 10: Overview of policy measures targeting labour shortages in occupations affected by digital transition
Table 11: Overall assessment of the strength of evidence
Table A1: Overview of 40 analysed measures: country, sector/occupation targeted, temporal scope, budget and lead organisation of the analysed measures
List of figures
Figure 1: CMO framework in relation to assessing measures to tackle labour shortages
Figure 2: Job vacancy rate, EU27, Q1 2013 to Q3 2022 (%)
Figure 3: Job vacancy rates, EU27, Q3 2013, Q3 2021 and Q3 2022 (%)
Figure 4: Job vacancy rate and labour shortages as a factor limiting production (EU27), illustrated by the Beveridge curve
Figure 5: Average job vacancy rate versus average unemployment rate by Member State – Beveridge points, EU27, Q3 2020 (left panel) and Q3 2022 (right panel)
Figure 6: Proportion of companies in the manufacturing, construction and services sectors citing labour shortages as a factor limiting production, EU27, Q1 2013 to Q4 2022 (%)
Figure 7: Dynamics of labour market slack and its components, EU27, Q1 2013 to Q3 2022 (%)
Figure 8: Labour market slack and its components by country, Q2 2022 (%)
Figure 9: Share of potential additional labour force by category, country and gender, Q3 2022 (%)
Figure 10: Growth in employment in the health and social care sector by gender, EU27, Q2 2013 to Q2 2022 (thousands)
Figure 11: Job vacancy rates in human health and social work activities, EU27, Q3 2014 to Q3 2022 (%), and the change in percentage points
Figure 12: Share of extremely and highly strained jobs in the healthcare sector by country, EU27, 2021 (%)
Figure 13: Share of individuals with no or limited overall digital skills, EU27 (%)
Figure 14: Job vacancy rates in the ICT sector, EU27, Q3 2014 to Q3 2022 (%), and the change in percentage points and as a ratio
Figure 15: Percentages of enterprises that had hard-to-fill vacancies for jobs requiring ICT specialist skills
Figure 16: Share of extremely and highly strained jobs in the ICT sector by country, EU27 (%)
Figure 17: Recognition of professional qualifications for working abroad
Figure 18: Frequency distribution of overall assessment of evidence
- Number of pages
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80
- Reference nº
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EF22015
- ISBN
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978-92-897-2316-9
- Catalogue nº
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TJ-04-23-163-EN-N
- DOI
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10.2806/216577
- Permalink
Cite this publication
Eurofound (2023), Measures to tackle labour shortages: Lessons for future policy, Publications Office of the European Union, Luxembourg.