Labour shortage is a complex phenomenon with no agreed definition and therefore is described in various ways in the literature. According to a 2021 Eurofound report:
Labour shortages arise when the demand for workers in an occupation exceeds the supply of workers available who possess the required skills and are willing to work at a specific wage rate and in specific working conditions in a particular place and point in time.
Since the third quarter of 2013, the unmet demand for labour, as expressed by the job vacancy rate, rose in the EU, and stood at 2.3% in the first quarter of 2019, its highest value since 2006. After a decrease to 1.6% in the second quarter of 2020 in the EU and euro area, the job vacancy rate increased sharply to 3% in the second quarter of 2022 in the EU and to 3.2% in the euro area, according to Eurostat. Some 5.1% of jobs in the Netherlands were vacant, the highest value in the EU, followed by Belgium (5.0%), Czechia (4.9%) and Austria (4.8%).
Evidence shows that labour shortages in some sectors and occupations persist even during periods of high unemployment. The COVID-19 crisis has served to further highlight the pressing concern of long-standing labour shortages in a number of sectors (such as health and social care) that have traditionally been undervalued and low paid. Restrictions on the movement of workers have further exacerbated such shortages. In 2022, the European Employment Services annual report, published under the aegis of the European Labour Authority, highlights that a total of 28 occupations, employing 14% of the EU workforce in 2020 (27 million), were classified as experiencing labour shortages, and that 19 occupations were classified as experiencing shortages of high magnitude.
According to the European Commission:
the underlying context linked to the megatrends of technological, climate and demographic changes, as well as the globalisation of the economy, means that ongoing changes in consumer and economic demands and associated labour and skills requirements will intensify shortages, requiring the attention of policymakers if limitations to productivity, service delivery and overall economic growth and competitiveness are to be avoided.
To tackle this issue, the Commission called for a ‘paradigm shift on skills’ in its communication on a European Skills Agenda, which contains 12 actions, including some of particular relevance in helping to address labour shortages.
As mentioned in Eurofound’s report on tackling labour shortages, labour and skills shortages have been at the heart of social partners’ actions at cross-sectoral and sectoral levels for a number of years. The European social partners’ work programme 2022–2024 provides for a seminar followed by a joint research project on effective access to training, social partners’ involvement in skills intelligence, and addressing skills mismatches and skills shortages.
Employer organisations are very active on this issue. For instance, BusinessEurope and 17 European sectoral employer organisations in 2019 underlined that growing ‘skills mismatches and labour force shortages in a majority of Member States … will have a negative impact on innovation and productivity, both in highly innovative industry sectors and other services sectors’. In October 2022, at an informal Employment, Social Policy, Health and Consumer Affairs Council meeting in Prague, BusinessEurope asked the Commission to include ‘a credible EU policy initiative to improve skills matching in its work programme for 2023’.
The European Trade Union Confederation (ETUC) has stated that:
good public education systems, vocational education and training strategies are indeed essential to prevent labour shortages, seize job opportunities and ensure EU autonomy in the development, deployment, and maintenance of strategic sectors and technologies. … ETUC also urges policy makers to reinforce workers’ rights to access quality trainings.
BusinessEurope ; ETUC ; EU Skills Panorama ; European social partners ; European Pillar of Social Rights ; International Labour Organization ; lifelong learning ; vocational training
Eurofound (2022), Labour shortage, European Industrial Relations Dictionary, Dublin
https://www.eurofound.europa.eu/en/european-industrial-relations-dictionary/labour-shortage