8. Conclusions
A number of sectors and occupations in the EU are characterised by persistent labour shortages. Important underlying structural drivers include the influence of skills shortages and mismatches, new demands linked to the ongoing green and digital transitions, demographic trends, low labour market participation of certain population groups, occupational segregation by gender, the influence of labour mobility and migration, poor working conditions in some sectors and occupations, inefficient company practices, incentives provided by the tax and benefit systems, and changing worker preferences. In the future, new labour shortages are projected to emerge, likely intensified by the structural changes stemming from the twin transition.
In general, occupations with persistent labour shortages tend to be characterised by demand for lower skills. Employers’ recruitment difficulties seem to be largely an outcome of poor HRM practices (e.g. retention issues) and unattractive jobs (e.g. poor working conditions, including high job strain), rather than workers’ failing to meet high skills needs. However, there are significant differences across occupations (e.g. ICT professionals). Skills policies play an important role in reinforcing better job performance across all skill levels and enabling access to higher quality jobs. They are also central to addressing expected future labour shortages in higher-skilled occupations, which often require more time and investment to attain the necessary skills and credentials.
The green transition is expected to lead to net job creation of between 1 million and 2.5 million jobs by 2030, with resulting changes in skills needs potentially exacerbating current labour shortages. The estimated effect of the green transition on employment differs across sectors, countries, and skills groups, and will depend on the successful implementation of accompanying policies, including reskilling, upskilling and adult learning. High expansion needs and a strong segregation of men and older workers in some sectors relevant for the green transition, coupled with the increasing demand for technical, transversal and digital skills in those sectors, might contribute to existing and new labour shortages.
The digital transition is associated with increasing demand for ICT professionals, but there is little evidence of its effects on persistent labour shortages more broadly. The numbers of ICT professionals in the EU almost doubled in the last decade and are projected to expand further, driven by the interlinkages between the green and digital transitions. ICT occupations are by far the most digitally intensive form of work in the EU, with around one-third of ICT professionals’ skills being digital, compared to less than one-tenth for most other occupations. Lower digital intensity of work among women, older workers, and those with lower levels of educational achievement stems largely from underrepresentation of these groups in ICT work.
Ageing population and insufficient labour market participation of certain groups are key drivers of labour shortages. The decreasing working-age population, together with sustained consumption by a growing older population, will likely drive up labour shortages. The EU suffers from a relatively low participation rate among older people, women (especially mothers of children younger than three years old), lower-educated people, migrants, particularly migrant women, and young people. Increasing the labour market participation of these groups could help to tackle persistent labour shortages. It will also be necessary if the EU is to reach the 2030 Porto target of 78% employment rate and address the higher employment needs resulting from the green transition.
Gender segregation in the labour market contributes to persistent labour shortages. This is true in occupations where men account for the majority of workers (e.g. STEM, including ICT) and in occupations where women are overrepresented (e.g. healthcare). Gender segregation contributes to labour shortages by hindering efficient matching of labour supply and demand, and by shaping supply of certain skills in ways that make suboptimal use of women’s and men’s talents. A substantial part of gender segregation can often be traced back to gendered participation in certain education paths. Increasing participation of women in relevant educational fields offers an opportunity to mitigate future labour shortages, including in fast-growing jobs, such as ICT, that are relevant for the twin transition.
Migrants residing in the EU have lower labour market participation, hindering their potential to contribute to tackling labour shortages. They are more often employed in occupations already facing persistent labour shortages or projected to experience strong labour shortages in the future in the EU. This is particularly the case for lower-skilled shortage occupations. However, the lack of skills in the host country language(s), difficulties in recognising their formal qualifications obtained abroad, care responsibilities, and discrimination present significant obstacles to migrants in getting a (suitable) job. This leads to lower labour market participation rates and dampens their potential to mitigate existing and future labour shortages, particularly in higher-skilled occupations.
Working conditions might explain the persistence of labour shortages in certain sectors and occupations, but are not the primary driver in others. A number of sectors facing persistent labour shortages record lower median gross hourly earnings, higher job strain, and higher shares of non-standard employment, which can be associated with desired job flexibility, but also lower job security and elevated risk of precariousness than permanent employment. Similarly, some occupations characterised by persistent labour shortages report higher job strain and difficulties in making ends meet. By contrast, high-skilled sectors and occupations, such as ICT professionals, stand out as being better remunerated and having lower job strain, highlighting the need for different types of measures to tackle their shortages.
Policy actions can play a key role in mitigating persistent and future labour shortages. These include supporting labour market matching through upskilling and reskilling, including in the context of changing skills needs in light of the green and digital transitions, increasing labour market participation through provision of effective employment and social services, reforms of tax-benefit systems, attracting and integrating foreign talent into the EU labour market, and improving working conditions, including with the help of social partners. Chapter 3 presents an overview of some selected policy actions that could help to address persistent labour shortages.