Foreword
In 2022, the EU labour markets exhibited remarkable resilience despite a number of major tests, including Russia's war of aggression against Ukraine, high inflation, and an economic slowdown. We witnessed record-breaking employment levels, with the highest number of people employed and the lowest unemployment rates ever recorded. This resilience serves as a testament to the strength of our labour markets and our social market economy.
However, we must also acknowledge and address the enduring challenges. These include lower labour market participation among individuals with lower educational attainment, migrants, individuals from minority racial or ethnic backgrounds, women, persons with disabilities, as well as individuals at the beginning or end of working age. Additionally, higher inflation has eroded households' purchasing power, leading to increased severe material and social deprivation and energy poverty in 2022.
Considering these challenges and in line with the European Year of Skills, the 2023 edition of the Employment and Social Developments in Europe report provides insights into persistent labour shortages and skills gaps in the EU. It looks at occupations and sectors that are expected to continue to face labour shortages, such as those linked to construction, healthcare, science, technology (especially information and communication technologies, ICT), engineering, and mathematics. This trend is likely to increase as the population ages and the green and digital transitions progress. It also analyses the contributing factors to these persistent labour shortages which vary across occupations. For instance, shortages in STEM jobs often result from an insufficient supply of workers with highly specialised skills. In lower-skilled and manual occupations, such as long-term care work, poor working conditions and challenges in retaining workers play a more significant role.
To alleviate labour shortages, it is essential to promote the labour market participation of underrepresented
groups. Measures aimed at reducing gender segregation will also be instrumental, as persistent labour shortages tend to
concentrate in either female-dominated jobs (e.g., nurses or cleaners) or male-dominated jobs (e.g., ICT specialists).
Recognizing that addressing labour shortages is crucial for supporting economic growth and enhancing the EU's
innovative capacities, the report analyses several potential solutions. It emphasises the effectiveness of upskilling and
reskilling initiatives, as well as policies to improve the alignment of labour supply and demand. The report also
highlights the positive effects of enhancing work incentives, reforming tax and benefit systems, and improving working conditions.
Furthermore, attracting workers from non-EU countries can help mitigate shortages.
It is important to note that we have already established numerous policies under the European Skills Agenda, providing a solid foundation to address labour shortages. For instance, the Pact for Skills has facilitated the establishment of 18 partnerships in key industrial sectors, each identifying skills gaps and committing to upskilling and reskilling workers. Already this has led to 2 million benefitting from training, with €160 million invested by Pact members so far. The EU Directive on adequate minimum wages, coupled with strengthened collective bargaining, will contribute to improved pay conditions and make certain professions more appealing to workers. Recommendations on effective active support to employment, social economy framework conditions, and a fair transition toward climate neutrality provide guidance for managing the digital and green transitions. Finally, we are committed to fully implementing the European Pillar of Social Rights and meeting the 2030 EU headline targets on employment, skills, and poverty reduction.
I encourage you to join the discussion and actively participate in designing effective and innovative actions to enhance Europe's competitiveness, inclusivity, sustainability, and resilience.
