Top 15 European Nations Facing the Most Severe Labor Shortages

"In this article, we explore the 15 European nations grappling with the most severe labor shortages. We delve into the broader occupational challenges facing Europe. If you prefer to skip our detailed analysis, you can jump directly to the discussion on the 5 Countries With The Highest Labor Shortages In Europe.

In 2022, despite facing various challenges such as geopolitical tensions and economic slowdown, the EU demonstrated remarkable resilience in its labor market. Employment surged to a record high of 213.7 million, with an employment rate reaching 74.6%. Concurrently, unemployment rates plummeted to a historic low of 6.2%, while youth unemployment dropped to 14.5%. For more insights into unemployment rates, you can explore countries with the lowest unemployment rates.

Nevertheless, labor shortages persist across Europe, affecting critical sectors like construction, healthcare, and STEM fields. This scarcity is compounded by the aging population, as the working-age demographic declined from 272 million in 2009 to 265 million in 2022, projected to further decrease to 258 million by 2030. To learn more about global labor shortages, see countries with the highest labor shortages in the world.

Despite advancements in digital transitions, the impact primarily resonates in ICT-related occupations, where one-third of required skills are digital. However, shortages are anticipated to endure in various occupations due to evolving skill prerequisites and subpar working conditions in certain sectors. Migrant workers from outside the EU significantly contribute to addressing these shortages, particularly in low-skilled occupations. Gender disparity in the workforce further complicates matters, with 86% of shortage occupations attributed to gender imbalances.

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Methodology

For countries facing the highest labor shortages in Europe, we relied on Manpower Group's Report on Talent Shortages for 2024 to determine the percentage of skilled labor shortages by country. In instances of similar skilled labor shortage percentages, we referred to the World Bank's data on the aging population (as a percentage of the total population) by country to break ties. The country with a higher percentage of aging population was prioritized. By the way, Insider Monkey is an investment website that employs a consensus approach to identify the best stock picks from over 900 hedge funds investing in US stocks. The website tracks the movements of corporate insiders and hedge funds. Our top 10 consensus stock picks from hedge funds have outperformed the S&P 500 stock index by over 140 percentage points in the last 10 years (details here). So, if you're seeking the best stock picks to purchase, you can benefit from the insights of hedge funds and corporate insiders. Here is a rundown of the countries facing the highest labor shortages in Europe:

15. Switzerland

Skilled Labor Shortage: 73%
Aging Population: 19%
According to Adecco, the IT sector in German-speaking Switzerland witnessed a noticeable easing, with a significant surge in job seekers last September. Labor shortages were more pronounced in German-speaking Switzerland, at 28%, compared to a 14% increase in French-speaking Switzerland. While German-speaking Switzerland experienced a 16% decrease in job seekers and an 8% increase in vacancies over a year, French-speaking Switzerland saw a 10% decrease in job seekers and only a 3% increase in vacancies. It stands among the countries experiencing skill shortages in Europe.

14. Hungary

Skilled Labor Shortage: 73%
Aging Population: 20%
In Hungary, stringent immigration policies have led to a shortage of laborers, prompting the government to open doors to foreign nationals. Nearly 700,000 Hungarians sought work abroad, necessitating the creation of approximately half a million new jobs. Companies are recruiting hundreds of workers monthly from Asia. Notably, a Hungarian-Italian company hired 60 Indonesian workers for an electric cable factory. Despite concerns regarding cultural compatibility and wage negotiations, foreign workers are welcomed, alleviating labor shortages.

13. Belgium

Skilled Labor Shortage: 74%
Aging Population: 20%
In Belgium, regional shortage occupation lists aid job seekers, particularly foreigners, targeting sectors with skilled worker deficits. Each region - Flanders, Brussels, and Wallonia - manages its list through respective employment agencies. These lists inform policy initiatives aimed at addressing labor shortages in sectors like healthcare, IT, and hospitality, aligning with the European Commission's Year of Skills. It ranks among the countries urgently requiring healthcare professionals in Europe.

12. Italy

Skilled Labor Shortage: 75%
Aging Population: 24%
Italy faces critical labor shortages across various sectors and aims to fill 600,000 job vacancies by welcoming skilled foreign workers. Urgent demand exists in healthcare, science, engineering, and hospitality, with professions like doctors, nurses, engineers, and restaurant staff topping the list. Italian employers have shown overwhelming interest, submitting 608,000 pre-applications for non-EU workers, but the annual quota stands at 136,000, creating a significant gap. Italy contends with one of the worst aging population growth rates in Europe.

11. Sweden

Skilled Labor Shortage: 77%
Aging Population: 20%
In autumn 2022, private employers in Sweden faced a 41% skills shortage in recruitment, while public employers experienced a higher rate at 60%. Professions like midwives, civil engineers, IT architects, and police officers faced acute shortages. Other occupations, including healthcare assistants, bus drivers, and welders, also experienced notable deficits. Highly skilled roles such as doctors and specialist nurses were particularly affected. Surprisingly, Sweden boasts one of the highest job opportunities in Europe.

10. Austria

Skilled Labor Shortage: 78%
Aging Population: 20%
Austria aims to attract over 15,000 skilled workers annually from non-EU countries by 2027 through the Red-White-Red Card system, intending to streamline access to the labor market. Collaboration among organizations will expedite procedures. Despite efforts, criticisms suggest companies must improve working conditions to effectively address labor shortages. It ranks among the countries facing the worst labor shortages in Europe.

9. Spain

Skilled Labor Shortage: 78%
Aging Population: 20%
Spain confronts a dire labor shortage in its hospitality sector, with a staggering demand for 60,000 workers. This shortage stems primarily from a surge in international tourism, evidenced by a 65.8% increase in visitors in January compared to last year.

8. Slovakia

Skilled Labor Shortage: 79%
Aging Population: 17%
In 2022, Slovakia witnessed a significant rise in the presence of Indian workers, reaching 1,350 individuals, mainly due to worsening staffing shortages in the IT and automotive sectors. Confirmation of this increase came from the Labour, Social Affairs, and Family Office, underscoring the valuable contribution of Indian and other Asian nationals in filling critical job vacancies, including positions such as truck drivers and welders. It stands among the countries with the highest job openings for Asians in Europe.

7. Romania

Skilled Labor Shortage: 79%
Aging Population: 19%
In 2019, a nationwide study in Romania revealed a substantial labor shortage of 300,000 individuals, projected to escalate to 549,000 by 2023. According to the Randstad HR Trends Study, the country could potentially face a workforce deficit of one million. This shortage is exacerbated by the migration of professionals, including healthcare workers, temporary laborers, IT specialists, and students, all contributing to the widening gap.

6. United Kingdom

Skilled Labor Shortage: 80%
Aging Population: 19%
Since the implementation of the post-Brexit points-based immigration system, foreign interest in UK jobs has surged, with Indeed reporting a doubling in inquiries, notably from non-EU nations like India and Nigeria. The proportion of foreign job searches escalated to 5.5% in June 2023 from 2.2% in April 2021. Key sectors attracting attention include social care and software development. The UK stands as one of the best countries for education.

5. France

Skilled Labor Shortage: 80%
Aging Population: 22%
France's hydrogen industry faces an urgent need for tens of thousands of workers by 2030, anticipating around 100,000 jobs. However, labor shortages and inadequate training hinder progress. In 2022, the sector had 6,800 positions, up 77% from 2019. France, like other European countries, grapples with workforce shortages, impeding the sector's development.

4. Ireland

Skilled Labor Shortage: 81%
Aging Population: 15%
Ireland contends with a significant labor shortage crisis, as highlighted by an investigation conducted by the Irish Sun. Across its ten crucial industries, an estimated 100,000 vacancies exist, with construction, hospitality, and healthcare sectors experiencing acute shortages.
To alleviate this shortfall, Ireland welcomes 40,000 non-EU workers annually. The government has streamlined the process for issuing non-EU visas for skilled workers, granting 39,955 such visas last year. Ireland also ranks among the best countries to live and work in 2024.

3. Portugal

Skilled Labor Shortage: 81%
Aging Population: 23%
Portugal grapples with a substantial labor shortage, with over 58,000 job vacancies persisting for more than 100 days across eight key sectors, as reported by Eurostat. Shortages are particularly acute in industries like information technology, healthcare, hospitality, construction, agriculture, and renewable energy.
To address this challenge, Portugal launched the "Working in Portugal" program last year, aiming to attract foreign workers to fill these crucial roles. Salaries in high-demand sectors like IT, business support, healthcare, and construction are competitive, presenting lucrative opportunities for skilled professionals. Notably, the Center region of Portugal is witnessing an increase in job openings, spanning from machine operators to positions in healthcare, transportation, and civil construction.

2. Germany

Skilled Labor Shortage: 82%
Aging Population: 22%
Even amid Germany's economic stagnation, half of its companies grapple with labor shortages, according to the DIHK Chamber of Commerce and Industry. The shortage of skilled labor remains a critical issue, with 50% of surveyed firms reporting difficulty in filling vacancies, though there has been a slight decrease since January. Around 1.8 million positions remain unfilled, with a potential loss of over 90 billion euros in added value, exceeding 2% of the GDP. Industries like construction and manufacturing are particularly affected, with 54% and 53% of companies respectively facing labor challenges.

1. Greece

Skilled Labor Shortage: 82%
Aging Population: 23%
The Greek government recently approved a bill to legalize approximately 30,000 undocumented migrants, responding to a pressing labor shortage across several sectors of the economy. This decision is a direct response to the significant exodus of workers due to the Covid-19 pandemic, notably impacting industries like agriculture, tourism, and construction. While opponents express concerns about potential risks and the possibility of encouraging more illegal migration, proponents argue that the legislation will facilitate the integration of migrants into the labor force, generate increased public revenue, and alleviate the current shortage of workers. Greece tops the list as the country with the highest labor shortages in Europe."