Employee, where are you?

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Are you having trouble finding employees? And to keep them? There’s a specter haunting the EU – and unfortunately, it’s very real: The shortage of skilled workers. And it’s particularly noticeable in some EU countries. That’s because demographic change is in full swing here – and often more advanced than in other regions of the world. This poses challenges not only for the financing of pensions in European countries. It’s a dilemma, as no one wants to work longer, but neither do they want to forfeit their financial opportunities.

The economy is also affected: Immense expertise is being lost due to the high number of future retirees, while fewer and fewer young people are entering the labor market due to the persistently low number of children. As a result, there is a shortage of fresh skilled workers at all fronts. One could say that the term “Old World” has never been so appropriate for Europe as it is today. 

Companies are therefore doing well to retain their specialists and maintain a healthy corporate image. Today, money alone is not enough to keep skilled workers, because the next one might offer more flexible working hours, childcare, home office or other interesting opportunities. 

Many countries in Europe have this problem and have currently developed their own strategies for counteracting the impending void in skilled labor and companies. Finland, for example, recently introduced a system that determines the retirement age depending on the year of birth: Everyone born in 1955 or later must work until 67. 

Poland has a different concept: recruiting IT specialists from abroad, such as Belarus, who want to escape the dictatorship there. Polish companies also look to Latin America, Asia and Africa for suitable specialists (despite difficult work permits for foreigners).

The Italian Government wants to approach it from the other side: Boosting the birth rate. It has been falling sharply for years. It currently stands at 1.17 children per woman – lower than during World War l. In order to boost the birth rate again and integrate women more strongly into the workplace, the previous government had already initiated the construction of new childcare facilities, an increase in child benefits, longer parental leave and financial incentives for women to start their own businesses. It will probably take 20 years for these measures to take root.

France’s move to implement pension reform is a sensitive issue, driving people into the streets. Although French women have 1.83 children per capita – a top figure in the EU – the shortage of skilled workers in France also threatens to become an ever-greater problem in the coming years.

A problem that is often observed in Spain and Portugal is the rural depopulation. Compared with other European countries, young people in Spain seem to be drawn to the cities to study or work to a particularly large extent. In some regions of Spain, it is mainly senior citizens who live there today. Here, both countries have created attractive incentives for returnees. The Portuguese government even provides bonuses to those who move out to the provinces and sweetens the job for returnees from abroad with financial incentives, such as half the income tax rate.

Incidentally, the Czech Republic is leading the way in the negative trend of the shortage of skilled workers in the EU. At the beginning of 2021, the rate of unfilled positions there was already 5%. In Austria, the main aim is to get unemployed employees back into jobs. 

One thing is clear: The urgently needed skilled workers need incentives; the problem will not be solved on its own. So be nice to your employees! Be creative too and come up with something to retain your employees.