WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

The map of job opportunities in the EU-28 is changing rapidly and is expected to look significantly different in the near future. The change in job demand requires an adequate labour supply in terms of skills which can match the needs of the market. The EU-28 countries are aware of this and a number of policy decisions have been taken to meet the changing and future demand for jobs.

The most recent forecasts from the European Centre for the Development of Vocational Training (CEDEFOP) on future labour market trends in the EU, and in particular about the demand for skills, point out that the EU-28 countries are facing a growing demand for jobs with competences coming from both ends of skill distribution. However, the demand growth is expected to be relatively more pronounced for high-skilled occupations such as ‘Professionals ¹⁾ (by nearly 7 million), followed by ‘Technicians, Associate Professionals’ (by around 4 million) and ‘Managers’ (by more than 2 million new jobs). Demand for ‘Elementary jobs ²⁾ is forecast to expand by only 1.7 million. In contrast, job opportunities that fall into the category of skilled manual or non-manual jobs  (medium-skilled jobs) such as ‘Clerks’, ‘Service workers’ and ‘Plant machine operators’ are expected to shrink by more than 5.5 million.

Uneven expansion of future job demand across EU-28

In countries such as the UK, Italy, France, Germany and Spain, most of the newly created jobs will belong to the category of high-skilled occupations. In contrast, most job opportunities in Bulgaria will be in the category of ‘Elementary’, while in Ireland they will mainly be in ‘Craft and related trade workers’ and ‘Elementary’ workers. In addition, while the demand for high-skilled jobs such as ‘Professionals’ will expand in all EU-28 countries, the demand for ‘Managers’ will shrink for quite a large number of countries such as Germany, Sweden, Romania, Portugal, Latvia, Lithuania, Greece and Estonia. Technicians will continue to be among the most wanted in the UK, Spain, Germany, Italy, and France but they will be in less demand in the Netherlands, Hungary, Poland and Romania. 

Overall the number of job opportunities related to skilled manual or non-manual labour is forecast to decline. However, the number of occupations in the category of ‘Service workers and shop and market sales workers’ is expected to grow the most for countries such as Austria, Greece and Slovakia. Further, the demand for ‘Clerks’, e.g. in the UK, France, Germany and Austria, will decline by more than the expected increase of demand in ‘Services’. Italy is the country that is expected to have the most drastic decline in ‘Services’.

Thus the overall mapping of trends in job opportunities suggests that the expanding demand for high and low skills might be a challenge for the EU-28 by 2025, and the heterogeneity of demand expansion for certain groups of occupations across EU countries may complicate this challenge still further.

Bottleneck occupations

At the current stage, qualitative skill shortages, mainly related to difficulties in recruiting people with the adequate skill level required for the job, are a phenomenon which has become more common in the EU-28 countries (EU 2014). Bottleneck occupations are already emerging and these are strongly related to skill shortages.

This is particularly the case for occupations that are high skill dependent. The study (EU 2014) points out that bottleneck occupations mainly fall into the category of ‘Professionals’, in particular ‘Science and engineering’, ‘Information and communications technology’, ‘Health’ and ‘Business and administration’. Some of the countries that are expected to have the largest expansion of high-skilled occupations are already facing important bottlenecks in occupations such as ‘Information and communications technology professionals’ (e.g. Italy, Belgium and Sweden), or ‘Health professionals’ (e.g. France and Finland).

The second largest group of bottleneck vacancies is found among occupations in ‘Metal, machinery’ and ‘Building and related trades workers’, ‘Food processing, wood working, garment and other craft and related trades workers’ and ‘Electrical and electronic’, which are all non-routine jobs where medium skills are needed. A third important group of bottleneck occupations belongs to ‘Personal service and care, sales workers’.

Mitigation strategies and the role of immigrants and foreign students

The EU-28 countries have already adopted mitigation strategies to address the issue of bottleneck vacancies in the high-skilled segment. A common approach used by employers is recruitment from other EU countries or from outside the EU (EU 2015).  Accordingly, companies are adopting strategies in line with the EU agenda on migration which sees not only intra EU-28 mobility but also immigration from non-EU countries among the principal solutions in addressing the labour market needs in the EU 28.

What about the potential of foreign students for satisfying the demand for high-skilled labour in the EU-28? The stock of foreign students in tertiary education in the EU-28 was around 1.8 million in 2012, of which 60% originated from outside the EU. The most attractive EU countries for non-EU students appear to be the UK, absorbing 36% of total foreign students in the EU-28, followed by France (20%), Germany (16%), Spain (6%) and Italy (4%).

So far, this potential has remained largely unexploited as the number of students who have switched from studies-related to work-related migration is almost negligible. The share of foreign students who converted their education related permit of stay to a permit for remunerated activities was only 3% in 2013. In previous years, the respective numbers varied significantly.

An important source of human capital is: (i) available from outside the EU (immigrants) and (ii) within the EU (foreign students), remains untapped or underutilised in spite of a desperate demand for high-skilled workers for both now and in the near future.

Footnotes:

¹⁾ Under this category, we find occupations such as science and engineering professionals (e.g. mechanical engineers, electrical engineers), health professionals (e.g. specialist medical practitioners, nursing professionals), information and communication professionals (e.g. software developers, system analysts).

²⁾ Under this category, we find occupations such as cleaners and helpers, refuse workers and other elementary workers (e.g. garbage and recycling collectors), agricultural, forestry and fishery labourers.