As countries across Europe try to recover from the Covid-19 pandemic, a severe labor shortage in a variety of areas threatens to hinder the recovery process. Recruiting truck drivers, store employees, and other logistics personnel has been difficult, putting a burden on already stretched supply lines. These limits have lately manifested in empty grocery shelves and long lineups for petrol in the United Kingdom (which intensify trends set in motion by Brexit and the end of free migration).
Attempts and initiatives by the hospitality industry in France, Germany, and other European nations (as well as their Canadian and American counterparts) to rebound from long-term closures or furloughs have faltered as companies struggle to find enough restaurant and hotel personnel. Furthermore, the pandemic has intensified long-standing challenges in recruiting and keeping health- and long-term-care employees due to poor pay and difficult working circumstances.
Although many of these skill and labor shortages are not novel, the pandemic has exacerbated them in several ways. To begin with, the public health measures put in place to prevent the spread of the virus, as well as the accompanying economic crisis, displaced many individuals from their jobs, particularly those in more precarious or low-paying positions.
As the economy recovers, firms must cover the costs of employing and training new employees while also incentivizing former employees to return to their previous positions. Furthermore, the pandemic has thrown off the availability of employees. Some workers have changed professions in the last 18 months in quest of possibilities that are better paid, more stable, or provide safer working circumstances.
In the meantime, the pandemic has forced some immigrants to return to their home countries. This is already taking place while persistent restrictions on travel and public health measures have hampered intra-EU movement and third-country immigration, posing a problem for industries where immigrants are over-represented, such as food production and hospitality, as well as health care.
As a result of the crisis, immigration policy has received fresh attention as a strategy for meeting some of these objectives. Germany, Spain, and other European countries, for example, have gone to incredible lengths to accept seasonal agricultural workers from other countries (such as Romania and Bulgaria) or even further afield (such as Morocco) all through the pandemic, which includes chartered flights and waivers from travel restrictions.
To help address labor shortages in these areas, the government of the United Kingdom recently expanded its seasonal worker program for agricultural employees to include 5,000 truck drivers and 5,500 poultry workers.
Employers are reporting renewed challenges in hiring people in fast-growing, knowledge-intensive industries such as science, technology, engineering, and mathematics (STEM), which need sophisticated technical and soft skills, while constraints are most acute in low- and middle-skilled occupations. These demands will only become more apparent as Europe’s population ages and workforces decline, and demand for high-skilled and precarious employees grows.
The pandemic has also reignited discussion over whether labor shortages are genuine and which are the result of companies refusing to pay competitive salaries or provide appropriate working conditions.
Prior to the pandemic, governments were taking steps to reform immigration policies to make it easier to admit specialized workers, as evidenced by Germany’s Skilled Immigration Act of 2020. And these renewed shortages may add urgency to planned reforms, such as the European Commission’s current push to finish reforms to the Blue Card Directive for skilled professionals and introduce a skills and talent policy package by the end of the year. This is due in part to the continued difficulty of precisely determining which occupations (and where) are currently facing shortages on a regular and recurring basis.
Economic growth and recovery provide an opportunity for governments to reconsider their immigration, education, and labor market policies, as well as how these policies interact. Evidence demonstrates that immigration can help solve labor market demands, both today, when companies are struggling to fill positions, and in the medium to long term when skills gaps emerge. However, immigration policy decisions should not be made in isolation from efforts to guarantee that all employees have good working conditions and competitive salaries, as well as to provide workers with the tools they need to navigate rapidly changing labor markets.
As Europe begins to recover economically, governments will need to address rising recruitment obstacles. Governments should not be afraid to use flexible and responsive labor mobility policies to accommodate growing requirements, both in the short and medium to long term. Current shortages also highlight the need for complementary changes, such as bettering the recognition of foreign educational and professional credentials, and investigating how and where EU-level efforts might produce economies of scale.
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