Issue link: https://maltatoday.uberflip.com/i/1503641
Lina Klesper Lina Klesper is a Legal Assistant at PKF Malta, an audit and consultancy firm 8 OPINION 13.7.2023 Scarcity of skilled workers everywhere E urope is currently facing a signifi- cant challenge: a scarcity of skilled workers across various indus- tries. is shortage can hinder economic growth, technological advancements and overall competitiveness. A recent analysis of labour market im- balances in Europe, including the EU27, Norway, and Switzerland, revealed la- bour shortages in 29 countries. e 2022 EURES Report on labour shortages and surpluses by the European Labour Authority found 38 specific occupations which are classified as widespread short- ages which were dominated by three groups of occupations; craft occupa- tions; healthcare occupations, and occu- pations related to software. ese shortages have been persistent for the past five years, indicating a struc- tural nature rather than temporary. To tackle this issue, European countries must adopt a strategic, multi-faceted ap- proach that encompasses education and training reforms, immigration policies and fostering innovation. As the 2022 EURES Report shows, var- ious factors influence the demand for and supply of labour. ose need to be taken into consideration to sustainably solve Europe´s labour problem. On the demand side, macroeconomic condi- tions, technological changes such as au- tomation, transition to a climate-neutral economy with the emergence of new types of jobs, sectoral shifts in employ- ment, regional shifts in employment demand, and employers' preferences for example for part-time contracts all play a role. e terms and conditions of employ- ment also influence the demand with focus on relative wage levels and work- place well-being. On the supply side, labour market participation in general, population ageing, education and train- ing levels, individual work preferenc- es, migration and mobility, and active labour market policies are influential. ese factors collectively shape the dy- namics of labour demand and supply. Moreover, regarding the supply side, the report showed that while the eco- nomic activity rates generally increased from 2010 to 2021, it did so unequally for different groups divided by age, sex and citizenship status. Particularly wom- en and migrants remain disadvantaged compared to men and citizens born in a country contributing to the labour mar- ket slack. is highlights that the approaches European countries are to follow must take those disadvantages, particularly concerning women and migrants in the equal access to the labour market into consideration to make sure that no one is left behind and excluded. What is the situation in Malta? Since a decade, there was a high demand for foreign labour as more Maltese young people are leaving Malta to work abroad and there's been a significant change in Malta's demo- graphic due to Malta's low fertility rate. Quoting Joanne Bondin, president of the Malta Employers Association, the island faced a rapid change in demographics over the past decade as more young peo- ple seek employment abroad combined with a fertility rate which is the lowest in Europe, and among the lowest world- wide. Bondin was referring to an interview with e Malta Independent on Sun- day in which President George Vella questioned whether Malta, as the most densely populated country in Europe, could continue importing "more foreign- ers to keep the economic wheel turning". Yet, there is no easy solution towards solving the chronic scarcity of workers apart from immigration. e major reason for the acceptance of migrant workers by organizations is to overcome severe labour market short- ages, an aging workforce, and the retire- ment of baby boomers, which has been observed in Europe. One of the prima- ry ways to combat the scarcity of skilled workers is by focusing on education and training initiatives. e high level of ear- ly school leavers in Malta diodes does not help when digitalization and now A.I competence is sought from workers. Ideally, European countries should pri- oritize the development of robust voca- tional training programs that equip indi- viduals with practical skills aligned with industry demands. By forging strong partnerships between educational institutions and businesses, students can gain hands-on experience and industry-relevant knowledge. Gov- ernments should also invest in promot- ing science, technology, engineering, and mathematics (STEM) education to nur- ture a future-ready workforce. Addition- ally, fostering lifelong learning opportu- nities through upskilling and reskilling programs can enable workers to adapt to evolving industry needs. Fostering close collaboration between educational insti- tutions and businesses is key to bridging the gap between academia and industry. ose collaborations would encour- age universities and research centres to engage in joint projects with companies promoting knowledge exchange, applied research, and innovation. Establishing internship programs, apprenticeships and industry-academia partnerships can provide students with real-world expo- sure and enable them to develop prac- tical skills. Moreover, industry experts can contribute to curriculum develop- ment to ensure it remains aligned with industry requirements, promoting the production of job-ready graduates. Is the mantra of implementing Flexible Immi- gration Policies working? Europe should consider implementing tighter flexible immigration policies to address the shortage of skilled workers. Streamlining visa processes and easing work permit restrictions can attract in- ternational talent, such as nomad work- er schemes, thus helping to fill the skills gap. Establishing pathways for qualified professionals, entrepreneurs and stu- dents to enter and contribute to the Eu- ropean workforce can invigorate indus- tries and promote economic growth. Countries can also initiate bilateral agreements to facilitate talent exchange programs, encouraging the free move- ment of skilled workers within the Euro- pean Union. Encouraging innovation and entrepre- neurship is essential for addressing the scarcity of skilled workers. Governments should establish favourable conditions for startups, providing tax incentives, access to funding, and supportive regu- latory frameworks. Initiatives like incubators and accel- erators can foster an environment con- ducive to entrepreneurial growth. By nurturing an innovation ecosystem, Eu- rope can attract skilled workers seeking professional growth and collaboration opportunities. Furthermore, fostering a culture of innovation within existing companies can inspire employees and create an attractive work environment. In that context, it should be on top of companies´ agendas to accelerate digital transformation in the short term to ac- celerate innovation in the long run. To conclude, Europe can overcome the scarcity of skilled workers through a comprehensive strategy combining ed- ucation reforms, collaboration between academia and industry, flexible immigra- tion policies, and promoting innovation. By addressing these areas and pursuing a socially just transition to a green econ- omy, Europe can cultivate a dynamic workforce capable of driving economic progress and sustaining its competitive advantage in the global market, especial- ly in light of the Green Deal and the slug- gishness of China post-Covid recovery.