Europe’s attempts to recover from Labor Shortage

Mathijs van der Kooi
Last updated: 9 Nov 2021

Europe’s attempts to recover from Labor Shortage

Mathijs van der Kooi
Last updated: 9 Nov 2021

Europe was the most affected continent after the pandemic. The pandemic saw a significant fall in labor supply in European countries like the Netherlands. It’s confirmed that there is a labor shortage crisis where there are fewer workers than there are jobs.

At least a quarter of companies operating in the Netherlands have a personnel shortage that worsened in the spring of 2021. Sectors dealing with catering, tech, and childcare are also experiencing labor shortages. Experts estimate that Germany would have a lack of about 2.4 million workers in 2020.

How Did the Labor Shortage in Europe Come About?

Over the years, there has been a discrepancy in labor supply in Europe, since the workforce consists mainly of an aging population. The sensible explanation of how the labor shortage worsened in Europe is that the interruptions came with the pandemic.

For instance, there were restricted movements. The effect was a concurrent interruption of migration. Reduced immigration was just one of the factors. The rest are:

  • Workers changed occupations
  • Migration complications
  • Workers became picky about the work they were willing to do
  • Low wages for an available worker
  • Poor work environment

Suggested Solutions to Resolve the Labor Shortage Crisis

The labor shortage in Europe has significantly affected the economy negatively. It will take time to recover. Experts have suggested the following solutions to help restore labor.

Investing In Skill Development

Some instances of labor shortage have emerged because potential workers lack the specific skills required. Employers will have to pay attention to ensure employee development. Previous methods applied to equip workers with valuable skills will not work.

Employers will have to do more and make more time for development. Assessments during training will show employers who is suitable for what position. At the same time, the wages for every job should match the work done.

More Part-time and More Expatriation

Old and new workers have to accommodate fewer part-time hours since companies cannot reimburse for longer part-time hours. Europe relies on immigrants to take up those opportunities to help bring the economy back on its feet.

Still, there is much to be done to bridge the gaps in the number of hours that migrant workers can work and the duration locals can work. Expatriates would be willing to take up open vacancies were it not for such policies.

The Labor Forecast revealed that there will be a spike in workforce contraction between 2020 and 2030. Modifying the wages paid for certain factors like wages and work conditions could encourage immigrants to seek those opportunities.

More Inclusion

The Netherlands is one country in Europe where most workers work on a part-time basis. A considerable fraction of that part-timing group are couples who prefer to work less, save some money, and have time to take care of their children. The alternative of working on a full-time basis means that couples have to rely on Childcare Allowance, which is expensive.

There have been attempts to show how allowing those who want to work more could help with the labor shortage crisis. The goal is to eliminate the state of vulnerability that comes with seeking a full-time-paying job. In return, the state of the economy will improve as well.

Will Europe Recover From Labor Shortage

Europe was one of the most affected continents when the pandemic struck. The labor shortage cut across all sectors, and severe economic contraction was imminent. Fortunately, reliable sources suggest that the labor shortage will not last.

If stakeholders can embrace the suggestions above, there will likely be a significant improvement in labor supply. Consequently, the European market will also recover.

Get in touch with us to learn more about the chain reaction of labor shortages in Europe.

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