Europe heads for jobs crunch that may be deeper than in US

The labour shortage that is hitting the US as the nation rebounds from the pandemic is also coming to Europe, where it could prove even more difficult to fix.Like the US, where April’s payroll growth fell far short of expectations, Europe will struggle to match workers with jobs. That’s despite unemployment at more than 7% in the European Union – and more than twice as high in Greece and Spain – which isn’t predicted to return to pre-crisis levels before 2023.In the short term, coronavirus travel restrictions mean workers can’t cross borders as easily as usual within the 27-nation bloc. That’s a problem because the EU is about to start dishing out its €800bn ($977bn) recovery fund, which is focused on environmental and digital industries that will require specialised workers.But the networks and pipelines that provide new workers have also been disrupted, which will have a lingering impact. Job fairs have been cancelled and vocational training programmes upended. Universities have seen a slump in foreign students. That will all exacerbate the existing challenge of the region’s unfavourable demographics.Brexit has imposed an additional barrier to movement of labour, because the trade deal between the UK and EU that started this year includes restrictions on movement and only limited mutual recognition of some qualifications.“In Europe, the problems are more structural,” said Axel Pluennecke, an economist at the German Economic Institute in Cologne. “Especially in the technical professions, areas like digitisation, decarbonisation, there will be big demand for qualified workers. You really have to wonder whether this demand will be met.”The region is already feeling some of the impact of the border closures imposed during the pandemic. Net migration to Germany, Europe’s largest economy, fell by about a third in 2020. Norway is short of specialised hospitality workers such as foreign rafting guides, and relaxed entry restrictions last month to include workers “strictly necessary to avoid downtime in projects or businesses for the next four months.”Swedish battery-cell manufacturer Northvolt AB needs 3,000 workers for a factory under construction in Skelleftea, and its chief executive – former Tesla Inc executive Peter Carlsson – has repeatedly highlighted access to expertise as a key challenge.An EU report in December identified shortages in construction, engineering, software development and – more prominently than in the past – healthcare. Likewise, training schools have been hit by closures and social distancing rules. Signups for vocational programs in Germany, which prepare young people for hundreds of specialised professions, declined more than 9% last year in a “clear effect” of the pandemic, according to the nation’s statistics office.Austria, which has a similar system, had more than 8,000 unfilled training positions at the end of April. The Austrian Economic Chambers resorted to deploying virtual-reality goggles, which Deputy Secretary General Mariana Kuehnel said helps highlight less well-known career opportunities to young people.German universities had almost 30% fewer international students last year, and many studied online from their home countries, eliminating the social interactions that often convince them to stay for a job after graduating.“The challenge for companies, for countries, is to synchronise the job disruption with the job creation,” said Alain Dehaze, chief executive of Swiss-based global recruitment agency Adecco Group AG. “You’ll have structural changes in mobility, in consumption, and it’ll have an impact on jobs.”