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EU urged to address paradox of high unemployment and skills shortages

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Published 06 June 2013, updated 11 June 2013

While many countries around the world are opening their borders and are introducing more flexible and liberal migration policies, the EU is not following the trend. This has led to the paradoxical problem of labour shortages in crucial sectors at a time of very high youth unemployment, experts say.

If Europe wants to remain one of the best and most competitive economies in the world, it needs to change its labour migration policies.

Faced with long and complicated procedures to hire employees in the EU, many global companies have decided not to establish themselves in Europe and re-direct their development strategy towards emerging economies such as Brazil, India and China.

At the moment youth unemployment in countries such as Greece and Spain has exceeded 50% while at the same time, the IT sector in Europe has a projected deficit of 700,000 skilled workers by 2015.

"How is it possible?" Dutch MEP Jan Mulder from the Alliance of Liberals and Democrats for Europe (ALDE) asked at a Parliament-held event on Wednesday (5 June).

"Apparently, the market that we have at the moment does not work adequately and we have to reflect on this situation. In the Parliament, we have a number of proposals from the Commission which we are discussing at the moment. I can only say that in all the negotiations with the Council that the end is probably in sight, but the progress has been tedious," Mulder said.

Pointing to the problems

Ameet Nivsarkar, vice president of Nasscom, India's national association of software and services companies, said that an applicant from a third country has to go back to his or her home country for a work permit each time the individual changes country in the EU.

"This is the reality. This is extremely difficult and who is paying the cost for all of this? The final cost is for the European customers and the European economy. It's a real-life problem.

"Countries have individual programmes for, for example, visa issues and work permits which are not difficult. One problem is that there isn't mutual recognition and the second problem is that there is no harmony or consistency."

Carl-Johan Hamilton, founder of Ants IT-support in Sweden, a consultancy which helps companies recruit workers, mentioned the different EU languages as a big obstacle for labour migration - even in his home country which is known for a liberal migration policy.

"Swedish is important in Sweden. There are people who can only speak English who work in Sweden, but it is surprisingly difficult for even various international companies. This is definitely a barrier," Hamilton stated.

Changing member state attitudes

Stefano Manservisi, director-general of of Home Affairs at the Commission, underlined that at the moment member states and national authorities are not willing to discuss how to ensure that companies can hire more migrants.

At the same time, what is happening with quotas or equivalent techniques decided at national level is not progressively discussed at EU level, he emphasised.

Migration remains a question which is controversial and therefore it's not that easy to put the issue on the agenda, the director-general said.

He added that the solution could be to make an evidence-based case working with the industry and social partners which together can demonstrate with facts and figures what is the situation now with unfilled gap and unemployment and jobs.

"If we want to still have an open economy, which is the best way to keep our internal market, I think we should remain open and even more attractive for the big talents which are developing elsewhere in the world," Manservisi said.

Positions: 

Sergio Carrera, senior research fellow and head of Justice and Home Affairs at the think tank CEPS, commented:

"Across the member states there is a rigid framework in addition to EU laws. Besides the EU blue card, there are also national schemes which make things even more complicated. I think the EU Commission in order to ensure the value of its directives and EU blue card needs to be very meticulous in assessing the extent in which governments are implementing this in practice."

Swedish MEP Cecilia Wikström from ALDE and Parliament rapporteur on the new directive to improve EU attractiveness and accessibility for foreign researchers and talents, said:

"Migration is not only, as many EU countries think, a matter of security but it is also an instrument to boost economic growth and competitiveness and a contribution to make social systems more sustainable, especially for those countries confronted with an ageing population.

"It is incredible that out of fear or political prejudice, many Member States are depriving their companies of the skilled labour they need. It is even more incredible that they don't conceive a system to encourage third country residents who studied or were trained in their territory to access their labour market. The battle for talents has its consequences".

Next steps: 
  • 2016: The two current directives on how to make the EU more attractive for students and researchers will be modified and replaced by a single new directive.
Henriette Jacobsen

COMMENTS

  • The EU has developed the Blue Card program. This program makes it easier and more attractive for highly qualified, third-country nationals to work in the European Union.
    The EU Blue Card deserves a lot more promotion and attention as it can play a crucial role in Europe's economic recovery.

    By :
    Michael
    - Posted on :
    06/06/2013
  • Definitely mastering English is a must if the EU is to move ahead. Like the article stated, doing business outside of the EU is preferable since we are saddled with high taxes, high labour costs, and red tape in retaining a workforce. Don't hold your breath for change. There are too many vested interests in maintaining a closed economy.

    By :
    John
    - Posted on :
    06/06/2013
  • High youth unemployment and shortage of skilled labour is not a problem particular to the European Union. It is also a problem in Asia. Shortage of skilled labour is also a problem and leads to import of skilled labour. Youth want to enter into academic universities thinking that that will lead to higher paying jobs and status, upward social mobility but the fact is that become unemployed or unemployable. They would be better off learning skills but learning skills must lead to better paying jobs and status but corporations are working on the basis of cheap skilled labour and these are found in Asia and elsewhere and in the new Member States of the EU. So, it needs re-thinking of corporations especially if they embrace CSR that raising wages for skiled labour is a social responsibility even if it cuts into their profit margins. if corporations believe also in humanity, in human values, they have to raise wages and better the social status of labour. Money means better life and social status which is a feature of capitalist life.

    We must note also that not everyone can be skilled to that high degree required and so what is to be done for those with lower skills or without skills. How can they have gainful employment? Are they condemned to living on unemployment benefits? Unemployment schemes now speak of skilling the unemployed but are these the correct skills. Corporations must come in to state what skills are required and give all a chance to be skilled. Obviously individual attitudes are important to learn skills, to learn about being independent and not be dependent on the dole.

    This subject is more complicated of course. This is just one viewpoint. The development of capitalism, of the needs of industry, of the services sector .... are full of contradictions.

    By :
    Paul Lim
    - Posted on :
    08/06/2013
  • The obvious thing here is that the numbers of Young Unemployed is a reflection of Society's ails. In the UK and Netherlands companies can retain employment of the over 65s and allow them to work for less than the Statutory Week in deference to the employment of the Younger People who desperately need jobs. this must be wrong.
    I know of a Company which is based in the EU will create over 4000 jobs immediately with four shovel-ready projects to convert waste to the renewable fuels and three onfollowing further projects. These will make the renewable fuels Ethanol and Butanol for immeditae use in the EU within 2 years and deliver these fuels at a price directly to the consumer at €urocents 65 per litre for Ethanol and €urocents 80 per litre for Butanol.

    By :
    Paul
    - Posted on :
    11/06/2013
  • From my perspective, the issue would seem to be that the EU is not up-to-date with either present or future skills needs. So for instance EUROGEO estimates the geospatial sector (an ICT sector) now has a shortage of 45-50,000 workers in Europe. The trouble is the geospatial sector is not even defined as a workforce group by the EC - so no research is being carried out to understand the needs and demands of an industry growing at 7-10% per annum.
    Europe needs to identify these areas and focus on developing education in them. The iGuess 2 project (www.iguess.eu) has introduced and piloted state-of-the-art training, but this needs to be scaled up. What options are there for this to be done? Very few. National education systems do not respond, even when facts are placed before them. They cite lack of opportunity, a crowded curriculum or slow change processes as reasons why tradition permeates.
    So antiquated education systems dominate across Europe. National curricula provide little or no incentive for innovation, they are dominated by agencies who do not encourage change. As a result, the uses of ICT in education remain predominantly based on 1990's parameters. Social media, the Cloud, mobile devices and Web 2.0 are not embraced, in fact they are actively discouraged as 'disruptive' in many institutions.
    The EC is also slow to respond, while looking at futures is being attempted (for example via Futurium), implementing and managing change requires strong leadership in education. Training (and rewarding) of generations of education leaders is essential - those with open minds and creative visions.
    Under the digital-earth.eu project (www.digital-earth.eu) we are trying to identify and reward Centres of Excellence across Europe, who can respond to the changing technological environment, support teachers and educators, work with the (geospatial) industry and advise Ministries and other stakeholders. Is this a model that could be tried with other skill shortage areas?

    By :
    Karl Donert
    - Posted on :
    11/06/2013
  • As someone who has worked in the European IT sector for over 40 years in both highly technical and senior management positions, I really have to seriously question the statement: “the IT sector in Europe has a projected deficit of 700,000 skilled workers by 2015”.

    Over my time in industry I have regularly been subjected to the ‘IT skills shortage’ refrain. It’s nearly always disingenuous and easily misconstrued by politicians. I suggest there are two main reasons for this chronic perceived shortage of IT skills.

    It’s the very nature of IT that new software packages, development frameworks, languages, security requirements, etc are continually coming on to the market offering various business advantages. New software does indeed generate need for new skills and experience. But the problem arises when companies and public administrations instantly expect to be able to recruit staff with experience of this new software. Of course they won’t (yet) exist, so the cry of “skills shortage” goes up and they demand that governments do something.

    We have plenty of clever and resourceful IT people in Europe already, but they must be trained and constantly retrained to take advantage of new developments. Any organisation claiming there is a ‘skills shortage’ has an inadequate staff training programme. They want to push the problem on to governments and abnegate their responsibilities to their staff.

    The second reason (as hinted by other commenters) is simply cost saving. Often there are skills available within Europe, but is cheaper for companies to bring people in from outside. Skills are wanted - but on the cheap. A bogus ‘skills shortage’ is a mere smoke screen to bring in cheap labour. Of course this is only short term, as once skilled practitioners come to Europe their rates soon rise to local norms. And so the cycle continues...

    If we train our IT staff properly, help them to regularly update their skills, and then pay them adequately in recognition of those skills, the supposed ‘skills shortage’ will be fully under control.

    By :
    Martin
    - Posted on :
    11/06/2013
  • To Paul, I have heard that it is more expensive to pay the pension bill than to pay unemployment allowances. This is a big contradiction. The pensioners paid for their pension and expect the return. So, it is easier to keep them in jobs. There are countries like Canada and Australia which, I understand do not have retirement ages and so people keep working. The experience and skills are considered valuable. Of course, young people cannot get in. If there were places for young people to occupy, will employers want to employ young people on long term contracts. We are seeing an age of precarious jobs.

    I am concerned about those who have no university education as most of us responding are. Where are the jobs for them.

    Martin spoke of cheaper foreign skilled labour in the IT. There's lot of it in Asia, for example. Trying to bring in Indians. This is an issue of the international division of labour, globalisation.

    Yes, education is an issue. Has always been an issue of how university and industry cooperate. Industry too has to play a part in getting directly involved in curricula-building and not expect universities and schools to produce instant skilled workers. German dual system could be looked at.

    This problem of education is world-wide. What is education for? Commodfication of education: is it good? Does it produce the creative and inventive mind? ETc. Etc.

    By :
    Paul Lim
    - Posted on :
    14/06/2013
  • I understand the EU policy to stabilize the economy and make every thing viable again. The EU blue card is a very strong tool if you agree with, but ever since I was aware of this scheme I have applied and waiting if an employer to approach me.
    All I see any time I log on is the numbers of viewers which keep increasing, and in my preferences I think i have chosen the right countries.
    Am not convinced that the head hunters are really facing challenge of staff. I wish to know if there is something i missed out or its not just forthcoming.
    Regards
    Zino from Nigeria

    By :
    Zino Mills
    - Posted on :
    22/07/2013
Background: 

The European labour market is confronted with a paradox: while confronted with a record unemployment in its member states, millions of jobs remain unfilled in many sectors key economic development.

Despite all efforts to bring down unemployment and match skills in the domestic labour force, Europe-based international companies and SMEs face huge problems to hire the people they need.

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