Measures to tackle labour shortages: Lessons for future policy

A strong labour market recovery in the aftermath of the COVID-19 pandemic, together with ongoing demographic trends, have exacerbated labour shortages in the EU. By 
the third quarter of 2022, the average EU vacancy rate had reached historic highs of close to 3%, with nearly a third of EU employers reporting that these shortages are 
a factor limiting production and service delivery – the fight for talent being most acute in countries like Austria, Belgium, Czechia, Germany and the Netherlands. Sectoral 
differences are also evident: shortages in healthcare and the information and communication technology (ICT) sector have been exacerbated by the pandemic. With 
the ending of most restrictions, labour market tightness also increased in sectors such as hospitality and retail, which were particularly affected by lockdowns and had 
shed labour, as many workers found employment in sectors with better working conditions. The impact of the green and digital transition increasingly influences skills 
mismatches, contributing to a shortage of appropriately skilled labour, as digital skills in particular are increasingly becoming core skills.

Labour market slack was at the lowest level in a decade in late 2022, again displaying variations between countries and demonstrating that there are still opportunities to integrate underutilised labour into the labour market.