Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Labor and skills shortages in Europe - statistics & facts
Across Europe employers are finding it harder to attract and retain staff with the right skill sets. This is reflected in the growing job vacancy rate in the European Union, with Germany in particular being highlighted as a country experiencing an acute shortage of qualified workers. include construction, healthcare, software development, and a range of manual professions. Labor and skills shortages are both a short- and long-term challenge for the European economy slowing down economic growth and strained public services like public health.
Unemployment has fallen to new lows in the European Union, reaching six percent in 2024, while the job vacancy rate - a measure of vacant positions as a share of all jobs in an economy - was around two percent in the Eurozone in the same year, and even higher in countries such as Belgium, the Netherlands, Austria, and Germany. 86 percent of employers in Germany reported having difficulty in finding talented candidates for open positions in 2025. At the same time, long-term trends are also impacting labor shortages, as many Europeans are heading into retirement during the 2020s, with few workers having the appropriate skills to replace them.
Another area which has seen an acute shortage of skilled staff in recent years has been in healthcare, where nurses and other healthcare staff have been in short supply. This trend is compounded by the fact that nursing and other healthcare-related positions were rated the most straining occupations in Europe during 2023, making it even more difficult to attract staff to positions which are often not highly paid. Compounding this issue is the declining value of real wages across Europe due to inflation, making work in low-pay sectors unattractive compared to alternatives.
In summary, Europe’s labor and skills shortages are driven by long-term demographic trends and underinvestment in training and education, along with emerging factors such as the development of new technologies. These shortages are straining key sectors such as construction, healthcare, and manual labor. With unemployment at historic lows and job vacancy rates climbing—particularly in countries like Germany—the mismatch between labor supply and demand is undermining economic growth.
What is driving labor and skills shortages in Europe?
Labor shortages in Europe are the result of a combination of long-standing and emerging factors. Structural issues such as declining populations, underinvestment in education, and persistent mismatches between workers and available jobs have developed over time. More recently, the rapid rise of automation and artificial intelligence has intensified the demand for skilled labor, exposing the gap between technological progress and the workforce’s ability to keep pace.Unemployment has fallen to new lows in the European Union, reaching six percent in 2024, while the job vacancy rate - a measure of vacant positions as a share of all jobs in an economy - was around two percent in the Eurozone in the same year, and even higher in countries such as Belgium, the Netherlands, Austria, and Germany. 86 percent of employers in Germany reported having difficulty in finding talented candidates for open positions in 2025. At the same time, long-term trends are also impacting labor shortages, as many Europeans are heading into retirement during the 2020s, with few workers having the appropriate skills to replace them.
The sectors of the European economy which are facing labor shortages
European countries are facing particularly severe shortages of workers for manual labor such as bricklayers, carpenters, plumbers, electricians, welders, and sheet metal workers. These jobs tend to be focused on the construction sector, which has seen its job vacancy rate spike since 2017 - in the first quarter of 2025, the job vacancy rate for the construction sector in the EU was 2.9 percent, compared to 2.5 percent in the services sector, and 1.6 percent in the industrial sector.Another area which has seen an acute shortage of skilled staff in recent years has been in healthcare, where nurses and other healthcare staff have been in short supply. This trend is compounded by the fact that nursing and other healthcare-related positions were rated the most straining occupations in Europe during 2023, making it even more difficult to attract staff to positions which are often not highly paid. Compounding this issue is the declining value of real wages across Europe due to inflation, making work in low-pay sectors unattractive compared to alternatives.
In summary, Europe’s labor and skills shortages are driven by long-term demographic trends and underinvestment in training and education, along with emerging factors such as the development of new technologies. These shortages are straining key sectors such as construction, healthcare, and manual labor. With unemployment at historic lows and job vacancy rates climbing—particularly in countries like Germany—the mismatch between labor supply and demand is undermining economic growth.
