Workforce shortage is the next big challenge for the economy. This issue was already raised more than a decade ago. So the current shortages on the labour-market came as no surprise. The mere fact that it came so quickly may have surprised some.
Individuals are the new source of competitive advantage and have a large impact on organizational performance. If organizations wish to survive over the long run, they need talents who are capable of helping the organization to adapt to change or even lead it. The investment in everything connected to learning and training will be essential in the years to come. And for companies this will be a means to keep and attract employees. And those companies who do this the best will eventually be the winners.
Over 50 trade union leaders from 18 different EU and Candidate countries participated in a two-day seminar in Zagreb, Croatia. The title of the seminar was “Workforce shortage: how to reduce it by intensifying the connection between educational institutions and employers?”. The initiative was organized by WOW-Europe and the Republican Workers’ Union (RSR) in cooperation with the European Centre for Workers’ Questions (EZA) and funded by the European Union. It was part of the EZA special project for workers' organisations in candidate countries.
Ms. Gordana Juran-Ratković, Professor of the Croatian language, Principal of Secondary school Ivan Seljanec Križevci and Ms. Tamara Vrhovec, Professional Associate Pedagogue and Adviser in the same institute (Croatia) stressed the fact that many students in vocational training are insufficiently prepared for a life of work. Developments on the labour market and the skills needed are changing rapidly. The educational system has difficulties keeping up. Furthermore many employers are incapable of supporting students and young workers. The change from young person to worker is too sudden. Students these days are too immature. The education system and the parents are to blame for this as they take over tasks from students. And we all know that one learns by trying.
This was confirmed by Ms. Mara Erdelj, President RS BOFOS (Serbia) in her presentation titled: “Smart education for a smart future: eliminating the labour shortage in the digital age”. She stated that ‘The increasing technological changes are leading to the digitization of the economy, which brings with it changes in the world of work and labour relations’. And these changes increasingly go faster. Making some jobs obsolete, but creating others too. ‘What we know is that the knowledge we acquire as children or young people will not last forever, that active learning is a very important form of lifelong learning, and that motivation and diversity of educational opportunities are basic prerequisites for successful lifelong learning’. This shows the importance of the educational system having to adapt itself quicker.
Mr. Johann Aigner, Deputy Head of WORK in AUSTRIA (Austria) explained that Austria, like many other Western European countries has benefitted, and still does, from EU mobility. Of course this also leaves gaps in the countries of origin. The current economic challenges are high raw material and energy prices as well as supply chains. He recognized three catalysts for the transformation process: Rapid technological change and digitalisation; Climate change and decarbonisation; and Demographic developments and shortage of skilled workers. Particularly the shortage of skilled workers as a major challenge. Through the RWR immigration system Austria is trying to tackle this shortage. This is predominantly for higher positions. And it is aimed for long terms stays.
Connecting education to the labour market is a great challenge in the Western Balkan countries. There is often a mismatch. Mr. Goce Trajkovski stated that there are two types of mismatches. Horizontal mismatch, where the type or field of education or skills is inappropriate for the job. And vertical mismatch, where the level of education or qualification is less or more than required. Improving this will proof essential for the school-to-work transition and the employment rate for young people. But ‘having work experience unrelated to their studies may also have a positive impact on younger adults’ labour-market outcomes’. There are a number of recommendations to improve the situation. Most important is the improvement of teaching methods. But also the accreditation of all faculties and study programs, and the greater cooperation between faculties and employers are essential.
Mr. dr.sc. Natko Klanac in his contribution focused on the labour market and future of education: trends, needs, challenges and expectations. The main challenges of the Croatian labour market are: Insufficiently educated workforce; significant lack of skills; and a high emigration rates of young and qualified workers. ‘A better-educated workforce is associated with higher productivity and can lead to more innovation’ Klanac stated. What employers are looking when hiring personnel is: communication skills; time management, teamwork; flexibility. These workers are not readily available on the labour market. So there is again a mismatch there. We do not always recognize the needs.
‘Talent shortages are increasing around the world’, Ms. Ana Modrić Topalović, Director of HR management department at Croatian Telekom stated. ‘Global data about shortage of needed roles shows that we need to be more creative, resourceful and change our strategic approach in order to reach targeted group, she further said. It will be essential to help the young to gain experience and skills. They should be enabled to work in a friendly working atmosphere with interesting projects, to have a lot of training and possibilities for development, to have a good work/life balance and experience appreciation at work. Those entering the labour market should be well-guided. This will be extremely important for their future.
Mr. Jannik Jansen, Policy Fellow for Social Cohesion & Just Transition, Jacques Delors Centre - Hertie School in his presentation stated that labour and skills shortages are a big challenge and a key stumbling block for the EU‘s green ambitions. The European Green Deal aims at transforming Europe into „the first climate-neutral continent“ by 2050. Mr. Jansen focused on three significant hurdles: ‘uncertain investment environment; cumbersome permitting procedures; and daunting skills and labour shortages’. But the investments are not made and the people are not available. ‘For 85% of the European companies, a shortage of skilled workers poses already an investment barrier (EIB survey, 2023)’. To tackle the skills and labour shortages it will be pivotal to make green jobs more attractive vis-à-vis brown jobs; to leverage diverse talent pools; and to smoothen workers‘ transition into clean tech sectors. Mr. Jansen stated that ‘If the green transition is managed rightly, it could lead to the creation of high-quality jobs & boost public support for ambitious climate policies’.
Mr. Georg Wagner, Head of the Institute and the Degree Program FH JOANNEUM, University of Applied Science focused on the importance of appropriate education. In Austria, like in many other countries there is unemployment and a labour shortage. This seems to be an economic paradox. Skills mismatch and expectations-conceptions are largely, but not solely, to blame for this. Generation X and Z are, for example, very much looking for a sense of purpose. Work is important, but not at all costs. There should be a good work-life balance. Additionally there is an undervaluation of some types of work. It is part of the explanation why STEM (an approach to learning and development that integrates the areas of science, technology, engineering and mathematics) degree programs attract relatively little applicants. This causes a gap between what the industry and society expect and what the capabilities of graduates are. Dual higher education is key. Connecting education with partner institutions and companies will be beneficial for all.
The two-day conference made very clear that there are many challenges on many levels when it comes to workforce shortage. There are a lot of initiatives being taken to reduce this shortage, but the people are still not to be found. Finding creative solutions and approaching education differently will have to be part of the answer. A redesign is needed to deal with a European population that will start to decrease in a number of years.