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Eurofound analyses labour shortages in Luxembourg
With a vacancy rate of 1.8%, and a level of labour market slack of just over 10% of the extended labour force, Luxembourg – like many EU Member States – is currently experiencing labour shortages. This is particularly the case in the Professional, scientific, and technical services sector, which has a vacancy rate of over 6%.
Labour shortages in Luxembourg were analysed in an information session on National policy and company approaches to addressing shortages at Eurofound this week. These exchanges, known as Virtual Visits, take place in the context of Eurofound’s ongoing efforts to reach out to the national level and ensure widespread dissemination and dialogue with respect to its research findings. Eurofound stakeholders, with an interest, knowledge, and experience in the areas of social, employment and work-related policies, attended the session. The session included representatives of government, trade unions and business from Luxembourg.
As economies began to recover from the COVID-19 pandemic, labour shortages became increasingly prevalent. Instead of alleviating shortages, the pandemic has exacerbated them, particularly in sectors and professions where they had been endemic for some time. Dragoș Adăscăliței, Eurofound Research Officer, presented research on the evolution of labour shortages in Luxembourg, including measures implemented at national level across the EU27 to tackle labour shortages. He also provided an assessment of what measures were effective and discussed the contextual factors supporting or hindering effective policy implementation and outcomes.
Overall, shortages can have several negative impacts on the labour market; these include lowering the quality of service delivery, limiting production and stifling innovation while also leading to work intensification for existing employees. The national labour market in Luxembourg presents challenges linked to the high prevalence of cross-border work. 44% of the labour force in Luxembourg are cross border workers, which can contribute to shortages, particularly in occupations where shortages also prevail in neighbouring countries. For the same reason, Luxembourg experienced disproportionate labour shortages during the pandemic as cross-border workers were furloughed or restricted from travelling to their place of employment.
Measures taken to address labour market shortages were also discussed in the meeting. For example, small and medium-sized enterprises (SMEs) adopted a range of approaches to address labour shortages, including making better use of talent within the company, and investing in training. In Luxembourg a higher share of SMEs relative to the European average invests in searching for relevant candidates for positions.
Virtual visits are a central feature of national level outreach for Eurofound, with forthcoming visits planned on adequate minimum wages and strengthening of collective bargaining in Romania, and social policies to bolster adequate and affordable housing in Croatia.
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