Employment: report shows lower skilled workers face increasing difficulties to find a job

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Low-skilled workers encounter increasing difficulties to find a job, face lower job stability and are out-competed by medium-skilled workers even in elementary occupations. In contrast, job opportunities are growing in some high-skilled professions. These are the main findings of the European Vacancy and Recruitment Report 2014 published today. The report also highlights the increase in temporary and part-time work during the crisis and underlines the need to better support school-to-work transitions, to decrease segmentation of the labour markets and to up-skill jobseekers, particularly the low qualified.

László Andor, Commissioner for Employment, Social Affairs and Inclusion, said: "Persistent labour market segmentation and weak economic recovery mean that many people are excluded from job opportunities and risk falling into poverty. Employment prospects for those with poor education are dire unless they acquire the right set of skills and competences sought by employers. We must urgently strengthen support for transitions on the labour market, in particular through the Youth Guarantee. We also need to invest in training and career development schemes addressing the lower skilled. The European Social Fund provides important financial support for all of this".

The Vacancy Report analyses the diverging nature of employment in EU Member States during the recession. It identifies three clusters of countries according to their labour market conditions:

  1. a first group of countries worst hit by the recession (such as Greece, Spain and Portugal) where young workers relied on elementary jobs with poor prospects

  2. a second cluster led by best performers during the crisis (such as Austria, Sweden and Germany), where hiring fell marginally yet good matching existed between educational and job skill levels

  3. a third cluster consisting of countries (such as Hungary, Poland and Slovakia) characterised by labour market shortages in certain high-skilled professions.

The report presents the following key findings:

  1. Employment: at 218 million, average EU employment in 2012 was 2.6% less than in 2008. Only five countries (Austria, Belgium, Germany, Malta and Sweden) have recovered both their pre-crisis GDP and employment levels.

  2. Vacancies and hiring: the number of vacancies went down by 19% and hirings by 14% on average between 2008 and 2012, with considerable variation between countries. In particular, there was a sharp decline in people recruited in eastern and southern Member States, with reductions of 25% or more below pre-crisis levels in Greece, Romania, Slovenia, Slovakia and Spain.

  3. Young jobseekers: Young people with low qualifications were worst affected by the crisis - hiring fell by one third (-31%) comparing the second quarter in 2013 with 2008. Young people generally enjoy a high rate of hiring, but this is not reflected by a significant reduction in youth unemployment due to high turnover.

  4. Types of contracts: temporary and non-standard contracts rose between 2008 and 2012. In 2012, 58% of all hiring was through temporary contracts, most of them involuntary, showing that jobseekers are forced to accept temporary or part-time positions. In 'elementary occupations', more than 70% of people recruited were on temporary contracts. The report warns of the potential adverse effects of temporary employment on career development.

  5. Occupational demand: occupations with higher level skills largely dominate the fastest growing professions. Software and sales professionals, as well as personal care workers and nurses in the health services show robust growth in employment. Jobs requiring low to intermediate skills, in particular those requiring manual skills, were among those with the largest decline in employees between 2011 and 2012. The fall in employee numbers was particularly sharp in the construction sector (-17% on average in the EU, but -50% in Greece, Ireland, Lithuania and Spain) and in manufacturing industry (-10% on average in the EU, but -20% or more in the same countries).

  6. Education requirements: the share of hiring for the low qualified is contracting across all major occupational groups, including in 'elementary occupations' (-4% between 2008 and 2014). This is particularly the case in the Baltic countries and even more so in Portugal. This may be an indication of worsening labour market conditions, causing medium skilled workers to fill low skilled jobs.

The findings of the report highlight the need for Member States to implement policy initiatives designed to better support jobseekers, such as the Youth Guarantee. Funding from EU Structural Funds is available to help Member States to address the economic and social challenges Europe faces between now and 2020, including more than €80 billion (in current prices) to be invested in human capital via the European Social Fund (see MEMO/13/1011).

Background

The European Vacancy and Recruitment Report presents an in-depth analysis of current trends in the European labour market focusing on changes in the recruitment demand for skills.

The first edition of the report was published in December 2012. This second edition traces developments in recruitment over the last five years using a combination of data on people recruited and job vacancies, and provides an insight into their implications on employment.

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