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Sourcing talent from within Europe is becoming increasingly difficult for employers, with unemployment in the EU27 at a record low of 5.9% in August 2023.
This EU-wide average figure is down from 6.0% in July 2023, and from 6.1% in August 2022. The latest figures published by Eurostat, the EU's statistical body, also show that figures for gross domestic product (GDP) across the EU and EU area are growing, while overall employment is exceeding 75% for the bloc.
Employers and recruiters in Ireland, of course, are keenly aware of the challenges in sourcing new talent to fill current vacancies. But those challenges are not unique to Ireland.
The unemployment rate in Ireland is at 4.8% for October, up from 4% in September 2023. However, analysts expect that rate to rise to 5% by the end of this quarter. That rate is stronger than the EU average, but EU statistics show that northern and eastern member states are reaching notably higher employment levels.
A current EU employment heat map published by Eurostat places Ireland among the mid-performing member states, along with France, Italy and Spain. The stronger performers are in central and eastern states and upwards into Scandinavia.
Eurostat’s study divided countries into 242 basic regions; two-fifths of areas had an employment rate equal to or above 78%. These areas were predominantly concentrated in Czechia, Denmark, Germany, Estonia, Malta, the Netherlands and Sweden.
In the Finnish archipelago of Aland, Eurostat noted the highest employment rate of 89.7%, and the second highest rate was recorded in the Polish capital region of Warsaw, where employment was at 85.4%.
The Dutch region of Utrecht and the Swedish capital region of Stockholm came in behind these two areas, both with an employment rate of 85.1%.
Meanwhile, in three regions in southern Italy, Eurostat found that less than half of the population was employed in 2022. These were Sicily (46.2%), Calabria (47.0%) and Campania (47.3%). In parts of Turkey, the employment rate fell even lower than in Italy, collectively recorded at 32.8% in the cities of Mardin, Batman, Şırnak, and Siirt.
Eurostat also found that 9 in 10 witnessed an increase in employment rates between 2021 and 2022. The top five areas with the highest rate growth include four Greek regions: Epirus (up 7.7%), Southern Aegean (+5.8%), Crete (+5.7%) and Central Greece (+5.4%). High growth of 5.5% was also seen in the Spanish Canary Islands.
The EU unemployment rate was 5.9% in August 2023, down from 6.0% in July 2023, and from 6.1% in August 2022.
Nonetheless, the EU is keenly aware of the recruitment challenges being created by the rising employment rate and receding levels of unemployment. Recent initiatives have included the easing of regulations around the mobility of workers within member states, and the easing of visa and other restrictions on non-EU workers entering the bloc.
William Mitchell, Professor of Economics at the University of Newcastle in Australia, told the EU news agency Euronews that “unfilled vacancies are now signalling an impending weakness”.
Professor Mitchell added: “Strong employment figures suggest the monetary policy changes have not had the impact that many economists believed. The real economy is not very sensitive to interest rate changes within the range we have observed.”
The latest EU figures for Q3 2023 show that the eurozone economy contracted quarter-on-quarter, with analysts predicting a technical recession if the fourth quarter turns out equally weak.
Nonetheless, against this, EU employment rose during Q3. Eurostat’s estimate from October 31 showed that GDP in the 20 countries sharing the euro fell 0.1% quarter-on-quarter during July-September, delivering a 0.1% year-on-year rise.
Meanwhile, in Ireland, employers remain strongly committed to their recruitment goals for the upcoming year in spite of an uncertain economic backdrop, according to a new report released by recruitment firm Hays Ireland.
Some 85% of employers surveyed said that they plan to hire over the next 12 months, down from 90% this time last year, which peaked at a six-year high. The vast majority of employers (66%) indicated that they primarily plan to hire permanent staff, while 34% of employers are seeking to employ staff on a temporary basis.
This represents a significant change from 12 months ago, whereby 75% of employers were seeking to recruit permanent staff and 28% were looking for temporary staff.
Despite the positive outlook for recruitment for the 12 months, employers anticipate that finding the right talent will be their most significant external challenge, with 53% expressing this concern.
The survey, published as part of the Hays Ireland Salary & Recruiting Trends Guide 2024, received over 1,450 responses from employers and professionals across Ireland between August and September 2023.