View from Europe: Labor Lackings

Europe has a skills shortage that's not easily solved.
Janet KersnarMarch 1, 2008

For the first time in a long while long while, unemployment levels have begun to fall across Europe. Broadly speaking, of course, higher employment is a good thing, but European companies are facing a massive shortage of skilled labor. Some companies had hoped that the recent expansion of the European Union to include Poland and other Eastern European countries would alleviate the problem by attracting more foreign workers, but no such luck. Now hopes are pinned to an EU proposal unveiled last year to loosen immigration policies with a “blue card” program.

It is certainly welcome news for the engineering and IT sectors. The EU reckons that for these sectors to compete internationally, 20 million skilled workers will be needed over the next 20 years. Proponents claim the blue-card program, like its green counterpart in the United States, will make it easier for skilled workers from outside Europe to get work permits, thus helping shift the global brain drain, which has historically flowed largely into the United States at the expense of Europe.

“It’s a good initiative,” says Marcel Berges Fox, secretary-general of Acieroid, a €200 million Spanish construction subsidiary of France’s Bouygues conglomerate. The construction industry suffers from serious labor shortfalls, from manual workers to engineers, he says, not to mention qualified finance staff.

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However, if previous attempts to introduce national green-card-like systems are any gauge, the program will struggle to get off the ground. Germany, for instance, launched a national visa program in 2000 to attract some 20,000 IT technicians from India and Poland. But put off by language and cultural barriers, not many foreign workers applied, and the program was scrapped in 2005. Last year, German companies reported a shortage of around 400,000 skilled workers. Such shortages, says the German Institute for Economic Research in Berlin, are costing the country €18.5 billion — around 1 percent of GDP — a year.

New immigration policies are only one part of the larger skills-shortage equation, asserts Martin Bergler, CFO of S&T. The Vienna-based firm, which provides IT services in Central and Eastern Europe, is focusing more on training and educating its own staff in response to the “war for talent.” But, he adds, S&T is “a people business, and our know-how needs to be able to follow demand.” Fewer barriers would mean more opportunities, he says.

Janet Kersnar is editor-in-chief of CFO Europe.