EMEA Labor Market Trends
EMEA
The euro zone labour market's exceptional resilience is unlikely to last as the one-off factors driving its strength are waning, although there is also no dramatic weakening on the horizon.
Unemployment is at a record low 6.3% as firms continue to hire, a puzzle to some since the bloc's economy has been stagnating for the past year and historical precedent would suggest growing labour market weakness in such an environment. Employment typically expands at about half the rate of real GDP growth but it has actually surpassed GDP growth since 2022.
Source: Reuters
The euro area labour market’s performance has been exceptional as compared with changes in output…..Rising profit margins enabled firms to retain their workers for longer than usual, despite falling revenues.
Poland's labor market is set to be significantly reshaped by expanding digital access, the dominant trend projected through 2030. This is reflected in the unanimous expectation among employers for increased demand in AI and big data skills.
Talent availability is a major concern, with 52% of employers anticipating an impact from an aging and shrinking workforce in the next five years, and 65% foreseeing hiring challenges. To mitigate these issues, Polish companies are prioritizing employee health and well-being, and expanding remote and hybrid work options as key strategies for talent attraction and retention.
Source: World Economic Forum
Norway's employers anticipate substantial business model shifts by 2030 due to green and digital transitions, driving increased demand for skills like curiosity, lifelong learning, resilience, flexibility, and agility, exceeding global norms. A significant 74% of Norwegian companies emphasize the benefits of public funding for reskilling and upskilling, surpassing the global average.
Moreover, three in five respondents plan to expand their talent pool via diversity, equity, and inclusion initiatives, also exceeding global averages. Notably, only 26% of Norwegian firms expect wages to increase as a share of revenue (compared to 52% globally), while 22% anticipate a decrease (compared to 8% globally), indicating a unique financial outlook.
Digitalization, climate mitigation and rising cost of living are the key trends expected to impact labour- market transformation in Europe over the 2025- 2030 period. As companies headquartered in the region aim to adjust to these trends, skills gaps and talent shortages in the labour market remain a key barrier: 54% of employers expect talent availability to worsen, significantly above the global average.
Austria's labor market is poised for significant transformation within the next five years, driven by the expanding digital economy, rising living costs, and heightened climate adaptation investments. Businesses are responding by prioritizing automation, positioning Austria as a leader in human-technology collaboration. Notably, 42% of human work tasks are projected to be augmented by technology by 2030, surpassing the global average of 33%. Furthermore, the demand for essential soft skills is surging, with 60% of employers anticipating a net increase in the importance of attributes like motivation and self-awareness.
By 2030, Belgium's business landscape will undergo significant shifts due to climate mitigation, an aging population, and rising living costs. This transformation is reflected in the high demand for specific skills among Belgian employers, with 75% reporting a need for environmental stewardship (compared to 53% globally) and 69% seeking talent management expertise (compared to 58% globally). To address talent availability, Belgian companies are proactively implementing strategies exceeding global averages: 85% plan to invest in reskilling and upskilling programs, 78% will prioritize employee health and well-being, and 48% intend to facilitate cross-border remote work.
The United Kingdom's labor market is bracing for significant shifts driven by digitalization and climate action over the next five years. A substantial 56% of UK companies anticipate business transformation due to increased climate adaptation investments, exceeding the global average. Similarly, 56% of UK employers expect geoeconomic fragmentation to impact their strategies, compared to 34% globally. Consequently, demand is projected to rise for skills like technological literacy, AI, big data, and resilience, flexibility, and agility. By 2030, roles such as Big Data Specialists, FinTech Engineers, and AI and Machine Learning Specialists are expected to experience considerable growth.
French employers anticipate substantial business model shifts due to digital transformation, climate mitigation, and rising living costs. In response, they are prioritizing upskilling, hiring talent with emerging skills, and accelerating automation. Notably, 71% of French employers are focused on augmenting their workforce with new technologies, exceeding the global average of 63%. Looking ahead to 2030, demand is projected to increase for roles like Security Management Specialists, Digital Transformation Specialists, and Software Developers, while positions such as Material-Recording and Stock-Keeping Clerks and Data Entry Clerks are expected to decline.
The fiscal loosening we’ve already seen in the U.K. is going to be a key theme for 2025 in the euro area as well.”
Peter Schaffrik, Chief European Macro Strategist
Czechia's labor market is bracing for a period of significant change, driven by the green transition, demographic shifts, and digital transformation. Over the next five years, over 80% of Czech employers plan to concentrate on automation and upskilling, while 76% intend to prioritize transitioning employees from declining to growing roles, exceeding the global average.
The labor market is projected to remain tight, with only 6% of companies expecting improved talent availability, far below the global average of 29%. To address this, 70% of employers aim to bolster their talent pipeline through reskilling and upskilling initiatives, and 65% plan to offer higher wages to enhance their attractiveness as employers.
Denmark's labor market is set to evolve by 2030, influenced by increased climate adaptation investments, a focus on labor and social issues, and geoeconomic fragmentation, while showing less concern for digitalization and inflation compared to global trends.
Notably, Denmark anticipates higher skill stability, with 71% of current on-the-job skills remaining relevant, exceeding the global average of 61%. Demand will rise for skills related to AI, big data, cybersecurity, and lifelong learning, alongside a significant surge in global citizenship skills, where 47% of Danish employers foresee a net increase, compared to just 19% globally.
In the Netherlands, talent shortages are anticipated as a significant hurdle from 2025 to 2030, with 56% of firms expecting hiring difficulties and only 15% foreseeing improvements in talent availability. To counteract this, 86% of businesses plan to accelerate automation, exceeding global peers, while 83% intend to upskill their workforce and 71% to recruit talent with new skills. Additionally, Dutch companies are leveraging diversity, equity, and inclusion strategies to broaden their talent pool, with 64% planning to set specific goals and 46% aiming to integrate DEI initiatives throughout their supply chains.
Hungary's labor market is projected to undergo significant shifts by 2030, influenced by rising living costs, increased digitalization, and a declining population. A substantial 70% of employers cite inflation as a primary concern, surpassing the global average of 50%. Talent acquisition is a major challenge, with 77% of firms anticipating hiring difficulties. To address these issues, nearly 80% of businesses plan to offer remote and hybrid work options domestically, while almost 40% intend to extend these opportunities across national borders. Furthermore, nearly 70% of businesses believe that more flexible regulations on remote work would significantly enhance talent availability.
Italian employers foresee significant business model transformations by 2030, driven by climate-mitigation efforts, digitalization, and rising living costs. Notably, 70% anticipate changes due to carbon reduction investments, significantly exceeding the global average of 47%. Projected net job growth in Robotics, Renewable Energy, and Environmental Engineering will fuel demand for AI, networks, cybersecurity, and environmental stewardship skills. To navigate these shifts, 85% of Italian employers plan to upskill their workforce, while 73% intend to enhance it through technology augmentation.
By 2030, Greece's business transformation will be primarily shaped by broadening digital access and rising living costs, with 63% of employers also citing growing labor and social issues, exceeding the global average of 46%. Over half of Greek companies face skills gaps and talent attraction challenges, prompting 82% to prioritize increased public funding for reskilling and upskilling, and 64% to seek government support through wage subsidies, both figures surpassing global averages. Furthermore, 46% believe pension and retirement age changes could boost talent availability. In response, 92% of Greek companies plan to enhance talent retention through improved progression and promotion opportunities.
Turkey's labor market is set for significant transformation between 2025 and 2030, driven by expanding digital access and the integration of AI, robotics, and energy technologies. This technological shift is evidenced by the projected rise of roles like Robotics Engineers, Renewable Energy Engineers, and Autonomous and Electric Vehicle Specialists. Employers anticipate a substantial 44% disruption of on-the-job skills by 2030, exceeding the global average of 39%. The fastest-growing skills in Turkey are projected to be AI and big data, technological literacy, and networks and cybersecurity, alongside an above-average increase in the importance of multilingualism.
Switzerland's business transformation by 2030 is heavily influenced by continuous digitalization, with 96% of companies expecting AI and information processing technologies to reshape operations. Workforce strategies prioritize automation, upskilling, and emerging skill acquisition, as 73% of businesses integrate new technologies to augment their workforce. However, talent retention is a significant concern, with 36% of employers anticipating a decline, nearly double the global average. To counter this, Swiss firms plan to enhance workplace flexibility, expand talent pools through cross-border remote work, and support employees with caregiving responsibilities, exceeding global peers in these areas.
Swedish employers foresee significant business transformation by 2030, driven by increased digitalization, demographic changes, and rising living costs. Notably, 50% of these employers recognize aging and shrinking workforces as a critical trend, while 41% acknowledge growing working-age populations in other regions. In contrast to global trends, only 5% of Swedish firms expect improved hiring conditions within the next five years. To address these challenges, employers are focusing on enhancing talent progression and promotion, expanding remote and hybrid work options, and investing in reskilling and upskilling to bolster talent availability.
By 2030, Portugal's workforce will face a significant upskilling challenge, with 71% requiring training, exceeding the global average of 58%. Over the next five years, crucial skills will include curiosity and lifelong learning, talent management, leadership, social influence, teaching, mentoring, and resource management. To address this, Portuguese firms are heavily investing in reskilling and upskilling, with 87% anticipating improved talent retention and 73% aiming to transition employees into new roles. Notably, 40% of Portuguese employers rely on government funding for these initiatives, double the global average.
