With another academic year underway, talent stakeholders should already be thinking about how they can convince this year’s graduates, and international students more broadly, to stay and take up in-demand jobs. Universities, employers, local economic development actors, and governments all have a role to play in facilitating the move from the classroom to the workplace – and they should engage, together, sooner rather than later.
That Europe is facing widespread labour shortages is well known. Nearly two-thirds of Europe’s 25 million small and medium-sized businesses report difficulty recruiting needed talent. Meanwhile, demographic ageing means that Europe’s working-age population is expected to decline from 265 million in 2022 to 258 million by 2030.
Yet, this autumn, a new cohort of global talent has once again arrived in the EU, in the form of international students. As governments seek to address the dearth of labour, there are several advantages to recruiting international graduates from local universities. On top of their tertiary education, they have a local degree, mitigating concerns about challenges getting their credentials recognised. And they have already made the move, demonstrating a strong interest in the country and kickstarting their social and cultural integration, in addition to enabling faster and cheaper recruitment because they are already in town.
But will international students stay after graduation to put their skills to use in their countries of study? And for how long? Although many indicate an interest in remaining, retention rates in many European countries are still relatively low, especially in the medium and long term, despite some recent progress. Fresh graduates may be low on funds, making it challenging to stay for practical and legal reasons, given rising living costs and the need to prove sufficient funds to sustain themselves to obtain a job search permit. Adding to their challenges, they may lack the local language skills and networks needed to navigate the necessary bureaucracy and to land the job needed to transition to a work permit.
To better tap the talent that international students can bring, key actors should come together and start earlier to make staying a real possibility.
Room for improvement
In 2022, nearly 471,000 first permits were issued for education reasons in EU Member States, an increase of nearly one-third since 2017. A 2019 estimate by the OECD and European Commission found that approximately one in three people with a study permit changed to a different permit to prolong their stay in their OECD country of study (including but not limited to work reasons). While this rate was 50% in Germany, several EU states saw fewer than 20% change their permit. In comparison, the rates were over 80% in Canada and nearly 70% in Australia. Looking at longer term retention, of individuals who obtained their initial education permit in 2015, the share of those still holding a valid (non-education) permit five years later ranged from above 50% in Germany to below 10% in Denmark. In other words, Europe is leaving a large share of this highly skilled labour pool – honed at its own universities – untapped.
International graduates are permitted to stay in their country of study for at least 9 months to look for work, in line with the EU Students and Researchers Directive, with some Member States opting to grant a stay of up to 2 years. More recent initiatives like the Netherland’s Orientation Year and Germany’s Opportunity Card give eased access to graduates of their universities while at the same time casting a wider net to reach students studying in some other countries. The ability to stay is certainly important for securing student retention through employment – but complementary support is vital for helping students land a job – and for encouraging them to stay and seek employment in their country of study in the first place.
A European Migration Network study on international student retention in Germany identified as obstacles a lack of awareness or hesitation among employers to hire international graduates. The report also spotlighted a need among students for more awareness of existing assistance and additional, tailored support from higher education institutions. Meanwhile, a survey in nine European countries found that related work experience during studies improves students’ perceptions of their career prospects in the country of study. Conversely, that same survey found that securing a work or residence permit is the biggest barrier to staying. Other obstacles to student retention include a lack of local language proficiency, a dearth of professional networks in the country, the high cost of housing and other living expenses, and challenges and restrictions related to immigration procedures. Three years after graduating from Finnish universities, international graduates with family ties and labour market opportunities are more likely to remain. These findings show that there is room to make it possible for students to stay – and suggest what types of interventions would be useful in this endeavour.
This commentary focuses on international students coming from outside the EU, yet several of the challenges they face are shared by EU students studying in another Member State. When they are added, the group of potential talent becomes even larger: 1.66 million tertiary students in the EU were studying outside of their origin country in 2022.
A syllabus for success
To improve the study-to-work transition for international students in Europe, there must be better coordination and cooperation among universities, science parks, employers, start-up communities, and local, regional, and national economic development bodies – well before graduation. This means bridging silos between higher education institutions and labour markets so that the two are talking to each other and better connected.
Considerations unique to international students stand to be better reflected in university services so that their graduates are more likely to get hired by local employers. For example, universities can help international students to make themselves at home and to navigate necessary bureaucracy and the local job market. Universities can also offer free or low-cost language courses – and ensure that these classes are offered at times when students will realistically be able to take them alongside other coursework – as English alone may not open doors.
Language classes, career advice, and assistance applying for job search permits can be offered via cooperation between universities and one-stop-shops such as ‘international houses’, which are an increasingly popular way to provide various services to global talent. Many international houses work with graduates once they have finished university and are looking for a job, but far fewer engage with current students – and this is a missed opportunity. These centres can coordinate with universities to reach their students, making them aware of their services and the possibilities for staying and launching their career in the area. This should include a focus on part-time work experience during studies because waiting until graduation may be too late.
Local economic development bodies and professional associations can serve as an intermediary to make both students and employers aware of the opportunities that exist and encourage them to seize this opportunity in their backyard. Employer engagement is essential, as job offers do not exist without them. Their participation in information sessions, networking events, and internship or mentorship programmes can introduce students to the local labour market, work culture, and job search process – and help them recruit needed talent.
Efforts can start even earlier, as seen in Finland’s Talent Boost programme, a promising approach to addressing low retention rates upon graduation via a range of activities, including workshops and coaching tailored to international students, career trips to different municipalities, job shadowing, mentorship schemes, Finnish and Swedish language instruction, and bilingual degree programmes. This initiative underscores the role that governments can play in enhancing student retention.
Scoring high on international student retention
International students represent an important pool of talent for Europe’s (future) workforce, and one whose potential is far from tapped. Indeed, retaining talent that is already in the country is a sensible starting point. Universities, employers, local development bodies, and government are all key stakeholders. They should increase their engagement with international students, while they are still in the classroom, to improve retention. While some international students may study up to 7 years, those in master’s programmes have an especially condensed timeline, meaning there may be a relatively short window of time to act.
Such intersectoral collaboration should be the norm, not the exception. What is needed: more services, more coordination, and the resourcing to make this possible. The future outlook points to increasingly international workplaces and universities across Europe; better alignment between the two is a worthwhile endeavour.
Caitlin Katsiaficas is a Policy Analyst in ICMPD’s Policy Unit, where her recent research focuses on talent attraction, complementary pathways, and integration. Among her previous positions, she worked at a U.S. university as a coordinator of a master’s degree programme, where she oversaw engagement and activities for students.