Europe needs more workers. But as the United States, the United Kingdom, Canada, and Australia dominate the global labour market¹, the European Union is caught in a ‘bruising worldwide battle’ to attract and keep workers in the region². Even as some Member States remain in strong positions, the EU collectively falls behind in recruiting and retaining international talent.
This intensifying race for talent comes from the growing need to attract essential workers and address adverse demographic shifts and, crucially, foster innovation not only for EU businesses but also for the EU economy. It is well known that labour and skills shortages are on the rise in all EU Member States. In 2022³ alone, some EU Member States reported to the European Employment Services (EURES) a massive shortage in several job categories. These included Italy (205 occupational categories), the Netherlands (166), Belgium (164), Slovenia (107), Denmark (106), Estonia (97), France (77) and Finland (60).
Attracting international talent to fill EU skills shortages seems to be imperative for sustaining economic growth and maintaining competitiveness in the global market. But how to do so effectively?
To analyse this question, the International Centre for Migration Policy Development (ICMPD) published the study "Cultivating talent: Exploring effective talent attraction and retention practices in and beyond the EU", describing the various contexts, policies, and outreach strategies that countries in and outside the EU, as well as EU regions and cities, have taken to fill the gaps in their labour shortages; and to retain international talent within their labour market.
“Migration can have a positive economic effect. When companies struggle to find people, migration can be a source of future employees. ICMPD’s study thus underlines how several countries, cities and regions see the benefits of migration in boosting economic prospects. Given the continent’s demographic profile and current projections, policymakers would do well in supporting measures to attract and retain international talent, which inevitably relates to opening legal pathways,” says Michael Spindelegger, Director-General of ICMPD.
Authored by ICMPD Policy and Liaison Officers Philipp Nigitsch and Marissa Weigle, the study looks at the challenges encountered in doing so: among them, interview respondents pointed mostly to the socio-cultural issues, including language barriers and the added task of acquiring proficiency – particularly where sufficient knowledge of the local language is necessary for everyday and professional life. They also cite the long and complex processes for visas and work permits, lack of awareness of labour law issues, discrimination, and non-digitalised immigration procedures.
Countries reviewed in the study include Norway; Australia, Canada, Denmark, Finland, and Germany. As the examples in the study show, some of these countries turned these challenges around as opportunities to fine-tune their strategies in attracting and retaining international talents in their markets.
Group 1: Denmark, Finland, Germany, Norway; Australia, Canada
- Developed a national strategy to attract and retain talent by convening all stakeholders from government, public administrations, and business sector.
- The Denmark – nation of solutions (2012) and Growth and Development (2015) strategies include over 100 initiatives to bridge partnerships between research and the private sector.
- The Talent to Denmark project linked 450 Danish companies with over 16,000 sought-after international applicants through the dedicated job platform State of Denmark; while Work in Denmark provides guidance and access to digital self-service tools, linking international talent with Danish employers.
- International House Copenhagen is a regional one-stop-shop to streamline career counselling, administration, and events for newcomers in the capital, Copenhagen.
- The most important driver for international talent is Finland’s safe and secure environment for jobseekers and their families, capitalising from its high standards in social security.
- The government’s initiative for talent attraction is the Talent Boost Program, an intersectoral programme for work-based and education-based immigration to improve Finland’s ability to attract foreign workforce to meet its labour needs.
- The annual 90-Day Finn Program invites international professionals to Helsinki for 90 days, to be immersed in Nordic culture and adopt a sustainable lifestyle, all whilst fuelling business interest.
- Finland also invested in developing job platforms such as Work in Finland, to connect international talent and Finnish employers.
- Almost half of companies in Germany report their business lacks skilled labour,⁴ significantly increasing across all its states.
- The new skilled labour strategy updates the dual education system enhances career development and training, increases women’s participation in the labour market, improves corporate work culture, and simplifies the administrative procedures in immigration.
- In line with the EU Blue Card Directive, the new Skilled Immigration Act widens the possibilities for employment in and migration for work to Germany by lowering the salary thresholds, eases the access for ICT specialists to the German labour market, enables short- and long-term mobility for Blue Card holders, and facilitates family reunification.
- The Recognition Partnership allows non-EU skilled workers to enter and work without the need for prior recognition of their professional qualifications. Those without a permanent job offer may apply for an Opportunity Card, which allows them to stay in Germany for one year while searching for suitable employment.
- With 62% of Norwegian industry facing a shortage of skilled labour, notably in crafts, engineering and the tech sector, the national and EU labour force pools are not sufficient to meet the needs of the Norwegian market.⁵
- The Oslo Region launched Oslopolitan, providing career opportunities in Oslo through its Oslo Talent Pool for international workers.
- The Digital Wallet also cuts visa processing from 37 weeks to only three days, streamlining the process for pre-approved and vetted companies to hire workers.
- Larger cities run the dedicated Service Centres for Foreign Workers as hubs for third-country nationals on registrations, tax information, and other aspects of life and work in Norway.
- In 2023, the Australian Government released an update to its Migration Strategy seeking to address systemic issues in the Australian labour market and immigration visa system.
- Following the Pacific Engagement Visa, each year 3,000 nationals from participating countries can apply for permanent residence.
- Uses a points-based system to select immigrants based on different skills; prioritising education and work experience in Australia.
- Key targets are for health care, net zero transition and the digital economy; with a focus on increasing pay for and creating more pathways for skilled workers.
- The Skills in Demand Visa system does not tie workers to an employer, is granted for an initial four years, and has clear paths to permanent residency.
- The Tech Talent Strategy helps employers hire international skilled workers faster, improving the Start-Up Visa Program, and promoting Canada as a destination for digital nomads.
- Workers under the International Mobility Programme (IMP) can access open work permits, work for more than one employer and freely change occupations, locations, and sectors. Their family members may access facilitated work and study permits.
- The electronic Express Entry System has been improved to reflect changes in the economic and labour market needs; taking into account factors such as language skills, concluded studies in or having an immediate family in Canada, etc.
- The Economic Mobility Pathways Pilot supports Canadian employers to hire refugees.
Within EU countries, cities and regions are also innovating their recruitment and keeping key economic sectors alive with international talent.
Group 2: Carinthia, Flanders, South Moravia, Vilnius, Barcelona, Gothenburg
- Local companies identified the key needs of international talents; such as quality child care, an international school environment, and personal support with taxes, health providers, and other social services.
- The Carinthian International Center (CIC) assists in relocating and integrating arriving foreign professionals; and organise workshops, trainings, and networking events to make them feel welcome in Carinthia.
- As over 70% of international talents arrive with their partners, the Dual Career Couples links local companies to employ arriving professionals’ spouses/partners; including German language courses, skills trainings and mentoring, and career planning support.
- The CIC’s network has helped over 1,900 internationals and their families, and the Dual Career Couples’ placement rate reached 85% in 2021 and 2022⁶.
- The industrial, construction, health care and transport sectors face the most acute challenges with labour shortages. This is despite Flanders’s high-quality education, research institutions, and hosting Belgium’s largest hospital.
- Since 2021, international graduates in Belgium can apply for a one-year residence permit. In this period, they can receive job counselling from the Flemish employment service (VDAB), tailored to their qualifications, and access guidance for vocational training, language courses, and job fairs.
- The Integration Agency in Flanders offers 70 contact points for people seeking integration into the Flemish community.
- International House Leuven’s (IHL) Welcome Ambassador Programme, pairs Leuven residents with newly-arrived international professionals and their family members to support in the arrival, settling in, and living in the region.
- The Centre for Foreigners of South Moravia in Brno links newcomers with local residents in the region to improve integration through engagement with government offices, unions, schools, and other institutions.
- The region invested in key sectors like cyber-security, gaming and e-commerce; analytical instruments; aerospace; precision engineering; and bio-technology. As of 2020, about 124,000 immigrants, including a significant number of highly skilled internationals, contributed to CEITEC’s workforce, which has tripled in the past decade.
- Brno Expat Centre (BEC) facilitates the settling down and participation of international talents in Brno; and offers free services such as consultations, interpretation at meetings with the authorities, networking events, and business development.
- The BEC has an extensive online library of useful guides including pre-arrival questions, visa and permits, insurances and taxes.
- Through ICMPD-led and EU-funded TALENTAS project, Lithuania developed its strategy for competitiveness in the race for global talent.
- Some amendments to the national Employment Law introduced financial incentives for both international talents and their employers in life sciences, ICT, engineering, and physical sciences, who now receive a one-time €3,000 payment.
- International House Vilnius (IHV), established by the agency Go Vilnius assists international talent on relocation, tax guidance, and social events. The BeFriend Vilnius programme, initiated by IHV, connects and helps newcomers engage in the local community on arrival,
expanding their networks and making them feel at home in Lithuania. - Amid widespread layoffs in the tech industry and despite limited budget, the Got fired by Meta or Twitter? Move to Vilnius campaign highlighted the city’s growing reputation as a global hub for business and innovation.
- Over 20 tech hubs recently set up in the city, including AstraZeneca, CISCO, Lufthansa, N26, and Nestlé; creating more than 6,000 jobs for international talent including fintech experts and microchip engineers.
- The city is stand-out example of soft-landing, social integration, community building, and LGBT+ inclusiveness; with initiatives like the Barcelona International Welcome and Barcelona Activa. The city also has an office for non-discrimination, which includes legal and psychological aid.
- The city’s leading facility for new arrivals is the Care Service for Immigrants, Emigrants and Refugees (SAIER), run by the City Council. It offers information on immigration, international protection, emigration and voluntary returns. courses.
- The City Council’s Digital Talent alliance promotes campaigns, specialised fairs and congresses, to link international talent and local companies.
- Various centres encompass basic services on residence/work permits, identity documents, access to housing, health and education; but also include guidance on mobility and public transport, setting up a business, taxes and other practical aspects of life in Barcelona.
- Gothenburg surpassed Stockholm as the most attractive city in Sweden for talent, according to the Talent City Index Sweden. In 2022, the city received 239,000 residents from diverse cultural backgrounds, comprising 22% of the local population. Compared with other Nordic cities, it also offers the lowest average cost of living, including office rent, and childcare.
- The business community in Gothenburg accounts for a third of the country’s private R&D funds. Its multi-stakeholder approach to talent attraction is evident in its three science parks, cultivating international collaboration between research institutions and the private sector.
- €100 billion is expected to be invested by 2035 on property developments and infrastructure, including housing (like Fixfabriken), offices and facilities.
- Move to Gothenburg (MTG) is a collaboration among the business community, academia and local government, and is dedicated to attracting, and facilitating the easy arrival of highly skilled internationals. The International House Gothenburg offers activities and guidance to ease integration into Swedish society.
- The prevalence of English proficiency locally reduces language barriers. Many companies also offer English-speaking jobs in an international corporate environment.
Based on the comparisons and analyses of these countries, regions and cities above, a key element of the study is the 10 recommendations for EU Member States to bring in talents and skills to keep the region’s labour powerhouse running – and sustain its future.
At the EU-level:
- Support and invest in Member States to develop, refine, or tailor their national strategies to attract and retain international talent.
- Set up Talent Partnerships on joint double-degree programmes, develop joint curricula, and foster investment in the countries of origin.
- Get the Talent Pool right: this proposed initiative can strengthen talent attraction, including by simplifying the qualification and skills recognition procedures.
- Set up a knowledge hub on legislation and policies would help individuals and institutions navigate the complex legal and administrative procedures necessary for talent attraction.
- Accelerate digital solutions for immigration purposes to streamline processes, and remove administrative burdens with the European Digital Identity.
At Member States-level:
- Allow for stronger exchange between policy-makers and practitioners to discuss challenges and operational details. The EU Labour Migration Practitioners Network, hosted by the Migration Partnership Facility, can be a strategic setting for knowledge-sharing for this.
- Alongside recruitment, invest in social integration through holistic onboarding, comprehensive support initiatives, and pooled funding involving public and private stakeholders.
- Tailor strategies for blue-collar workers who typically have different needs than white-collar workers, to whom international welcome centres are usually targeted.
- Encourage multilingualism among Member States’ national administration and bridge language barriers with Artificial Intelligence (AI).
- Provide international students coming to the EU to study with the tools to stay in the EU after graduation.
The public now understands their countries need essential labour from abroad, not just high-skilled workers; and yet the appeal of a location to global talent hinges beyond only career prospects. A 2023 OECD report admitted as much: attracting talent also needs to factor in the international workers’ desire for high-quality of life, inclusiveness, relaxed tax rates, and family-friendly societies. These underscore the necessity of adopting a strategic and all-encompassing approach to talent policy.
With the global population set to peak in just two decades, and with China already experiencing a demographic reversal, competition for international talent is set to intensify with each passing year. Canada alone intends to admit nearly one million new permanent residents by 2025.
For the EU, these examples from both within and outside the bloc highlight the potential benefits Member States could reap from their talent attraction and retention strategies. The ICMPD study further underscores the untapped potential in this area. Europe, undoubtedly, will not be left behind in the global race for talent.
About the authors
Marissa Weigle is Associate Policy and Liaison Officer at ICMPD, where she analyses EU policy developments and liaises with relevant stakeholders in Brussels. In her recent research, she focused on labour migration policies.
Philipp Nigitsch is an Associate Project Officer at ICMPD, working on project cooperation with the European Commission. He analyses international and EU policy developments and liaises with different stakeholders in Brussels.
[1] Stuart Condie/Gabriele Steinhauser, ‘Countries Raid Each Others’ Health Systems in Global Battle for Nurses,’ Wall Street Journal, 1 August 2023. Specific worker categories cited include the construction, tourism, agriculture and, above all, healthcare sectors.
[2] These cover workforce in the construction, tourism, agriculture and, above all, healthcare sector.
[3] EURES, 2022, Report on labour shortages and surpluses, https://www.ela.europa.eu/sites/default/files/2023-03/eures-labour-shortages-report-2022.pdf.
[4] Andreas Peichl, Stefan Sauer, Klaus Wohlrabe, 2022, Fachkräftemangel in Deutschland und Europa –Historie, Status quo und was getan werden muss, ifo Institut München, https://www.ifo.de/en/publications/2022/article-journal/fachkraeftemangel-deutschland-und-europa-historie-status-quo.
[5] Confederation of Norwegian Enterprise, Competence Barometer 2023, https://www.nho.no/contentassets/cd1336aad0eb43e9b724a0da5c83644c/rapport-kompetansebarometeret-2023.pdf.
[6] Mirela Nowak-Karijasevic, 2023, Interview with Alexandra Truppe, https://www.meinbezirk.at/kaernten/c-wirtschaft/bei-zuzug-auch-die-familie-im-blick-haben_a6197387.