The war for talent, labour shortages and demographic changes: what can we do?
Etienne Pujol
Berry Law, Paris
While a diverse workforce fosters creativity and innovation and enhances employee performance, what strategies are countries and companies taking to attract and to retain a diverse workforce to address labour market changes? What are the challenges and opportunities?
This was the topic raised by panellists in the session held during the IBA Employment and Diversity Law Conference in Marrakech in April 2025.
European employers are in the midst of a global competition for talent. China, India and several Middle Eastern countries are also recruiting skilled workers, offering attractive salaries and benefits.
Labour shortages, demographic changes and changes in employee expectations have altered the employment landscape. The European Union acknowledges that its countries are facing a major crisis consisting in a shortage of skilled workers. Industries like construction, healthcare and transportation are struggling to find enough employees. Several factors contribute to the problem:
- the workforce is aging;
- the EU is expected to lose one million workers every year until 2050; and
- AI and automation are changing job requirements, but education systems are failing to keep up.
The European Commission has introduced an aggressive plan to tackle this issue. On 5 March 2025, it launched the ‘union of skills’ initiative, which focuses on four main areas:
- investment in education and training, to improve skills development at all levels;
- support for professional retraining, to help workers transition into high-demand fields;
- mobility programmes for students and workers, to encourage movement within the EU to fill labour gaps; and
- attracting skilled foreign workers by easing visa processes for non-EU professionals through the ‘Choose Europe’ campaign, to attract skilled workers from outside the region. The initiative will simplify work visa applications, expand programmes such as Erasmus+ and increase efforts to recruit foreign students.
So, one solution lies in the regulation of immigration. Italy, for instance, welcomed 135,000 people from outside the EU in 2023. In January 2025, Italian Prime Minister Giorgia Meloni announced the intention to welcome 500,000 new entries from outside the EU between 2026 and 2028, to help address labour shortages in agricultural sector, tourism, construction and healthcare. Tunisians benefit from a quota of 12,000 persons for the construction sector.
The upcoming European Travel Information and Authorisation System (ETIAS) will require visitors from visa-exempt countries to obtain pre-authorisation before entering the Schengen Area. While the ETIAS won’t affect work permits, the policy reflects a shift toward stricter border control. There will also be changes to Schengen visa policies, including digital applications, which could make it easier for skilled workers to apply for long-term stays. The union of skills initiative reflects a shift toward skills-based immigration, where applicants are judged on their qualifications rather than nationality. The challenge will be balancing migration control with the need for skilled workers, as EU countries compete for global talent.
Another solution to the labour shortage lies in the industry and education’s role. Solving the labour shortage isn’t just up to policymakers. Businesses and schools must also adjust to the changing job market. Education systems also need to keep up with industry changes. As technology transforms IT jobs, traditional teaching methods may no longer be enough.
Vocational training and ongoing education will be essential to help prepare workers with the right skills.
Our clients also need to prepare, as they are among the organisations most affected by these issues – and we as lawyers can also educate and help mobility.
For instance, one panellist promoted the fact that he had helped the Franco-British Chamber of Commerce & Industry, after Brexit, to organise a platform of services providers assisting in France-UK businesses ‘orphans’ of the EU. This has proven successful, and the platform may be expanded to other countries such as Canada and the US.
In conclusion, with an aging population and rapid technological changes, the changing labour market requires companies to look elsewhere for talent – to different demographics, to different regions, to different countries – and adjust their approach towards work according to employee expectations. As a result, DEI (diversity, equity and inclusion) is naturally occurring, with persons historically excluded from workplaces impacted by such strategies. However, the labour market requires companies to actively consider that if they do not adjust their policies and environment, they may well be left behind.
As lawyers, it is our duty to educate our counterparts – whether they are our clients or politicians – that we all need to address this important issue for our economies. We must rely increasingly on education and the need to consider with care immigration policy as a part of the solution to labour market changes.