Addressing labour and skills shortages—steadily increasing across all EU Member States—has become a critical priority on the European policy agenda. The Future of Competitiveness report underscores the urgency of tackling these shortages, which constrain productivity and economic growth by limiting the availability of the skilled workforce needed for efficient operations and innovation.
This supply-demand imbalance leads to underutilised resources, higher costs, and delayed adoption of transformative technologies, ultimately dampening productivity across sectors.
To support policymakers at both national and European levels, and to inform future policies aimed at addressing labour and skills shortages, Cedefop has introduced its new Labour and Skills Shortage Index (LSSI), designed to:
- Investigate occupational shortages through 2035 across various occupational groups for each Member State, leveraging data from Cedefop’s 2025 Skills Forecast.
- Guide policies that strengthen vocational education and training (VET) systems, ensuring better alignment between skills supply and market demand.
Cedefop Labour and Skills Shortage Index (LSSI)
Cedefop new LSSI analyse labour market trends through 2035 and evaluates occupational shortages across three key factors:
- Demand measures the pressure created by employment growth. High-growth occupations may face delays in securing workers with appropriate skills, as education and training systems often lag market needs.
- Supply focuses on replacement needs, driven by retirements, career changes, and other workforce exits, which often create more opportunities than new job creation.
- Imbalances examine mismatches in the labour market, where either underqualification or overqualification undermines efficiency and satisfaction.
The LSSI reveals labour shortages estimated to manifest by 2035 across all skill levels:
- High-skilled occupations, including legal, social, and cultural professionals, face significant shortages due to strong employment growth and replacement demands. Health professionals are also critically affected, with resource-intensive training needs compounding the issue.
- Medium-skilled roles, such as service and sales workers, experience multifaceted shortages, driven by demand, supply challenges, and imbalances.
- Low-skilled positions, including personal care and manual labour, are particularly affected by replacement needs, exacerbated by difficult working conditions and demographic pressures.
The index also shows high variability across Member States:
- High-skilled shortages dominate in countries like Slovakia, Czechia, Poland, and Italy.
- Low-skilled roles face shortages in Bulgaria and Ireland.
- Broad-spectrum shortages, spanning all skill levels, are evident in Greece, Spain, and the Netherlands.
LSSI: Implications for Policy and Strategy
The LSSI empowers stakeholders to develop comprehensive and forward-thinking strategies to address these critical challenges, by focusing on:
- Expanding skills intelligence efforts to provide granular insights at the national and occupational levels.
- Strengthening education and training systems to meet future demands, particularly in high-impact fields such as healthcare and engineering.
- Leveraging technology and AI to mitigate shortages in low-skilled and repetitive roles, easing the burden on the human workforce.
- Improving working conditions in low-appeal but high-demand sectors, such as personal care, to attract and retain talent.
Tackling labour shortages is essential to sustaining the EU’s economic competitiveness and social cohesion. With Cedefop’s LSSI, policymakers and stakeholders have a powerful tool to guide their efforts in addressing current challenges and preparing for future opportunities.
