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31 October 2023 / Report
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By deploying strategies like talent supply protection, or skills-first hiring approaches, companies can stay ahead of the competition.
A Hot Labor Market in a Chilling Economy: Employers Keep Adding Staff Despite Economic Deceleration.
The Euro Area jobless rate has stabilized at a record-low 6.4%, while additional potential workers also dropped to a record low of 13%. Demographic declines and skills mismatches mean Europe is facing extreme talent scarcity, and employers fear not being able to find new workers with the right skills once economic activity begins to pick up.
Staffing shortages put pressure on employers to invest in productivity. Hours worked per employee remain almost two percentage points below prepandemic levels, but early signs suggest employers are experimenting with the new advances in AI to boost productivity. As AI promises to replace many technical skills, demand for cognitive, human-based skills is intensifying, with ‘willingness to learn’ and ‘collaborating in teams and networks’ seeing the biggest growth in demand from recruiters.
Labor markets in Germany and France diverge, spelling trouble for Europe. Private sector jobs in Germany shrink, with manufacturing jobs down 2.9% since Q4 2019. Meanwhile France continues to show impressive private sector gains. But French productivity declines and Germany’s economic weakness bodes ill for Europe in the longer term.
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