As the global population continues to age, and more people opt for early retirement, labour shortages have become a huge problem in many countries.
This is especially true of developed nations like those in the European Union, where populations are increasingly increasing and younger generations are not replacing them with enough workers. The trend is expected to continue in the years ahead, leading governments to take drastic measures to address the looming problem.
The growing rate of early retirement is one of the primary drivers of this labour shortage. According to Eurostat figures from 2018, around 14% of European Union citizens aged 55-64 were already retired; a significant rise from just 9% in
2000. This number is only set to increase in the future as pension schemes across Europe become more generous and retirees take advantage at earlier ages.
At the same time, however, population ageing accelerates this trend. As Europeans are living longer than ever before, fewer children are being born as fertility rates decline across Europe’s member countries – leaving a larger proportion of elderly people who are no longer active members of society’s workforce. This means that advanced economies will soon find themselves short on experienced workers and new job seekers alike; posing a major challenge for employers looking to fill positions and maintain productivity levels.
In response, governments across the EU – particularly those most affected by an ageing populace – have started introducing policies designed to offset this crisis by attracting immigrants with different skill sets into their domestic employment markets or encouraging older employees to stay active longer. However, these measures may take some time before any noticeable impact is felt. In order for the country’s labour markets not be overwhelmed by retirements and limited replacements, productive policymaking must act swiftly and decisively if long-term solutions are sought
Therefore it’s essential for governments within the European Union to look ahead when tackling labour shortages caused by early retirement and the ageing population. By making changes now that encourage skilled immigration while also helping older workers stay employed longer, they can ensure their nations remain competitively engaged with an ample workforce that can propel its various industries forward in our ever-changing global economy.
