Spain is experiencing a paradoxical crisis in its labour market: high unemployment alongside a record number of unfilled jobs. With an unemployment rate of 11.2% and over 2.5 million unemployed, Spain struggles to match workers with vacancies.
Factors such as an ageing population, talent migration, and skills mismatches are aggravating this issue. The Spanish government aims to address the problem by easing pathways for foreign workers to fill the gaps.
Vacancies hit record levels
According to Fedea and BBVA Research experts, the number of unfilled jobs could reach 153,000 in the third quarter of 2024—a 4.3% increase compared to the previous year. In 2023, Spain had already set a record with 148,000 unfilled positions. This figure represents a 50% rise since 2019 when there were just over 100,000 vacancies.
Companies face recruitment challenges
Spain’s vacancy rate remains among the lowest in the EU at 0.9%, compared to a European average of 2.6%. However, the number of unfilled positions has almost tripled since 2014, increasing strain on companies. Employers’ organisations are particularly concerned about the impact of these labour shortages, especially in sectors critical to the economy.
Impact on economic growth
The shortage of workers has substantial economic repercussions. The record high of 148,000 vacancies in 2023 is estimated to have cost the Spanish economy over €8 billion in gross domestic product (GDP). Experts suggest that if Spain’s labour market continues to align with the European trend, this cost could triple in the future. With Spain facing rapid demographic ageing, such a scenario is especially worrying for the country’s economic resilience.
Critical shortages in key sectors
Despite reassurances from the Ministry of Labour, multiple sectors are facing critical staff shortages. The State’s Public Employment Service (SEPE) has reported difficulties in filling roles such as waiters, cooks, cleaners, physiotherapists, mechanics, and drivers for trucks and buses.
The reasons for these shortages are manifold. Some jobs are simply unattractive due to low wages, poor working conditions, or physically demanding tasks. Meanwhile, the ageing workforce is another major factor, with fewer younger workers entering many of these professions.
Pandemic effects on employment preferences
The COVID-19 pandemic has significantly altered employment preferences, particularly among younger workers. Many young people are no longer willing to accept low-paying, physically demanding, or unstable jobs that were once common stepping stones in their careers. The pandemic highlighted the importance of work-life balance, mental health, and job security, causing a shift in the types of roles that younger generations are willing to take on. This change has exacerbated the shortages in sectors like hospitality, transportation, and manual labour, which are struggling to attract new talent.
Rise of remote work
The pandemic also accelerated the adoption of remote work across Spain. Many workers now prefer the flexibility and convenience of working from home, which has led to a shift in employment patterns. The rise of remote work has made certain sectors less attractive, particularly those requiring physical presence, such as hospitality and retail. This trend is contributing to the growing disparity between the number of available jobs and the willingness of workers to fill them. Employers in traditional sectors face increasing competition from companies offering remote positions, further complicating the labour market.
Government action: Immigration reform
To address this, the Spanish government has amended immigration rules, simplifying procedures and extending visas for job searches. These changes aim to allow up to 900,000 immigrants to join the labour market over the next three years. The hope is that foreign workers will alleviate staff shortages and help stabilise the economy.
Sustaining social security
Foreign workers are not only vital to resolving the vacancy crisis; they are also crucial for sustaining Spain’s social security system. Employment among foreign nationals has grown three times faster than among native workers over the past decade. The contributions of these workers are expected to support Spain’s ageing population, particularly as the country faces increased pension demands from the retiring baby boomer generation.
A structural problem
Spain’s vacancy crisis reflects deeper structural issues in the labour market, ranging from skills mismatches to an ageing population. While the government has set measures in motion to mitigate the problem, the success of these initiatives remains to be seen. Without a comprehensive solution, the imbalance between unemployment and vacancies could become a persistent barrier to economic growth.