Mirela Lazički Ćurik, Head of Client Services & Delivery, Manpower HRVATSKA Mirela Lazički Ćurik, Head of Client Services & Delivery, Manpower HRVATSKA


An unbalanced rebound of the manufacturing, construction, and logistic sector and changes in the composition of aggregate demand are among the reasons causing shifts in the labor demand pattern. As we in the HR sector can witness daily, employers are confronted with many difficulties finding qualified candidates. The resulting labor shortages are holding back recovery from the crisis induced by the COVID-19 pandemic and damaging the longer-run trajectory of the potential output growth for many countries.


So what are the reasons for these unseen events in the labor market?

On a national or even regional level, we face many demographic problems - the aging population and massive migration, as workers, especially the younger generation, took advantage of the EU's common labor market and moved to more prosperous European countries. Also, we face structural mismatches between labor supply and demand because of the inefficient education and upskilling system that is not tailored and adaptable to our labor market demand. It also comes down to more structural problems, including low wages, dissatisfaction with work, and poor working conditions, implying that the reasons discouraging people from work are much more profound and will require more extensive efforts to resolve. Blame is equally lead upon both policymakers and practitioners.

According to the UN and World Bank analysis, there are a few potential scenarios for the imminent future of labor. Suppose the talent shortage becomes a long-lasting problem even after the implementation of additional benefits or payments. In that case, it may stimulate investment in innovation, research and development, and more capital-intensive technologies to compensate for the human factor. We all can notice that more and more tasks traditionally performed by humans are increasingly performed using robots and artificial intelligence. The declining cost of machines threatens low-skill, routine jobs. Changing workforce dynamics and the acceleration of tech adoption are forcing organizations across all industries to redesign their workforce composition and rethink their skills mix. Companies want to be employers of choice, achieve the first-mover advantage on scarce and in-demand talent, and ensure a durable competitive edge in the market. They should invest in assessment, learning, and development to grow or acquire talent.


Always mind (and resolve) the skill gap.

At this moment, not all of the industries facing labor shortages are subjected to digitalization and automatization. The current lack of hospitality or construction workers is creating immediate problems, and it can hardly be resolved by automation in the near term. While innovation and increased automation may help to address the labor scarcity, it doesn't resolve the skill gap. Other ways to bridge the labor gap are connected with labor imports from the external market. However, all involved subjects should negotiate a more liberal approach to this subject and its legislative. The history of some of the EU economies are examples of how to approach the immigration problem well. However, we should also work on inclusion in society if we don't want to become a short pit stop for Third World immigrants. Companies should also increase the percentage of part-time, freelance, contract, and temporary workers to complement existing and emerging skills to be more profitable. 

A positive economic outcome depends on the development and implementation of active policies, both by governments and the private sector. Besides much-needed wages for the relatively lower-skilled jobs, the main focal point is consensus on the educational system and formal upskilling/training criteria for jobs in demand. Most individuals need to improve present skills and adjust them to the current labor market situation. History tells us that each time we've experienced an industrial revolution as we are facing it now, an education revolution was needed to follow to provide a more skilled workforce. Governments should invest in all stages of the human development cycle — early childhood, tertiary education, and adult learning. Necessary skills readjustments happen increasingly outside compulsory education and formal jobs through early childhood, tertiary education, on-the-job learning, and adult learning outside the workplace. Policymakers and practitioners should champion policies and programs emphasizing the importance of lifelong learning actual tech and digitalized tools supported by Ai or similar technologies.

Adaptability – the key to the future 

The future of work is now. Tech is here to stay and will continue to impact the workforce of today and tomorrow. Manpower globally believes that the most critical skill for any employee will be the ability to learn and develop continuously. Individuals can no longer expect job security because of their tenure. When conditions change and the business needs new skill sets, having been there for 20 years will not matter. Reskilling and upskilling of workers who are mid-way through their career and will need further skills to secure employment in the future of work, policies that ensure that workers can create cash reserves during periods of employment, and policies that legislate against bias in hiring, firing, and setting wages can help a lot. 

The job security of tomorrow will come from an employee's ability to adapt and acquire new skills – and organizations have a critical role in this regard. One clear lesson arises. Adaptability – in organizations, individuals, and society – is essential for navigating the changes ahead. 

Inevitably, much of the responsibility will be on the individual. They will need to adapt to organizational change and be willing to acquire new skills and experiences throughout their lifetime, try new tasks, and even rethink and retrain mid-career. All sectors can and should do much to help: easing the routes to training and retraining and encouraging and Incentivizing adaptability and the critical and increasingly valued skills of leadership, creativity, and innovation. Strong skill-foundations are essential for developing in-demand skills and adaptability.