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EURES IS Mobility Conference, May 2008
The future demand for specialists in the
Icelandic labour market and the launch of a
partnership to recruit key skilled workers.
Dröfn Haraldsdóttir, Eures Manager Iceland
Foreign citizens residing/working in Iceland
40000
• Hengja
upp augl. í verslunum, sjoppum,
Erl. ríkisb.
Fæddir erl.
30000 skólum o.s.frv.
25000
• Leita undir “Húsnæði í boði” á www.mbl.is
20000
and www.visir.is .
15000
• Skoða leigumiðlanir á netinu, www.leiga.is,
10000
5000 www.rentus.is and www.leiguskra.is .
•0 Auglýsa eftir húsnæði í blöðunum, kostar
ekki mikið.
19
94
19
96
19
98
20
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20
02
20
04
20
06
20
08
19
92
19
90
19
88
19
86
19
84
19
82
35000
10%
6,8%
Background facts on foreign workers
• Over 70% male (8,1% of all M residing in Icel.)
• Nearly half is under 30! Another 30% between 30
and 40 years old.
• The majority is situated in the capital area today.
• They work in constuction (40-50% of all workers
in the sector), though decreasing. Growing number
work in service and retail
• Majority in unskilled jobs + some craft workers
• Poles by far the most numerous – about 70% of all
newcomers on the Icelandic labour market the last
couple of years.
Economic consequences of the inflow
• Economists agree that the increased labour immigration has
been positive for the Icelandic economy.
• Labour immigration increased production capacity, reduced
salary and inflation pressure thus contributed to a more
healthy economy and balanced labour market.
• The average family profited considerable because of the
foreign workers contribution. Now the gain is diminishing due
to a fall in the housing market and increase in dept because of
the depreviation of the Krona (many took loans in Euro).
• But difficult to say what would have happened without the
inflow; less economic activity, less tension and negative
effects thereof?
Expected labour demand/supply
• The construction sector is estimated to slow down in 2008 and 2009
i.a. depending on decreasing credit supply (the housing market more or
less frozen) and the completition of the projects in East Iceland, On the
other hand public works will increase substantially during the same
period.
• There are drawbacks in the fish industry due to coda cuts (30% in
2007) and continuing rationalisations and technological advances.
• Problems in the finance sector, founding crises, part of international
finance crises. Banks have started to lay off financial specialists and
other staff. These dismissals and other, mainly expected in the
consturction sector, will be more noted next Autumn.
• There is still unrest in the health care industry, that seems to be no
more competitive in attracting highly educated nurses. There is though
a small increase in the number of nurses graduating from the Icelandic
universities.
Expected labour demand/supply (cont.)
• The demand for highly skilled specialists has become more
prominent. There is a demand for skilled engineers, for skilled
programmers, system administrators and other IT specialist. skilled
health personnel such as nurses, midvifes and physiotherapists.
• The tourism sector keeps expanding with continuing labour demand,
though of course big seasonal variations.
• Some sectors are mainly filled with foreign labour, such as horti- and
agriculture, seasonal jobs in the meat industy, some service jobs
and some other unskilled jobs. We do not see any signs of that
changing.
• Alcoa´s new aluminium factory in Reyðarfjörður will employ 450,
total number of new long term jobs will be over 1000 (derived jobs)
• The main elements of uncertainty are further large scale investment
and infrastructure projects, conditions on international financial
markets and the exchange rate.
Demographical trend
Source: VMST
Workers mobility – push and pull factors
Main incentives to move – pull factors:
• Job opportunities – labour demand in the receiving country
• Earning possibilities. Level of salaries and standard of living compared
to home country
• Network - fellow countrymen in the receiving country
• Distance to the country of origin
• Language and culture
Other significant factors:
• Age
• Family situation
• Education
• Unemployment
Source: Eurofond and more
Can Iceland attract key skilled workers?
Pros:
• High salaries, average yearly salaries 60 K USD, forth highest in the world
• Relatively moderate tax rates. Average taxes on salaries: 24,4% taxes on high
salaries: 28,4%, marginal income taxes: 34,3%
• GDP – ranks sixth highest in the world
• Small society, peaseful and secure, good welfare system and the happiest
people on earth!?
Cons:
• Price level highest of all OECD countries, 60% higher than the average, 44%
higher that in the Euro zone
• Iceland rates 12 compared to other OECD contries in purchasing power,
similar level as Ireland and Germany
• Currency fluctations, the krona has fallen by 20% from the 2007 average
• Small society, gegraphical position, language, weather
Source: SA/OECD and more
Changes in the legal framework
• Restrictive immigration laws. When the temporary
restrictions for NMS citizens were repealed in
May 2006, the access for third country citizens
was simultanuasly restriced even further.
• Intended amendments to grant skilled workers
outside the EEA access to the Icelandic labour
market
• EU´s blue card - intended to enable skilled
workers outside the EEA to work in the EU/EEA
Partnership for recruiting key skilled labour
• The lack of and increased competition for highly skilled labour one of the
greatest challenges next years and decades.
• Last autumn EURES IS initiated a partnership with countries in similar
situation in order to adopt a common approach and share resources,
experiences and best practices rather than compete for these scarce
workers.
• Partners: EURES in Norway, Ireland and Denmark and Capacent Search
and Selection
• Mapping of surpluses to find suitable candidates, common promotion of
vacancies, tailored joint job-fairs etc.
• At first the focus will be on Greece and Italy
• Look into the possibilities of recruiting from third countries. Can EURES in
the participating countries build a common approach despite different
domestic laws and regulations?