23 Jun, 2016

Europe is underachieving in the global competition for talent – OECD Report

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Paris, 7 June 2016, OECD Newsroom –  The European Union should reform its legal labour migration policies to get its fair share of the global talent pool, according to a new report published by the OECD.

Europe is facing an unprecedented humanitarian crisis, and this requires a coordinated, bold and comprehensive response by Member States. This does not diminish, however, the importance of addressing the challenges related to the management of legal labour migration in Europe. The long-term competitiveness of the EU and its ability to move to a strong and sustainable growth path is at stake.

Recruiting Immigrant Workers: Europe finds that migrants to the EU are younger and less well educated than those in other OECD destinations. Of the total pool of highly-educated third-country migrants residing in EU and OECD countries, the EU hosts less than one-third (31%), while more than half (57%) are in North America. Some progress has been made in the past decade, with a sizeable increase in the share of highly educated among recent migrants — from 21% of the total in 2000 to 36% in 2011. But this is still less than received by North America (41%) or Australia and New Zealand (52%).

The EU is experiencing a decline in the overall number of labour migrants in the aftermath of the global economic crisis — from more than a half-million in 2008, to less than 250 thousand annually since 2012. This contrasts with stable flows to other OECD destinations. But most importantly, many labour migrants are not coming to the EU under programmes for skilled workers. Among those who do, most come under national schemes, since the EU permit for highly-qualified migrants, the EU Blue Card, is hard to obtain. Only about 10 000 new arrivals would have qualified for the EU Blue Card in 2014, and of these, just 5 000 received it. In total, EU Member States covered by EU legal migration policies received annually less than 80 thousand highly qualified third country labour migrants. By comparison, Canada and Australia have annual admissions under their selective economic migration programmes for highly-qualified workers of 60 thousand each.

The EU has overtaken the United States as a destination for international students, but most of them don’t stay after they graduate. Depending on the method used for calculating, between 16% and 30% stay on in Europe, which is lower than what is observed in non-EU OECD countries where more than a third of students usually stay.

“The long-term competitiveness of the EU and its ability to move to a strong and sustainable growth path is at stake,” said Stefano Scarpetta, OECD Director for Employment, Labour and Social Affairs. “Skilled migrants can play an important role in addressing labour market shortages, drive innovation and promote productivity growth. Employers in most EU Member States already report more difficulty attracting and retaining talent than those in competing non-EU countries.”

“The EU needs to address demographic decline and shortages of specific skills. Talent from outside can help the EU deal with these challenges.” said Belinda Pyke, Director for Migration and Mobility in the Commission’s Directorate-General for Migration and Home Affairs.

The report identifies three main channels through which EU instruments can help make Europe more attractive for global talent.

• First, the EU should adapt its labour migration channels to ensure that talented foreigners can choose Europe over other destinations. As is being proposed today by the European Commission, the EU Blue Card should be expanded by lowering the wage threshold, notably for youth. A “Blue-Card–Ready” pool of candidates whose qualifications have been recognised could also be considered in the longer term. It should be easier for people graduating in the EU to obtain a work permit in the EU. More generally, the authors point to the need to build more flexibility into EU Directives on labour migration.

• Second, the EU should simplify procedures and processes which are currently an obstacle to attracting and recruiting talents. Recognition of foreign qualifications should be simplified. Existing national good practices such as “trusted employers” can be incorporated into EU schemes and extended across Europe A single application platform for labour migration would also help, while maintaining decision making at national level.

• Third, the EU should reinforce and promote the single labour market for highly qualified third country nationals. As is being proposed with the reform of the EU Blue Card, provisions for intra-EU mobility for talented workers should be strengthened and emphasised so as to present Europe as a single labour market for global talent, and to help employers offer an enticing package to potential recruits abroad. EU labour migration instruments need to be part of EU external action with third countries (e.g. training, mobility and recruitment initiatives). The EU could do a better job in branding itself as a single destination and in advertising options for the highly qualified third country nationals.

The report is part of a joint research project by the OECD and the European Commission in response to objectives set by the Juncker Commission in 2014, which called for “a new European policy on legal migration [to] address shortages of specific skills and attract talent to better cope with the demographic challenges of the European Union [and] the legal immigration that Europe will sorely need”. The report examines the shortcomings which limited the uptake of the EU Blue Card scheme and identifies limits over existing EU instruments to manage labour migration. This report was one of the inputs ahead of the Blue Card reform presented today on 7 June 2016 by the European Commission.