Skills Shortage Fuels Global Demand For Contractors

3 August 2023

With many countries around the world having to grapple with persistent shortages of skills, the long-term implications for economic growth are far-reaching across a number of industries.

And as we uncover in our latest blog article, even the historically strongest economies are facing treacherous skills gaps and shortages that are severely handicapping growth. For global contractors able to fill skilled jobs, this is a great time to seek opportunities as organisations are desperate for top talent.

A word of caution though: it is imperative to be tax compliant in whichever country you operate in.

There are always winners but also losers when it comes to migration, the ‘brain drain’ depriving countries of their skilled workers who go off in search of better prospects elsewhere. One example of this phenomenon, as highlighted in ShengenVisaInfo.com, is the West Balkans, which encapsulates AlbaniaBosniaNorth Macedonia and Herzegovina. Research by LinkedIn and the World Bank found that these nation-states have felt the effects of the exodus, with skill losses hurting areas such as medicine as well as business and tech during the 2015-2019 period.

The same research also analysed specific skill sets during the same period and found that dentistry, genetic engineering, medicine and rehabilitation, web development and development tools were the top five skills that had now left their countries with big talent shortfalls. This has created a big problem, especially in the medical sector where services have been affected, with some medical centres even closing down. At 29%, Albania had the highest percentage of net migrants. Of note, reasons for migration weren’t only financial but also linked to the socio-political situation in the countries.

Germany, the EU’s strongest economy, is also not immune to skill shortages and has been looking at ways to combat its demographic decline. Indeed, as reported by the same website, the country’s Minister of Labour, Hubertus Heil, took advantage of a G20 ministerial meeting in India (July 2023) to promote immigration pathways. This would include recognising cross-country qualifications for the citizens of both countries. Heil said he wanted to “find out more about the potential for skilled workers and to promote Germany as an attractive location with good working and living conditions”.

While the cooperation seeks to address these skills woes, it doesn’t want to exacerbate shortages for either country. The nursing industry in Germany is one example that has benefited from the recruitment of Indian nurses from the state of Kerala since 2022. Meanwhile, new visa rules, due to come into force on 1 March 2024, have been simplified to allow for Indian IT workers to make the move. Visiting India earlier in 2023, Chancellor Olaf Scholz had said that rules would be relaxed and that workers would be able to come to Germany without needing to learn the language first.

Global contractors can help address skill shortages

For those looking for more casual work, there are also many seasonal jobs available in the EU for third-country or non-EU nationals with either student or working visas. The same requirement does not apply to the self-employed. However, much does depend on the person’s country of origin with those from Turkey a case in point as they can enjoy the same conditions as their EU counterparts as long as they meet certain conditions. For example, Turkish citizens will have full access to the employment market after four years (they can only change employers after three years).

Turkey isn’t the only country to benefit from such agreements. Other nations such as Algeria, Morocco, Tunisia, Kosovo, Ukraine and Andorra have also been able to take advantage. Indeed, there are 79 countries across Africa, the Caribbean and the Pacific that fall in the same category. While nationals of countries that have agreements with the EU can enjoy preferential treatment, those that don’t are automatically subject to the national laws of the state. The one notable exception is for those who have a family relationship with an EU citizen, in which case a work permit is not obligatory.

Meanwhile, Schengen holdups for Moroccan truck drivers are causing local companies a real headache, with some close to bankruptcy due to the delays in visa processing. The finger seems to be firmly pointed in the direction of Spanish consular authorities and a lack of processing centres to speed things up. The pressure is mounting on Nasser Bourita, the Minister of Foreign Affairs, to help facilitate the process to ensure that Moroccan truck drivers can get the documents they need.

Part of the problem stems from the fact that Morocco does not have a visa-free travel agreement with the EU.  MP Jamal Diwany of the House of Representatives highlighted the desperate plight of local companies that face financial ruin, especially those in the coastal city of Agadir. Minister Bourita said the government was redoubling efforts at “making appointments, to reduce the complexity circuits and above all to treatment that preserves the dignity of visa applicants”.

Acute skill shortages are hitting economies hard all over the world. While this has caused harmful net migration outflows as discussed, it has however created bountiful opportunities for specialist contractors to ply their trade abroad. But these skilled professionals must be aware of all visa requirements and importantly remain tax compliant wherever they are based. With experience working in 70+ countries, our 6CATS International experts can provide all the global contractor compliance advice you need.

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