Maltese companies by far most likely in EU to fill positions from non-EU countries to address skills shortage

Malta is not the only EU country to be grappling with severe skills shortages, however Maltese companies are far more likely than EU member state counterparts to plug the gaps by hiring candidates from outside the EU.

The information came to light through a Eurobarometer survey targeted at SMEs in all EU member states. The survey was carried out in October while the views of 253 Malta-based SMEs were collected.

The survey asked the question: Have you tried to hire foreign talent to solve your company’s skill shortage? On average, 16 per cent of EU member state SMEs turned to non-EU nationals to fill labour shortages, 14 per cent recruited from other EU member states, while 75 per cent made no attempt to hire foreign talent.

In contrast, 37 per cent of Malta-based SMEs tried to hire from other EU countries, 32 per cent from outside the EU and 42 per cent made no attempt to hire from beyond Malta’s shores. The proportion of Maltese SMEs that opted for non-EU recruitment attempts was hire than any other EU member states, and beat out the second highest country, the Netherlands, by seven percentage points.

So, why do Maltese SMEs find it so hard to hire from other EU member states? A total of 35 per cent chose ‘no suitable candidates’, compared to the EU’s 12 per cent. Further, 19 per cent listed language problems – comparable to the EU average of 18 per cent, and 12 per cent said they found difficulties in understanding the skills of the applicant, an issue faced by six per cent of EU-based SMEs. Finally, 43 per cent said they had no difficulties in hiring candidates from other EU countries, compared to an EU average of 50 per cent.

When asked: How difficult was it for your company to find and hire staff with the right skills over the past 24 months, a proportion of 49 per cent Malta-based SMEs replied ‘very difficult’, compared to an EU average of 38 per cent, while 22 per cent of Malta’s SMEs selected ‘slightly difficult’, compared to the EU’s 24 per cent. Effectively, 71 per cent of SMEs on the island reported some level of difficulty to find and hire staff, a significant majority.

In terms of the most difficult to recruit based on qualification/educational levels, 34 per cent of Malta’s SMEs struggled with hiring talent with a Bachelor’s degree (EU: 17 per cent), 24 per cent struggled with hiring talent with the right vocational training qualifications (from master level, journeyman, down to apprentice level) (EU: 38 per cent), and 22 per cent found difficulty with hiring talent with a Master’s degree (EU: 12 per cent).

Maltese companies have long complained of a skills shortage, and this issue has been placed high on the business agenda for the last 10 years. A large part of the issue stems from the Maltese economy’s acceleration into specialised and skilled industries, such as financial services, gaming and online betting, insurance activities, and more recently, fintech.

The landmark annual EY attractiveness survey routinely found that foreign companies on the island identified difficulties in attracting and hiring workers with the right skills, and the country has even commissioned skills shortage studies and surveys to identify the challenges. In its 2023 analysis, 28 per cent of foreign companies found skills shortages to be the biggest risk to Malta’s FDI attractiveness, coming second to OECD/EU tax reform (61 per cent).

As for which three problems are currently found to be the most serious for their company, the Eurobarometer survey reported that 50 per cent of Malta’s SMEs said ‘difficulties in finding the right employees with the right skills, compared to an EU average of 54 per cent, a proportion of 25 per cent chose ‘regulatory obstacles or administrative burden’, compared to an EU average of 34 per cent, and 23 per cent said ‘making your business more sustainable and environmentally friendly’, compared to the EU’s 11 per cent.