Closed Borders vs. Skills Benefits and Boosting Economies

I’ve chosen to write about a fairly challenging topic this month but one that is also timely. As discussions heat up across Europe and in the US where immigration and use of migrant workers have been weaponised for political gain, I wanted to reflect on whether or not our general discussions on this topic are missing the point. No matter whether our viewpoints are political, economic, or security-focused, I feel we cannot look at labour or worker mobility outside the context of current economic transformation and shifts in the global economy.

Why markets need labour mobility

The simple answer to why workers increasingly move or relocate to work in new markets is increasingly based on skills needs (note: this is on top of search for better economic prosperity which has always been a motivating factor in the past and continues to be one in climate- and conflict-troubled parts of the world). Per WEF forecasts 23% of new jobs that will evolve in the next decade or so will require upskilling in some areas (AI, new tech, robotics, automation, data science, logistics, etc.) or eventually reskilling for many workers. On top of that, as talent pools evolve in some advanced economies, there will be a need to source talent, likely from foreign countries, to fill gaps for work skills domestic talent no longer wishes to learn; or work they are not interested in doing. Often this is in sectors like construction, transport, service industries, etc. Here, I do not make any subjective quality assessments on types of work. I am just speaking to a reality where worker interests and skills change and, specifically, with the generational shift to more Millennial and Gen Z workers, professional aspirations have evolved. So the bottom line: if we cannot source talent from within, we have to start looking to other labour markets abroad.

State of play in Europe

Recent statistics from the EU’s Joint Research Centre (JRC) report that the EU will need to fill roughly 1 million roles for which skills are lacking on the internal (EU27) labour market in the coming year. This is a significant number and the EU has put forward programmes to help businesses and governments in member states source properly vetted talent through its Talent Partnership structure. This initiative houses three sub-programmes which look to match businesses with talent to fill labour gaps – both from EU-adjacent countries in Europe, e.g., Ukraine and Caucasus countries: Armenia and Georgia, as well as from Africa (Egypt, Morocco, Tunisia and some sub-Saharan countries). So far, these programmes have met with limited success but they do offer a starting point for a regulated, moderated approach to seeking talent abroad while bearing in mind public views on mass immigration flows. Just to give a snapshot of how countries are handling the sourcing of foreign workers: Latvia reported to Schengen News at the middle of this year that by year-end 2023 it had roughly 24K job vacancies the country could not fill locally and for which it would need to seek foreign talent. This includes work in construction, engineering, transportation and healthcare. The need to look outward is driven by the fact that the country is experiencing a decline in population growth while the current population is ageing. Similarly, next door in Lithuania, businesses have been forced to look abroad to find talent for growing tech and finance industries, while pushing the government to support more flexible work visa programmes.

The other side of the coin: India, China and the Middle East

In other markets my teams work in, namely larger countries like India and China, the labour mobility issue takes on a different form. Both are countries, where for years, talent has been highly mobile, particularly in India, in taking on roles in other countries. This includes traditional migration to parts of the Middle East for work in the construction industry but also cooperation with European and US firms to support back office roles and processes like call centre management. Per data from our Gi Group Holding International Mobility Report published in spring 2024, key markets for sourcing labour from outside the EU included the aforementioned India but also Russia and Syria. In this same report, we highlight how some of the biggest employers in Central Europe like construction firms in Poland and EV factories in Hungary are bringing in workers from abroad: for construction from Pakistan, the Philippines, and Turkmenistan, while from China for electric vehicles production. In the latter case, talent sourcing is tied to foreign direct investment, but it still shows that skills on domestic markets need to be supplemented in some cases by foreign worker support.

It’s impossible, on a single page, to go into the ins and outs of motivation for hiring foreign talent or to provide adequate justification for sourcing talent abroad. However, it is clear that in our current age of rapid economic transformation and industry restructuring (specifically for digital transformation, green economy jobs and more) talent mobility will continue to grow. What the WEF calls the Reskilling Revolution will only intensify and there are two main ways forward for national economies to come through this process successfully: recruit qualified foreign labour to fill momentary skills gaps AND invest heavily in reskilling and upskilling to ensure domestic workforces can meet future skills needs. By addressing both these issues, we can hopefully achieve a better balance in employing domestic talent seeking jobs and recruiting from abroad when absolutely necessary.