Expert Voice

The impact of COVID-19 on talent attraction: An unexpected opportunity for the EU?

21 June 2021

2020 will go down as a year that upended lives, systems and the modus operandi of the entire world. This past year saw severe public health and economic crises coupled with unprecedented changes in global mobility. Borders were closed, visa processes frozen and exceptional travel restrictions imposed – all overnight. The exponential loss of resources and livelihoods suddenly suffered by tens of millions of migrant workers has impacted well-being across the board.

By Justyna Segeš Frelak, Oleg Chirita and Sergo Mananashvili

This article was first published in the ICMPD Annual Report 2020.

2020: The year of shifting work and mobility patterns

In the midst of efforts in Europe and elsewhere to grow the workforce, COVID-19 has fundamentally shifted – throughout the world – the ways in which people work and move. It has questioned the importance of the physical dimension of work and pushed the adaption to the new work-from-home environment.  It has also made mobility more costly and subject to changes as the health crisis continues to unfold.

The crisis has taken a heavy toll on many lesser-skilled migrants and those overrepresented in the sectors most affected by the crisis (e.g. hospitality or cleaning services). In particular, it has hurt labour market outcomes, including unemployment rates that are rising sharply alongside increased return to countries of origin.[1] While less skilled migrants have limited choices in a job-scarce labour market, international talent has gradually adapted to the new situation. With the shifting economy and changing work patterns, many have moved back to their country of origin, telecommuting across borders. The place of work and place of residence have thus become disconnected for many migrants, bringing about another shift in international migration patterns.

But not everyone can do their job remotely. This is especially true for workers in health and agriculture, sectors that employ a high number of migrants – and which have been deemed essential in responding to COVID-19 and keeping our societies up and running. Reflecting the critical role played by migrants in these sectors, several countries and regions moved swiftly to attract and keep international health care and other key workers. Such creative approaches, including easing accreditation restrictions and extending temporary residence, reflect the growing recognition that migrants, refugees and the diaspora are key to responding to, recovering from and ‘building back better’ after the pandemic.[2] At the EU level, COVID-19 has led to heightened awareness among Member States as to their dependence on foreign labour in certain high-demand sectors.

The EU and the global race for talent beyond COVID-19

Population ageing has long been accelerating in Europe, putting pressure on labour markets throughout the continent. Prior to the COVID-19 outbreak, estimates indicated that, across Europe, the labour supply was growing by about 0.3% annually − whereas labour demand was increasing by approximately 1%. Growing labour market shortages, although spread very unevenly among Member States, and technological transformations that affect the composition of the workforce and labour market needs, will lead to higher demand for migrant workers with the requisite skills and qualifications. Given various economic, demographic and social considerations as well as upcoming transformations, the EU will need to draw on international talent if it is to recover from the effects of the pandemic and achieve a green, digital economic transition that keeps it competitive on the global scale.

Despite progress made towards a joint framework for legal migration and developments at the national level, EU Member States have been less successful than other OECD countries in attracting skilled migrants. The complexity of existing rules at both the EU and Member State level and diverging national approaches hampers progress. For the most part, international job matching thus remains both costly and ineffective. This practice is further hampered by a lack of resources and know-how on employing migrant workers, especially among small- and medium-sized enterprises. The requirements of Europe’s highly specialised and formalised labour markets also prove difficult to meet for many migrants. [3]

With the EU labour market swooning under the weight of COVID-19, June 2020 saw the release of the Skills Agenda for sustainable competitiveness, social fairness and resilience, calling for a paradigm shift on skills across the EU’s strategic approach to legal migration. The Agenda is oriented towards better attracting and keeping talent and acknowledges the need to improve legal pathways, enhance skills matching and better recognise the competences of migrants.

In the same vein, the European Commission’s New Pact on Migration and Asylum (September 2020) − aimed at giving a “fresh start” to a system that “manages” and “normalises” migration – placed an emphasis on increased cooperation with partner countries on legal pathways. This comes with a view to addressing emerging demographic shifts, labour market needs and skills shortages in different sectors. The Pact recognises that, while activating and upskilling the domestic workforce is necessary, it will not sufficiently address all shortages in the labour market, highlighting the potential of foreign migrant workers, including in the COVID-19 context. Against this backdrop, it is invigorating to see the Commission propose an innovative tool in the Pact: EU Talent Partnerships − envisioned as a single framework aiming to “offer cooperation with partner countries and help boost mutually-beneficial international mobility”.

What are the prerequisites for effective bilateral cooperation on talent?

A question remains as to whether enhanced bilateral cooperation on talent circulation alone will provide the necessary boost for the EU labour market. When designing talent attraction frameworks and policies, policymakers often focus on single or ad hoc measures, e.g. determining who has access to the labour market or launching ‘buzzy’ attraction campaigns. In pursuing such an approach, they may be overlooking other issues of equal importance for talent attraction – and retention. For it is usually not just the job offer or legal pathway that attracts the highest level of talent – it is also career opportunities for partners, a good education for their children, and a high quality of life overall.

The OECD Indicators of Talent Attractiveness, for instance, highlight several policy areas that influence a talent’s decision to move, including those related to integration (e.g. employment, income, citizenship) and the wider environment (e.g. tax rates, gender equality). Such considerations underscore the importance of aligning migration and integration policies with talent attraction aspirations and strategies, ensuring that they do not run in opposite directions, while demanding that policy areas work together towards a common goal.

Cooperation frameworks such as the EU Talent Partnerships can facilitate the mobility of international talent. ICMPD’s implementation of the Mobility Partnership Facility pilot projects on legal migration has shown the necessity of creating a supportive, inclusive ecosystem around such cooperation if sustainable results are to be achieved. This means not limiting the frame to effective migration regulations and bilateral cooperation but also building appropriate skills identification matching systems, (up)skilling and incorporating education components, both in countries of origin and destination. Especially when origin countries are facing acute brain drain, these types of partnerships can help strike the right balance between domestic needs and the demands of the international labour market.

Unlocking the potential of the private sector

The role of the private sector in designing and implementing the Talent Partnerships will be crucial to achieving their full potential. This will require not only the involvement of businesses in need of international talent but also of European businesses operating, and perhaps wishing to expand, in partner countries – as well as those looking to invest.

For there are several reasons why these groups can contribute to skills and talent development through mobility. Central among these is the fact that European businesses active in third countries have a vested interest in contributing to skills creation, ensuring their long-term prosperity, both locally and internationally. Businesses could facilitate agile upskilling solutions by providing support for training activities (inside and outside the EU), particularly if they can provide internships or other on-the-job training opportunities to prospective migrants. The private sector is also best placed to assess third country skills shortages, and can be encouraged to support the development of the socio-economic fabric within which they operate by investing resources or promoting measures to meet current and future demand. If framed in this way, the Talent Partnerships hold the potential to unlock foreign direct investment and promote the competitiveness of SMEs in promising markets.

How should the Talent Partnerships be used?

The global pandemic has brought to the surface a series of labour market needs and challenges. It has accelerated many existing trends, including remote work and technological transformation. New skills will also be required for recovery, chiefly in relation to the transition to greener, technologically driven economies. According to the estimates, almost all growth in labour demand will occur in high-wage jobs, meaning that many low-wage workers would need to shift to higher wage occupations, which require different skillsets. [4]

The current crisis will change the migration landscape in a number of ways, but it will not close the skills gap experienced across the regions of the world, including the EU. Reduced transnational mobility may further induce technological progress in sectors that typically depend on temporary migrants to fill labour shortages. Labour migration frameworks will need to respond better to remote working by attracting international professionals that are not physically bound to an employer through tailored measures such as remote work visas, digital residency permits or revised taxation schemes.

The Talent Partnerships thus potentially represent a powerful instrument for cooperation between the EU and its key partner countries − to meet the labour market needs of both sides, as well as private sector priorities; to support the transition towards more inclusive, knowledge-based economies that are both digital and green; and, ultimately, to underpin the post-pandemic recovery. However, the conceptualisation and operationalisation of the Talent Partnerships should be predicated on a number of policy, legal and institutional considerations, as well as understanding distilled from past experiences. In short, such schemes require setting in place, and sustaining, enabling ecosystems − including robust governance structures, policy and legislative frameworks, administrative practices, institutional infrastructure, whilst building sustainable public-private and multi-stakeholder partnerships, keeping in mind that it is the private sector which will play a make-or-break role in any success of such partnerships. Only when all these conditions are in place, will the Talent Partnerships prove truly successful and display the strength required to endure in the long term. ICMPD will continue to work with our public and private partners in Europe, Africa and Asia to untangle the complexities of talent partnerships and make them beneficial to all sides of the equation.