Changing European Demographics due to Migration Patterns

Migration between countries is changing European demographics. Young workers are leaving certain countries at higher rates, and moving to other countries for a variety of reasons. As a result, the phenomenon known as “brain drain” has been cited in a report produced by the Commission for Social Policy, Education, Employment, Research and Culture of European Committee of the Regions.

Brain Drain Leads to Changing European Demographics

“Addressing brain drain: The local and regional dimension” notes that the fundamental right of free movement of European Union (EU) workers results in several disparate effects. Freedom of movement and residence for persons in the EU was established in 1992 by the Treaty of Maastricht. This Treaty, officially known as the Treaty on European Union, was originally signed by 12 countries in the city of Maastrict. Maastricht is located in the Netherlands near this country’s border with Belgium and Germany.

The report examines data that shows changing European demographics due in part to migration patterns. As a result of free movement, highly educated workers in some countries are moving to other countries to live and work. The “sending” countries often do not have the capacity to develop better conditions that will keep and attract workers with high levels of education and skills. Some of these countries are resorting to changes such as eliminating income taxes on young workers in order to entice them to remain.

Countries Gaining from Changing European Demographics due to Migration

The main destination countries that gain from changing European demographics due to migration are:

• Germany
• United Kingdom (UK)

During 2017, nearly 17 million workers moved within the EU. Of these 17 million workers, nearly one third were between the ages of 15-34. Generally, young mobile workers in the EU migrate towards the two largest and most economically stable countries.

Workers with higher degrees from universities and trade schools also move to countries and cities that offer great opportunities and a more attractive lifestyle. Generally, about a quarter of the nearly 17 million workers who moved in 2017 are within this bracket, between the ages of 15 and 64. Adding to the changing European demographics, these workers migrate to countries including:

• Denmark
• Estonia
• Ireland
• Sweden
• UK

Highlight on Estonia

Estonia is one of the fastest growing economies in the EU. In 2017, this country’s Gross Domestic Product (GDP) grew by 4.9%. Growth has been broadly spread across the economy’s various sectors:

• Manufacturing 3.9%
• Mining and Quarrying 46.1% (fastest-growing)
• Construction 17.8% (largest contributor to GDP)
• Information 15.6%
• Communications 0.8%
• Professional, Scientific 13.9%
• Technical Activities 0.6%
• Trade 1.8%

Estonia supplies over 90% of its electricity requirements through locally mined oil shale. The country’s four main trading partners are Finland, Germany, Russia, and Sweden. As a result, much of Estonia’s fortunes depend on developments in these countries.

The country has a shortage of skilled workers. Therefore, Estonia increased the working visa quota for non-EEA citizens to promote migration to the nation. Some of the largest companies in Estonia are Tallink Group, Ericsson Eesti, Eesti Energia, Tallinna Kaubamaja, and Maxima Eesti.

Countries Losing from Changing European Demographics due to Migration

Several countries in the EU are facing the loss of educated workers due to migration patterns. These countries experience brain drain, the loss of skilled and talented workers who are critical to a nation’s economic success. Often these countries experience problems that are compounded by the loss of high income-producing workers. European countries facing out-migration include:

• Italy
• Poland
• Portugal
• Romania

Highlight on Romania

Romania’s economy continues to experience setbacks. The nation has some of the EU’s highest income inequalities, as well as an aging and shrinking population. Romania’s population is declining at a rate of over 0.32% per year. However, this rate rose to 0.50% in 2018, indicating a faster rate of decline. In the early 1990s, the population peaked at 23,372,101 residents. Currently, Romania’s population is approximately 19,348,013 residents, a loss of over 4 million people since its peak year.

Bucharest Stock Exchange in 2018 reports 249 trading sessions, for 87 companies with listed shares. By comparison, the New York Stock Exchange trades stocks for nearly 2,800 companies, illustrating the relatively small size of the nation’s economy. The Romania economy is also more highly dependent on manufacturing industries tied to export growth. Both the industry and exports are increasingly dependent on the automotive industry. As a result, Romania’s industry is highly dependent on the activity and consumer confidence of its European trading partners.

What Should Employers Impacted by Changing European Demographics do?

Employers in EU countries impacted by changing European demographics should consider highlighting their relocation program’s benefits in their recruiting materials. A good example to follow is the healthcare industry. The healthcare industry has been facing a critical talent shortage for several years. Healthcare employers have responded in several ways, including:

• Creating Exceptional Candidate Experiences
• Leveraging Data to Enhance Their Recruiting Programs
• Focusing on Cultural Fit in Their Recruiting
• Developing a Superior Employer Brand so New Hires Develop Favorable Impressions
• Increasing the Process Speed so Candidates Stay Engaged with the Employer

Relocation Management Companies (RMCs) are ideal sources for information on global candidate recruitment and relocation. Pre-Decision Services are critical for employers as they provide valuable information about a candidate’s ability to accept a position and be successful in the new location. Assessment data can be paired with structured interview questions to better understand the candidate’s interests, goals, and motivations.

Conclusion

Global Mobility Solutions’ team of global relocation experts has helped thousands of our clients understand how to leverage global relocation to counter the effects of changing European demographics. Our team can help your company by using industry best practices to design your relocation program. This will increase your company’s ability to attract and retain new employees and mitigate the effects of talent shortage.

GMS was the first relocation company to register as a .com, created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to discuss your company’s interest in learning how to mitigate the impact of changing European demographics, or give us a call at 800.617.1904 or 480.922.0700 today.