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Norway’s labour shortage: Which professions are most in need in 2023?

While the shortage of workers in Norway has decreased from 2022 to 2023, the country's economy still needs tens of thousands of workers – especially in some professions.

Published: 9 May 2023 10:55 CEST
Worker
According to a new survey, approximately one in four businesses in Norway reported facing difficulties with recruitment, with 26 percent indicating that they had encountered challenges in acquiring labour within the last three months. Photo by Marianna Krzakiewicz on Unsplash

Businesses in Norway are still faced with a shortage of workers. According to the latest survey among companies carried out by the Norwegian Labour and Welfare Administration (NAV), some 53,000 workers are needed.

The shortage is most significant in health and care services, but there are also far too few craft and industrial workers.

“Although the estimated shortage of qualified labour is significantly lower this year, it is still very high. With the exception of 2022 and 2019, we have to go back to 2008 to find a higher level,” NAV chief Hans Christian Holte said on Monday.

The shortage of workers has decreased throughout the country compared to last year, with the exception of Troms og Finnmark.

Measured in absolute numbers, the labour shortage is greatest in Oslo, followed by Øst-Viken.

One in four businesses said they experience recruitment problems – 26 percent responded that they had had problems getting labour in the last three months.

Furthermore, many companies replied that they could not hire anyone, while others ended up hiring workers with lower or different formal skills than they were looking for.

In-demand professions in 2023

According to the NAV survey, the occupational groups with the most significant labour shortage include:

  • Nurses, health professionals, social workers, and other health workers
  • Store and sales staff
  • Cooks
  • Carpenters, plumbers, and electricians
  • Primary school teachers

The greatest labour shortage is present within health and care services, where employers report a shortage of around 13,000 workers.

While the shortage of labour in the construction industry has fallen sharply, from 13,700 people last year to 7,600 people in 2023, it is still the industry with the second largest labour shortage in Norway, the NAV points out.

Lower optimism when it comes to new hires

On the other hand, the optimism related to new hires and expansion among Norwegian companies in the year ahead is also weaker than last year.

This year, the net share of businesses that expect growth in employment in the coming year is 13 percent – a decrease from 22 percent last year and the lowest level since 2016.

Some 25 percent of Norwegian businesses expect to increase staffing in the coming year, while 11 percent expect a reduction.

At the same time, 64 percent think the staffing situation will remain the same.

The decline in expected new hires is greatest in accommodation, construction, and information and communication services.

Demand for qualified labour to increase

According to the NAV’s new global analysis, the need for qualified labour will continue to increase in the coming years.

The analysis also highlights global uncertainty and the risk of increased income differences.

“Considering the great need for skilled workers, greater provision must be made for workers to receive the training they need in the workplace. The education sector, the NAV, and employers must work together to find good solutions,” Holte said.

The NAV business survey was conducted from January 30th to March 17th among a representative sample of all the country’s public and private enterprises.

Almost 11,000 businesses took part in this year’s survey.

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IMMIGRATION

Nordic countries urged to set common working from home rules

The Nordic countries should have common conditions on working from the place of residence, including working from home, to fulfil the objective of an integrated labour market, says a report by the region's Freedom of Movement Council.

Published: 25 September 2023 11:41 CEST
Nordic countries urged to set common working from home rules

The proposal is part of a series of recommendations to simplify tax agreements to facilitate free movement of people and make the region “the most integrated” in the world by 2030, as agreed by Nordic Prime Ministers.

The Freedom of Movement Council argues that the pandemic revealed the flaws in the current system, as a large proportion of cross-border workers had to operate from home, facing taxation in two countries, different tax levels and mounting bureaucracy.

“Now that more companies are open to their employees working from home, the current Nordic tax agreement just isn’t keeping up. I hope this analysis will pave the way for dialogue and that the end result will be simplification and less bureaucracy,” said Karen Ellemann, secretary-general of the Nordic Council of Ministers.

Internationally less known than EU free movement rules, the region has a special agreement on free movement of people that dates back to the 1950s.

Under the Nordic Passport Union, citizens can move within the region without travel documents or residence permits and enjoy more rights than those granted to EU citizens within the European Union. Non-EU residents, however, only partially benefit as they do not have the automatic right to work in another Nordic state.

The Nordic free movement area covers Denmark, Finland, Iceland, Norway, Sweden, the Faroe Islands and Åland. Greenland is not part of the Passport Union but is in practice subject to some of its provisions.

The Nordic governments set up the Freedom of Movement Council as an independent body to identify obstacles to this principle and propose how to remove them.

In an interview with The Local, chair Siv Friðleifsdóttir said the Council has identified over 100 barriers to free movement and prioritised 30. The tax system is one of them.

“The Nordic countries currently have several agreements that regulate cross-border and remote working. Common to all of them is that they’re based on the countries’ need to protect their tax base,” the Council notes.

INTERVIEW:

The report, prepared by consultancies KPMG and Resonans Nordic, points at four problems in particular: rules for domestic work, registration obligations in more than one country for employers, as well as taxation of wages and pensions when working in another Nordic state.

The Council therefore proposes to set common conditions on “permanent establishment” when working in the country of residence, including from home. It also suggests to tax salaries in the country of employment and consider work from home in the country of residence equal to work in the country where the employer is located.

In addition, advance tax should be reported and collected in the employer’s country to avoid having different rules for the same salary.

Pension contributions should be mutually recognised as deductible in another Nordic states and returns taxed only under the legislation of the country where the pension plan is established, the Council argues.

In the Øresund region, between Denmark and Sweden, a fully integrated labour market could generate combined annual socio-economic gains of 2.9 billion Danish kroner, the report estimates.

“Our countries have a lot to gain from having a flexible common labour market. It can solve the problem of skills shortages in one country and the problem of unemployment in another. In other words, a functioning labour market is a strong catalyst for our countries’ economies,” says Siv Friðleifsdóttir, chair of the Freedom of Movement Council.

The full report is currently only available in Danish but translations are expected in the coming weeks.

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