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UNDERSTANDING SPAIN

Six out of ten Spaniards rely on word of mouth to find a job: study 

The preferred means of job seeking for unemployed people in Spain is to ask friends and family, official data reveals about a trend which is closely linked to the ingrained Spanish tradition of “enchufe”. 

employment office spain
Spaniards are three times more likely to first ask their circle if they know of a job that’s up for grabs rather than going to their local unemployment office to enquire. (Photo by CESAR MANSO / AFP)

When it comes to finding work in Spain, it’s often more about who you know than what you know. 

Some call it ‘looking out for friends or loved ones’, others cronyism. What’s clear is that getting the intel on a job that’s newly available and potentially getting hired because of your contact is part and parcel of work matters in Spain. 

Spaniards even have a word for it – enchufe which can be understood as being ‘plugged’ into a job as a result of your connections. 

A work survey by Spain’s National Statistics Institute reveals how when it comes to looking for work, the first port call for Spanish jobseekers is the people they know.

A total of 57.8 percent of surveyed respondents said they asked family or friends about any jobs they knew were available, making it the most common way to look for work in Spain. 

This was followed by looking at job ads (48.1 percent), contacting companies and employers directly (41 percent), updating their CVs (35.4 percent), replying or posting job ads (34.6 percent), contacting a public job seekers’ agency (20.4 percent) or a private one (15.12 percent). 

In a 2020 study by Spain’s National Research Council, 40 percent of Spaniards admitted they’d gotten a job thanks to a close contact, with family members being the first to help them get their foot in the door.

So it’s perhaps no surprise that Spaniards are three times more likely to first ask their circle if they know of a job that’s up for grabs rather than going to their local unemployment office to enquire.

Although this way of doing ‘business’ may seem frustrating to Northern Europeans in Spain, similar Eurostat studies have revealed that in countries such as the Czech Republic (87 percent), Greece (88 percent) and Romania (96 percent) it’s even more common to ask friends or family first, whereas in Spain it happens in 72 percent of cases according to the European stats body.  

Interestingly, one 2.1 percent of unemployed respondents in the INE survey said they’d begun making plans to set up their own businesses. 

By contrast, data from Spain’s self-employment department RETA shows that the number of foreigners who are becoming autónomos in the country is increasing at a faster rate, with 20,000 new inscriptions every year.

“The lingering issue of Spain’s labour market is the intermediation between those looking for work and those offering it,” Asempleo, a Spanish association of recruitment agencies, told El Economista. 

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PENSIONS

Spain needs 25 million foreign workers to keep its pensions afloat

As the retirement of baby boomers looms, Spain's ageing population and declining birth rate mean the country will need millions of foreign workers to maintain its public pension pot and reinforce the labour market, the Bank of Spain has warned.

Spain needs 25 million foreign workers to keep its pensions afloat

A recent study by the Bank of Spain estimates that the country will need up to 25 million more immigrant workers by 2053 in order to combat demographic ageing and maintain the ratio of workers to pensioners in order to support the pension system.

Without an influx of more foreign workers or sudden increase in the birth rate in Spain, something that seems very unlikely, experts fear that the growing disparity between working age people and pensioners could put the public pensions system in danger in the medium to long-term.

Like in many countries in the western world, the Spanish population is ageing, with the percentage of the population over 65 years of age predicted to peak in 2050, when almost one in three will be 65 years old or older.

READ ALSO: Spain’s over 65s exceed 20 percent of the population for the first time

By 2035 around one in four (26.0 percent) of Spaniards are expected to be 65 or older. That figure is currently around one fifth of the population.

Furthermore, this is compounded by falling birth rates. Spain’s birth rate hit a record low in 2023, falling to its lowest level since records began, according to INE data. Spain’s fertility rate is the second lowest in the European Union, with Eurostat figures showing there were just 1.19 births per woman in Spain in 2021, compared with 1.13 in Malta and 1.25 in Italy.

If nothing changes, the current ratio of 3.8 people of working age for every pensioner is predicted to plummet to just 2.1 by 2053, according to INE projections.

Maintaining this ratio seems unlikely moving forward, according to the report’s conclusions, something that would put pressure on pensions without significantly increasing social security contributions among working age people.

READ ALSO: Older and more diverse: What Spain’s population will be like in 50 years

The Bank of Spain report noted that “immigrants have high labour participation rates, generally above those of natives – in 2022, 70 percent and 56.5 percent, respectively.”

In three decades’ time, the INE expects Spain to have 14.8 million pensioners, 18 million Spanish nationals of working age and 12 million foreigners. To maintain the ratio, the Bank of Spain forecasts that the working immigrant population would have to rise by more than 25 million to a total of 37 million overall.

Of course, the arrival of 25 million working-age foreigners seems unlikely, if not impossible. To achieve this, around 1 million net migrants would have to enter Spain each year (discounting departures), a figure unprecedented in recent history. To put the figure in context, between 2002 and 2022 net arrivals in Spain reached five million, roughly five times less than what would be necessary to maintain the balance between workers and pensioners.

READ ALSO: ‘Homologación’ – How Spain is ruining the careers of thousands of qualified foreigners

Putting the economics aside, even if such an increase were statistically plausible, such a surge in net migration would be contentious both politically and socially. And it’s not even certain that increased migrant flows would be able to fill the gap in working age people and bolster public pensions: “The capacity of migratory flows to significantly mitigate the process of population ageing is limited,” the Bank of Spain warned in its report. 

What these projections suggest is that Spain’s public pension system will, in coming decades, likely have to be sustained by the contribution of fewer workers overall. This likely means higher social security payments. “Migratory flows have been very dynamic in recent years, but it does not seem likely that they can avoid the process of population ageing… nor completely resolve the imbalances that could arise in the Spanish labour market in the future,” the report stated.

The problem of ageing will also be transferred to the labour market and the types of jobs filled in the future. Increased migratory flows will soften the effect, but the labour characteristics of migrants coming to Spain may not match the job market in the coming decades. The jobs of the future, increasingly digital, will likely require qualifications that many of the migrants expected to arrive in the coming years do not have.

Consequently, the Bank of Spain suggests that “without significant changes in the nature of migratory flows, it does not seem likely that… [they] can completely resolve the mismatches between labour supply and demand that could occur in the coming years in the Spanish labour market.”

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