Skills, Scale and Geography: Who Suffers Most from Talent Shortages in European SMEs?

Skilled-worker shortages are a structural constraint on European small and medium-sized enterprises (SMEs), but their prevalence and effects vary across firms and regions. We examine this variation by skill type, firm size and geographic location. Using firm-level data from Flash Eurobarometer 537 across the 27 EU Member States, we estimate design-weighted binary and ordinal logit models of recruitment difficulties and skill gaps, their reported causes and consequences, and firms' adaptive responses. Small and especially medium-sized firms are more likely than micro-enterprises to report recruitment difficulties. Firms in Central, Southern and Eastern Europe also report more difficulty than those in Northern/Western Europe. Advanced Services have the largest digital-skill gap counts but face less recruitment difficulty than Primary and Construction activities, distinguishing internal skill gaps from recruitment difficulties. Among firms reporting recruitment difficulty, wider digital gaps are significantly associated with more types of adverse impact; the association with educational gaps is not statistically significant. Small firms are more likely than micro-enterprises to cite a shortage of qualified applicants, and this perceived cause also varies by sector. Firms in Advanced Services are more likely to cite wage competition than those in Primary and Construction; Eastern European firms are more likely to do so than those in Northern/Western Europe. International recruitment is more common among larger firms than among micro-enterprises, and in Central and Southern Europe and Ireland than in Northern/Western Europe. Eastern Europe does not differ significantly from that regional reference group. The uneven relationship between exposure to shortages and international recruitment supports policies that help SMEs address their skill needs while accounting for firm size and location.

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Journal
Икономически изследвания
Published
2026-11-06
DOI
https://doi.org/10.56497/esj260803
Primary Topic
Labor Market and Education
Type
article
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article

Skills, Scale and Geography: Who Suffers Most from Talent Shortages in European SMEs?

Gualter Fernandes Martins Câmara, Dimitar Zlatinov, Gustavo F. C. Barbosa
1 links
Икономически изследвания
Labor Market and Education
article

Skills, Scale and Geography: Who Suffers Most from Talent Shortages in European SMEs?

Gualter Fernandes Martins Câmara, Dimitar Zlatinov, Gustavo F. C. Barbosa
article en

Abstract

Skilled-worker shortages are a structural constraint on European small and medium-sized enterprises (SMEs), but their prevalence and effects vary across firms and regions. We examine this variation by skill type, firm size and geographic location. Using firm-level data from Flash Eurobarometer 537 across the 27 EU Member States, we estimate design-weighted binary and ordinal logit models of recruitment difficulties and skill gaps, their reported causes and consequences, and firms' adaptive responses. Small and especially medium-sized firms are more likely than micro-enterprises to report recruitment difficulties. Firms in Central, Southern and Eastern Europe also report more difficulty than those in Northern/Western Europe. Advanced Services have the largest digital-skill gap counts but face less recruitment difficulty than Primary and Construction activities, distinguishing internal skill gaps from recruitment difficulties. Among firms reporting recruitment difficulty, wider digital gaps are significantly associated with more types of adverse impact; the association with educational gaps is not statistically significant. Small firms are more likely than micro-enterprises to cite a shortage of qualified applicants, and this perceived cause also varies by sector. Firms in Advanced Services are more likely to cite wage competition than those in Primary and Construction; Eastern European firms are more likely to do so than those in Northern/Western Europe. International recruitment is more common among larger firms than among micro-enterprises, and in Central and Southern Europe and Ireland than in Northern/Western Europe. Eastern Europe does not differ significantly from that regional reference group. The uneven relationship between exposure to shortages and international recruitment supports policies that help SMEs address their skill needs while accounting for firm size and location.

Икономически изследванияVol. 35(8)
Universidade dos Açores (PT), Bulgarian Academy of Sciences (BG), Economic Research Institute (BG), Centro de Estudos de Economia Aplicada do Atlântico (PT), Sofia University "St. Kliment Ohridski" (BG)
Decent work and economic growth, Reduced inequalities
Openalex Percentile: Top 12%
Labor Market and Education
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