The Mega Trends in the Italian Labour Market

There is a pre-covid and a post-covid Europe. The pandemic led to an unprecedented economic fallout, with the EU GBP falling by 6.1%, and a period of great uncertainty for businesses and workers. However, it was also a turning point that pushed Europe to come back even stronger.

With €806.9 billion invested in post-pandemic economic recovery, the European Union plans to not only address remaining Covid-19 challenges, but to rebuild a more modern and sustainable economy. One key programme that supports this is the European Year of Skills, which focuses on solving key skills gaps in order to meet employer demand and support innovation. 

The impacts of such strategies on the workforce are multiple: skills needs are changing, new occupations are emerging, and industries are becoming eco-friendlier. Our Head of Global Research, Elena Magrini, gave a keynote speech at the Forum PA conference in Rome this year, where she discussed the latest megatrends affecting the Italian labour market. If you weren’t at the conference, you did miss out, but luckily, we gathered some of the insights Elena presented in this blog. 

For those who are maybe not too interested in the nuances of the Italian labour market, stay tuned, as many of the trends she was talking about are similar in other countries across Europe and indeed the world. And whether you’re a pasta aficionado or not, you may also be interested in exploring Italy’s food sector and whether it is as dominant as our Milan-based team wants to believe (no spoilers!).

The Italian workforce is going green

The growth of green jobs has the potential to shake up the labour market even more noticeably in the future. As governments invest in building emerging green economies, occupations related to sustainability and the environment are increasingly more frequent. Despite it being a global phenomenon, the rate at which green jobs are growing and green skills are required varies between countries. 

In Italy, we can see that 1.7% of all job postings required some sort of green skills in 2022. This is, in fact, the highest percentage out of the European countries we studied (France, Spain, Germany, and the UK), meaning that the grass may be greener in Italian territory. 

It’s also worth noting the upward trend: in 2019, less than 1.25% of Italian job postings mentioned green skills. Compared to the 1.7% we noted in 2022, that’s a staggering 36% growth. Within Italy, the south has seen the highest demand for green skills, with job postings in Basilicata, Sicily, Sardinia, Valle d'Aosta and Puglia requiring green skills in over 2.5% of their job postings. 

One Italian sector is at the forefront of green job postings: about 70% of all job postings for the water supply, sewage and waste management sector are green. Electricity, gas, steam and air conditioning supply is the second sector with the highest share of green job postings (over 35%). The third “greenest” sector is construction, with a much smaller share of 5%. Despite the clear lead, it’s worth noting that the demand for green skills is spreading fast across all sectors - not just those that are directly related to the environment. 

The essential digital skills in Italy

It’s all about technology now. So much so that 40% of all job postings in Italy require digital skills, and the percentage is fairly similar in France, Spain and the UK. In Germany, the share of job postings requiring digital skills is even higher, at close to 50%. If you’re wondering what digital skills mean - this term is broad enough to include simple communication software tools you may use daily, like Microsoft Teams, but also much more complex subjects like computer science and programming languages. 

The most in-demand digital skill in Italy, France, Spain, Germany and the UK is Microsoft Office, present in a staggering 13% of all job postings in these countries. Microsoft Excel comes second in the list, with an equally impressive 11%, and Microsoft PowerPoint comes fourth. We can see that the Microsoft suite is widely used by workers, and remote and hybrid working trends made it even more indispensable.

The top 10 list of most in-demand digital skills also includes computer science, automation, personal computers, and programming languages such as SQL and Python. There is a good variety of highly technical digital skills, and more basic tool knowledge. 

Digital skills across industries

So there is demand for digital skills, but where exactly? IT would be an obvious one to pinpoint, but demand spreads far beyond this sector. In the Construction and Healthcare sectors, for instance, about 15% of job postings require digital skills. They may not request Python knowledge, but as we have seen earlier, knowledge of software tools is now a must-have for a large number of roles. 

The Media sector has the highest share, with almost 40% of Media-related job postings requiring digital skills. Manufacturing is another key industry that has seen high demand for digital skills, potentially due to the integration of new automation technologies. 

AI-taly: The growth and impact of AI technologies

We can’t talk about digitalisation without mentioning AI anymore. Those who weren’t familiar with this technology may have become more acquainted with it after ChatGPT shook up the internet - but there is more to AI than meets the eye. 

Demand for AI skills surged in Italy, especially since 2018. Some of the most popular AI technologies or applications include Visual Image Recognition, Autonomous Driving, Neutral Networks and Robotics. While the growth in demand for these technologies isn’t particularly significant, the demand for Machine Learning (ML) skyrocketed over the last years. ML skills went from appearing in just 0.01% of Italian job postings in 2014, to a little over 0.3% in 2021.  

Talent shortages in Italy

It isn’t all rainbows and butterflies for the Italian labour market. Europe is facing a worrying demographic crisis, officially called “The Ageing of Europe,” which impacts the labour market too. As the working age population declines, there is not enough talent to meet the skills demands of employers and support the advancements we see in technology, sustainability, and other areas. 

Italy is certainly not alone in dealing with the demographic drought, but its position is nevertheless concerning. With a declining working age population that is on the border of facing skills, tech and innovation gaps, its skills and talent shortages pose a significant barrier to the country’s economic growth, and add a high level of uncertainty to its labour market. The future isn’t looking the brightest either: the number of vacancies in Italy are at an all time high, so the talent shortage is likely to get worse. 

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