Could skills-based recruitment help solve labour shortages?

Could employers be overlooking valuable skills by focusing primarily on formal qualifications? Skills-based recruitment, which places greater emphasis on candidates’ abilities and competencies, is a valuable tool employers can use to find the workers they need – and Europe’s PES can help businesses make the most of it. PES are the authorities that connect employers with jobseekers in the 27 EU Member States, Norway, Iceland and Liechtenstein.

Barriers to overcome

Awareness of skills shortages has grown. So why aren’t more employers focusing on candidates’ skills when looking to recruit? There are a few obstacles in the way, according to a recent European PES networkpaper:

Many employers – especially SMEs – are still unfamiliar with the concept of skills-based recruitment.
Even if familiar, companies may hesitate to adopt skills-based approaches due to perceived resource demands.
Many find skills-based recruitment too complex, resulting in poorly defined skill requirements and generic vacancy descriptions that hinder successful matches.
Many employers don’t fully understand their own skills needs.

This is where Europe’s PES come in. By working with PES, employers can identify their needs and develop recruitment processes that better recognise candidates’ skills and competencies.

PES use digital tools to help improve employers’ vacancy descriptions, for example by identifying occupation-specific and transferable skills. Another valuable service is helping employers distinguish between skills that are essential for doing a job from day one and those that can be developed over time.

Support by country

Such services aren’t new. Many PES across Europe have been helping employers adopt skills-based recruitment for years. Here are some examples:

The French PES (France Travail) uses the méthode de recrutement par simulation (MRS). The system involves simulation exercises – developed jointly with employers – that assess key abilities and skills (e.g. attention to detail, teamwork) needed to succeed in a role. The MRS has been especially effective for sectors facing labour shortages (e.g. logistics, manufacturing, hospitality, retail) by widening access to skilled candidates lacking credentials.
Luxembourg’s PES (ADEM) works closely with employers to co-design skills-based recruitment and training processes, particularly in sectors facing acute shortages (e.g. restaurant and hospitality industry).
Austria’s PES (AMS) partners with employers to define skill requirements and align short training modules with vacancy needs in shortage occupations.
Belgium’s (VDAB) and Finland’s (Työmarkkinatori) PES deploy AI-assisted matching systems that focus on similarities in skills rather than identical occupations.
In Ireland, Regional Skills Fora serve as a coordination platform between the country’s PES (Intreo), education and training institutions and employers. Employers use the Fora to define current and anticipated skill shortages, and education and training boards adjust their curricula accordingly. The result is a stronger alignment between training programmes and industry demand, faster responses to sectoral shortages and increased SME participation in upskilling initiatives.

Overall, PES services support employers in the shift from a qualification mindset to a focus on skills, strengthening their ability to recruit the right people for the job.

PES services are further improved through EU-wide networks such as EURES. Read about the new EURES strategy, and how it supports both employers and jobseekers.

ADEM – Luxembourg PES

AMS – Austria PES

VDAB – Belgium PES

Työmarkkinatori _ Finland PES

Intreo – Ireland PES

Regional Skills Fora (Ireland)

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