Labor shortage continues to threaten productivity in Portugal

Rising difficulties in finding labor and hiring highly qualified technicians are among the main obstacles to productivity and efficiency, according to companies. In the period between 2014 and 2017, this issue has been gaining priority. Last Friday a study released by the Portuguese Office for National Statistics (INE) showed as well that the number one aspect constituting major blockages to companies’ activities, was the slowness of the judicial system. 

Human resources related activities were not a representative obstacle on a first glance. However, there has been an increasing difficulty in hiring workers, in comparison to 2014. It is increasingly harder to hire highly qualified technicians. This trend has also been identified by many stakeholders, as a very urgent matter.

Vieira da Silva, Minister for Social Security and Work, has stepped up and publicly raised concerns about the labor shortage issue companies are facing.

Even though the labor shortage is intensifying and deserves much attention, a rising difficulty in terms of laying-off staff has also been identified as a major contender to the progress in companies activities. The costs of laying off staff, have been largely reduced in this period, but the companies are still taking note of the blockages they’ve experienced during dismissals. 

Nevertheless, the judicial system takes the lead as the major barrier to company’s growth, as it “was the process mostly identified as a blockage to companies’ activities, being considered of high-cost for the enterprises”. According to this INE study, 49% of the companies considered it a priority, or a high priority issue.

This report gathered information from 5.060 companies, between March and April of 2018. From this universe, only 4,248 answers were considered legitimate. “In 2016, the sales turnover of these companies represented 40.3% of the total sales turnover for all Portuguese non-financial corporations” the study shows. Also, INE included, in this version of the study, a new question that aims at asserting if companies are compliant with their obligations in terms of transparency, through revealing their costs with reporting obligations.

The answers from companies revealed that in 88.5 % of the cases, the reporting obligations’ costs were borne by the corporations directly, whereas 13.5% of the cases they resorted to third-party service providers.

“The companies’ information and fiscal reporting delivery had the highest weight in terms of average annual costs relative to the reporting obligations (37.5%), followed by licensing, certificates and permissions (23.3%)”, Friday’s report also indicated.