Following the robust recovery from the pandemic, the global economic landscape has encountered significant challenges, including soaring inflation rates and subsequent adjustments in monetary policies.
However, amid this turbulence, the Maltese economy has showcased remarkable resilience, boasting a robust growth rate of 5.6 per cent in 2023, the highest among all EU member states. This economic strength has been mirrored in the labour market, with a notable 6.5 per cent increase in employment last year. As of March this year, the unemployment rate stood at a mere 3.2 per cent, which is almost half the EU average.
The strong performance of the Maltese labour market reflects both economic strength and effective policy interventions. The government’s initiatives under the banner of ‘Making Work Pay’ have propelled several active labour market policies aimed at fostering quality employment and reducing dependency on social benefits.
Initiatives such as the Tapering of Benefits scheme have successfully reintegrated long-term unemployed individuals into the workforce. Additionally, initiatives like the Free Childcare Scheme and In-Work Benefit have boosted labour force participation, particularly among women.
Furthermore, avenues for youth development have flourished, with Malta reporting a NEET (share of youth not in education, employment or training) rate of 7.5 per cent, significantly lower than the EU average of 11.2 per cent.
The Youth Guarantee Scheme has been instrumental in this regard, benefiting around 6,810 individuals aged 15-25. Jobsplus, leveraging initiatives such as Work4NEETs, ALMalta, Intercept and Smartly, remains steadfast in its commitment to empowering youth by refining their digital and green skills.
Underpinning these efforts is the National Employment Policy 2021-2030, which prioritises inclusivity, equality and mobility. Jobsplus plays a pivotal role in realising these objectives, offering tailored job advisory services for various demographic groups and serving as a conduit between vulnerable populations and employment opportunities.
Programmes such as VASTE have been particularly successful in assisting individuals facing social challenges. Moreover, the government has fostered collaboration with the private sector to identify emerging sectors and skill demands. Initiatives like the Access to Employment Scheme support employers in upskilling and reskilling their workforce, while other schemes offer financial incentives for businesses investing in employee training.
Despite the surge in labour market participation, demand has outpaced supply, resulting in widespread shortages. Data from the National Statistics Office indicates approximately 7,600 vacancies in Q4 of last year, translating to approximately seven vacancies for every job seeker registered with Jobsplus.
The Maltese economy has showcased remarkable resilience- Byron Camilleri
Consequently, there has been a substantial rise in the recruitment of foreign workers in recent years, making up approximately one-third of the workforce. The influx of foreign workers fills crucial gaps in the labour market and facilitates the transfer of valuable skills to the Maltese workforce, opening doors for local employees to pursue higher-skilled occupations.
However, high turnover rates among foreign workers pose continuity risks for businesses and strain resources devoted to recruitment and training. This underscores the need for long-term workforce development strategies.
And amid the ‘Triple Transition’ – digital, green and social – the government remains committed to enhancing skills development. Investing in digital literacy and technological proficiency is paramount in an era defined by rapid digitisation and automation.
Similarly, the transition towards a green economy presents both challenges and opportunities for workforce development.
Prioritising green skills training and environmental education can position Malta at the forefront of the global transition towards sustainability.
Initiatives like Intercept and Smartly focus on digital and green skills, aligning with projections of increased demand in these areas. Additionally, efforts to ensure that foreign workers have the right skill set include the introduction of the Skills Pass in the tourism and hospitality industry.
Ensuring a dignified work environment free from exploitation remains a top priority, underscored by recent legislation regulating temping agencies to safeguard temporary workers’ rights. Moreover, endeavours to integrate foreign workers into society through training and language courses aim to minimise hiring costs and enhance productivity.
The National Employment Policy 2021-2030 embodies Malta’s vision for a dynamic and inclusive workforce, equipped to thrive in the evolving economic landscape. By fostering collaboration between the government, private sector and civil society, Malta is poised to sustain growth and create opportunities for all citizens to improve their livelihoods.
Byron Camilleri is Minister for Home Affairs, Security and Employment.