Luxembourg: a dynamic labor market
A Covid crisis that has reshaped the labor market
In 2020, Luxembourg companies had to face an unprecedented health crisis. The labor market has changed.
As elsewhere, they have had to adapt to offer their employees a secure working environment, while continuing their activities.
Today, more and more employees are looking for a better balance between their professional and private lives. Job stability is once again an important criterion.
Nearly 60% of employees plan to stay in their job for a longer period of time, beyond 5 years. However, 75% of employees say they remain open to new opportunities in the job market, in order to give their careers a new boost.
Telework is now fully integrated by companies for the professions that can practice it.
Even though returning to the company is increasingly advocated by the employer, many employees are still reluctant to return to the company premises.
In a changing labor market, are we moving toward making telecommuting a corporate norm? The Chamber of Employees is not really in favor of it today. It would be a matter of one or two days maximum of telework per week.
Left to the discretion of companies, telework is nevertheless today a benefit in kind for employees.
Unemployment rate end of July 2022
But the job market is still very active
Despite the Covid crisis, the Luxembourg labor market is still very active. Luxembourg has an overall unemployment rate below the European average. The Luxembourg labor market reflects the international and dynamic environment that characterizes the country.
While the unemployment rate rose sharply during the crisis, it is now back to the previous level. The mandatory confinement has implied a considerable increase in unemployment of 33.6% over the period 2020/2021. The increase in unemployment is due in particular to short-time working, a decrease in the number of people leaving the workforce and the number of vacancies reported. Nevertheless, the country has emerged from the crisis and is now resuming its activities.
Increasingly technical and operational needs
This new situation reinforces the needs of companies in technical, IT and operational profiles to meet the needs of digitalization of work tools and processes.
An international workforce
Multilingualism and multiculturalism
Luxembourg is characterized by a multicultural, multilingual workforce, just like its residents.
The working population was 499,100 at the end of March 2022, including 219,107 cross-border workers.
At the end of 2021, 53% of the active population was represented by residents, 26% of whom were of Luxembourg nationality. 23% of active foreign residents are from the European Union. Attracted by the career opportunities and quality of life in Luxembourg, many foreign executives find employment in Luxembourg.
Multilingualism is a reality in the Luxembourg professional world.
English is increasingly becoming a major language in professional exchanges, particularly in European institutions, the financial sector and industry. French is used in shops, restaurants and hotels.
The learning of new languages is widely encouraged, as is continuing education.
The international nature of the employees enriches the exchanges in intra- and inter-company relations. Above all, it is an asset for the dynamism of its economy and its openness to the outside world.
% of cross-border workers in the active population
The importance of cross-border workers
Frontier workers are also attracted by the work opportunities and remuneration conditions offered by Luxembourg.
The number of cross-border workers has been steadily increasing over the past decades. The city of Luxembourg, the center of economic activity, sees its population double on working days.
At the end of 2021, the country employs more than 217,000 cross-border workers, or 47% of the active population. 53% of these cross-border workers come from France, 24% from Germany and 23% from Belgium. Some studies carried out before Covid point to a population of 600,000 border workers by 2060.
The 200,000 mark was crossed for the first time in April 2019. This also causes traffic problems on the motorways at peak times. Bilateral telework agreements are constantly being discussed between the countries of the Greater Region to allow border workers to work from home.
The coronavirus crisis has highlighted Luxembourg’s dependence on cross-border workers. This is particularly the case for the hospital sector, mass distribution and other priority sectors, which are heavily involved during the containment period. The hotel and catering industry also has a high concentration of cross-border employment.
A service labour market
Originally an agricultural country, Luxembourg saw the development of a powerful steel industry in the middle of the 20th century.
Numerous industrial sites in the mining basin in the south of Luxembourg bear witness to this past which gave this country its growth and wealth. Subsequently, with the oil crisis of 1973 and the ensuing crisis, theLuxembourg economy turned to services and the development of tertiary industry.
Luxembourg has become an international financial center and is Europe’s leading center for investment funds. It is home to a large and competitive private banking, wealth management, investment fund and insurance/reinsurance sector.
The Luxembourg government has been aiming for economic diversification for several years.
Itencourages the development of sectors such as Communication and Information Technology, logistics, e-commerce and biotechnology. It also promotes the research and development effort, through the University of Luxembourg, but also through research institutes present on the international scene. It invests massively in space and makes its start-ups the spearhead of its economy. Luxembourg defines itself as a “start-up nation”.
The service, information and communication sectors have seen the strongest increases in hiring in recent years, particularly in accounting activities, temporary work and computer programming.
According to the latest statistics in our possession at the end of the 3rd quarter of 2021, the economic branches employing the most people are in order:
- commerce/ transport/accommodation/restaurants 22.1% 22.1%
- administrations and public services 21.6% 21.6%
- specialized activities and support services 16.6% 16.6%
- financial and insurance activities 11.3% 11.3%
- construction 10.9% 10.9%
- industry 8.2% 8.2%
- information and communication 4.4% 4.4%
- other activities 4.8% 4.8%
Private companies, European institutions and the civil service
Luxembourg private employers
Luxembourg enjoys a high degree of social and political stability that is conducive to development. The AAA rating is regularly confirmed by the major rating agencies.
More and more international companies are coming to Luxembourg, attracted by the dynamism of the country. Large multinationals are among the largest employers in the country .
On the other hand, one of the characteristics of Luxembourg is its high proportion of individual entrepreneurs. The business structure is as follows as of January 1, 2019:
- single-person companies: 39.0%.
- 1-4 employees: 37.2
- 5-9 employees: 10.5
- >=10 employees: 13.2
European officials in Luxembourg
The numerous European institutions present in Luxembourg-Kirchberg can explain in part this constant flow of active population, according to the movements of European officials.
As a founding member of the European Community, Luxembourg is home to several European institutions. The Court of Justice, the Court of First Instance, the Court of Auditors, the European Investment Bank, the Secretariat of the European Parliament, and several Commission departments are present and located mainly in the Kirchberg district. The European School I is also located in this area.
More than 14,000 international European civil servants are based in Luxembourg.
European civil servants in % of the active population
Luxembourg public sector
The Civil Service includes more than 30,000 state employees in Luxembourg. More and more, the Luxembourg government is opening up civil service positions to candidates of non-Luxembourgish nationality.
To date, in addition to the educational and professional training requirements for each position, candidates must be nationals of a European Union member state. To apply for a position in the Civil Service, they must enjoy their civil and political rights and know the 3 administrative languages, namely Luxembourgish, French and German.
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