Job market and working population in Luxembourg

The working population in Luxembourg in 2020

The Luxembourg labour market is a very active market. The latest figures of 6.3% unemployment rate at the end of November 2020, i.e. 18,159 unemployed (ADEM figures) are mainly a reflection of the crisis linked to Covid19.

The lockdown due to Covid-19 and the stoppage of construction sites, among other things, has led to this incredible increase of 33.6% over one year. This increase in unemployment was due in particular to short-time working, the decrease in the number of people finding a job, as well as the declared number of vacancies.

Nevertheless, Luxembourg’s unemployment rate is below the European average. The Luxembourg labour market reflects the international and dynamic environment that characterises the country.

An international workforce

The majority of employees resident in Luxembourg are foreigners (120,845), 85% of whom are from the European Union. Multilingualism is a reality in the Luxembourg professional world. English is increasingly emerging as a major language in professional exchanges.

Moreover, it is very easy to learn new languages or to improve one’s skills.

The importance of cross-border workers in Luxembourg

The work opportunities present in Luxembourg attract a large number of cross-border workers, whose numbers have been steadily increasing over the last few decades. For example, the capital of Luxembourg, the centre of economic activity, sees its population double on working days. In the 4th quarter of 2019, the country employs 442,772 employees, including 203,522 cross-border workers.

Some studies carried out before Covid report a population of 600,000 cross-borders workers by 2060.

Of all the people working in Luxembourg, more than 45% are cross-border workers. More than 200,000 cross-border workers cross the French, Belgian and German borders every day to work in Luxembourg and leave for France (106,197 employees), Belgium (47,422 employees) and Germany (47,361 employees) in the evening. The threshold of 200,000 cross-border commuters was crossed for the first time in April 2019. This also causes traffic problems on the motorways during peak hours.

Negotiations are underway between governments to find agreements on telework, which was widely used in the Covid19 crisis.

The coronavirus crisis has thus highlighted Luxembourg’s dependence on cross-border workers, particularly in the hospital sector, the retail sector and other priority sectors, which were highly stressed during the period of confinement.

See the results of the Hays Management 2020 compensation study.

Luxembourg, country of services with a service economy

A powerful steel industry emerged in the middle of the 20th century in Luxembourg. Numerous industrial sites of the mining district in Southern Luxembourg testify of this past which gave its development and its wealth to the country. Afterward, with the oil chock of 1973 and the crisis which followed, the Luxembourg economy turned to services and the development of a services economy.

Now an international financial centre, Luxembourg is the first European centre of investment fund and shelters competitive and successful private banks, private asset management and insurance/reinsurance sectors.

The Luxembourg government has been aiming at an economic diversification for a few years, and has been encouraging the development of sectors such as communication and information technologies, logistics, e-commerce and biotechnologies, while favouring research and development.

In fact, it was the service, information and communication sectors that saw the largest increases in hiring (+ 32% jobs over the 2017T2 and 2018T2 periods) during the past year, particularly in accounting, temporary work and computer programming jobs.

At the end of June 2020, the economic branches employing the most people are in the following order:

  • commerce/
    transport/accommodation/catering (22.6%),
  • public administrations and services (21.3%),
  • specialized activities and support services (15.8%),
  • financial and insurance activities (11.5%),
  • construction (10.8%), industry (8.4%),
  • information and communication (4.5%),
  • other activities (4.9% of the active population)

Understand wage levels in Luxembourg and see remuneration by sector of activity

Furthermore, Luxembourg has an important social and political stability convenient to the development, recognized by the confirmation of the AAA rating of major rating agencies.

Working population in Luxembourg: private companies and european institutions

The most important luxembourgish private employers

More and more international companies come to settle down in Luxembourg, in rapidly developing business districts such as Kirchberg or Cloche d’Or. It is the case among others of the big Luxembourg employers, that attract numerous senior executives seduced by the quality of life in Luxembourg.

The structure of the companies is as follows as at 1 January 2019:

  • one-person companies: 39.0%
  • 1-4 employees: 37.2%
  • 5-9 employees: 10.5%
  • >=10 employees: 13.2%.

European civil servants in Luxembourg

The European institutions operating in Luxembourg can also partially explain this constant flow of population according to the movements of the EU civil servants.

The Court of Justice, the Court of First Instance, the Court of Auditors, the European Investment Bank, the Secretarial Department of the European Parliament, and several services of the Commission are essentially located in Luxembourg-Kirchberg. You can moreover find the European School there.

Nowadays, more than 12,500 international EU civil servants are implanted in Luxembourg and constitute more than 5% of the resident working population.

Luxembourgish civil servants

Increasingly, the Luxembourg State is extending civil servant posts to candidates of non-Luxembourgish nationality.
To date, in addition to the study and professional training requirements for each position, candidates must be nationals of a Member State of the European Union, enjoy their civil and political rights and know the 3 administrative languages, namely Luxembourgish, French and German.

See the country’s largest employers

More information about working in Luxembourg