The labour market at its most volatile

The unemployment rate in Luxembourg has reached 6.5 per cent, the highest level since 2021. Despite the negative macroeconomic statistics, there are signs of recovery in the labour market: since the start of this year, the number of short-term job vacancies has risen by 9 per cent. Laurent Peusch, Head of Employer Relations at the National Employment Agency (ADEM), describes this growth as a positive economic indicator. According to him, the temporary employment sector is the first to respond to rising demand for staff. When companies are uncertain about the long-term outlook, they prefer to minimise risks and hire staff on short-term contracts.

The greatest demand for temporary staff is currently being seen in the logistics sector – partly due to seasonal factors – as well as in retail, construction and healthcare. At the same time, whilst the overall demand for staff in the services sector is falling, the demand for highly specialised personnel is rising. Marc Lebrun, Director of the recruitment agency Randstad Luxembourg, notes that these structural shifts require recruiters to change their approaches, as they have to seek out candidates with the most precisely matched set of skills. He emphasises, however, that it is currently difficult to predict a full-scale recovery of the labour market, primarily due to ongoing digitalisation and the rapid adoption of artificial intelligence technologies.

ADEM does not expect the unemployment rate to fall in the coming months. As Laurent Peusch points out, the number of job vacancies has fallen over the last two months, whilst the proportion of unemployed people has continued to rise sharply. Nevertheless, temporary contracts are increasingly becoming an effective stepping stone to permanent employment for jobseekers. To support young professionals, the relevant government departments, in collaboration with the Federation of Temporary Employment Agencies, have organised specialised seminars. Following introductory lectures, job fairs are held where candidates can speak directly to employers and secure a temporary position straight away. The effectiveness of this approach is confirmed by the statistics: in the first eight months of 2024, 1,800 temporary positions were successfully converted into permanent roles.