PRESS RELEASE

Researchers and the business sector present proposals to boost employment and competitiveness in Portugal

Report identifies five priority areas for action to address labor market challenges

CoLABOR – the Collaborative Laboratory for Work, Employment, and Social Protection – in partnership with the Minho Region Business Confederation, DST Group, Mota-Engil, and Sonae, along with their members, is presenting the report today Employment in Portugal – Diagnosis and Recommendations for Public Policy and Business Strategiesat a conference/debate at the Manuel António da Mota Foundation. The study was developed through a combination of academic research and business perspectives to build a joint assessment of the main challenges facing the Portuguese labor market and to propose action strategies for public decision-makers, companies, business organizations, and unions.

Nine structural challenges and five priorities for action

The report now being presented, which is available on the project’s microsite at https://eep.colabor.pt/, identifies nine structural issues that continue to hinder the functioning and growth potential of the Portuguese labor market.

Among the main challenges are difficulties in expanding the workforce, obstacles to recruiting and retaining workers, the underutilization of the potential labor force, the mismatch between productivity and wages, shortcomings in the tax system, challenges associated with the integration of immigrant workers, the need for coordination between different levels of social dialogue and negotiation, and the diversification of Social Security funding.

Based on this assessment, the study identifies three major challenges shaping the future of employment in Portugal: a skills gap and a mismatch between available training and the needs of businesses, particularly in the industrial and technology sectors; adverse demographic trends, marked by an aging population, the emigration of skilled young people, and the need to integrate immigrant workers; and low levels of productivity and low wages, associated with an economic model still overly reliant on low-value-added activities.

To address these challenges, the report proposes five priority areas for action:

• economic restructuring by increasing the importance of strategic sectors and those with higher value added;

• promotion of vocational and technical education;

• reskilling programs for the digital and green transitions tailored to vulnerable workers;

• integration of immigrant workers;

• improving fiscal and financial literacy throughout one's life.

Measures aimed at the government, businesses, and social partners

Among the specific recommendations are strengthening the link between businesses and the education system, promoting integrated vocational training models that are effectively connected to the business community, implementing integration programs for immigrants in the first few years after their arrival in Portugal, and fostering collaborative networks aimed at boosting productivity while ensuring wage growth.

The authors emphasize that implementing these measures requires collaborative, multilevel governance involving the government, businesses, labor unions, the scientific community, local governments, and entities within the employment and training system, highlighting the contribution of these various stakeholders to negotiated and sustainable solutions in the labor market.

They also argue that the challenges of the labor market require coordinated, long-term solutions that bring together public policy, business strategies, and scientific knowledge.

Methodology

The study—scientifically coordinated by a team of researchers from CoLABOR, with contributions from external experts in the fields of fiscal policy, skills and job quality, and migration —was conducted using a variety of methods, including CoLABOR thematic workshops, focus groups, and bilateral meetings with representatives from different sectors, interviews with partner companies, a review of specialized literature, and statistical analysis of national and international sources.‍

About CoLABOR

CoLABOR is a collaborative laboratory dedicated to applied research and knowledge transfer in the fields of labor, employment, technology, and social protection, promoting evidence-based public policies and contributing to more equitable, inclusive, and sustainable development.