• 6.8




Key drivers

Education Flexibility (5.9)

There has been a slight fall in the number of graduates as a share of the population, reducing the supply of skilled workers to firms.

Overall Wage Pressure (10.0)

Wage growth is forecast to accelerate this year, further above the historical average, driving this high Indicator score.

Talent Mismatch (10.0)

The imbalance between the skills offered and those needed remains high relative to the past. It suggests any future employment growth is likely to come from further increases in the numbers commuting in from neighbouring countries for work.


Education Flexibility


Labour Market Participation


Labour Market Flexibility


Talent Mismatch


Overall Wage Pressure


Wage Pressure in High-Skill Industries


Wage Pressure in High-Skill Occupation


Tina Ling

Managing Director, Hays France & Benelux

View from the Ground

With GDP growth of 3% in 2018, Luxembourg remains above the EU average. Luxembourg’s economic climate is good, despite a need for caution as the economic downturn in neighbouring countries as well as the tightening of US monetary policies both have the potential to impact Luxembourg. The strong support of the Government has allowed the economy to remain strong and it is forecast to grow further in 2019 and 2020. The overall unemployment rate is forecast to decrease further to 5%; however there are large numbers of open vacancies going unfilled as Luxembourg lacks the skilled professionals, a prime example being engineers. The population of Luxembourg will exceed 600,000 people in 2019, adding to the pool of potential workers. Many organisations are competing for talent and will have to review their strategy in order to attract new recruits and retain employees.

Tina Ling, Managing Director, Hays France & Benelux

Key Skills in Demand

  • German-speaking Profiles
  • JAVA Developers
  • Electricity Project Managers
  • Mechanical Engineers
  • Transport Managers

Market Insight

The Luxembourg economy continues to expand, with annual GDP growth reaching 3.2% in 2018. This expansion is underpinned by solid growth in household and government spending.

The strong growth and active labour market policies reduced the unemployment rate to 5.4% in 2018. It may prove challenging for the unemployment rate to decline much further, because of skills mismatches and the financial disincentives to work embedded in the tax and benefit system. The latter explains the high unemployment rates among the young and low-skilled.

Participation rates for women at 55.8% and older people at 42.0% (55-64-year-olds) remain low relative to European peers. This is thought to reflect the high marginal effective tax rates for second-earners, and the generosity of the pension system and pre-retirement schemes.