Gozo businesses face persistent staffing challenges amid tight labour market

Gozo’s business community continues to grapple with a shortage of suitable employees, with staffing challenges emerging as the foremost concern in the latest business sentiment survey.

Despite some improvement since previous rounds in September 2023 and March 2024, this issue remains a significant hurdle for enterprises across the island, reflecting the ongoing tight labour market and historically low unemployment rates.

The survey revealed that the range of concerns for Gozo-based businesses has broadened, with issues such as rising cost pressures following closely behind employee shortages. However, the intensity of these challenges has eased, with concerns about costs dropping by 22 percentage points compared to the same period in 2023.

While global factors such as the pandemic’s aftermath and geopolitical conflicts in Ukraine and Israel have continued to drive international price increases, the easing trend marks a positive turn for the local economy.

Over 40 per cent of businesses in Gozo reported workforce growth in the past six months, with all sectors experiencing some level of expansion. Despite this, the shortage of skilled employees continues to hamper operations for many businesses, particularly smaller enterprises.

The survey highlighted that more than half of Gozo’s businesses employ fewer than ten individuals, while 25 per cent manage teams of between ten and 50 employees. Only 18 per cent reported a workforce exceeding 50, a distribution that has remained consistent across survey rounds and reflects Gozo’s predominantly small-scale business ecosystem.

Looking to the next six months, the outlook is optimistic, with over half of surveyed businesses planning to maintain their current workforce levels. Notably, sectors such as wholesale and retail trade, industry, and construction expressed intentions to expand their teams, even as the construction industry forecasts a decline in economic activity. Significantly, no businesses indicated plans to downsize, further underscoring the strength of Gozo’s labour market.

The businesses planning workforce growth are on the lookout for a diverse skill set. According to the survey, expertise in tools and machinery is particularly sought after, along with strong communication and collaboration skills – key to supporting the operational and sector-specific needs of Gozo’s industries.

However, staffing challenges persist. Speaking to MaltaCEOs.mt earlier this month, Eman Abela, General Manager at Ta’ Ċenċ Hotel in Gozo, noted that the shortage of employees occasionally affects service levels. “A lot of foreigners that we depend on are leaving the country for better careers and cheaper options,” he said, highlighting the dual pressures of labour market dynamics and increasing competition for skilled workers.

The steady or growing workforce levels reported by businesses, coupled with the gradual easing of cost pressures, signal a cautiously optimistic outlook for the island’s economic landscape.