Attracting and retaining labour one of Portugal’s top priorities says minister
A chronic lack of human resources – one of the greatest challenges facing Portuguese employers, particularly in the hospitality sector – was flagged up by Portugal’s minister of Work and Social Security, Ana Mendes Godinho this week.
The minister addressed business leaders on Tuesday at a lunch organised by the International Club of Portugal (ICPT) on the topic of ‘An Agenda for Decent Employment’ held at the Sheraton Hotel & Spa in Lisbon.
In her speech, the minister highlighted that Portugal could not hope to enjoy growth if it didn’t have the capacity to attract labour, particularly skilled labour, and provide the conditions and wages to retain them.
Ana Mendes Godinho added that Portugal needed overseas workers to make up for the lack of manpower that the country suffers from.
And she said that the majority of the 660,000 employees from overseas that were making social security contributions were from Brazil and the Portuguese-speaking African countries or PALOPS. This compared with the 120,000 registered in 2015; a sharp increase in Portugal’s labour market.
“Out of the 660,000 workers from overseas, 360,000 are from Portuguese-speaking countries, and this shows everyone the direction we have to take and even more so now”, said the minister adding that attracting talent is a challenge “not just for this country but for the world.”
The minister recalled that the Portuguese government had approved the Mobility Agreement legislation on visas with special rules to fast-track citizens from Portuguese-speaking countries and making it easier for them to come to Portugal.
Ana Mendes Godinho also mentioned that the total number of employees who pay national insurance contributions to Social Security stood at around 5 million people or just under half of the population of Portugal.
That meant “more than a million active workers paying national insurance contributions than in 2015, of which 300,000 are aged under 30.
Lessons from life
Describing herself as a “restless woman always on the go” Ana Mendes Godinho took the opportunity to outline some of the “lesson I have drawn from life” during her intense tenure as Portugal’s minister for work and social security.
Considered as one of the most friendly and accessible of all the ministers currently serving in the PS party socialist government – she actually gave out her work mobile phone number during he lunch! – Ana Mendes Godinho highlighted intense moments that her ministry had to experience such as during the Covid-19 pandemic which required the government to “react rapidly”.
The first lesson was: “Only by working collectively can we face the huge structural challenges facing us, which evidently during the pandemic became more intense and needed a rapid response,” she said.
“It was evident that problems that usually would have taken years to sort out were dealt with in a matter of moments. I remember a measure that we created, apart from the simplified lay-off regime, was achieved from one day to the next with the extraordinary participation and support from social partners, and in which everyone had to compromise to come up with a solution”.
The minister gave the example of the programme PARES, a measure that boosted the government’s social funding by 20% during Covid-19 to help the most vulnerable in society with a €900 million cash injection; a decision that was taken in just one day.
Focusing on the essential
“The pandemic put us all to the test and showed how we could do things quickly and in a different way when it’s an emergency”, she said.
“The pandemic showed us that when we’re up against the wall we can have a great capacity to focus on the essential, particularly in the collective response from the welfare state in its various dimensions – regarding companies, employees, social welfare, and organisations – we were able to show how we could respond in a different and better way”.
The second lesson was that the pandemic revealed Portugal’s weaknesses as a society at a critical time with the challenges posed by an ageing population coming to the fore, and which although were evident from the statistics, had not been given due attention in terms of measures and solutions.
“The pandemic revealed social situations that were dramatic because of the number of people who were outside of the welfare system, and therefore completely unprotected, and so we needed a system that could come up with solutions that were completely new to help groups of people that were on the margins of society,” explained the minister.
And continued: “Structural problems don’t just affect one person as an individual, but end up spilling over to affect us all because a pandemic of this nature affects the whole of society and cannot be confined to just a few. Growth has to be inclusive, you can’t have growth for just some groups because (emergencies) affect us all.”
The minister stressed that government, society and its welfare services had to have the public capacity through collective commitments to respond to emergencies whether the pandemic, the effects from the war in Ukraine, inflation, and migration without paralysing investment and the structural transformation that needs to be undertaken.
A good example of this collective cooperation and commitment was the Incomes and Competitiveness Agreement reached between social and business partners signed in October 2022 that agreed to improve salaries, incomes and competitiveness in the medium term.
The agreement rested on three essential pillars: raising the national minimum wage to €900 or 4.8% by 2026, providing incentives to companies to hire and pay better wages, and paying young people better salaries.
The minister paid a particular compliment to the former leader of the Portuguese business confederation CIP, António Saraiva who was at the lunch and had to deal effectively with salary questions during the pandemic and ensuing inflation which saw the real purchasing power of the Portuguese eroded, particularly effecting the lower paid echelons of Portuguese society as consumer inflation in Portugal reached 7.8% in 2022.
Lack of human resources
But the biggest challenge for businesses, social partners and the government today is the lack of human resources in Portugal.
“We have a historically low employment rate (Currently 6.1%), yet we managed to overcome the worst effects of the pandemic with extraordinary results, with historically high employment rates, and this is the fruit of everyone’s work,” said Ana Mendes Godinho.
And added: “This was possible because the whole of society decided to accept the risks by keeping people on and paying their wages for the sake of social cohesion and thereby overcome the crisis.”
Portugal’s 4-day week experiment
On the sidelines of the lunch-debate, Ana Mendes Godinho, who has been in the post for three years, also addressed the controversial measure of a four-day week, to which some companies have already signed up to.
In an interview with New Men the minister said that the government had launched a four-day week pilot project, inviting companies that wanted to partake and that 40 companies had signed up.
The pilot project is to gauge the advantage and disadvantage of the measure and see what impact it will have on productivity.
“Of course, this pilot project is underway at the moment and we’re hoping to begin taking stock by the end of year through an evaluation by an independent team that is monitoring this project, and see what lessons we can glean, see what we can learn, and how we can improve apply best practices that could inspire other organisations,” she said.
Text: Chris Graeme Photo: ICPT