Luxembourg is ranked second out of 69 destinations for talent, right behind Switzerland, in the 2025 World Talent Ranking by International Institute for Management Development (IMD). Yet, it faces an acute shortage of skilled workers, which threatens to slow growth in key sectors. The problem is not volume, but a structural mismatch.
Lacking specialised profiles
In general, according to IMD, employers in Luxembourg report major difficulties hiring competent senior managers, giving an ease-of-hiring rating of 5.58 out of 10 (with 10 meaning readily available). For general skilled labour, employers gave a 4.41 rating. In 2024, acute shortages were noted among highly skilled finance and compliance experts; IT; cybersecurity; and data specialists; engineers and R&D professionals; and healthcare and social care workers, according to Luxembourg’s employment agency ADEM.
A Willing Workforce
On the surface, Luxembourg does not lack workers. In December 2025, 21,100 people were registered as unemployed in Luxembourg, up 8% from December 2024. Over 45s made up 40% of the country’s jobseekers. According to OECD data, from 2024 to 2025, unemployment among people with university degrees rose 10% as graduates in general social sciences struggle to find roles.
What Luxembourg lacks are specialised profiles, a phenomenon linked to changing labour demands causing a polarisation of the labour market. The result is a sharp shift in employment patterns: employment among people with tertiary education doubled from 2010 to 2023, according to the OECD Economic Survey: Luxembourg 2025. Low-skilled services in sectors like construction, hotels and restaurants, also grew. Meanwhile, middle-skill employment, requiring upper secondary education, shrank.
The shift is driven by automation and AI in information processing and by Luxembourg’s focus on high-value services, in areas like space, cleantech, sustainable construction, health technology, industry, IT, and logistics, requiring high level qualifications and experience.
Hiring Abroad
An obvious solution is to fill these roles with candidates from outside of the country. However, because the skills shortage is Europe-wide, Luxembourg finds itself competing with global hubs like Dublin, Paris and London for talent, not always with success. Recruiters extending the search net beyond the EU face additional barriers. Skilled workers in regulated professions who trained outside of the EU must have their qualifications recognised in another EU country and have three years’ of professional experience. The Luxembourg Chamber of Commerce addressed this challenge in its Talent4Luxembourg roadmap listing 34 recommendations gathered from a consultation with companies, representatives and HR leaders. Launched in December 2025, the roadmap advocates for a faster and more transparent procedure to boost the talent pool by focusing on administrative onboarding.
Languages also pose a challenge to non-EU nationals who may not be comfortable in French, which was cited as the main language in 70% of job listings in the private sector, ADEM reported in 2025. The good news is that English, often seen as a vehicular language for non-EU nationals, is growing as the main language of work in several sectors. To support this shift, the chamber of commerce called for English to be taught from the start of the school curriculum to foster a more globally-oriented education system.
Centralising Information
In the short-term it has taken steps to make it easier for candidates to access information, through the Talent Desk. Launched in January 2026, as a joint initiative with the economy ministry and created with other partners, this physical information point for workers and employers aims to guide international professionals and companies through relocation and recruitment in Luxembourg.
“The Talent Desk offers a single, human and reliable entry point for international talents, their families and companies, simplifying administrative processes and strengthening Luxembourg’s attractiveness,” explained Muriel Morbé, CEO of the House of Training and director of Talent and Skill at the Luxembourg Chamber of Commerce. “The key objective was to ensure a personalised and human contact.”
A connected initiative is “Work in Luxembourg”, a portal centralising relevant information for companies and international talents. It includes a chatbot, ensuring requests can be handled digitally.
The Power of Spouses
Among the Talent Desk’s first projects will be the Spouse Programme, a training and support programme. Organised by the House of Training, with the ministries of economy and family affairs and chamber, it aims to help spouses of international talent find work in Luxembourg. “The Spouse Programme recognises that successful talent attraction is a family journey, supporting partners’ integration is key to long-term retention,” said Morbé, adding: “This programme provides guidance and training to support spouses in integrating into life in Luxembourg and in finding suitable professional activities.”
To improve the country’s image abroad as an attractive place to work, the chamber will collaborate with Trade & Invest, and Luxinnovation to promote the theme at international trade fairs and economic missions. “International digital campaigns will also be launched. These are concrete steps currently being discussed within this specific working group, together with ministries and other stakeholders,” said Morbé.
Upskilling Workers
Based on projections from Luxembourg’s General Inspectorate of Social Security, Luxembourg will need to hire 335,000 more staff between now and 2040 to replace the anticipated 180,000 retiring employees, fill 155,000 new roles and ensure a functioning social security system. Given the country’s aging population, hiring from abroad is a necessary solution but not the only one. Turning attention to upskilling the country’s existing workforce is equally important, and challenging.
“To ensure productivity growth, it is crucial Luxembourg develops the skills of its workers and supports their professional mobility. If not, the talent shortage risks becoming a structural barrier for prosperity,” the OECD noted into its employment perspectives report.
Employee training is widely used by employers thanks to generous state subsidies, covering a baseline rate of up to 15% of the total investment in employee training.
In 2021 only around 2,248 companies benefited from public training funding, according to the Observatory of Skills at INFPC. But it is gaining momentum. According to Ioana Popp of Luxembourg think tank Fondation IDEA, over the past two years, 38% of SMEs in Luxembourg have relied on training and reskilling their staff.
“While this is an increase, it remains far from sufficient,” said Morbé. “Luxembourg aims for a 62.5% adult participation rate in lifelong learning by 2030, we are still a long way from that target.”
Popp argues that the training co-funding is underutilised due to difficulties in finding suitable training providers, high costs and lack of resources, while it also remains largely unknown among companies.
20-60% Subsidies
To incentivise more employers to invest in upskilling staff, the chamber of commerce advocated for the proportion of subsidies to rise from 15% to 20% and for the scope to be expanded so that self-employed people can benefit. This proportion should rise to 60% for training linked to an AI proof of concept or in strategic areas.
“This measure should equally apply for older workers, enabling them to update their skills in-line with market needs and support their employability,” the chamber wrote in Talent4Luxembourg.
Luxembourg already offers co-funding for employers providing training for staff aged over 45, covering up to 35% of the costs, making it a strong incentive to recruit experienced talent. However, according to a 2025 employment barometer survey, only a third of surveyed employers were aware of these schemes.
Cross-Border Workers
The 220,000 crossborder workers, who make up almost half of the workforce, also play a critical role in the talent game. But, with long commute times, worker numbers are declining among those living in Germany and Belgium. Teleworking reduces congestion, improves work–life balance, and is an important factor in attracting and retaining talent. However, fiscal arrangements with respective countries limit the number of days they can work from home without being doubly taxed.
The umbrella organisations for Luxembourg’s private sector employers the UEL has recommended a 25% fiscal “safe zone” to harmonise tax regimes and allow for more for home working without being stung by the tax office. At the time of publishing, no further announcements had been made by the government on this matter. Doing nothing, however, is not an option.
Despite recent concrete actions, many solutions remain subject to discussion, negotiation or, like the elevation of English to administrative language, purely a recommendation from the Chamber of Commerce.
Luxembourg’s challenge is not simply attracting talent, it’s about aligning systems, language, training, and expectations fast enough to keep the economy running.
This article was published in the Silicon Luxembourg magazine.
