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Where are the available workers?

In recent years the number of people of working age has increased by two to three thousand a year. There has been a severe contraction in the economy over the last years so in general the demand for jobs considerably outweighs supply. This is now changing and there is greater equilibrium between demand and supply.  As the level of education is high in Iceland, there is a considerable number of well-educated people unemployed, but it should be mentioned that half of the individuals registered as unemployed are educated only to junior secondary level. 

There are now slightly fewer foreign citizens in the job market, but the number has not fallen as much as had been forecast; they still make up 8-9% of the workforce. The number of people leaving the country decreased considerably in comparison to 2009 when 4 835 more people moved from the country than to it. The majority moved from Iceland to Norway or Poland (the largest single group of immigrants to Iceland is Polish).

Unemployment has continued to be greatest in the construction industry as well as in the service and retail sector over the last quarters and months. This includes professions such as architects, carpenters, electricians, plumbers as well as various retail and service personnel.

Text last edited on: 04/2014

Where are the available jobs?

Since autumn 2008 many jobs have been lost on the Icelandic labour market, especially in construction and the retail and service sector, as a result of reductions in private consumption. Business has increased in the tourism industry and has benefitted from the reduction in the value of the Icelandic krona.

The number of tourists has increased and it is expected that this development will continue, bringing with it an increase in related jobs. The software development and IT sector has grown in recent years and there is now something of a shortage of computer scientists and software developers of all kinds.

Representatives of the industry believe that over the next few years about 1000 people need to graduate in this discipline in order to meet the industry’s needs. In addition, there is a shortage of labour within the metal industry, for example for welding and iron working. Within the health sector there is a shortage of personnel at all levels. Doctors and other health professionals have increasingly moved out of the country or not returned home after specialising during residencies or fellowships abroad.

Text last edited on: 04/2014

Short overview of the labour market:

The population of Iceland numbers 325 671 (1 January 2014) and has increased by about 1.2% in a year. The growth affected men and women similarly but there were 1065 more men than women in Iceland at the end of 2013. The Icelandic nation is one of the youngest in Europe – with an average age of around 36 years and 74% of the population being under fifty. The Icelandic labour market is characterised by a high participation rate, i.e. around 80% of all able-bodied individuals aged 16-74 participate in the labour market.

The most important sectors in Iceland are service industries such as travel, financial and health services, miscellaneous industries, agriculture and fishing. The relative importance of these sectors has changed somewhat recently; the significance of service industries, for example, has increased considerably in recent years while fishing and other production industries have declined.

35% of employees work in jobs that require a university education or other specialised knowledge. Office and commercial workers number around 26%, tradesmen 13%, and 12% are unskilled workers. Farmers and fishermen number around 5%. Another characteristic of the Icelandic labour market is the general awareness and high proportion of trade union membership, at around 85%.

During most of the last 55 years, the Icelandic labour market has exhibited a considerable excess demand for labour. This is partly explained by the fact that in times of economic difficulty, the solution has been to reduce spending power and decrease the value of the Icelandic krona, whereas countries in the Euro zone have in similar circumstances allowed unemployment to rise.

In 2007 unemployment was 1% on average and 1.6% in 2008. Gender and region appeared to have little impact on unemployment. Unemployment has increased considerably since autumn 2008, on average 8% in 2009, 8.1% in 2010, 7.6% in 2011 and 5,8% in 2012. It is forecast that unemployment will decrease over the next months. Registered unemployment in Iceland is today about 4,5%.

The bottom appears to have been reached in the Icelandic economy in 2009 and economic growth now measures 3,3% but was 1,5% a year ago. Many uncertainties remain that can easily change the situation.

Text last edited on: 04/2014

Hot jobs:

Top 10 of the most required occupations in Iceland

1.    Service and sales workers    (ISCO 5)
2.    Elementary occupations    (ISCO 9)
3.    Waiters and bartenders    (ISCO 513)
4.    Sales workers    (ISCO 52)
5.    Agricultural, forestry and fishery labourers    (ISCO 921)
6.    Hairdressers, beauticians and related workers    (ISCO 514)
7.    Child care workers and teachers’ aides    (ISCO 531)
8.    Personal services workers not elsewhere classified    (ISCO 5169)
9.    Clerical support workers    (ISCO 4)
10.  Technicians and associate professionals    (ISCO 3)