This blog is part of the series “Quo vadis Europa?”, hosted by the European Economic Policy program at Polis180.
Europe’s labour markets are going skills-first. But if employers still ask for a degree, a job title or a famous employer, has anything really changed?
A blog post by Benjamin Holzmair
A Missing Layer in Europe’s Skills Infrastructure
Europe faces demographic change, rapid technological development and pressure to improve productivity. In this environment, what people can actually do becomes an economic asset.
Labour markets across Europe are responding with a shift towards a skills-first approach. This approach places greater weight on demonstrated capabilities like work samples or micro-credentials when hiring, rather than relying primarily on degrees, job titles or work history. To support this shift, the EU built key infrastructure. For example, ESCO provides a common language for skills, European Digital Credentials create verifiable records of learning, and Europass supports portability across borders.
The goal was a complementary system for retaining, developing and creating new talent in the Union. But one simple question remains: can employers trust what this system tells them?
The recent OECD report A Skills-First Labour Market highlights this challenge. Employers differ in how much they trust skills signals, particularly from non-traditional sources like professional certifications or assessments. Europe invested heavily in establishing a skills infrastructure. Now they need to make the assessment behind it trustworthy.
Building a European Trust Layer
The problem is that a digitally verified certificate proves a person completed an assessment, but not that the assessment rests on reliable criteria employers can trust as much as traditional qualification signals. Traditional signals like job titles or work history often benefit from established institutions and reputations, while non-traditional signals lack this shared basis of trust.
The solution would not be to build an entirely new system. National validation systems, European guidelines and quality assurance already provide key principles. One approach could be a voluntary European pilot with employers and relevant actors that brings these existing foundations together.
Building on existing standards, the pilot would restructure and develop the guidelines into commonly trusted principles for assessment quality, transparency and comparability. Its aim is to strengthen the infrastructure so employers better understand and trust how skills were assessed, while keeping existing systems in place.
Trust Has to Be Co-Designed
Trust cannot be created simply by writing guidelines in Brussels. The people relying on skills signals must help define what trustworthy assessment looks like. A voluntary European pilot could bring together public authorities, employers, social partners, education providers, validation bodies and researchers, building on the OECD’s recommendation for coordinated action.
Together, participants could test whether a co-developed framework improves trust in non-traditional skills signals and whether hiring based on these signals yields positive outcomes for companies. The key question could be: Would these improvements make employers more willing to hire based on skills assessed in this way?
The pilot could examine this by measuring changes in employers’ willingness to use these signals in hiring, the number and share of hires based on them, and changes in firm performance.
Scale or Fix the System
If evidence shows that jointly developed principles increase employer trust and improve the economic state of the firm, these elements could be gradually incorporated into existing European and national systems.
If improvements do not increase trust or produce better outcomes, that finding also matters. It suggests barriers to skills-first hiring lie deeper than the quality of alternative signals. Europe might then look more closely at how traditional qualifications could be strengthened, updated or opened to skills acquired outside formal education and lifelong learning.
Turning Skills into European Competitiveness
This may look like a technical question about credentials, but it is not. It directly impacts Europe’s competitiveness.
Mario Draghi estimated that lower productivity accounts for around 72 per cent of the EU’s per-capita GDP gap with the United States. Better use of Europe’s human capital cannot solve that gap alone, but it is an economic asset Europe cannot leave underused. The OECD underlines this by stating that a skills-first labour market can reduce information barriers and improve matching, raising productivity at both firm and economy-wide levels.
Europe has spent decades building a Single Market in which goods, services and capital move with confidence. The next challenge is to make human capital equally visible, portable and trusted.
Benjamin Holzmair writes on human capital: what enables people to realise their potential, and what societies and economies gain when they do. He is a member of Polis180’s working group on EU economic policy, a fellow of the RuhrTalente scholarship programme, and is building his own start-up alongside his final year of secondary school. In an age of demographic change and AI, he argues, what people can do may be Europe’s most underused competitive advantage.
Image via Gemini
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