As increasing labor shortages continue to spread across Europe, employers intensify their calls for policies allowing them to fill the vacancies – and with summer in full swing, especially in sectors with seasonal need. This trend is apparent in a number of major European economies, with German, Italian and UK farmers stressing the need for more workers and the Portuguese worker shortage in the tourism sector threatening the country’s economic recovery.
In the midst of these labor shortages, Spain has approved a reform to streamline and improve its seasonal worker scheme – a move that may offer an example to other European governments facing similar issues.
Spain’s 4-year Multi-Entry Visas are Key to the Reforms
At the end of July, Spain approved the overarching package of reforms in an effort to reduce bureaucratic red tape, increase flexibility, predictability and transparency in visa conditions, improve regularization procedures for migrant workers, and incorporate greater responsiveness to labor market trends.
The reforms include promising changes to Spain’s GECCO[1] program, the country’s main seasonal worker scheme. Instead of short-term work authorization periods that are valid only for the duration of seasonal contracts, the reform introduces a four-year multiple-entry work authorization that allows workers to stay and work in Spain for up to nine months each year. If workers comply with the rules, they can renew their work authorization for another four years or switch to a two-year residency and work permit.
In most countries, seasonal worker visas are structured as short-term work authorizations of up to 9 months. Workers have to then apply for a new visa for each year, which can create great uncertainty and elevated costs. Frequent renewals are also cumbersome for employers and complicate efforts to rehire the same workers they previously trained.
The longer authorization horizon included in Spain’s reform could have many positive impacts. Workers should benefit from reduced bureaucracy and costs, a more stable and predictable legal status, and a path to a more open-ended visa option. Employers should benefit from productivity gains as workers build skills and experience across multiple seasons. And the government should have fewer visa renewals to process each year, implying important cost savings to the public budget.
On top of that, the promise of future visas tied to returning home has shown to reduce overstay in other contexts.[2] Such a system creates incentives to “play by the rules” by providing a predictable path to additional or more flexible work permits to workers abiding by the circularity rules.
Further Changes To Consider
While the reforms represent a leap forward, the government should implement further improvements to the GECCO program that will align employer incentives with good worker outcomes and strengthen worker agency. These improvements would help ensure that the positive intent and potential of the reform are met in practice. Specifically, without building additional flexibilities into the scheme, the multi-annual visas may inadvertently worsen power dynamics between employers and migrant workers.
The following are policies and practices that the government should consider during implementation of the reform to create a win-win-win situation for employers, the involved government, as well as all workers.
- Occupation- or sector-specific visas. Untying workers visas from specific employers, allowing them to change jobs as long as they stay in the same sector or occupation, could reduce workers’ vulnerabilities, strengthen their wages, and improve working conditions. Evidence shows lower levels of reported abuse and higher wages when migrant workers can change employers.[3] In other words, allowing migrant workers to switch employers motivates businesses to improve their treatment of workers to be able to keep the workers they trained, and in whom they invested. This then leads to improved working conditions and wages for all workers.[4]
- Educating workers on labor rights. To make positive use of these reforms, government agencies should institutionalize partnerships with non-profit organizations on the ground who can provide migrant workers with a thorough practical understanding of the GECCO program and their rights. This greater knowledge can strengthen workers’ agency and ability improve working conditions overall.
- Capacity building for sending countries’ employment & training agencies. Employers currently using the GECCO program are often concerned about the quality of job matching, as they need to ensure the arriving workers are well-vetted and suited to the job. At the same time, countries of origin seek to develop a better trained workforce for their own economies. The Spanish government could have a role to play in addressing both of these issues. Spain’s government should support the capacity and functions of sending-side public employment agencies so as to facilitate proper recruitment, skills matching, and hiring practices. It should also consider programs like Global Skills Partnerships that, if designed well, may bolster the pool of qualified workers in essential sectors in both Spain and countries of origin. These investments would represent an important step towards ensuring that the development gains of migration are felt by all.
Conclusion
In times of growing labor scarcity, Spain’s reform serves as a promising example for other European countries considering adjustments to their seasonal worker programs. If implemented as a holistic system, the changes have potential to strengthen productivity and economic growth in Spain, and lead to better outcomes for national and migrant workers alike.
In this blog we suggested a few additional policies and practices that should accompany the reform to bring further flexibility and innovation – thus make the GECCO program work better for employers while also safeguarding workers’ rights.
[1] In Spanish “Gestión Colectiva de las Contratacions en Origen”, GECCO.
[2] The New Zealand Recognised Seasonal Employer Scheme (a gold standard among temporary mobility programs) had overstay rates of less than 1 percent for its first six years. (Clemens et al 2018). The program allows workers from Pacific Island states to work for specific employers on a seasonal basis, no longer than 7 months within the 11-month seasonal period. While a migrant worker’s stay in one season is limited, it is possible for that worker to return in subsequent years to work for the same or a different employer. This sense of job security gives workers an incentive not to overstay their visas, while also creating relative consistency and predictability within the circular design.
In contrast, the UK’s Seasonal Workers Agricultural Scheme (as it existed between 1945-2013, it has now been reintroduced and fully redesigned) had overstay rates as high as 10 percent (Clemens et al. 2018). A significant contributor to the high overstay rates was the fact that the program was available only for full-time students, the workers had no prospects for returning to the UK following graduation and were thus prone to overstay once they completed school.
[3] In the U.S., occupational mobility led to fewer federal claims for wage and hour deception, discrimination, and trafficking, and higher wages.
[4] Employer-tied visas associated with inefficiencies totaling 6.6 percent of total costs and 11 percent of profits on average in the UAE