Small and medium-sized enterprises in Cyprus are increasingly turning to workers from non-European Union countries to address growing labor shortages. However, the process of hiring foreign staff remains a major challenge for businesses. According to the results of the Flash Eurobarometer survey published by the European Commission, 65% of Cypriot companies consider the recruitment of third-country nationals to be difficult and problematic.
This figure is significantly higher than the European Union average, where 54% of SMEs report similar difficulties. The survey shows that employers face not only a shortage of qualified personnel but also lengthy administrative procedures that slow down the hiring process.
Cypriot Companies Are Increasingly Recruiting Outside the EU
Labor shortages remain one of the most pressing challenges facing the Cypriot economy. In recent years, the country has experienced workforce deficits in construction, hospitality, services, logistics, and various technical professions. Against a backdrop of low unemployment and growing demand for workers, many employers have been forced to look beyond the European Union for talent.
According to the survey, 21% of Cypriot companies attempted to recruit workers from third countries to fill shortages of skilled personnel. By comparison, the EU average stands at just 14%. Experts note that labor migration is becoming one of the key factors supporting the island’s economy, particularly in sectors where local talent is insufficient to meet market demand.
The Main Challenge: Complex and Lengthy Procedures
Bureaucracy remains the primary obstacle for employers. Among Cypriot companies that attempted to hire third-country nationals, 47% cited complex and lengthy procedures related to permits and documentation as a major challenge. Across the European Union, only 31% of respondents identified this as a problem.
Business owners report that obtaining work visas, residence permits, and other necessary documentation can take several months. In a period of acute labor shortages, such delays create significant difficulties for employers and hinder their ability to fill vacancies quickly.
A lack of information about immigration procedures represents another obstacle. This issue was reported by 18% of Cypriot companies, compared to 16% on average across the EU.
Finding Suitable Candidates Is Becoming More Difficult
In addition to bureaucratic hurdles, employers face growing difficulties in finding qualified workers. A shortage of suitable candidates was reported by 38% of Cypriot businesses, compared with an EU average of 25%.
The labor shortage is particularly severe in sectors requiring physical work and high workloads, which is why companies are increasingly relying on foreign employees.
Workers in cleaning and support services remain the most in-demand category among third-country nationals in Cyprus. In this area, 42% of companies reported hiring foreign staff. By comparison, the EU average is only 12%.
Strong demand is also evident in the construction industry, where 29% of companies recruited foreign skilled workers, compared to 17% across the EU. In the food service and food production sectors, the share of companies hiring foreign workers reached 26%, while the European average stands at 14%.
Businesses Are Seeking Greater Government Support
The survey indicates that Cypriot employers are interested not only in simplifying recruitment procedures but also in receiving additional support for relocating workers. The most requested measure was assistance with immigration and employee relocation. This option was identified as the most useful by 38% of Cypriot companies, compared with an EU average of 18%.
Business owners also place considerable importance on guidance and information regarding the employment of foreign nationals. Support for integrating new employees into the workplace and helping them adapt to their new environment is viewed as equally important.
Interestingly, while financial incentives, subsidies, and tax benefits rank as the top priority for businesses in most EU countries—with 31% of companies supporting such measures—this option ranks only fourth in Cyprus, where 26% of businesses consider it important.
Integrating Foreign Employees Remains a Challenge
Once recruitment is successful, companies face a new challenge: integrating foreign workers into the workplace. Difficulties in employee adaptation were reported by 25% of Cypriot businesses. For comparison, the EU average stands at 30%.
Employee retention remains another significant issue. Both in Cyprus and across the EU, 27% of employers admitted experiencing difficulties in retaining foreign workers over the long term. Specialists attribute this trend to intense competition among employers, rising wages in other European countries, and workers seeking better employment opportunities.
Economists predict that demand for foreign workers in Cyprus will continue to grow. An aging population, expansion of the tourism sector, major construction projects, and the digital transformation of the economy are increasing labor demand across numerous industries.
In these circumstances, simplifying immigration procedures, accelerating work permit approvals, and expanding information support for businesses could become important factors in strengthening the competitiveness of the Cypriot economy. As a result, labor migration and the attraction of skilled workers from outside the EU remain at the center of attention for both employers and government authorities.