- Unemployment rose to 14.70% in the first three months of the year, something usual after the Christmas campaign.
- Compared with a year ago, employment is still growing: almost 600,000 more people in work.
- For a company, the figure serves as context: it helps plan hiring, especially seasonal hiring.
On 25 April the National Statistics Institute published the Labour Force Survey (EPA) for the first quarter of 2019. The unemployment rate stood at 14.70%, 0.25 points higher than in the fourth quarter of 2018, with some 3.35 million people unemployed, almost 50,000 more than in the previous quarter. The number of people in work fell by 93,400, or 0.48%, to 19,471,100.
Year on year, however, employment grew by 596,900 people, or 3.16%. Comparing the two periods explains the apparent contrast: the first quarter is usually weak, because the Christmas campaign ends and temporary jobs are lost in retail and hospitality, and the pace of job creation should be judged by looking at a full year, not just one quarter.
What the survey measures
The EPA is a quarterly survey of some 65,000 households, and it measures employment and unemployment under an international definition: a person is unemployed if they have no job, are actively looking for one and are available. That definition does not coincide with registered unemployment, which counts those signed up at employment offices, nor with social security affiliation, which counts those who contribute.
It is worth knowing these differences because each indicator answers a different question. The EPA gives the broadest picture, with the unemployment rate and its breakdown by age and region; registered unemployment and affiliation, published monthly, serve to follow the closer evolution. Looking at only one can give an incomplete impression of the labour market.
What it says about the labour market
With a rate of 14.70%, Spain still has the second-highest unemployment rate in the European Union, and youth and long-term unemployment remain a challenge. At the same time, job creation continues at a notable pace, which translates into difficulty filling certain profiles in sectors such as technology, industry or construction.
That coexistence of high unemployment and unfilled vacancies points to a mismatch between available training and companies’ needs, and to a high level of temporary work that generates high turnover. For companies it is a double challenge: finding and keeping talent, and doing so in a context where the minimum wage and labour costs have risen.
What a company can do
A good starting point is to analyse your own turnover and the weight of temporary hiring in the workforce: how much each departure costs, which profiles are hardest to fill and what alternatives exist, such as in-house training or conversion to permanent contracts. The EPA’s aggregate data do not replace that analysis, but they help put it in context.
It is also useful to take seasonality into account when planning. If the business depends on seasons, it is wise to plan hiring in good time and check the requirements of each type of contract. A labour adviser can help choose the most suitable and meet the formal requirements, which if wrong can turn a temporary contract into a permanent one. For small and mid-sized companies, it can also be useful to compare their own indicators, such as turnover and absenteeism, with those of their sector, because national averages hide very large differences between regions, occupations and company sizes, and the most relevant comparison is with the local labour market.
A quarterly figure tells part of the story: the trend shows when it is compared with the previous year.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
