Never Been More Difficult to Hire Staff: September Unemployment at 2.8%

Reykjavík pond downtown

Unemployment rates sat at 2.8% in September, creating tension in the labour market.

Although this may sound like a good development, according to the Federation of Trade and Services, hiring new staff has never been more difficult for Icelandic employers.

In a statement to RÚV, Landsbankinn economist Una Jónsdóttir said that instead of employees competing for jobs, it is now the case that employers are competing for staff.

In total, around 5,400 were unemployed in September, largely representing the retail, service, transportation, and restaurant industries.

Of these 5,400, 44% are reported to be foreign residents in Iceland. In comparison with the total unemployment rate for Iceland of 2.8%, the unemployment rate for foreigners is double, at 5.6%.

Iceland’s Suðurnes region is notable as having an especially high unemployment rate of 4.8%, with the capital region sitting around 3.2%. Icelandic unemployment is lowest in the Northwest, which has only 0.7%.

Economists have suggested that the increased demand for labour created by the low unemployment could affect the upcoming wage negotiations.