Portugal Keeps Workers, Offers Few Openings: What Expats Should Know

Portugal’s economy is still creating work at a brisk clip, yet the country sits near the bottom of Europe’s ranking for open positions. That contrast—steady employment growth on one side, a meagre 1.4 % job-vacancy rate on the other—suggests good news for stability but mixed prospects for anyone hoping to change jobs or hire talent.

A labour market running hot—but not hiring

The headline numbers look reassuring at first glance. The national statistics institute (INE) estimates unemployment at 5.9 %, close to a five-decade low. Payrolls reached a post-1953 record with more than 5.18 million people working. Wages, while still lagging the Eurozone average, continue to inch higher. In short, companies are hanging on to employees and households enjoy unprecedented job security.

Yet Eurostat’s latest release shows there were openings for just 1 in every 70 posts during the April-June quarter. Only Romania, Spain, Poland and Bulgaria recorded thinner vacancy ratios. The figure has barely budged for a year, even as the Union-wide average eased to 2.1 %.

Why Portugal diverges from the EU norm

Economists at the Bank of Portugal point to a mix of factors. First, rigid labour-protection rules make layoffs costly, so firms hesitate to expand head-counts unless absolutely certain. Second, an aging population and long-term emigration have shrunk the pool of job-seekers in growth industries. Finally, employers report an 84 % skills-shortage rate, the highest share in Western Europe, especially in IT, engineering and healthcare.

The outcome is paradoxical: companies cling to existing staff for fear they will not find replacements, while workers who do not possess the right certificates sit on the sidelines. The unemployment tally therefore disguises a broader 10.1 % under-utilisation index, which includes involuntary part-timers and discouraged job-seekers.

How the numbers compare across the bloc

At the top of the Eurostat table, the Netherlands posted a 4.2 % vacancy share, followed closely by Belgium and Austria. In those economies, fierce competition for talent is still pushing salaries upward. Portugal, by contrast, joined Spain on the low end—even though Madrid’s hiring appetite dipped to 0.8 %.

The disparity is not new. Over the past decade the Portuguese vacancy gauge rarely cracked 2 %, reflecting a structure heavy in tourism, retail and public administration where turnover is low and digital skills gaps remain wide. Reforms under discussion in Lisbon’s parliament—to streamline despedimento colectivo procedures and modernise vocational training—aim to unlock mobility, but business lobbies warn real results will take years.

What it means for foreigners on the ground

For expats already based in Portugal the tight supply of advertised roles can feel frustrating. Job boards list fewer openings than in northern Europe, and competition for English-speaking posts in tech hubs such as Lisbon’s Parque das Nações or Porto’s Matosinhos Sul is intense. On the upside, once settled, workers often enjoy long tenures, generous leave and the growing popularity of hybrid arrangements.

Entrepreneurs face a different calculus. The shallow vacancy pool implies that convincing locals to jump ship may require premiums above the national average salary of €1,500 gross per month. Many founders therefore target international talent, leaning on Portugal’s digital-nomad visa and the Non-Habitual Resident tax regime to lure specialists.

Outlook: more churn, slowly

The central bank forecasts overall employment growth to decelerate through 2026 as GDP cools after the post-pandemic bounce. Even so, analysts expect the vacancy ratio to edge only gradually toward the EU mean, held back by demographic headwinds and uneven up-skilling. In practical terms, newcomers can assume a market where jobs are plentiful for the right profile but scarce for the average generalist.

For now, the safest strategy remains clear: arrive with an in-demand credential—or a business plan flexible enough to train staff—rather than counting on a glut of postings to appear overnight.