Cyprus has no shortage of university graduates, but finding people with the right skills remains a headache for employers, even as many qualified workers end up in jobs that do not require their degrees.

The contradiction runs through the country’s first national employers’ skills Survey (CYEmployers), published by the Education Ministry this week, which found that 71 per cent of private employers with vacancies struggled to fill certain positions, despite a workforce with substantial academic qualifications.

At the same time, 34 per cent of private employers who had recruited recent graduates admitted hiring them for jobs that did not require a university degree. Among public-sector managers surveyed, the figure was considerably higher at 58 per cent.

Nor does the problem stop with new recruits. Some 45 per cent of private employers and 69 per cent of public-sector managers reported having employees whose skills exceeded the demands of their jobs.

The findings point to a mismatch between education and employment, with businesses unable to find the skills they need and workers unable to make full use of those they already have.

The survey, conducted by PwC Cyprus in cooperation with the Department of Higher Education, involved 1,395 private-sector organisations and 221 senior public-sector officials. Responses were collected between May 2024 and January 2025, with the findings released on November 9.

What makes the results particularly interesting is that a lack of qualifications is not the main reason employers struggle to recruit.

Among private employers reporting recruitment difficulties, 68 per cent cited a lack of interest in the jobs on offer, followed by too few applicants at 58 per cent. A shortage of candidates with the necessary skills came third, at 53 per cent.

The picture was similar in the public sector, although the reasons differed somewhat. Half of the respondents pointed to insufficient interest in available positions, while 42 per cent blamed unattractive employment conditions, including pay. Another 39 per cent reported difficulties finding suitably skilled applicants.

This raises an uncomfortable question for employers. Is the problem really a shortage of workers, or are some jobs simply failing to attract them?

Recruitment difficulties were most common among professionals, service and sales workers, technicians and clerical employees in the private sector. In the public sector, professional, technical and administrative positions were particularly difficult to fill.

However, the qualifications employers already have at their disposal are hardly insignificant.

According to the survey, private employers reported that an average of 48 per cent of their staff held higher education qualifications, compared with 71 per cent in the public sector, although the two figures were calculated differently.

Despite this, employers continued to identify shortcomings in some of the most basic workplace abilities.

In the private sector, willingness to learn was the hardest skill to find, cited by 43 per cent of employers struggling to recruit. Effective communication followed at 35 per cent, time management at 31 per cent, and teamwork and analytical or critical thinking at 28 per cent each.

Public-sector managers reported similar frustrations, although they placed greater emphasis on initiative, cited by 42 per cent, and complex problem-solving at 39 per cent. Communication, teamwork, time management and willingness to learn each accounted for 37 per cent.

In short, employers are not simply looking for people who know how to do a job. They also want people who can communicate, work with others, take initiative and solve problems.

The assessment of recent graduates tells much the same story.

Although 82 per cent of respondents in both sectors who had recruited graduates from Cypriot higher education institutions considered them at least moderately prepared for employment, only 33 per cent of private employers rated them as well or very well prepared. The corresponding figure in the public sector was 49 per cent.

Graduates performed better in written communication, basic numerical skills, practical use of digital tools and willingness to learn. Leadership, initiative and the ability to tackle complicated problems, however, attracted weaker assessments.

Private employers also identified difficulties with analytical thinking and more demanding numerical tasks.

There is, though, another finding that deserves attention.

Seven in ten private employers regard previous work experience as a major recruitment criterion, but 76 per cent offered neither internships nor work placements during the period examined.

Only 15 per cent provided internships and 12 per cent offered work placements to students or graduates.

Of those businesses that did offer such opportunities, 30 per cent paid none of their participants, while 31 per cent subsequently recruited someone who had completed an internship or placement with them.

For young graduates, the difficulty is obvious. Employers expect experience, but relatively few provide a way of acquiring it.

Enthusiasm for the job was another important consideration for private employers, cited by 63 per cent, followed by relevant technical skills at 59 per cent.

Public-sector recruitment, meanwhile, remained more closely tied to formal qualifications, cited by 73 per cent of respondents, technical skills at 67 per cent and previous experience at 66 per cent.

The consequences of failing to recruit suitable staff are also being felt by those already in employment.

Among respondents who reported that recruitment difficulties affected their organisations, 80 per cent in the private sector and 85 per cent in the public sector identified increased workloads for existing employees as a major consequence.

The effects extended to daily operations, service quality and the development of new products and services.

More broadly, 89 per cent of private employers and 95 per cent of public-sector respondents answering the relevant question acknowledged that difficulties filling vacancies affected organisational performance to some extent.

Meanwhile, the survey found that employers considered a proportion of their existing workforce insufficiently equipped for the jobs they performed.

Depending on the occupational category, private-sector employers estimated that 14 to 23 per cent of employees lacked full proficiency in the required skills. Public-sector estimates ranged from 12 to 33 per cent.

This sits alongside the problem of overqualification, with workers possessing abilities that their positions do not require.

Indeed, 61 per cent of private-sector employees and 91 per cent of public-sector employees worked in organisations reporting some degree of underused skills. These figures do not mean that all those workers were overqualified, only that their organisations had identified the problem.

The distinction matters, particularly when comparing the two sectors, where the survey used different statistical approaches.

Looking further ahead, employers do not expect the situation to improve without action.

Some 56 per cent of private employers and 63 per cent of public-sector managers anticipate skills shortages over the next five years. A quarter of private employers and 21 per cent of public-sector respondents expect those shortages to be severe.

The skills expected to be missing, however, are not quite the same.

Private businesses anticipate greater difficulty finding workers with interpersonal, organisational and specialised technical abilities. Public-sector organisations, by contrast, are particularly concerned about digital skills.

The difference is considerable. In the public sector, 60 per cent of employees worked in organisations expecting digital skills shortages, compared with just 11 per cent in the private sector.

Within the wider public sector, the figure reached 86 per cent, against 43 per cent in central government.

These percentages reflect the proportion of people employed by organisations anticipating such shortages, rather than the number of employees expected to lack the skills themselves.

Despite the differences, employers broadly agreed on what existing staff need most.

Improving communication, teamwork, initiative and other interpersonal skills emerged as the leading training priority for 36 per cent of private employers and 40 per cent of public-sector respondents. Digital skills followed at 22 per cent and 26 per cent respectively.

The report also points to the need for closer cooperation between universities and businesses, more opportunities for practical experience and better training for employees already in work.

Equally important are the way jobs are designed, the opportunities available for career progression and the employment conditions offered to prospective recruits.

The findings are based on employers’ own assessments rather than independent tests of workers’ abilities, and differences in sampling and weighting mean that comparisons between the public and private sectors should be treated with some caution.