Dorita Yiannakou
A gap between available jobs and the skills of the unemployed workforce has emerged in Cyprus. The mismatch between employers' needs and the available workforce presents a greater challenge than labor shortages in key sectors of the Cypriot economy because it negatively affects both business competitiveness and the efficient use of available workers.
For businesses, this creates additional costs because employers are forced to invest more in hiring, training, and recruiting staff from abroad, something that has proven especially difficult. At the same time, unemployed people remain outside the labor market because their skills and experience do not match the requirements of available positions. In addition, there is a growing need for upskilling and reskilling policies so unemployed people can gain the qualifications employers are looking for.
Despite the availability of workers, businesses are still unable to fully meet their staffing needs.
According to statistics from the Department of Labour analyzed by "K," the greatest demand for workers is concentrated in the trade, hotel and food service, construction, manufacturing, and transportation and storage sectors, which recorded the highest number of reported job vacancies during the first five months of 2026. At the same time, registered unemployment data show that in May 2026 the hotel and food service, transportation and storage, trade, administrative and support services, construction, and healthcare sectors recorded the largest increase in hiring from the unemployed workforce.
At the same time, the trade and hotel and food service sectors continue to have a significant number of registered unemployed people. This clearly shows that despite the availability of workers, businesses are still unable to fully meet their staffing needs. It also reflects the difficulty of matching unemployed job seekers with available positions because of differences in skills, professional experience, and geographic location.
Higher demand, greater hiring
The figures for the hotel sector are especially telling, as it recorded the highest level of activity in the labor market during May 2026. Registered unemployment in the sector fell from 1,986 people in April to 1,177 in May, a decline of 809 people, or 40.7%, marking the largest monthly decrease among all sectors of the economy. At the same time, the sector also recorded the strongest demand for workers, with 3,902 job vacancies reported to the District Labour Offices during the first five months of 2026, the highest total of any sector in the economy.
This trend appears to be directly linked to the start of the summer tourism season, when staffing needs at hotels and food service businesses increase significantly. The sharp drop in registered unemployment in the hotel sector suggests that a substantial number of workers found jobs, although employers still could not fill all of their vacancies. Several factors contribute to this, including a lack of the required skills or professional experience, the distance between available jobs and where unemployed people live, and the seasonal nature of the industry. It is also worth noting that some registered unemployed people may come from different specialties within the tourism sector, while employers are mainly seeking frontline staff such as chefs, waiters, housekeepers, and reception personnel.
Department of Labour data show that the hotel sector has both the strongest demand for workers and the highest level of hiring among registered unemployed people, while still maintaining a significant number of unemployed individuals. This shows that the labor market's main challenge is not simply the availability of workers but the ability to match employers' needs with the qualifications and skills of available job seekers. Likewise, the sectors with the largest number of registered unemployed people continue to be trade, with 1,380 people, and professional, scientific, and technical activities, with 812 people.
The market
Department of Labour data show that the labor market continues to experience strong demand for workers, particularly in tourism, trade, construction, manufacturing, and transportation. Specifically, the trade sector accounted for 3,070 reported job vacancies, construction for 1,872, manufacturing for 1,572, and transportation and storage for 1,101 during the first five months of this year. These figures confirm that these industries remain the main sources of labor demand in the Cypriot economy.
The same sectors also recorded a significant decline in registered unemployment between April and May, indicating increased hiring. In transportation and storage, unemployment fell from 453 people to 323, a decrease of 130 people or 28.7%. In trade, unemployment dropped from 1,489 people to 1,380, a decrease of 109 people or 7.3%. These changes reflect the strong level of activity in the labor market at the beginning of the summer season.
However, despite the significant increase in hiring, these same sectors continue to account for a large number of registered unemployed people. In May 2026, there were still 1,380 registered unemployed people in trade, 812 in professional, scientific, and technical activities, 706 in public administration, and 479 in manufacturing. This shows that despite increased hiring, a substantial pool of available workers remains in these sectors.
As a result, the combination of a high number of reported job vacancies and a large number of registered unemployed people in key sectors of the economy shows that while employers are looking for workers, many unemployed people are unable to enter the workforce. This demonstrates the need for a more effective connection between business needs and the qualifications and skills of available workers.
Job vacancies
Meanwhile, the number of job vacancies in the Cypriot economy reached 13,905 during the first quarter of 2026, while the job vacancy rate stood at 2.8% of all employees and available positions, according to figures released by the Statistical Service.
The data show continued demand for workers across several sectors of the economy, with the greatest shortages found in entertainment, construction, and hospitality. More specifically, the highest job vacancy rate was recorded in the arts, entertainment, and recreation sector at 5.1%. Construction followed with 4.7%, while accommodation and food service activities ranked third at 4.0%. Significant vacancy rates were also recorded in wholesale and retail trade at 3.5%, administrative and support activities at 3.0%, and public administration and defense at 2.7%.
At the other end of the scale, the lowest vacancy rates were recorded in mining and quarrying at just 0.5% and in financial and insurance activities at 0.9%.
Low vacancy rates were also recorded in water supply and waste management activities at 1.1%, education at 1.5%, and health and social care services at 1.6%.
