Cyprus has no shortage of university graduates, yet employers continue to struggle to fill vacancies, while many qualified workers are employed in roles that do not fully use their skills.

This contradiction is highlighted in CYEmployers, the country’s first national employers’ skills survey, published by the Education Ministry. The findings reveal a persistent mismatch between the skills businesses need, the jobs they offer and the capabilities available in the labour market.

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Among private employers with vacancies, 71% reported difficulty filling certain positions. Meanwhile, 34% of private employers that had recruited recent graduates hired them for roles that did not require a university degree. The figure rose to 58% in the public sector. In addition, 45% of private employers and 69% of public-sector managers said some employees had skills exceeding their job requirements.

Recruitment Challenges Go Beyond A Lack Of Qualifications

Conducted by PwC Cyprus in cooperation with the Department of Higher Education, the survey gathered responses from 1,395 private-sector organisations and 221 senior public-sector officials between May 2024 and January 2025. The findings were published on November 9.

Among private employers struggling to recruit, 68% cited insufficient interest in available positions, 58% a shortage of applicants and 53% a lack of candidates with the right skills.

Public-sector managers reported similar challenges: 50% pointed to insufficient interest, 42% to unattractive employment conditions, including pay, and 39% to difficulties finding suitably skilled applicants.

Recruitment difficulties were most common for professionals, technicians, service and sales workers, and clerical employees. The findings suggest that the problem is not simply a shortage of qualified candidates, but also the ability of employers to attract them.

Employers Need More Than Technical Skills

Higher education qualifications accounted for an average of 48% of private-sector workforces and 71% of public-sector workforces. However, employers identified gaps in both practical and interpersonal skills.

Among private businesses facing recruitment difficulties, 43% said candidates lacked willingness to learn, 35% cited communication skills and 31% time management. Teamwork and analytical or critical thinking were each mentioned by 28%.

Public-sector managers also highlighted communication, teamwork, time management and willingness to learn (37% each), alongside initiative (42%) and complex problem-solving (39%).

Most employers considered graduates from Cypriot higher education institutions at least moderately prepared for work. However, only 33% of private employers rated them as well or very well prepared, compared with 49% of public-sector respondents.

Graduates received stronger assessments for written communication, basic numeracy and digital skills, but weaker ratings for leadership, initiative and complex problem-solving.

Graduates Face A Shortage Of Work Experience Opportunities

Seven in 10 private employers considered previous experience a major recruitment criterion. Yet 76% offered neither internships nor work placements during the period covered by the survey. Only 15% offered internships and 12% provided placements to students or graduates.

Among businesses offering these opportunities, 30% did not pay participants. Nevertheless, 31% later recruited someone who had completed an internship or placement with them.

Private employers also prioritised enthusiasm for the job (63%) and relevant technical skills (59%). In the public sector, formal qualifications were the leading criterion (73%), followed by technical skills (67%) and previous experience (66%).

Vacancies And Skills Gaps Affect Organisational Performance

Recruitment difficulties are putting additional pressure on existing employees. Among organisations reporting an impact from hiring challenges, 80% of private-sector and 85% of public-sector respondents cited heavier workloads.

Overall, 89% of private employers and 95% of public-sector respondents said recruitment difficulties affected organisational performance to some extent, including daily operations and service quality.

Skills gaps also persist among existing employees. Employers estimated that 14% to 23% of private-sector staff and 12% to 33% of public-sector staff, depending on occupational category, did not have full proficiency in the skills their jobs required.

At the same time, 61% of private-sector employees and 91% of public-sector employees worked in organisations reporting at least some underuse of staff skills.

Employers Expect Shortages To Continue

Over the next five years, 56% of private employers and 63% of public-sector managers expect skills shortages. A quarter of private employers and 21% of public-sector respondents anticipate severe gaps.

Private businesses are particularly concerned about interpersonal, organisational and specialised technical skills. Public-sector organisations expect greater shortages in digital capabilities: 60% of employees worked in organisations anticipating such gaps, compared with 11% in the private sector. The figure reached 86% across the wider public sector and 43% in central government.

Both sectors identified interpersonal skills as their main training priority, cited by 36% of private employers and 40% of public-sector respondents. Digital skills ranked second, at 22% and 26%, respectively.

Connecting Education With Labour Market Needs

The findings point to the need for closer cooperation between universities and businesses, more practical work experience opportunities and stronger training for existing employees. Employers may also need to reconsider job requirements, career progression and employment conditions to attract suitable candidates.

Cyprus’s challenge is not simply to produce more graduates, but to connect education more closely with labour market demand and make better use of the talent already available.

The survey reflects employers’ assessments rather than independent tests of workers’ abilities. Differences in sampling and weighting also mean that comparisons between the public and private sectors should be treated with caution.