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Cyprus Struggles With Overqualification: The Hidden Gap In Its Labor Market

by News Editor

April 16, 2025

In 2024, Cyprus found itself facing a significant labor market challenge, with the third-highest overqualification rate among EU nations. According to Eurostat, nearly 28.2% of Cypriot workers are employed in roles that don’t fully leverage their tertiary education. Even more striking is the gender disparity: 31.2% of women are affected by overqualification, compared to 24.6% of men, revealing a worrying trend of underutilized talent.

Across the EU, the overqualification rate stands at 21.3%, with Spain and Greece leading the pack. Cyprus follows closely behind, highlighting a mismatch between educational qualifications and available jobs. While Luxembourg and Czechia boast lower overqualification rates, countries like Cyprus are grappling with this inefficiency.

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This issue isn’t isolated to Cyprus; across 21 of the EU’s 27 member states, women face higher overqualification rates than men. The most significant disparities are found in Italy, Slovakia, and Malta, suggesting that the issue may be more systemic, with women particularly impacted by labor market challenges.

Cyprus, however, is not just facing a problem of underemployed graduates. It is also witnessing a steady rise in overall employment, with a 79.8% employment rate in 2024 — higher than the EU average of 75.8%. This figure reflects a growing labor force but also underscores the challenge of ensuring that more individuals, especially women, are not overqualified for their roles.

Despite these hurdles, Cyprus is seeing signs of positive economic shifts. The country’s GDP per capita has grown by 22% between 2018 and 2022, reaching €30,400 in 2022, though it still lags behind the EU average. Key sectors such as tourism, technology, healthcare, and renewable energy are expected to fuel further growth, but the country’s labor market will need to adapt to meet the needs of an evolving economy.

With the rise of digitalization and the ongoing demand for tech-savvy professionals, Cyprus is seeing a rapid shift in the types of jobs available. Information and communications technology professionals are in particularly high demand, while sectors like traditional agriculture and retail are facing challenges.

As Cyprus navigates these complexities, the growing reliance on skilled immigration is another factor shaping its workforce. Immigrants now account for over 21% of the country’s active workforce, with the largest portion coming from non-EU countries. This highlights the labor shortages in critical areas, and the continued demand for foreign talent to fill gaps in key sectors.

Cyprus’ labor market in 2024 presents a complex landscape. While the employment rate is rising, the challenge of overqualification remains a pressing issue, especially for women. As the country faces the growing demand for digital skills and tackles evolving economic and demographic pressures, addressing this mismatch between education and employment will be crucial for future growth and stability.

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Modernizing Cyprus SMEs: Investment Initiatives Drive Competitive Excellence

by THEFUTURE.TEAM

February 19, 2026

SMEs: The Backbone Of Cyprus’ Economy

Small and medium-sized enterprises (SMEs) remain a central pillar of Cyprus’ economy, supporting employment, innovation and local production networks. Their long-term competitiveness increasingly depends on access to modern technologies, operational upgrades and targeted investment that improves efficiency and productivity.

The Thalia Initiative: A Strategic Investment Framework

The Thalia 2021–2027 Program plays a key role in supporting this transition. The initiative provides financial assistance to both new and established SMEs, particularly in manufacturing and selected economic sectors, helping businesses modernize infrastructure, upgrade technology and improve production capacity. With a total budget of €50 million and co-financing from the European Union, the program aims to strengthen competitiveness while encouraging entrepreneurship and job creation.

Case Study: Pivo Microbrewery’s Production Revolution

Pivo Microbrewery illustrates how targeted investment can accelerate growth. Before receiving funding, co-owner Thanasis Poluneikis identified limited production capacity as a major obstacle to meeting rising demand. The introduction of modern machinery and updated technology has significantly improved production processes. According to Poluneikis, the new equipment has increased precision and consistency in quality control, helping maintain product freshness and standards throughout distribution. The upgrades also allowed the company to expand production and develop new partnerships, supporting broader market reach.

Enhancing Product Offerings: The Vanilla Aroma Bakery Experience

Vanilla Aroma Bakery represents another example of modernization through investment support. Owner Giannis Toumpas used the funding framework to upgrade both the facility layout and production equipment. The improvements have accelerated operations and increased efficiency, enabling the bakery to refine existing products while introducing new offerings. These changes have strengthened customer experience and reinforced the brand’s position in a competitive market where quality and presentation remain key differentiators.

Financial Support As A Catalyst For Growth

These examples highlight the role of the Thalia Initiative as a financing tool that translates investment into measurable business development. By supporting equipment upgrades, technology adoption and infrastructure improvements, the program contributes to the long-term sustainability of SMEs, encourages innovation and supports job creation. The continued modernization of small and medium-sized enterprises is helping build a more resilient and competitive business environment that supports broader economic growth in Cyprus.