Hiring Trends in Italy for 2026: Record Employment, Persistent Youth Joblessness

Italy's 2026 labour market combines historically low headline unemployment with persistent youth joblessness, deep regional disparities, and selective shortages in healthcare, STEM, and tourism. Despite record employment levels, the country faces demographic decline, modest wage growth, and a dual market where northern prosperity contrasts sharply with southern struggles.

Disclaimer: This article provides a qualitative overview of hiring trends based on publicly available labour market statistics, economic forecasts, and institutional analysis. It is intended to support understanding and workforce planning rather than formal forecasting or statistical prediction. This assessment reflects conditions and projections as of late 2025; labour market outcomes may vary by region and evolve with economic or policy changes.

A labour market at record highs amid persistent structural challenges

Italy's labour market in 2026 operates at historically strong levels by national standards while maintaining structural weaknesses relative to European peers. Around 23.6 million people are employed, with the employment rate for ages 15-64 standing at approximately 62.5-62.7% according to ISTAT data, still below the EU average (around 71%) but substantially higher than a decade ago.

Unemployment has fallen to approximately 6.0-6.3% (representing about 1.5-1.6 million people), the lowest level since before the global financial crisis. ISTAT economic outlook projects unemployment continuing to decline towards 5.8% by 2026, accompanied by employment growth of around 1.1-1.2% annually measured in full-time equivalents.

The job vacancy rate stands at approximately 1.7-1.8% according to EURES data, slightly above pre-2020 levels (around 1.4%) but down from a peak of around 2.7% in early 2023, signalling a labour market that remains tight but no longer at maximum pressure.

The labour force reached approximately 25.7 million people in 2024, the highest level since at least 2019, with female employment reaching recent peaks at more than 10.2 million women employed. Permanent employee numbers have increased since 2022, while self-employment remains stable at around 5 million.

Average nominal yearly wages stand at around €33,000-34,000 (approximately €2,750-2,850 monthly), with projections nudging towards €34,000-35,000 by 2026-2027. Net average monthly pay typically falls in the €1,650-2,200 range after tax, varying substantially by region and sector. Wage growth remains modest at several percentage points annually, leaving Italy slightly below OECD averages in purchasing-power terms.

This analysis is most relevant to employers, HR professionals, job seekers, training providers, policymakers, and institutions supporting workforce development in Italy's regionally segmented labour market.

1. Youth unemployment persists at 19-20% despite overall labour market strength

Italy's most striking labour market paradox is the coexistence of record-low overall unemployment with persistently high youth joblessness, creating a dual market of shortage and surplus.

Youth unemployment remains elevated: Despite overall unemployment at 6.0-6.3%, youth unemployment (ages 15-24) runs at around 19-20% according to recent data, though this represents substantial improvement from levels around 29% earlier in the decade and approximately 40-42% during the 2014 crisis. Some sources report youth unemployment having fallen by roughly half between 2014 and 2024, yet it remains far above the OECD average.

Graduate underemployment: University graduates in humanities, social sciences, and generalist fields often face underemployment, precarious short-term contracts, or positions below their qualification level. The mismatch between educational output and labour market needs creates frustration and emigration among educated youth.

NEET population: Italy maintains a substantial population of young people Not in Education, Employment, or Training (NEETs), particularly in southern regions, representing untapped human capital and long-term social challenges.

Structural factors: Youth unemployment reflects skill mismatches, employer preferences for experienced workers, contractual rigidities that make permanent hiring risky, and educational system outputs misaligned with employer needs. Young workers often begin careers in temporary or short-term contracts, creating precarity.

Regional variation: Youth unemployment concentrates more heavily in southern regions, where economic opportunities remain limited and emigration towards northern Italy or abroad represents common pathways.

So what

For candidates: Young job seekers face substantially more difficult market entry than experienced workers; technical skills, STEM qualifications, and willingness to accept temporary contracts initially improve prospects; geographic mobility towards northern regions or abroad often necessary.

For employers: Youth talent pool exists but often requires training and development investments; offering career development paths and pathways to permanent contracts improves attraction and retention of young workers.

2. Deep North-South regional divide creates two distinct labour markets

Italy's labour market operates as two distinct regional systems with dramatically different characteristics, opportunities, and challenges.

Northern and central regions lead: Milan, Turin, Bologna, and surrounding areas show substantially higher employment rates, stronger industrial and export bases, higher wages, and tighter labour markets. These regions concentrate high-value manufacturing (machinery, automobiles, food processing), advanced services, technology sectors, and tourism infrastructure.

Southern regions lag persistently: Southern regions consistently show lower employment, higher unemployment (often substantially above national averages), greater reliance on informal or seasonal work, and limited industrial development. Infrastructure deficits, less developed business ecosystems, and demographic decline compound challenges.

Wage disparities: Net monthly wages in northern regions can exceed southern wages by 20-30% or more for comparable roles, reflecting productivity differences, cost of living variations, and labour market tightness.

Internal migration patterns: Young, educated southerners migrate to northern cities or abroad for opportunities, draining human capital from southern regions and exacerbating regional disparities. Smaller southern towns struggle to retain young people, creating ageing populations and economic stagnation.

Sectoral concentration: Manufacturing, advanced services, technology, and export industries concentrate in northern and central regions. Southern economies rely more heavily on tourism, agriculture, construction, and public sector employment.

So what

For candidates: Geographic location fundamentally determines labour market prospects; northern regions offer substantially more opportunities, higher wages, and career advancement potential; southern residents face difficult choices about migration.

For employers: Northern employers compete in tight labour markets with higher wage expectations; southern employers face larger talent pools but often struggle with infrastructure, business ecosystem limitations, and difficulty attracting/retaining skilled workers.

3. Critical shortages in healthcare, STEM, and tourism despite surplus in other fields

Italy experiences selective labour shortages coexisting with surplus in other occupational categories, creating mismatched supply and demand.

Healthcare workforce gaps: Doctors, nurses, elderly-care staff, and healthcare specialists face persistent shortages, especially outside major northern cities. Italy's rapidly ageing population (people over 65 representing around 24% of population and rising towards 35% by mid-century) intensifies healthcare workforce demands precisely as demographic decline shrinks potential worker pools.

STEM and technical roles: Engineers, specialized technicians, some IT profiles, and technical specialists remain difficult to fill. Despite substantial university education output, many graduates pursue humanities and generalist fields rather than technical specialisms where employer demand concentrates.

Hospitality and tourism during peak seasons: Hotels, restaurants, and tourism services struggle to fill positions during high seasons. Unsocial hours, seasonal nature of work, relatively lower pay, and physically demanding conditions deter local candidates, driving reliance on foreign workers. Sectors experiencing highest foreign worker concentration include accommodation/food services (22.7%), personal and collective services (30.4% of foreign employees), agriculture (18%), and construction (16.4%).

Manufacturing and skilled trades: Despite being Italy's largest employment sector (around 4.75 million workers, approximately 20% of workforce), manufacturing faces recruitment challenges for specialized machinery operators, quality technicians, and skilled trades supporting Italy's strong machinery, automotive, and specialized manufacturing base.

Surplus occupations: Many humanities graduates, generalist administrative roles, and some traditional professions face surplus conditions, with more candidates than positions available. The mismatch between educational outputs (heavy emphasis on classical education and humanities) and employer needs (technical skills, STEM) creates structural imbalance.

So what

For candidates: STEM qualifications, technical skills, healthcare training, and specialized manufacturing expertise provide strongest employment security and advancement prospects; generalist degrees and humanities qualifications face more competitive markets.

For employers: Healthcare, technical, and tourism seasonal roles require international recruitment, training investments, or acceptance of qualification gaps with subsequent upskilling; generalist administrative hiring has eased substantially.

4. Demographic decline threatens long-term economic capacity

Italy faces one of Europe's most severe demographic challenges, with profound long-term implications for labour supply and economic capacity.

Working-age population shrinking dramatically: ISTAT and demographic analyses project the working-age population (ages 15-64) will shrink by just over 20% by 2050, from approximately 37.4 million to roughly 29.7 million. This represents a loss of approximately 7.5-8 million potential workers over 25 years.

Total population declining: Overall population is expected to fall from around 59 million currently to near 55 million by mid-century, with the over-65 share rising from approximately 24% to roughly 35% of residents.

Fertility rates remain low: Birth rates stay below replacement level, meaning natural population decline continues absent substantial immigration. The cohorts born in recent decades are substantially smaller than those retiring, creating demographic imbalance.

Dependency ratio rising: As the share of elderly rises and working-age population shrinks, dependency ratios increase dramatically, placing immense pressure on pension systems, healthcare, and public finances. Fewer workers must support growing numbers of retirees and elderly requiring care.

Regional variation: Demographic decline concentrates most severely in southern regions and smaller towns, where youth emigration compounds natural decline. Northern cities maintain populations through internal and international migration but face ageing as well.

International institutions warn of growth constraints: Without higher labour force participation, productivity gains, or substantial immigration, demographic decline will weigh heavily on long-term growth and strain public finances according to IMF, OECD, and European Commission analyses.

So what

For candidates: Demographic decline creates sustained long-term opportunities as replacement demand (retiring workers) substantially exceeds new labour market entrants; job security high for those with relevant skills.

For employers: Workforce planning must account for shrinking labour pools over coming decades; automation, productivity improvements, and international recruitment become strategic imperatives; competition for workers intensifies.

For policymakers: Demographic trajectory requires transformative interventions around immigration policy, labour force participation (especially women and older workers), retirement ages, and productivity enhancements to maintain economic capacity.

5. Modest wage growth leaves real wages below 2021 levels

Despite labour market improvements, wage dynamics remain challenging, with real wages still depressed relative to pre-inflation surge levels.

Nominal wage growth moderate: OECD projections suggest nominal wages (compensation per employee) increasing by around 2.6% in 2025 and 2.2% in 2026, significantly lower than most other OECD countries. Contractual hourly wage growth runs at around 2.6% year-on-year according to ISTAT Q3 2025 data.

Real wages depressed: Despite relatively solid recent increases, OECD analysis shows Italian real wages were still approximately 7.5% lower than in early 2021 as of early 2025, representing the largest fall in real wages among major OECD economies. Inflation during 2021-2023 substantially eroded purchasing power, and wage increases have not fully compensated for lost ground.

Collective bargaining renewals: Major collective agreement renewals over recent periods led to higher-than-usual negotiated increases, but these fell short of fully compensating for lost purchasing power since the inflation surge.

Sectoral variation: Information and communication, finance, and energy sectors offer highest compensation. Manufacturing wages cluster around national averages. Services, retail, hospitality, and agriculture typically offer lower pay. Foreign private entities show stronger wage growth (around 8.3% year-on-year) compared to state enterprises (5.7%), local government (2.7%), and Italian private entities (5.4%).

Regional wage disparities: Northern wages substantially exceed southern wages for comparable work, reflecting productivity differences, cost of living, and labour market tightness.

Expected trajectory: Real wage growth projected to remain subdued over next two years, though modest gains in purchasing power expected as inflation moderates to around 2.2% in 2025 and 1.8% in 2026 while nominal wages increase 2-3%.

So what

For candidates: Wage growth expectations should remain moderate; real purchasing power gains will be modest as wages slowly recover ground lost during 2021-2023 inflation surge; negotiating leverage exists in shortage occupations but limited in surplus fields.

For employers: Wage pressure remains manageable relative to other European markets; selective increases for retention and shortage occupations rather than across-the-board raises represent sustainable approach; international competitiveness benefits from moderate wage growth but risks losing talent to higher-wage markets.

6. Foreign workers increasingly essential for shortage sectors

International labour migration plays growing role in addressing Italy's selective labour shortages, particularly in sectors Italian workers increasingly avoid.

Foreign employment growing: Foreign employees numbered approximately 2.4 million in 2023 (up around 2.1% from 2022), representing approximately 10.1% of total employment. Growth concentrates particularly in information and communication services (up 12.7%) and hotels/restaurants (up 7.6%).

Sectoral concentration: Foreign workers concentrate in personal and collective services (30.4% of foreign employees), agriculture (18%), accommodation and food services (17.4%), and construction (16.4%). These sectors rely substantially on international labour to maintain operations.

Recruitment forecasts: November 2024 forecasts showed Italian companies seeking immigrant workers to cover approximately 86,000 positions monthly, representing around 20.1% of total contracts. Sectors making most use of foreign labour include transport, logistics and warehousing (29.4%), services for businesses and people (28.3%), accommodation and food services (22.7%), construction (22.2%), and metallurgy (19.7%).

Source countries: Foreign workers come primarily from Romania, Albania, Morocco, China, Ukraine, and other Eastern European, North African, and Asian countries. EU freedom of movement facilitates Romanian and other EU national employment.

Necessity for economic function: Sectors like agriculture, construction, hospitality, and elderly care could not maintain current operations without foreign workers. Seasonal tourism particularly depends on international labour during peak periods.

So what

For candidates: International workers find opportunities especially in hospitality, agriculture, construction, manufacturing, and care sectors; Italian language skills improve prospects beyond entry-level positions.

For employers: International recruitment essential for hospitality, agriculture, construction, and care sectors; providing language support, integration assistance, and clear advancement paths improves retention; administrative processes for non-EU workers require navigation.

7. Services sector dominates employment while manufacturing remains critical

Italy's economic structure reflects advanced economy transition towards services while maintaining substantial manufacturing base.

Services sector employs approximately 75% of workforce: Healthcare, education, public services, retail, hospitality, financial services, professional services, and other service activities dominate employment. The shift towards services continues, with 44.3% employed in "other services" (including public sector, healthcare, education) according to regional data.

Manufacturing employs around 20%: Despite services dominance, manufacturing remains economically critical, employing approximately 4.75 million workers and representing Italy's export strength. Italian manufacturing specializes in machinery, automobiles, food processing, textiles, pharmaceuticals, and precision equipment. Manufacturing and energy supply represents the economic sector employing the largest absolute number of workers.

Agriculture maintains importance despite small employment share: Agriculture represents small employment percentage but remains crucial in rural areas and for food production, wine, olive oil, and specialty products that define Italian cultural identity and export markets.

Regional economic structures differ: Northern regions show higher manufacturing concentration and advanced services. Southern regions rely more heavily on agriculture, tourism, construction, and public sector employment.

Economic structure evolution: Continued shift towards services expected, with technology, healthcare, professional services, and knowledge-intensive activities growing while traditional manufacturing faces automation and efficiency pressures.

So what

For candidates: Service sector skills (healthcare, IT, professional services, hospitality, education) represent growing opportunities; manufacturing technical skills remain valuable especially in specialized machinery and high-value production.

For employers: Service sector growth creates opportunities but faces productivity challenges; manufacturing competitiveness requires skilled workers, automation investments, and focus on high-value specialized production where Italy maintains advantages.

8. Labour market reforms balance flexibility with worker protection

Italy's labour legislation continues evolving to balance worker protections, employment flexibility, and business competitiveness.

Contract types: Labour market offers various contract forms including permanent contracts (showing growth since 2022), fixed-term contracts (most frequently used for new employment relationships), part-time arrangements, and various contracts with pre-defined duration. Permanent employment increasing but temporary contracts remain common entry pathway.

Collective bargaining: Strong trade union tradition and widespread collective agreements cover much of workforce, establishing sector-specific wage floors, working conditions, and employment terms. Recent major collective agreement renewals led to higher wage increases though insufficient to fully recover inflation-era losses.

Worker protections: Italian labour law provides substantial protections around dismissal procedures, severance, working hours, leave entitlements, and workplace rights. These protections support workers but create perceptions of rigidity that some employers navigate through temporary contracts for new hires.

Recent reforms: Labour market reforms over past decade aimed to increase flexibility in hiring/firing, encourage permanent contracts through incentives, reduce bureaucracy, and improve business environment. Reforms have supported employment growth but not fully closed gap with European peers.

Gender and age considerations: Labour law includes provisions around maternity/paternity leave, anti-discrimination protections, and older worker rights. However, female employment rates (though improving) remain below EU averages, and older workers often exit labour market before official retirement age (gap of 1-2 years).

So what

For candidates: Strong worker protections provide security once permanent employment obtained; understanding contract types and collective agreements relevant to sector important for negotiations; awareness that many positions start as temporary contracts.

For employers: Labour law balances worker protections with reasonable flexibility; temporary contracts provide flexibility for initial hiring but permanent arrangements important for retention and workforce stability; collective agreements establish floor for compensation and conditions.

What this means in practice

For job seekers

• Develop STEM and technical skills: Healthcare, engineering, technical specializations, and IT provide strongest employment prospects and wage growth; humanities and generalist degrees face more competition.
• Consider geographic mobility: Northern regions offer substantially more opportunities and higher wages; willingness to relocate from southern regions expands prospects dramatically.
• Build practical experience: Employers value demonstrated capabilities; internships, apprenticeships, and practical projects differentiate candidates in competitive entry-level markets.
• Prepare for contract progression: Many careers begin with temporary or fixed-term contracts; focus on performance and skill development to transition to permanent arrangements.
• Language skills for international opportunities: English proficiency facilitates opportunities in multinational companies, technology sectors, and international roles; additional languages expand options.

For employers

• Invest in youth development: Young talent exists but often requires training and development; structured programmes, apprenticeships, and clear advancement paths to permanent contracts attract and retain talent.
• Embrace international recruitment: For healthcare, hospitality, agriculture, construction, and seasonal tourism, foreign workers essential; providing integration support, language training, and advancement opportunities improves retention.
• Navigate regional realities: Northern employers compete in tighter markets with higher wage expectations; southern employers have larger talent pools but may struggle with infrastructure and skilled worker attraction.
• Address skill mismatches proactively: Cannot wait for perfectly qualified candidates in shortage fields; hiring adjacent talent and upskilling represents viable strategy.
• Plan for demographic constraints: Shrinking working-age population over coming decades requires automation investments, productivity improvements, and workforce retention focus.

For training providers and educational institutions

• Align programmes with employer needs: Severe mismatch between educational outputs (humanities-heavy) and employer needs (STEM, technical skills) requires programme rebalancing.
• Expand healthcare and technical training: Healthcare workforce shortages and technical skills gaps represent sustained demand; expanding capacity in nursing, medicine, engineering, and technical specializations addresses critical needs.
• Emphasise practical, applied components: Employers value immediately applicable skills; internships, apprenticeships, hands-on projects, and industry partnerships improve graduate employment outcomes.
• Support youth employment transitions: Programmes facilitating school-to-work transitions, providing career guidance, and building practical skills help address youth unemployment.

For policymakers

• Address North-South divide: Regional disparities require sustained infrastructure investment, business ecosystem development, and incentives for southern economic development beyond short-term subsidies.
• Manage demographic transition: Working-age population shrinking 20% by 2050 requires comprehensive response including immigration policy, labour force participation incentives (especially women and older workers), retirement age adjustments, and productivity enhancements.
• Facilitate youth employment: Youth unemployment at 19-20% versus 6% overall indicates structural barriers; policies around first-job incentives, training-work transitions, apprenticeship expansion, and reducing temporary contract rigidities can help.
• Support wage recovery: Real wages 7.5% below 2021 levels erode purchasing power and living standards; policies supporting productivity growth that enables sustainable wage increases without inflation important for social cohesion.

For all stakeholders

Platforms like Yotru can support these strategies by making skills visible, standardising employer-ready CVs at scale, helping institutions measure learner job readiness, and enabling employers to identify candidates with the right applied experience for Italy's shortage occupations and regionally segmented labour market.

Looking ahead: Demographic decline amid modest recovery

Italy's 2026 labour market operates at historically strong levels by national standards while maintaining fundamental structural challenges. Record-low unemployment coexists with persistent youth joblessness, northern prosperity coexists with southern struggles, and labour shortages in critical fields coexist with surplus in others.

Future outcomes depend on addressing deep-rooted challenges:

Demographics: Working-age population shrinking 20% by 2050 (37.4 million to 29.7 million) represents unprecedented challenge requiring transformative rather than incremental responses. Total population declining from 59 million towards 55 million, with over-65 share rising from 24% to 35%, fundamentally constrains economic capacity absent productivity breakthroughs.

Regional convergence: North-South divide persists as fundamental challenge. Southern regions cannot thrive through northern prosperity alone; sustained infrastructure investment, business ecosystem development, and human capital retention essential for balanced national development.

Youth integration: Youth unemployment at 19-20% while overall unemployment hits record lows indicates structural barriers preventing young people from entering workforce effectively. Education-employment mismatch, temporary contract prevalence, and employer risk aversion around youth hiring require policy and institutional responses.

Wage recovery: Real wages 7.5% below 2021 levels erode purchasing power and social cohesion. Modest projected increases of 2-3% annually represent slow recovery that will take years to restore pre-inflation living standards. Productivity improvements enabling sustainable wage growth without rekindling inflation represent critical challenge.

Immigration integration: Foreign workers at 10.1% of employment and growing prove essential for healthcare, agriculture, hospitality, construction, and other sectors. Demographic decline intensifies immigration necessity, requiring policies that facilitate integration, recognition of qualifications, and pathways to permanent residence and citizenship.

Skills realignment: Mismatch between educational outputs (humanities-heavy) and employer needs (STEM, technical skills) requires fundamental education system reorientation. 93% of roles in shortage sectors suggest massive realignment needed between training and labour market demand.

Organisations and individuals who recognise Italy's distinctive reality (record employment masking deep structural challenges, northern-southern divide, demographic decline, youth-senior employment gap, and wage stagnation) will navigate most successfully. The combination of immediate labour market strength and profound long-term demographic constraints creates opportunities for skilled workers in shortage fields while requiring strategic adaptation from all labour market participants.

References

ISTAT (Istituto Nazionale di Statistica). (2025). Labour and Wages [Statistical database]. https://www.istat.it/en/statistical-themes/education-and-labour/labour-and-wages/

ISTAT. (2025). Italy's Economic Outlook 2025-2026 [Economic forecast]. https://www.istat.it/en/press-release/italys-economic-outlook-2025-2026/

EURES - European Labour Authority. (2024). Labour Market Information: Italy [Country profile]. https://eures.europa.eu/living-and-working/labour-market-information/labour-market-information-italy_en

Trading Economics. (2025). Italy Employment Rate [Economic indicators]. https://tradingeconomics.com/italy/employment-rate

OECD. (2025, July 9). OECD Employment Outlook 2025: Italy [Country note]. https://www.oecd.org/en/publications/2025/07/oecd-employment-outlook-2025-country-notes_5f33b4c5/italy_a775131b.html

Statista. (2024). Employment in Italy - statistics & facts [Statistical overview]. https://www.statista.com/topics/12899/employment-in-italy/

Supporting and contextual sources:

Business Italy UK. (2024, August 12). Italy's job market trends: Insights on key industries [Labour market analysis]. https://www.businessitaly.uk/business/job-market-trends/

Various regional labour market reports and ISTAT regional statistics.

Note: Quantitative claims in this article are drawn from official Italian statistical agencies (ISTAT), EURES, OECD, Trading Economics, and institutional analyses. Where specific figures are cited, they reflect published statistics and projections available as of late 2025. Secondary sources provide supporting context on skills demand, regional dynamics, and employer sentiment. Labour market outcomes remain subject to economic developments and policy changes.