Addressing labour and skills mismatches through integrated monitoring systems

Abstract

Trentino, Italy—

• The Autonomous Province of Trento in Italy has established a robust system for monitoring labour market trends and addressing skills mismatches, leveraging national surveys, local firm data, and real-time workforce tracking.

• This integrated approach facilitates timely, data-driven policy interventions, enhancing Trentino's ability to align workforce development with regional economic needs, particularly in response to sectoral shifts and emerging skills shortages.

• Trentino's model showcases the effectiveness of data integration in guiding evidence-based decision-making, offering a replicable blueprint for other regions confronting similar labour market challenges.

What are the objectives?

The primary objective of Trentino’s integrated monitoring system is to provide a comprehensive, up-to-date understanding of labour market dynamics, enabling informed decisions to address both immediate and long-term workforce challenges. By leveraging multiple data sources, the system seeks to:

• Monitor labour market trends and recruitment challenges continuously.

• Identify and address sector-specific labour and skills shortages.

• Provide policymakers with real-time data to optimise workforce planning and policies.

• Strengthen coordination between public institutions and social partners for targeted responses.

• Anticipate future labour market shifts and skills mismatches for strategic planning.

• Support economic resilience by aligning workforce development with evolving industry needs.

How does it work in practice?

Trentino’s monitoring system integrates data from various public sources, with data providers and social partners coordinating under the Provincial Labour Market Observatory. Key components include:

• Excelsior survey: Managed by the Italian Chambers of Commerce, this nationwide initiative surveys over 500 000 firms across Italy, providing detailed insights into recruitment challenges, labour market demand and sector-specific skills shortages. The data is disaggregated by region, offering a comparative view of Trentino’s labour market.

• Quarterly local economic surveys: Conducted by the Trento Chamber of Commerce, these surveys offer insights into business conditions, focusing on turnover trends, employment intentions and future outlooks. The survey can be flexibly adjusted to capture emerging issues, such as the post-COVID-19 surge in remote work and, more recently, labour shortages.

• Real-time monitoring through contracts data: The Trento Agency for Labour uses real-time data from the “comunicazioni obbligatorie” system, where firms record hirings, terminations and contract changes. Monthly reports from this system provide detailed insights into workforce flows, disaggregated by sector, gender, age and contract type.

• A holistic view of local employment trends: The Provincial Institute of Statistics (ISPAT) collaborates with the Trento Agency for Labour to produce quarterly employment reports. While the Agency focuses on jobs within the province, ISPAT tracks the employment status of Trentino residents, whether they work inside or outside the region.

• Cross-referencing data sources to assess shortages: The Trento Agency for Labour cross-references local hiring demand from the Excelsior survey with actual hiring data from the “comunicazioni” system, providing an initial proxy for assessing mismatches between labour supply and demand. The Agency also tracks job postings on its employment portal and compares them with actual hires, offering an additional estimate of unmet demand.

What has been the impact?

The labour market monitoring system in Trentino has yielded several positive outcomes:

• Talent attraction through the “Trentino for Talent” project: Leveraging insights from its monitoring system, Trentino launched this initiative to address local skills shortages in high-demand sectors such as engineering and IT. Jointly run by Trentino Sviluppo and the Labour Agency, the project combines targeted marketing campaigns with job matching services. As a result, the region has successfully attracted highly skilled professionals, filling critical roles and enhancing the competitiveness of the local economy. Since its launch in February 2023, the project, as of mid-October 2024, has gathered 745 applications and facilitated the hiring of 68 candidates, effectively bridging local skills gaps.

• Teleworking strategy development: Following the COVID-19 outbreak, Trentino leveraged insights from its monitoring system to design a remote work strategy. This ensured a smooth transition for businesses and workers to remote work, while also preparing for the long-term implications of a hybrid workforce, including the opportunity to expand the talent pool by enabling people to live further from their workplace.

• Long-term economic resilience: Trentino’s monitoring system has been instrumental in the region’s economic transformation over the past four decades. After a significant decline in manufacturing jobs in the 1980s, Trentino transitioned towards service sectors, particularly knowledge-intensive industries. This shift, supported by progressive labour and industrial policies, helped maintain employment levels and boost average incomes. Programmes like Progettone, which re-employed workers after mass layoffs, were backed by data-driven insights from the monitoring system, enabling timely interventions and strategic workforce planning.

What can other communities learn from this example?

Key lessons that other regions can take from Trentino’s approach include:

• Integrating multiple data sources (e.g. national, local, survey and administrative data) provides a fuller picture of labour market dynamics and helps identify specific local needs.

• Real-time data collection through mandatory reporting systems on hiring and dismissals allows for more agile and responsive policy interventions.

• Flexible survey design enables regions to quickly adjust to evolving labour market trends, such as the growing concerns around skills shortages.

• Collaboration between public institutions, social partners and private sector stakeholders strengthens the monitoring system and ensures comprehensive coverage of local and cross-regional labour trends.

• Leveraging integrated data for predictive analytics helps anticipate future labour market shifts, allowing regions to act proactively and design targeted interventions before issues escalate.

Further information

• Survey | Excelsior

• Trento Chamber of Commerce’s quarterly economic surveys (in Italian)

• Periodic reports on Trentino’s labour market trends (in Italian)

OECD resources

OECD (2021), “The future of remote work: Opportunities and policy options for Trentino”, OECD Local Economic and Employment Development (LEED) Papers, No. 2021/07, OECD Publishing, Paris, https://doi.org/10.1787/35f78ced-en.

The Comeback Kid: How Smart Policy Turned Trentino Around (Mattia Corbetta and Wessel Vermeulen, 25 July 2023): https://oecdcogito.blog/2023/07/25/the-comeback-kid-how-smart-policy-turned-trentino-around/

Progettone – job matching for low-skilled workers (5 January 2024): https://www.oecd.org/en/publications/providing-local-actors-with-case-studies-evidence-and-solutions-places_eb108047-en/progettone-job-matching-for-low-skilled-workers_7636f479-en.html