Portugal, a country renowned for its rich culture, stunning landscapes, and vibrant communities, has been experiencing a significant shift in its labor market dynamics. The emergence of Lisbon as a thriving start-up hub, coupled with a growing expatriate community, has brought forth new opportunities and challenges for the Portuguese labor market. Among the pivotal factors driving this transformation is the increasing demand for foreign language speakers, particularly those proficient in German.

The findings reveal a substantial demand for language skills in key sectors such as customer service, sales, accounting, marketing, and various communication roles. Furthermore, the close economic ties between Germany and Portugal have fostered a higher demand for German-speaking individuals, as evidenced by the rising number of German companies operating in Portugal.

As German immigrants in Portugal reached record numbers in 2022, the country’s growing economy further contribute to the need for skilled professionals in various industries.

Despite these positive indicators, Portuguese companies and startups are encountering obstacles in talent acquisition and retention, particularly in competing for highly qualified professionals with competitive compensation packages. We found that there are several reasons behind the shortage, from recent macroeconomic developments to Portugal’s demographics.

In response to these challenges, both companies and the government can adopt strategic measures to enhance employment prospects, productivity, and overall competitiveness as for Portuguese companies seeking to attract and retain German-speaking talent can make a significant difference.