How Rising Labour Costs Are Changing Recruitment in Malta
Rising labour costs are driving major changes in how recruitment operates across Malta’s business landscape in 2025, pushing employers to rethink hiring strategies, overhaul compensation packages, and streamline work arrangements. A surge in wages is paired with increased living and housing expenses, making the cost of attracting and retaining talent steeper than ever before.
The Cost Curve: What’s Changed in 2025?
Hourly labour costs in Malta rose by 3.4% in 2025, mirroring upward trends across the Euro area and the EU. This means companies now spend significantly more for each new hire, including higher salaries, increased social security contributions, and enhanced benefits packages. For example, whole-time employees received a weekly wage increase of €5.24 in 2025, while minimum wage levels and statutory benefits have also been updated.
Impact on Recruitment Strategies
Employers must balance budget constraints with the need to offer attractive compensation—especially in high-demand sectors such as IT, finance, and healthcare, where skill shortages intensify competition. Companies are adopting:
- Flexible work arrangements (remote/hybrid) to retain talent without constantly pushing up salaries.
- Expanded benefits packages and career development options, which have become essential to offset rising costs and boost employee loyalty.
- More selective hiring, favoring specialized roles and upskilling over broad expansion.
Changing Employer-Employee Dynamics
Wage pressures mean candidates are negotiating harder, with recruitment cycles now shaped by applicants prioritizing not just salary but quality-of-life factors and long-term prospects. Employers must move quickly—top talent is available for only a short window—and keep up with regulatory changes in minimum wage, collective bargaining, and transparency.
Sector Effects and the Bigger Picture
- Entry-level and manual roles saw smaller increases, but specialized technical and managerial positions now command up to €3,217 per month or more.
- Businesses reliant on foreign workers face steeper costs due to new salary thresholds for key and specialist employee permits—raising the bar for skill and pay.
Rising labour costs are transforming recruitment in Malta, spurring innovation and competition for talent while forcing companies to rethink budgets, benefits, and the value they offer to every employee.
