European Diary: It has been a bumper year for investment in Poland. Dell, Bridgestone and Cadbury are just a few of the international brands that have been attracted to the former communist state. Cheap labour and a competitive corporate tax rate of 19 per cent are the twin ingredients transforming the economy of one of the EU's newest members.
"We are especially proud of the drop in unemployment," says Piotr Wozniak, Poland's minister for economy, who is wearing a broad smile after announcing a big fall in the jobless figure last year - to 14.9 per cent from 17.6 per cent.
"It has been a world championship effort." Yet Poland's huge success in attracting inward investment, combined with an outflow of migrants to Ireland and Britain, is beginning to cause a few headaches for employers and the government. Despite a high unemployment rate by EU standards, labour shortages are now cropping up in key sectors of the economy and threatening economic growth.
"Investors are beginning to complain about a lack of labour in parts of the country," admits Mr Wozniak, who cites the example of an LG Philips factory due to open next year in the industrial town of Wroclaw in southwest Poland.
"They wanted to attract about 1,200 applicants for training positions in the state-of-the-art factory for the manufacture of LCD screens but have so far only got about 600 people interested." According to Cohen Choi, president of LG Philips LCD in Poland, there are about 20 per cent fewer people available than required. Skilled construction workers are a particular problem and the firm is concerned the skills shortage will increase costs.
"In my company case, it's on track so far but it's true some of the special people are limited and will be difficult in the near future," says Mr Choi, whose firm is investing €429 million in the Wroclaw plant.
Warsaw is also becoming a difficult place to recruit skilled staff.
"Ten years ago if we placed an advert in the paper we would likely get 500 CVs but now it is common to get just 10 CVs for a particular position," says Ela Kaszynska, director of Grafton Recruitment in Warsaw. Her company specialises in placing workers in businesses in Poland and abroad.
"In very buoyant industrial areas such as Wroclaw the real unemployment rate is probably about 2.5 per cent," she says.
According to Macieuj Duszczyk from the Institute of Social Policy at University of Warsaw, labour shortages are also a regional problem.
"The medical sector is a particular problem with statistics showing that 5 per cent of doctors and 15 per cent of anaesthesiologists have gone abroad. This doesn't mean there are shortages of doctors everywhere in Poland but in some eastern towns there are now shortages."
Dr Duszczyk says the high unemployment rate demonstrates that there is surplus labour in Poland but many people are not prepared to work or are unable to work.
Lack of housing and poor infrastructure often prevent unemployed people from relocating to regions in Poland where workers are needed.
"There is a whole class of people with the experience of communism that have been out of work for five to 10 years and are socially excluded . . . There are also many people with poor education that there isn't a lot of offers for," says Dr Duszczyk. Emigration plays a smaller contributing factor to Poland's skills shortage, he believes.
But some policymakers believe migration is a real threat. EU regional development commissioner Danuta Hubner is concerned that the continued drift west by young skilled workers is a factor that could undermine Warsaw's ability to spend the €67 billion of EU cohesion funds due to flow to Poland during the next budget period, from 2007 to 2013.
"One of the problems is that you cannot change the labour market in the construction sector in the short term," says Ms Hubner, who is Poland's representative on the EU executive.
"We should treat very seriously the challenge to the labour supply . . . there is an unprecedented amount of investment planned over the next few years, much of which is based on the construction sector."
Politicians are beginning to pay attention to the emigration issue. For example the mayor of Wroclaw has begun an advertising campaign in Britain to try to attract workers back home while opposition politicians are proposing tax breaks to returning workers. Last week on a visit to Britain Polish president Lech Kaczynski also played the patriotic card, calling on migrants to return because their "country needed them".
But persuading Poles to come home is not proving an easy sell, according to some local recruitment consultants, who cite political instability as well as lower salaries as barriers.
"I'm trying to bring skills back from abroad for multinational companies based in Poland but it is proving very difficult to tempt people back even with rapidly rising salaries," says Seamus Pentony, director of the Polish subsidiary of Headcount Solutions.
"One person I relocated to Poland actually gets paid more here than he did in his last job in Germany . . . but I think some young people delay their return home due to unstable politics in Poland. Many migrants don't like the government and the way the country is going."
Aware of the difficulty of attracting its workers back home, the right-wing government in Poland recently lifted restrictions on seasonal workers from Ukraine. It has also signalled that Romanians and Bulgarians are welcome to work in Poland from January. So in Europe the migration of skills from the east looks set to continue.