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Article - Securing of Skilled Labour

Skilled professionals for Germany

Introduction

Skilled professionals are the key to innovation and competitiveness, to growth and employment, and to prosperity and a good quality of life. As the demographic development progresses, securing a sufficient supply of skilled labour will be one of the most important challenges that lawmakers and the business and science communities will be facing in the decades to come.

Although Germany does not have a nation-wide skills shortage at present, it is already impossible to fill vacancies in certain regions and sectors with suitable skilled workers. This is particularly true in STEM and health-related occupations. The situation is worsening in southern and eastern Germany in particular. Many companies are already severely affected by the shortage of skilled workers: more than 60% believe it poses a threat to the development of their business. More and more companies say that the skills shortage is posing a threat to their development – back in 2010, 16% said they regarded the skills shortage as a business risk. Today, companies deem this to be their greatest problem, as reflected not least in the early Summer 2018 Economic Survey by the Association of German Chambers of Commerce and Industry (in German).

Demographic change is having an impact

A major factor which will impact decisively on the prevailing skills shortage in future is Germany’s ageing society. An aspect of demographic change, the ageing of society is exacerbating the skills shortage. According to current forecasts, the working-age population, i.e. people aged between 20 and 64, will drop by 3.9 million to 45.9 million by 2030. In 2060, there will be 10.2 million fewer people of working age.

The skilled worker – a fundamental economic factor

The Federal Government’s own projections show that the encouragingly high economic growth seen in recent years has mainly been driven by migration from within the EU. However, the forecast level of immigration will not suffice to offset the drop in the total labour force resulting from demographic change. Numerous studies show that, but for the skills shortage, economic output would be even higher.

Leveraging potential

It is therefore vital to take proactive measures now to expand the skills base in order to meet future challenges. For this reason, the Federal Ministry for Economic Affairs and Energy sponsors the KOFA (www.kofa.de), a centre of excellence for securing skilled labour. Its aim is to assist SMEs in their efforts to become attractive as employers and remain competitive by recruiting qualified staff.

The Federal Government is taking various approaches to tackling this challenge. Firstly, it aims to boost the labour force participation rate, involving more women and older people in working life. Secondly, it wishes to encourage the immigration of qualified professionals from abroad and to utilise the potential offered by the refugees by integrating them into the labour market. Also, the Federal Government is helping companies to take advantage of the benefits of a diverse workforce consisting of people of different sexes, ages and origins, and including people with disabilities.

Four figures on demographic change and skills shortages

30-45
Symbolicon für Wachstumskurve

rise in proportion in per cent
of over-67s in all workers aged 20-67 up to 2034.

1/3
Symbolicon für Wachstumskurve

fewer people of working age by 2060
(or up to 16 million people), if Germany were to block immigration.

352
Symbolicon für Arbeiter

of 801 occupations
are currently facing skills shortages

61
Symbolicon für Bürogebäude in Deutschland

percent of companies
already view the skills shortage as a risk

Analysis and trends

Identifying the problems

Germany as a whole is not yet suffering from a skills shortage, but some regions, sectors, and professions are experiencing a lack of skilled labour. Right now it is proving impossible to fill many vacancies in Germany’s engineering sector, a sector which is so crucial to the success of our economy.

In fact, in many places it has become common to encounter difficulties filling vacancies, as is shown by the KOFA Study “Fachkräfteengpässe in Unternehmen: Rezepte gegen den Fachkräftemangel” (Skills shortages in companies: responses to the lack of skilled workers). Back in 2011, between 30 and 40% of vacancies in small and medium-sized enterprises (SMEs) were in occupations affected by the skills gap, and the figure had risen to 66% of all unfilled jobs in 2016/2017. It is thus already possible to speak of an entrenched skills shortage on the labour market. The pressure of demographics due to the ageing labour force is being felt in all of Germany’s regions. The baby boomer generation is gradually reaching retirement age – and too few young people are following in their footsteps. The number of unfilled vacancies hit a new record in the 2016-7 training year. At the same time, in eastern Germany in particular, the number of unfilled training places is going hand in hand with many applicants who can’t find a training place: it is becoming increasingly difficult to match applicants with training places.

A particularly great need for vocational training

The biggest shortage is that of skilled workers with a vocational qualification. But in some occupations there is also a growing lack of specialists with a master craftsman’s certificate or Bachelor’s degree. The healthcare sector – and particularly nursing and care services for the sick and the elderly – is severely affected by the skills shortage. As the population ages, demand for carers will keep growing. And there is also a shortage of people with the right technical and craft-based skills. At a higher level, there is a lack of doctors, engineers and information scientists – key occupations which will help shape Germany’s economic future.

The occupations particularly affected by skills shortages include:

  • graduate occupations in the field of medicine, mechanical and automotive engineering, electrical engineering, supply and waste management, IT and software development/programming, STEM disciplines (science, technology, engineering, mathematics).
  • Crafts trades: electricians/electrical installers, plumbers, lathe-operators, toolmakers, plastics process workers, pipe fitters, welders, mechanical technicians.
  • Care services: healthcare and care for the elderly.

So Germany’s dual vocational training system needs to be bolstered. This task involves the whole of society. For this reason, the Federal Government, the Federal Employment Agency, commerce, the trade unions and the Länder formed the Alliance for Initial and Further Training at the end of 2014. Together, the partners in the Alliance want to enable and to convince more young people to train for one of the more than 300 professions for which vocational training is available.

The south is suffering from the skills shortage – and the situation is getting worse in the east

The skills shortage varies not only from one occupation to another, but also in regional terms. The southern German Länder, with their strong economies, are particularly affected. The latest KOFA study says that roughly two thirds of all jobs advertised in Bavaria and Baden-Württemberg are for professionals whose skills-set is in short supply. The companies can’t see any real improvement happening in the near future. The situation has become worse in eastern Germany in particular. Behind Baden-Württemberg, Thuringia is now the Land with the greatest skills gaps.

This finding is also corroborated by the 2017 IAB Establishment Panel Survey for eastern Germany. According to this study, 37% of the skilled jobs advertised in the first semester of 2017 were still vacant at the date of survey. In western Germany, the proportion of unfilled vacancies has risen sharply to 36% (from around 30% in 2016). This means that, for the fifth successive year, the share of jobs companies were unable to recruit for was once again higher in eastern Germany than in western Germany. In addition to this, approximately one third of vocational training places also remained vacant as there were no suitable applicants.

KOFA’s interactive map shows that the shortages are not nation-wide, and that certain areas are particularly hard hit.

Leveraging potential

Where is the greatest untapped pool of skilled labour within Germany?

Greater use can particularly be made of the potential of women, older people, people with an immigrant background, young people without vocational qualifications, and people with disabilities. Diversity is an important element of corporate success. In occupations facing a skills shortage, it is also important to approach qualified professionals from around the world.

Women

The greatest pool of talent with which to meet the skills shortage is offered by women. With a female labour force participation rate of more than 74% (women aged between 20 and 64), Germany was doing well in 2016. However, the rise in female employment over the last ten years is rooted in more part-time work; there has been virtually no change in the number of women in full-time jobs. The ratio of women in full-time work is higher in almost all the other EU countries. Many women in part-time jobs would like to increase the hours they work. And almost 42% of women aged between 25 and 49 who do not participate in the labour market said that this was because they were looking after children and other relatives.

Of the nearly five million women of working age who are currently not working or looking for a job, the majority are well trained and educated. So it is in the business community’s own interest to make better use of the work and skills offered by women. Here, it is important to have better possibilities to combine family and career.

Older people

Young people and old – all generations will be needed for Germany’s future. Older employees in particular can draw on comprehensive expertise and many years of professional experience. Between 600,000 and 1.1 million skilled workers will be aged between 55 and 64 by 2025. This figure can be found in a study by ZEW from Mannheim on behalf of the Federal Ministry of Labour and Social Affairs. In fact, according to the latest KOFA study (4/2017), the labour participation rate of people aged between 55 and 64 has risen in recent years. Women in occupations with skills shortages tend to work longer, and more men are continuing to work after the age of 65, often in part-time jobs.

Every company can take targeted measures to benefit from the potential of older people. Age-appropriate design of work, an improved balance between work and private life, more further training for older people, targeted recruitment of older people and proactive health management – all of these are investments which pay off equally for companies, for employees and for Germany as a whole.

People with a migrant background

People with a migrant background also offer a lot of potential. Many thousands of additional workers could come on to the market if people with a migrant background were given more support in terms of integration and training. On the one hand, this means integrating refugees into the labour market.

In order to improve the integration of immigrants into the training and labour market, some 170 refugee recruitment advisors have been supporting small and medium-sized companies in filling their vacancies and vocational training positions with refugees since spring 2016. Across Germany, these advisors organise work placements and job shadowing opportunities for refugees, support them in acquiring the basic skills they need, and find jobs and vocational training positions for them in small and medium-sized enterprises (SMEs); since the end of 2017, they have also been working with large companies. They also advise companies on matters including language training, refugees' residence status, skills, and support services – and their work is paying off: since the programme was launched, support has been given to around 11,500 job placements for refugees.

Inclusion: recruiting people with disabilities

According to the Federal Employment Agency, some 177,000 severely disabled people would like to work. Many people with a disability have above-average skills, and their ability to work is hardly affected at all by their disability.

The Economic Affairs Ministry is leading by example. Around 9% of the ministry’s workforce are people with disabilities – that’s well above the legal requirement of at least 6% (current as of February 2018).

You can find out more about inclusion on the website of the Centre of Excellence on securing skilled labour (in German).

Top Germans working abroad

According to estimates, at least 200,000 highly qualified German nationals are currently working in the U.S., Switzerland and other EU countries. It is good to see that German skilled workers enjoy such a great reputation abroad. At the same time, we can do more to try and benefit from this wealth of experience, and encourage these people to make a career in Germany. We need to do more to build a bridge for people returning to Germany. Here, it would be helpful to have greater transparency about services and opportunities for those interested in returning to Germany, and also to give them more support with their return and reintegration.

Apprentice at work symbolizes Vocational training and work; Source: Franz Bischof/Laif

© Franz Bischof/Laif

Dual vocational training – a recipe for success

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Immigration and a culture of openness to the world

International qualified professionals – offering and utilising opportunities

If we want skilled professionals from around the world to come and work in Germany, an open culture of welcome is vital – amongst policy makers, civil society, public administration, and companies.

In its latest report, the Council of Economic Experts says: “In order to keep the total potential labour force at its current level, 400,000 more people will have to migrate into Germany than emigrate from the country each year from now on.”

Tailored services help professionals and immigrants to integrate successfully in the labour market. In order to fill as many jobs as possible, the Federal Government will introduce a law on the immigration of skilled workers. It is quite clear that, without immigration, we cannot maintain the current size of the labour force in Germany. We need immigration to tackle the shortage in STEM and other occupations. According to the latest autumn STEM report, foreign STEM workers are making an above-average contribution to securing the supply of skilled labour. Without them, the gap would be around 118,100 people more than it is today.

A law on the immigration of skilled workers

On 2 October 2018, the Federal Government agreed on principles for the immigration of skilled workers from third countries. A draft act is to be presented by the end of 2018, and the parliamentary procedure is to commence in the second half of 2019. The aim is to improve the possibilities for the immigration of skilled workers. The current rules applying to people with vocational qualifications on particular are to be adapted, and supporting measures are to be taken.

Make it in Germany

"Make it in Germany” is the German government’s information portal for qualified professionals from around the world. It provides information for skilled professionals who are considering moving to Germany, including information on career opportunities in Germany and details of current job vacancies in professions where there is a skills shortage. Furthermore, some of the international qualified professionals who are already successfully building careers in Germany share some of their personal experiences and explain how they mastered the challenge of living in Germany. Employers in Germany can find information on how to successfully recruit international skilled professionals, whilst professionals abroad can inform themselves about visa issues, job offers and the various sectors in the German economy. Since June 2012, more than 15 million users from over 200 countries have visited the site - an average of 200,000 people a month.

“Make it in Germany” – 24 hours in Germany

The launch of the “Working and living in Germany” hotline on www.make-it-in-germany.com marks the first time that the German government has offered a comprehensive, multilingual advisory service for qualified professionals, students, and apprentices who have moved to Germany or are planning to do so. Call +49 30 1815 1111 for information on immigration and visa issues, German language courses, job hunting, and the recognition of professional qualifications in Germany.

Recognition of professional qualifications acquired abroad

The rules governing the recognition of foreign professional qualifications were improved in 2012 by the Federal “Act to Improve the Assessment and Recognition of Professional Qualifications Acquired Abroad”. This law creates a legal entitlement to have one’s professional qualifications obtained abroad assessed, to see whether they can be recognised as equivalent to German qualifications.

Furthermore, non-EU nationals with higher-education qualifications can now spend up to six months in Germany to seek employment, provided that they can support themselves for the duration of their stay.

A practical tool: The BQ Portal of the Federal Ministry for Economic Affairs and Energy is the most comprehensive online knowledge and working platform for foreign professional qualifications. The platform offers descriptions of 87 vocational training systems around the world and more than 3,000 foreign professional qualifications. This enables the relevant bodies (the professional chambers) to improve their assessment of foreign professional qualifications and to make the recognition process quick, uniform and transparent.

Highly qualified professionals from around the world are particularly needed in occupations where there is a skills shortage. The rules on the immigration of people with vocational qualifications are therefore being relaxed. The orientation of the “positive list” of occupations where there is a skills shortage to regional labour market needs means that qualified professionals from abroad can now work in more than 130 occupations.

The Federal Government’s website on the recognition of foreign professional qualifications also helps people find out more about how to get their qualification recognised in Germany. The Federal Ministry of Education and Research (BMBF) keeps providing updates about this on its Facebook page.

EU Blue Card

The “EU Blue Card” makes it possible for persons with a higher-education degree who have a specific job offer and come from non-EU countries to come to Germany with their families and work and live here.

Giving immigrants the best possible support

There is also the programme for the perfect match for SMEs, which is tailored to young people from Germany and abroad who do not have refugee status. This programme has proven highly successful in helping consultants, who in turn help companies establish and develop a culture of openness to the world and integration for the many non-German apprentices and skilled workers who have come to Germany, but not as refugees.

Dual vocational training abroad

‘Skills Experts’ help train skilled workers across the globe

Companies that want to be able to compete need a skilled workforce. This also applies to German companies abroad. This is why the ‘Skills Experts’ support German small and medium-sized companies, in particular, as they provide vocational training to young locals.

In many countries across the globe, skilled labour is in short supply. This means that neither local businesses nor foreign investors, for instance from Germany, are in a position to harness the full potential offered by the relevant markets. This is where the Skills Experts programme comes into play. It aims in particular to support German SMEs as they train up young people in other countries in line with the German dual vocational training system. This programme benefits German SMEs in particular, and also the partner countries and young people in those countries.

The programme funds the secondment of vocational training experts (skills experts) to seven German chambers abroad (in Bosnia and Herzegovina, Indonesia, Kenya, Croatia, Malaysia, Macedonia and Viet Nam). There are plans to extend the coverage to include Ghana, Nigeria and South Africa. The skills experts work closely together with the Association of German Chambers of Industry and Commerce (DIHK) as the programme partner, in order to guarantee standards in the field of vocational training that are recognised worldwide and their certification in line with the German system.

Further information

  • 01/11/2018 - Joint press release - Vocational Training & Profession

    Minister Altmaier: Dual training “made in Germany” in Indonesia – courses launched for some 500 future skilled workers in five countries

    Open detail view
  • 22/01/2018 - Joint press release - Vocational Training & Profession

    There is a lot going on between France and Germany – and apprentices have a role to play in this

    Open detail view
Electrician at Work; Quelle: Getty Images/altrendo images