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Topic - Securing of Skilled Labour

Safeguarding the supply of skilled labour

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.

Germany does not have a nation-wide skills shortage at present. It is, however, a fact that demographic change is creating a situation whereby companies are finding it increasingly hard to recruit the labour they need. Due to demographic change, the working-age population (20-64 years) will decline by 4.4 million by 2030 and by 11-15 million by 2060 (source: 13th coordinated population forecast).

Six out of ten companies are now concerned that the skills shortage poses a risk to their business activities; cf. Early Summer 2018 Economic Survey by the Association of German Chambers of Commerce and Industry (in German). The Federal Government therefore aims to continue to boost the labour force participation rate. The immigration of skilled workers and the integration of refugees into the labour market are some of the measures to strengthen the skills base. More and more companies are discovering the advantages of a diverse workforce consisting of people of different sexes, ages and origins, and including people with disabilities. The Economic Affairs Ministry supports small and medium-sized enterprises (SMEs) with this – e.g. with the Centre of Excellence on securing skilled labour.

Four figures on demographic change and skills shortages

1/3
Symbolicon für Wachstumskurve

Increase in the number
of people aged over 65 by 2060

11-15
Symbolicon für Wachstumskurve

million fewer people
will live in Germany by 2060

96
Symbolicon für Arbeiter

of 619 occupations
are currently facing skills shortages

60
Symbolicon für Bürogebäude in Deutschland

percent of companies
already view the skills shortage as a risk

Diagnosis and trends

Lack of skilled labour already making itself felt

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.

A recent study (02/2017) entitled ‘The corporate skills gap: regional supply of skilled labour and mobility’ (in German) and conducted by the Centre of Excellence on Skilled Labour (KOFA) has shown that it is now commonplace for companies in many regions to have difficulty recruiting the staff they need. Between 2011 and 2016, the share of jobs advertised for professionals whose skills-set is short in supply rose from 4 in 10 to 1 in 2. In many regions, the problem is exacerbated by the fact that many companies’ workforces are of an advanced age and that there are not enough young people with the desired qualifications. In fact, the number of vacant places for vocational training is also on the rise, both in the south of Germany, the country’s economic powerhouse, and in the east, which is hit hardest by demographic change.

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.

Regional disparities

In some regions, demographic change is already having a visible impact on the labour market. The shortage of skilled labour is felt the most in Germany’s south, the country’s economic powerhouse. A recent study conducted by the Centre of Excellence on Skilled Labour (KOFA) found that two thirds of all jobs advertised in Bavaria and Baden-Württemberg are professionals whose skills-set is in short supply. And the situation is not improving. Over the past five years, the east of Germany has also been hit hard by a skills gap.

This finding was also corroborated by the 2016 IAB Establishment Panel Survey for eastern Germany (in german) According to this study, 36 per cent of the skilled jobs advertised in the first semester of 2016 were still vacant at the date of survey. This means that the share of jobs companies were unable to recruit for was once again higher in eastern Germany than in western Germany (2016: 30 per cent). In addition to this, approx. one third of vocational training places also remained vacant as there were no suitable applicants.

Leveraging potential

Where is the greatest untapped pool of skilled labour?

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 labour force participation rate of more than 72%, Germany is well-positioned. But many women work part-time. 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. On behalf of the Labour Ministry, ZEW in Mannheim has calculated a skills potential of between 0.6 and 1.1 million people aged between 55 and 64 up to 2025, compared with a scenario for 2025 with a labour participation rate and average working hours at the level of 2013. In recent years, the labour participation rate of people aged between 55 and 64 has risen sharply.

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. On the other hand, it also means that we want to attract highly qualified professionals from other countries, particularly in occupations facing 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.

Inclusion: recruiting people with disabilities

According to figures from 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

Immigration and a culture of welcome

Whetting the appetite of qualified professionals in other countries for careers in Germany

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. 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.

Hotline for international qualified professionals

The launch of the “Working and living in Germany” hotline 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 more comprehensive online knowledge and working platform for foreign professional qualifications. It is a tool which the authorities (the professional chambers) can use to improve the assessment of foreign professional qualifications and to make the recognition process uniform and transparent.

EU Blue Card

The "EU Blue Card", which was introduced in August 2012, 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. For more information, please click here.

Making the best possible use of immigrants

In order to improve the integration of immigrants into the training and labour market, some 170 refugee recruitment advisors are supporting small and medium-sized companies in filling their vacancies and vocational training positions with refugees. 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). They also advise companies on matters including language training, refugees' residence status, skills, and support services.

There is also the programme for the perfect match, which is tailored to young people from Germany and abroad who do not have refugee status. This programme has proven highly successful in helping companies establish and develop a culture of welcome 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 recruit skilled professional across the globe

Any company that wants to be able to compete needs 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. The ‘Skills Experts’, who are based at some of Germany’s Bilateral Chambers of Commerce and Industry, want to address this issue by supporting German companies willing to offer their own training under the German-style dual vocational training system. Learn more.

Further information

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

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

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Electrician at Work; Quelle: Getty Images/altrendo images