Struggling with Talent Hunt: 84% of German Companies Feel the Bite of Skills Gap
Study reveals: More than eight out of ten businesses encounter a talent deficit - Findings Show that Over 84% of Companies Struggle with a Lack of Proficient Employees
Looking for a perfect fit can be a real headache for businesses across Germany. According to a study by the Institute for Employment Research (IAB), as many as 84% are currently grappling with a skills shortage. "Skills shortage remains the most common problem across industries,” says IAB researcher Michael Oberfichtner. Apart from this, other concerns include high payroll costs and high employee absenteeism.
Two out of every three businesses are skeptical about finding enough adequately qualified workers in the future. The construction industry is particularly worried, with just a quarter believing they won’t face any issues.
To combat the skills shortage, around half of the businesses are looking at continuous learning opportunities, employee development, and a better work-life balance.
However, 5% of the 15,000 surveyed businesses foresee a potential oversupply of staff - mainly in the manufacturing industry. "The sluggish external trade and the energy transition are weighing heavily on the manufacturing sector," says IAB researcher Ute Leber.
In 2022, 55% of businesses reported high wage costs as a burden - an increase of 12 percentage points compared to the previous year. Businesses in manufacturing, as well as those in wholesale and retail trade, complain the most about this burden.
While the labor scarcity isn't as significant for entry-level jobs like helper roles, it is still evident: one in three businesses anticipates issues in recruitment for this sector. The hospitality industry, service providers like temporary work and security services, agriculture, and mining are the most impacted.
- Germany
- Skills Shortage
- IAB
- Coping Strategies
- Hiring Challenges
Insights from Enrichment:
- Persistent Skilled Worker Shortage: Germany grapples with a persistent shortage of skilled workers, with many vacancies left unfilled. An aging workforce and a lack of highly qualified new recruits exacerbate this issue [2].
- Insufficient Training and Education: The number of new apprenticeships has fallen below 500,000 annually since 2020, while corporate training has yet to reach pre-pandemic levels. Additionally, declining academic performance could weaken the overall qualifications base [2].
- Sector-Specific Skill Gaps: Certain sectors, such as finishing and drywall construction, face significant shortages of skilled workers, with lengthy vacancy periods [3].
- Potential Solutions: To address the shortage, the IAB suggests investing heavily in education, especially in digital skills to enhance productivity. Encouraging lifelong learning and retraining programs can also help prepare workers for new job requirements. Strategic recruitment, digitalization, and decarbonization can drive economic growth, improve competitiveness, and help attract and retain skilled talent [1][2].
Community policy could be implemented to address the skills shortage in Germany, focusing on vocational training programs to bolster the educational system. These training programs, if adequately funded, may help businesses by providing them with a skilled workforce, potentially reducing their reliance on finance from external sources for business expansion.
