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Economy in Germany: Shortage of Skilled Workers Reaches an All-Time High

According to a new survey by the Ifo Institute, based in Munich, a record 49,7 percent of companies are currently short of workers.

German manufacturers of machinery and equipment are increasingly short of skilled workers, a constraint that adds to the shortages in materials and intermediate goods that they are also suffering, the Ifo economic institute reported recently.

“More and more companies are having to cut back on business because they simply can’t find enough staff,” says Stefan Sauer, a labor market expert at the Ifo Institute. “In the medium and long term, this problem is likely to become more severe.”

The Munich-based Ifo said its survey of some 4,000 companies showed the skills shortage extends beyond trained engineers, mechanics, and IT specialists, with a shortage of low-skilled employees emerging as well.

“Manufacturers of machinery and equipment are feeling the effects of layoffs they carried out before and during the coronavirus pandemic,” said Ifo industry expert Nicolas Bunde. “Now these companies are desperately seeking suitable staff.”

Certain industries worse-affected by lack of staff

The Ifo figures show that certain industries are worse-affected than others. Service providers were hit the hardest, with 54.2 percent reporting a shortage of skilled workers, up from 47.7 percent in April. The hotel and event industries came in above this sector average at around 64 percent. In warehousing and storage, 62.4 percent of establishments were affected. 

The manufacturing sector is also badly affected by skilled workers’ shortage, with 44,5 percent of survey participants saying they are suffering from a lack of skilled workers. 41,9 percent of retailers, 39,3 percent of construction companies, and 36,3 percent of wholesale companies also reported shortages.

A total of 41.9 percent of retail businesses reported a shortage of skilled workers, as did 39.3 percent of construction companies and 36.3 percent of wholesalers. 

The shortage of skilled workers has risen to a new high in Germany, affecting 49.7 percent of companies in July. This finding is based on data collected in conjunction with the ifo Business Survey since 2009. The new level is much higher than the previous record of 43.6 percent, which was set in April.

German government looks to reform immigration policies

Industry representatives and economists have long been sounding the alarm about Germany’s dire need for skilled labourers, warning that the shortage risks holding back the economy. A recent study by the KfW found that the proportion of companies that see themselves held back by worker shortages has doubled within the space of a year.

The German government is looking increasingly serious about tackling the country’s crippling shortage of workers, with the traffic light coalition pushing ahead with plans to reform Germany’s immigration policies, to give foreign workers easier and quicker access to the German labour market.

Sources

Carter, A., (2022), “One in two employers in Germany short of skills workers, survey finds”, retrieved 12 September 2022 from IamExpat website https://www.iamexpat.de/career/employment-news/one-two-employers-germany-short-skilled-workers-survey-finds

Carrel, P. (2022), “German manufacturers increasingly short of skilled workers, report says”, retrieved 12 September 2022 from Reuters website https://www.reuters.com/markets/europe/german-manufacturers-increasingly-short-skilled-workers-ifo-2022-08-16/

Muller, M., (2022), “Despite pandemic and Ukraine war, growing demand is worsening the skills shortage”, retrieved 12 September 2022 from KfW Research website https://www.kfw.de/PDF/Download-Center/Konzernthemen/Research/PDF-Dokumente-KfW-ifo-Fachkräftebarometer/KfW-ifo-Fachkraeftebarometer_2022-05_EN.pdf

Sauer, S., Schultz, H., (2022), “Shortage of Skilled Workers in Germany Reaches an All-Time High”, retrieved 12 September from Ifo institute website https://www.ifo.de/en/press-release/2022-08-02/shortage-skilled-workers-germany-reaches-all-time-high

By Itamar Medeiros

Originally from Brazil, Itamar Medeiros currently lives in Germany, where he works as Director of Design Strategy at SAP.

Working in the Information Technology industry since 1998, Itamar has helped truly global companies in multiple continents create great user experience through advocating Design and Innovation principles. During his 7 years in China, he promoted the User Experience Design discipline as User Experience Manager at Autodesk and Local Coordinator of the Interaction Design Association (IxDA) in Shanghai.

Itamar holds a MA in Design Practice from Northumbria University (Newcastle, UK), for which he received a Distinction Award for his thesis Creating Innovative Design Software Solutions within Collaborative/Distributed Design Environments.

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