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Economy in Germany: Skilled Worker shortages costing 86 billion euros per year

According to a new study, nearly 1.9 million skilled worker shortage is costing Germany 86 billion euros each year.

According to calculations by the management consultancy Boston ConsultingGermany loses 86 billion euros in economic output annually due to a lack of manpower. According to the authors, the losses of the German economy are thus the second highest internationally after the USA compared to the strongest economic nations, as stated in a study published recently.

86 billion euros in lost output each year

The study authors Johann Harnoss and Janina Kugel prepared the paper in cooperation with the International Organization for Migration of the United Nations. The calculation for Germany was based on the figures of the Nuremberg Institute for Labour Market and Occupational Research, which had reported 1.9 million vacancies for the second quarter.

“That’s about a million above the long-term average,” Harnoss said. “Both economists and we see this as a structural deficiency.” Harnoss and former Siemens Chief Human Resources Officer Kugel assume that on average each of these one million missing employees would provide economic output of about $84,000 per year – a total of $84 billion.

Compared to other developed nations around the world, Germany came second only to the US in terms of economic losses caused by worker shortages. Even assuming that between 300.000 to 400.000 workers immigrate to Germany each year, Harnoss and Kugel estimated that the number of working-age people in the federal republic would fall by 3 million by 2035 and by 9 million by 2050.

“The cost of 84 billion will be even greater if we do not steer against it,” Kugel said. Although the USA has the most vacancies, it is also best positioned to close the gap again. In the USA, Kugel and Harnoss assume a gap of 19 million workers for 2050, but also from as many immigrants.

Germany should target recruitment to specific countries

Harnoss suggests that Germany recruits workers specifically in countries whose population is still growing. One possibility would be to train the people there in their home countries before they come to Germany. This would have advantages for immigrants, for countries of origin, and for the destination countries.” As examples, he cited India, Nigeria, Indonesia and Egypt.

“We must have unideological lines,” Kugel pleaded for a factual discussion about immigration. “If we get an even greater shortage of skilled workers, we will get political discussions in completely different tones,” she said with regard to the affordability of the pension and health system.

“Where immigration takes place on a large scale, acceptance is also significantly higher,” argued Kugel, referring to cities like Munich, where a very high proportion of immigrants goes hand in hand with a comparatively low influx of extremists.

Kugel and Harnoss advise German medium-sized companies to increasingly look around the international job market – and not just to replace local workers who are leaving. “The more diverse companies are, the more innovative they are,” said Kugel, referring to US tech companies that employ a large number of immigrants.


By Itamar Medeiros

Originally from Brazil, Itamar Medeiros currently lives in Germany, where he works as VP of Design Strategy at SAP and lecturer of Project Management for UX at the M.Sc. Usability Engineering at the Rhein-Waal University of Applied Sciences .

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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