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WORKING IN GERMANY

EXPLAINED: The German industries ‘most affected’ by skilled worker shortage

Germany's shortage of skilled workers has reached a new high with almost half of firms struggling with staff shortages, according to a survey.

A sign at a Munich store says they are looking for staff urgently.
A sign at a Munich store says they are looking for staff urgently. Photo: picture alliance/dpa | Peter Kneffel

In July, 49.7 percent of companies surveyed by the Munich-based Ifo Institute said they were affected by the lack of skilled workers. 

This is the highest figure since researchers launched their quarterly survey in 2009. The previous record was 43.6 percent in April.

“More and more companies are having to cut back on business because they simply can’t find enough staff,” said Stefan Sauer, a labour market expert at the ifo Institute.

“In the medium and long term, this problem is likely to become more severe.”

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Since the survey started, the problem has increased significantly. At the beginning, around 10 percent of businesses reported being affected by worker shortages. But by 2019 this had climbed into the range of around 30 percent. 

The Covid crisis caused a temporary slump, but since the beginning of 2021, numbers have been rising significantly.

Service providers most affected

The service sector is the most affected with 54.2 percent of companies saying they are struggling to fill vacancies, up from 47.7 percent in April. Within this group, accommodation and event industries came in above this sector average at around 64 percent. In warehousing and storage, 62.4 percent of firms were affected. 

The service sector is followed by manufacturing, with 44.5 percent of companies saying they can’t find staff. Within that group, 58.1 percent of food manufacturers said they faced problems caused by staff shortages. Around 57 percent of manufacturers of data processing equipment and of metal products are also having difficulty finding qualified staff.

In the retail sector, 41.9 percent of companies say they have problems with a lack of staff. In construction that figure is 39.3 percent and in wholesale, it’s 36.3 percent.

The pharmaceutical and chemical industries report the lowest shortage of skilled workers, with 17.2 and 24.1 percent of companies respectively reporting that they are affected by staff shortages.

The automotive industry is also below average with 30.5 percent of firms reporting issues with staffing, as is mechanical engineering, with 43 percent.

Germany’s labour shortage is causing major concerns. A report by the IAB Institute for Employment Research from earlier this year found 1.74 million vacant positions across the country. 

The president of the German Confederation of Skilled Crafts and Small Businesses, Hans Peter Wollseifer, recently spoke out about the issues. According to Wollseifer, the skilled crafts sector in Germany alone lacks at least a quarter of a million qualified employees.

Meanwhile, between 15,000 and 20,000 apprenticeship places remain unfilled every year, signalling problems for the future. 

As The Local has been reporting, the government is pushing ahead with plans to reform immigration law in a bid to attract talent from abroad to fill jobs.

“We want to make it easier and faster for foreign skilled workers to find their way to Germany,” said Interior Minister Nancy Faeser and Labour Minister Hubertus Heil (both SPD) recently.

The plans for a reform of immigration law could be presented as early as autumn.

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Vocabulary

Skilled workers – (die) Fachkräfte

Labour market – (der) Arbeitsmarkt

High/peak – (der) Höchststand

Service providers – (die) Dienstleister

Temporary employment – (die) Zeitarbeit 

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

Member comments

  1. Let’s hope the proposals, whenever they come, make the pathway to dual citizenship simple and short. Otherwise it’s just not going to work as, in my opinion, skilled immigrants are just not going to up sticks and take the risk of being treated as guest workers.

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WORKING IN GERMANY

German employers ‘must give notice of holidays expiring’, court rules

Employers in Germany often set strict deadlines for taking annual leave - but a new court ruling states that these deadlines could be invalid if employees don't inform their workers of the rules.

German employers 'must give notice of holidays expiring', court rules

Whether it’s a heavy workload or prolonged illness, there are plenty of reasons that holiday days can end up going unused. In many cases, they simply expire at the end of the calendar year – but are there some cases in which they shouldn’t expire at all?

According to a new decision by the European Court of Justice (ECJ) – the highest court in the EU – some workers may be entitled to compensation for their “expired” holidays after all.

In a landmark ruling based on a dispute in Germany, the ECJ has stated that deadlines for taking holidays are only valid from the date when the employer tells their employees about the rules. It means that if workers are unaware that they have to use their annual leave within a certain time, these holiday days can still be taken after the supposed deadline has passed.

The latest decision comes on the back of a similar ruling by Germany’s Federal Labour Court in 2019, which obliged employers to remind their workers to take their holiday before it expired.

The Labour Court said that the reminders should be addressed directly to the employee in writing and should inform them explicitly that their holiday days could expire if the employee decided not to take them.

READ ALSO: Why German employers will soon have to record staff working hours

Law firm dispute

In the latest case in question, a tax clerk who worked at a law firm from 1996 to 2017 claimed she was entitled to financial compensation for several days of holiday.

Her contract entitled her to 24 days of annual leave, which she said she was unable to take over a number of years because she had too much work to do.

At the beginning of March 2012, her employer certified that she was entitled to a total of 76 days of remaining leave from 2011 and previous years.

This did not expire on March 31st 2013 as usual because she had not been able to take it “due to the heavy workload in the office”, the ruling explained. 

In the following years, the employee once again did not take the full amount of annual leave she was entitled to. During this time, the employer did not remind her to take her holidays, nor did he indicate that the entitlement to leave could be forfeited if she did not take it.

Financial compensation

After the tax clerk left the firm in July 2017, she received just €3,201.38 for 14 days of leave that hadn’t been taken in 2017. 

According to the employee, at least 101 further days of leave were unaccounted for. In a court complaint, she demanded full compensation for these additional days of unused holiday.

However, her previous employer argued that the time limit for taking the holiday days had expired.

The case was initially heard by Solingen Labour Court and then by Düsseldorf Regional Labour Court. It subsequently ended up before the Federal Labour Court, who asked the ECJ to provide an opinion on whether Germany’s three-year cap on taking annual leave was compatible with European law.

READ ALSO: Bildungsurlaub: What is Germany’s ‘education holiday’ and how can I use it?

The entrance to the European Court of Justice in Luxembourg.

The entrance to the European Court of Justice in Luxembourg. Germany’s three-year cap on untaken leave is compatible with EU law. Photo: picture alliance / dpa | Nicolas Bouvy

According to the ECJ, the time limit isn’t problematic. However, it can only apply from the date that the employee is informed about the rule.

That means that, if workers are unaware that their holiday days can expire, the days can be still be taken after the three-year time limit is up. 

“Indeed, since the employee is to be regarded as the weaker party to the employment contract, the task of ensuring that the right to paid annual leave is actually exercised should not be shifted entirely to the employee,” the judgment from Luxembourg states.

The former law firm employee is now likely to be entitled to a hefty payout from her previous employer. In its own judgement, the Federal Labour Court declared that the complainant was entitled to compensation for 76 days of leave at a rate of €228.64 per day.

This equates to a payout of around €17,400 plus interest.  

READ ALSO: Which public holidays are coming up in Germany?

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