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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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ENERGY

Energy crisis to labour shortage: Five challenges facing Germany right now

From Russia's war on Ukraine putting an end to cheap energy to a lack of staff in several industries and rising inflation, here are five challenges causing Germany's economy to become unstable.

Energy crisis to labour shortage: Five challenges facing Germany right now

Stagnant German growth in the second quarter has led analysts across the board to predict a recession as the outlook becomes clouded by the threat of a halt to Russian gas supplies.

But it is not only growth that is sputtering at zero percent between April and June – Germany’s entire economic model is being called into question by experts. Here’s a look at the challenges on the table right now.

READ ALSO: Germany economy stalls as recession looms

End to cheap energy

“The war in Ukraine puts an end to the German economic business model as we knew it – a model which was mainly based on cheap energy imports and industrial exports into a increasingly globalised world,” say analysts from ING bank.

Less expensive to produce and transport, with prices pinned down in long-term contracts, Russian gas has for decades contributed to Germany’s economic prosperity.

Industry consumes 30 percent of the gas burnt in Germany. Before the war, more than half of the total supplies came from Russia, a figure which had fallen to 35 percent by the beginning of June.

To wean itself completely off Russian gas, Germany is looking further afield for new supplies including shipments of liquefied natural gas from the United States and Qatar, as well as moving more quickly to renewable electricity generation.

Meanwhile, German society is having to take extreme measures to save gas. Cities have started turning off the lights, including Berlin, as is shown in the cathedral below. 

The Berlin Cathedral or Berliner Dom will no longer be illuminated to save energy.

The Berlin Cathedral or Berliner Dom will no longer be illuminated to save energy. Photo: picture alliance/dpa | Paul Zinken

READ ALSO: What is Germany’s new gas bill ‘tax’ and who pays it?

Globalisation in crisis

“As an exporting nation, Germany has benefited disproportionately from free trade. But it is exactly that which is now in danger,” opined the Süddeutsche daily earlier this month.

The coronavirus pandemic and the Ukraine war have shown the weaknesses of open economies as supply chains have been upended and key components have become scarce. Germany has been among the most exposed to the logistical snafus of the past two years.

Germany’s dependence on China is also worrying politicians in Berlin. The strong two-way ties between Germany and China were “not healthy”, liberal Finance Minister Christian Lindner said in April.

Beijing is Germany’s number one trade partner, with trade between the two nations climbing again by 15.1 percent in 2021.

“It’s potentially a new risk,” economist Claudia Kemfert told AFP. While the risk was less acute than dependence on Russia, more needed to be done to “focus on the domestic economy and build resilience”, she said.

Inflation shock

After years of anaemic growth, inflation is back with a vengeance in the European Union. In Germany, the memory of 1920s-style hyperinflation weighs heavy on the public debate.

Beyond this psychological block, the obsession with price stability ensures a “competitive industry and a nation of savers”, according to a recent report by French think tank OFCE.

An employee takes money from the till at a shop in Stuttgart.

An employee takes money from the till at a shop in Stuttgart. People in Germany face more price hikes, according to a study. Photo: picture alliance/dpa | Marijan Murat

Rising prices have led to rising labour unrest in Germany. July saw the longest industrial action at German ports in 40 years and a day of strikes by ground staff at Lufthansa. Unions haven’t ruled out more strikes happening if employers do not push up workers pay.

READ ALSO: Will Germany see more strikes affecting air travel this summer?

Ahead of negotiations that are set to kick off in September, the powerful IG Metall union is asking for an eight-percent pay rise for 3.8 million workers across various industrial sectors, the biggest wage demand since 2008.

Staff wanted

Overshadowed by the war in Ukraine, the lack of skilled workers is a major headache for German industry.

On top of the million vacancies already advertised, “Germany will need 500,000 extra employees every year for (the) next ten years,” said Marcel Fratzscher, head of the DIW think tank in Berlin.

The potential shortfall was a “risk for the competitiveness and prosperity of the country”, he noted.

Auto supplier Continental raised the alarm in July saying the shortage “threatened the future of the German economy”, which “urgently needs controlled immigration”.

Germany’s coalition government made up of the Social Democrats, Greens and Free Democrats say they want to make Germany more attractive to skilled immigrants to encourage them to come to Germany and work.

READ ALSO: ‘Appointments in English’: How Germany wants to attract workers from abroad

Germany is also planning to relax citizenship laws as part of its overhaul of immigration policies, which will mean non-EU nationals will be allowed to hold more than one nationality. 

Debt brake illusion

Returning to Germany’s strict budgetary rules in 2023 after a three-year pandemic-enforced hiatus is a key aim for Finance Minister Lindner.

However, the goal was “as surprising as it is unrealistic”, said analysts at ING.

Germany is preparing to spend billions again to support households through the coming energy crisis and investing colossal amounts into the switch to renewable energy.

“Germany will need time and money” to implement “investment and structural change as determined and committed as it demanded from other eurozone countries in the past”, the ING analysts said.

READ ALSO: Germany plans return to debt limit rules in 2023

By Sophie MAKRIS

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