Debate on the future of skilled labour

At the end of August 2010, the Federal Minister of Economics and Technology met representatives of German business associations to discuss possible solutions to the shortage of skilled labour that is being experienced during the recovery from the global economic crisis. While the opinions of the social partners differ, recent research also confirms the need for urgent action in this area.

At the end of July 2010, Rainer Bruederle, Germany’s Federal Minister of Economics and Technology, proposed in a press report (in German) that companies in need of skilled labour should be allowed to offer cash premiums to foreign skilled workers as an incentive. At the end of August 2010, he presented a ministry working paper (in German) on the issue and discussed it with representatives of 17 business associations. The paper suggested several lines of action. The first is to develop a suitable immigration policy, in order to recruit skilled foreign workers. The second calls for better integration of existent labour resources in Germany, for example women, older workers or people with an immigrant background. As indicated by the results of a recent company survey (in German) by the German Chambers of Industry and Commerce (DIHK), every second company is already facing difficulties in filling vacant positions.

Survey of Germany’s skilled labour needs

Between 9 and 15 July 2010, the DIHK conducted an online survey among companies to assess the situation regarding recruitment of skilled labour. Over 1,600 companies participated in the survey. Out of these, 32% are active in industry and construction, 15% in commerce and 53% in services. One in five companies surveyed stated that they faced general difficulties in filling vacant positions, and half stated that they were having some trouble with recruitment. Companies were also asked to give their views on the future prospects for attracting skilled labour. In this context, 49% expected a shortage of workers with academic qualifications within the next five years and 43% a shortage over all occupational groups. A further 45% think that skilled labour with qualifications in technical fields and the natural sciences will be especially hard to find.

Another study (in German, 350Kb) published by the Association of German Engineers (VDI) and the Cologne Institute for Economic Research (IW Köln) shows that until 2012 nearly 36,000 new engineers will be needed each year to replace those leaving the labour force. This figure is expected to rise to 48,300 a year between 2023 and 2027. However, there are currently not enough new engineering graduates to make up for the loss of the older generation. Unfilled vacancies in key areas, such as engineering positions, can lead to production delays and the loss of orders, or adversely affect the development of new products (DE0707039I).

Social partners’ views

On 3 August 2010, the Confederation of German Trade Unions (DGB) issued a statement (in German) rejecting Minister Bruederle’s suggestion of attempting to attract foreign skilled labour with a cash premium, proposing instead the creation of more continuous training and qualification opportunities for unemployed and low-qualified workers. Furthermore, DGB said childcare facilities should be expanded to allow more single parents with good qualifications to work. DGB Vice-Chair Ingrid Sehrbrock also pointed out that migrants who were already living in the country should be able to have vocational qualifications acquired abroad recognised in Germany. Moreover, according to Ms Sehrbrock, around 40% of migrant youngsters have neither received proper schooling nor completed vocational or other training courses, and she called for measures to improve their integration into the labour market. Anti-discrimination measures and a fair chance to receive schooling and a job are needed, as well as a legal right to the recognition of foreign qualifications.

On 24 August 2010, DIHK President Heinrich Driftmann presented the results (in German) of the Chambers’ survey, emphasising that even in the wake of the recession, companies were reporting a shortage of skilled labour. This shortage was likely to get worse in the economic upswing. He called on the federal government to join the social partners in solving this problem. The chambers of commerce and industry were already engaged in a variety of activities to inform and advise on vocational and continuous training, better integration of older and immigrant workers, and balancing family and working life, but the DIHK survey also stressed that the German educational system had to be improved in order to raise the overall proportion of qualified people.

On 31 August 2010, the Chair of the German Confederation of Employers’ Associations (BDA), Dieter Hundt, issued a press release (in German) welcoming the latest news from the Federal Employment Agency (BA), which reported that the unemployment rate had remained stable at 7.6% in August 2010 (the same as in the previous month). While this was good news, Mr Hundt once again warned about the shortage of skilled labour, saying that in the natural sciences alone Germany needed 65,000 more skilled employees. Every vacant position that could not be filled was a ‘lost opportunity for companies’, he said, calling for a comprehensive strategy to tackle this problem and to complement companies’ efforts in vocational and continuous training. According to Mr Hundt, more effort is needed to integrate women, older workers and people with immigrant backgrounds into the labour market, but he also stressed that it is necessary to systematically open up the labour market to skilled foreign workers.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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