Joint strategy to resolve shortage of skilled labour

The German government met representatives of employer organisations and unions in June 2011 to discuss how to resolve the shortage of skilled labour. They have now published a joint strategy paper setting out their plans. The main emphasis is on using the potential in the domestic labour supply, for example women, older employees, people with disabilities, migrants and the long-term unemployed. However, controlled immigration of skilled labour is also envisaged.

Background

An imminent shortage of skilled labour in certain professions was foreseen by the government and social partners in 2010. Rainer Bruederle, the former Federal Minister of Economics and Technology had, for example, suggested that companies could introduce a cash premium for foreign, skilled workers, in order to provide them with an incentive to take up a job in Germany (DE1009019I). In June 2011, after talks, the German government, the trade unions and the employer organisations published their joint strategy paper (in German, 17.9Kb PDF).

Content and scope of the joint paper

The talks took place on 22 June 2011. The employers were represented by the German Confederation of Employers’ Associations (BDA), the Federation of German Industries (BDI), the Association of German Chambers of Industry and Commerce (DIHK) and the German Confederation of Skilled Crafts (ZDH). The unions were represented by the Confederation of German Trade Unions (DGB), the United Services Union (ver.di), the Mining, Chemicals and Energy Industrial Union (IG BCE) and the German Metalworkers’ Union (IG Metall).

Before the summit, the German government announced in a press article (in German) the challenges of an ageing society for the German economy. It said that by 2025, the labour force will have lost around 6.5 million skilled workers. A shortage of skilled labour is, however, already perceptible in certain sectors today, with a need for graduates in mathematics, computing and natural sciences, and workers in the health and social care sectors.

The joint paper says a high-quality and labour-market-oriented education system is a prerequisite for countering the shortage of skilled labour. The government and the social partners have singled out certain population groups for further support:

• Older employees represent a great resource. Companies need their competencies and knowledge. Initiatives will be further developed to keep older employees in work. These will include offers of information and consultation to companies and their staff on reintegration measures for employees who fall ill, and on measures to secure and prolong the employability of older workers, for example by training, reorganising work processes and new ways of part-time working which will ease the transition to retirement.

• Unemployed people are another unused labour resource. The German government and the social partners want to match labour supply and demand more accurately. Discrepancies exist between supply and demand in regional labour markets, as well as between the qualifications offered by job applicants and those sought by companies. Further training and retraining for the unemployed, as well as measures to increase their mobility are deemed essential for activating this group.

• The employment, and especially full-time employment, of women, needs to be increased in the next few years. To this end, the legal, regulatory and structural conditions for female employment have to be improved. The government and social partners will strive to create greater access to full-time employment for women, including single mothers, and to promote family-friendly working hours, work organisation and the extension of child-care facilities.

• Finally, the delegates also agreed on the need for better integration of people with disabilities. In order to help them participate in the labour market, they will be given more support for entering (vocational) training or taking up a job.

In addition to exploiting the potential of the domestic labour supply, the paper also includes a clause on immigrants. While the former minister’s proposal to introduce a cash premium is not mentioned, there is to be support for people with a migrant background, through education and training and by introducing efficient ways of recognising foreign qualifications. More skilled foreign workers need to be attracted and have to be offered secure living and career prospects.

Position of social partners

At the press conference held after the summit meeting, Dieter Hundt, the BDA chair, welcomed the new declaration, but also called for further steps to be taken (see press conference transcript (in German)) can be seen in detail on the government website. He stressed the need to enable foreign students to stay in Germany after they have successfully completed their academic studies and secured a job. Mr Hundt criticised the income barrier which non-EU skilled workers face if they wish to get a settlement permit in Germany. Current law demands that these workers have to prove they earn an annual income of at least €66,000. Mr Hundt called for this to be lowered, but he also said that domestic labour resources had to be better activated, with better training and education, for women, older employees, people with disabilities and those with a migrant background.

Michael Sommer, the DGB Chair, also welcomed the declaration of intent. While he acknowledged the problems caused by a lack of skilled labour, and the need to exploit the domestic labour supply, he called for a European solution to cope with the lack of skilled labour in Germany, explaining that few European countries had a youth unemployment rate below 10%. He highlighted countries such as Spain, which suffer from high youth unemployment, and suggested that the German labour supply problems could be jointly addressed with the other EU Member States. In another press statement (in German) he went on to say that Germany should recruit well trained young people who currently have no career prospects in their home country, such as Spain and Ireland.

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