Struggle with Personnel Issues: 84% of German Businesses Warned
Majority of Companies in Germany Anticipate Personnel Issues (84%) - Majority of German Enterprises Anticipate Workforce Challenges (84%)
Germany's labor market is facing a significant storm, according to the latest IAB research. The prime problem? A massive skills shortage that's causing headaches for businesses across various sectors. Three out of every four companies (64%) are sceptical about finding qualified employees in the future. The construction industry, in particular, expresses the most anxiety, with only 25% expecting no personnel issues.
High labor costs are another thorn in businesses' sides. More than half (55%) of all companies feel the pinch, an increase of 12 percentage points compared to 2022. Companies in manufacturing and retail sectors suffer the most from these financial burdens. Aging workforces, the need for continuous training, and the hassle of managing multiple work schedules further complicate matters, the study found.
The IAB gathered its data from its Establishment Panel, a representative survey of around 15,000 businesses.
The German labor market's current predicament and future prospects are cause for concern, with the skills shortage being a major source of trouble. The vehicle, healthcare, IT, and engineering sectors, amongst others, are grappling with a lack of skilled workers[1]. This skills gap is leading to extended job vacancies and, in some cases, positions remaining unfilled for an average of 285 days, as of 2024/2025[1].
The roots of this issue lie in demographic trends - an aging population with low fertility rates and rapid technological progress requiring constantly updated expertise that the domestic workforce can't entirely supply[3]. With the domestic talent pool struggling to keep up, Germany has taken a proactive approach, implementing comprehensive measures to tackles the skills shortage[2]. The Skilled Immigration Act, recently implemented, simplifies the recruitment of qualified workers from abroad by making it easier to recognize qualifications, expanding eligibility criteria, and introducing flexible visa options[2][3].
The German government is also supporting the integration of foreign talent through language courses and administrative assistance. Digitalization of visa processes and HR technology solutions are streamlining the hiring, compliance, and onboarding procedures, easing the burden on HR professionals managing the inflow of skilled migrants[2].
As Germany looks ahead, it aims to maintain and expand this open and adaptive approach to skilled immigration, ensuring long-term economic competitiveness by nurturing a diverse and capable labor force[5]. Despite stable employment figures, the persistent and sector-specific skills shortage underscores the need for these policies[4][5].
In short, Germany is working tirelessly to resolve its labor market's personnel issues through structural reforms and attraction of international talent, supported by research and policy implementation from institutions like the IAB in Nuremberg.
- The IAB's community policy study reveals that the skills shortage in Germany's labor market is a significant concern, particularly in sectors like vehicle, healthcare, IT, and engineering, where positions remain unfilled for an average of 285 days.
- To combat this problem, the German government has introduced the Skilled Immigration Act, which simplifies the recruitment of qualified workers from abroad and supports the integration of foreign talent through language courses and administrative assistance.
- Oberfichtner, a business likely feeling the pinch of the skills shortage, may find solace in vocational training and employment policies, which could help bridge the gap in their sector, as suggested by the IAB's latest findings.
- As Germany continues to aim for long-term economic competitiveness, employment policies, particularly those focused on digitalization of visa processes and HR technology solutions, will play a crucial role in easing the burden on HR professionals managing the inflow of skilled migrants.
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