Enterprise workforce deficit identified in 84% of companies due to talent shortage of qualified personnel

Struggling to Staff Up: 84% of German Businesses Grapple with Skills Shortage Crisis

Businesses struggle significantly due to a lack of skilled workers, according to a study, with 84% experiencing this labor shortage. - Enterprise workforce deficit identified in 84% of companies due to talent shortage of qualified personnel

Germany's business landscape faces a persistent challenge: a yawning skills gap. A study by the Institute for Employment Research (IAB) reveals that an eye-watering 84% of businesses in the nation grapple with skills shortages - a headache that spans various industries.

IAB researcher Michael Oberfichtner revealed, "Skills shortages remain the most frequently cited problem across industries." Classic examples of other stress points include high labor costs and high absentee rates.

Two-thirds of businesses voice their doubts about their ability to snag qualified candidates in the foreseeable future. And, it seems that the construction sector clocks the highest levels of trepidation, with a mere 25% expecting a smooth ride.

Courses, workshops, improved job work-life balance, and better skilling programs are seen as remedies to solve the skills shortage crisis. Over half of the 15,000 polled companies swear by these measures.

However, something's not quite right. A meager 5% of companies expect to be overstaffed, particularly in the industry. IAB researcher Ute Leber declares, "The weak external trade and the energy transition are particularly affecting the manufacturing industry."

In 2022 alone, 55% of companies felt the squeeze from skyrocketing labor costs - a whopping 12 percentage point increase compared to the previous year. Businesses in manufacturing, wholesale, and retail felt the weight the hardest.

The labor shortage isn't as pronounced for mundane tasks, like help jobs, but it's still a lingering issue. Approximately one-third of businesses anticipate hiring difficulties in this sector.

Notable industries feeling the pinch include hospitality, service providers like temp work and security firms, agriculture, and mining.

Mirroring the Gridlock

• IAB: Researchers with the know-how.
• Skills Shortage: The challenge that refuses to go away.
• Germany: The nation facing the storm.
• Nuernberg: Where the study originated.
• Future: A murky picture for businesses.

Shuffling the Deck

The IAB has weighed in on potential strategies to tackle skills shortages in the future:

• Skills Mismatch: Despite a high unemployment rate, there's a gap between the skills of job seekers and job vacancies. Sizable talent pools lack required qualifications.[3]
• Shrinking Job Market: The labor market is witnessing a drop in job vacancies, exacerbating the skills shortage conundrum. Sectors such as manufacturing, construction, and services are hardest hit.[3]
• Aging Workforce & Skills Gap: Germany is bracing for demographic challenges, needing skilled replacements for a retiring force. This calls for a strategic recruitment and training approach.[5]

Addressing the conundrum involves:

• Strategic Recruitment & Training: Attractive working conditions, better work-life balance, and further education can go a long way in retaining workers. It may also be beneficial to collaborate with education institutions to align courses with industry needs, which start-ups often prioritize.[1]
• International Talent Hiring: Germany plans to recruit around 7 million skilled workers by 2035 - aiming to plug the domestic labor gap by sourcing talent overseas, especially from India.[5]
• Upskilling & Reskilling: To bridge the skills gap, recruitment agencies will likely focus more on training programs to equip the unemployed with employable skills.[3]
• Adaptation to Technological Change: As the demand for AI and digital skills escalates, businesses need to stay agile - regularly measuring and addressing the need for such skills while accounting for other crucial skills.[4]
• The Community policy could address the skills shortage crisis in Germany by focusing on strategic recruitment and training, providing attractive working conditions, better work-life balance, and further education.
• Vocational training programs could be a key solution to the skills shortage crisis in Germany, as they can equip the unemployed with employable skills and help to bridge the gap between the skills of job seekers and job vacancies.
• According to the IAB researcher Ute Leber, the weak external trade and the energy transition are particularly affecting the manufacturing industry in Germany, contributing to the skills shortage crisis.
• Despite the high unemployment rate in Germany, there is a significant skills shortage crisis, with 84% of businesses in the nation experiencing difficulties in finding qualified candidates, particularly in the construction sector.

Read also: