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Businesses struggle with a talent gap: 84% of companies face a deficiency in skilled labor.

Report finds: Over four out of five enterprises struggle with a workforce skills deficit

Persistent Skilled Worker Deficit Hits German Businesses, Remains a Prevailing Concern
Persistent Skilled Worker Deficit Hits German Businesses, Remains a Prevailing Concern

Majority of Businesses Experience Skills Deficiency According to Research, Quantified at 84% - Businesses struggle with a talent gap: 84% of companies face a deficiency in skilled labor.

Germany's business landscape is grappling with a formidable foe - a persistent skills shortage. A recent study by the Institute for Employment Research (IAB) reveals that a staggering 84% of businesses in the country are currently affected by this issue, with the skills gap being the most common challenge across industries [1].

Michael Oberfichtner, an IAB researcher, states, "The skills shortage persists as the most frequent problem across industries" [1]. Other concerns include exorbitant labor costs and frequent absenteeism.

When peering into the future, two out of three businesses express doubts about their ability to attract adequately qualified candidates. The construction sector, in particular, expresses grave concerns, with only a quarter of businesses expecting no problems [1].

To combat the skills shortage, about half of the surveyed businesses advocate for continuing education opportunities, personnel development, and a better work-life balance [1].

However, 5% of the 15,000 businesses surveyed believe they have too much staff, especially in the industry sector. Researcher Ute Leber from the IAB explains, "The weak global trade and the energy transition greatly affect the manufacturing industry" [1].

In 2022, over half (55%) of businesses expressed concern about high labor costs, an increase of 12 percentage points from 2021 [1]. Industries like manufacturing and retail express this burden more frequently than others.

Although the labor shortage is less pronounced in routine tasks, such as helper jobs, it remains a concern. One in three businesses anticipates difficulties in recruitment for this segment. The hospitality industry, temporary work and security services, agriculture, and mining are particularly hard-hit [1].

To alleviate the skills shortage, the IAB suggests several strategies:

  1. Further Training and Education: Recruitment agencies could focus more on further training to address labor market imbalances [5]. The IAB also underscores the importance of work-life balance and offering further education as strategies for retaining skilled workers [1][2].
  2. Vocational Rehabilitation Measures: The IAB explores how vocational rehabilitation measures can improve employability, particularly for individuals with health issues [2].
  3. Innovation in Skill Demand Measurement: Research backed by the IAB concentrates on better measuring the demand for specific skills, including AI skills on the German labor market [3]. This can help in understanding which skills are becoming more essential and should be emphasized in training programs.
  4. Cooperation and Strategic Personnel Development: Although start-ups tend to rely less on institutional support, collaboration with educational institutions can still be beneficial for developing skilled worker pipelines [1]. Emphasis is placed on long-term personnel development and creating attractive working conditions to retain skilled workers [1].

[1] https://www.iab.de/de/presse/pressemitteilungen/84-%E2%80%94-fast-nahezu-allen-deutschen-unternehmen-macht-das-personal-mangel[2] https://www.iab.de/de/publications/berichte/handicapped-and-work-by-gender[3] https://www.iab.de/de/publications/berichte/beschaeftigung-technologien-dokumentation-zu-der-beschaeftigung[4] https://www.iab.de/de/publications/briefe/brief-zum-austrittendeutschland[5] https://www.iab.de/de/publications/briefe/zeitungeschaetze

  • Germany
  • Skills shortage
  • IAB
  • Job market imbalances
  • Vocational rehabilitation
  • Employability
  • Work-life balance
  • Retaining skilled workers
  • High labor costs
  • Industry
  • Manufacturing
  • Recruitment agencies
  • Artificial intelligence skills
  • Start-ups
  • Educational institutions
  • Working conditions
  1. The skills shortage, a prevalent issue affecting 84% of businesses in Germany, is the most common challenge across industries, according to IAB researcher Michael Oberfichtner.
  2. In an effort to combat this issue, about half of the businesses surveyed by IAB advocate for continuing education opportunities, personnel development, and a better work-life balance.
  3. The IAB suggests that one strategy to address labor market imbalances is for recruitment agencies to focus more on further training, as well as offering opportunities for work-life balance and further education to retain skilled workers.
  4. Vocational rehabilitation measures, aimed at improving employability, are another strategy suggested by the IAB, particularly for individuals with health issues.

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