Job vacancies No end in sight to German employment boom

The economy may be cooling but German firms remain desperate for workers, saying the shortage of skilled staff is a bigger business risk than a cyclical slowdown. This doesn't mean wage are rising, though.
Quelle: dpa
Skilled workers have reason to smile.

Despite the slowing world economy, German companies remain in hiring mode, with the 30 blue-chip firms listed in the DAX index currently looking for a total of 20,000 workers in Germany — including 3,000 at Volkswagen alone.

Most of the 9,000 firms polled by the Ifo economic institute plan to keep on increasing their workforces.

The boom is confirmed by another survey of 1,500 firms by consultancy EY. It showed that 38 percent plan to increase their payrolls in Germany over the next six months. That’s the highest percentage since the regular survey was launched in 2004. Only 3 percent of businesses plan to shed jobs.

More than half of Mittelstand firms currently regard the difficulty in finding enough skilled workers their biggest business risk. “The lack of skilled labor is a far greater concern to companies than the risk of a cyclical downturn,” said Michael Marbler, a Mittelstand expert at EY.

“They know that a shortage of well-trained workers can be a fundamental and lasting threat to a company’s innovative capacity, whereas experience shows that every economic downturn is followed by an upturn.”

Vacancies reach a record high

The government-owned Institute for Employment Research (IAB) has counted more than 1.2 million vacancies in Germany. Finding the right staff is increasingly a struggle. It currently takes firms 113 days to fill a vacancy, 11 days more than a year ago, according to research by the employment agency. For every 100 vacancies registered, there are only 247 unemployed people, down from around 1,100 in 2009, when the country was in a recession caused by the financial crisis.

The agency said the number of professions suffering significant labor shortages had increased by 40 over the last year to 86. They include mechatronic engineers, vehicle technicians, construction workers, sanitary and air conditioning engineers, train drivers and software developers.

Carmakers looking for tech specialists

Among DAX companies, even the ones that are currently shedding jobs like Siemens and Deutsche Telekom are looking for skilled workers to help them manage the accelerating pace of technological change.

The shortage is particularly acute in the auto industry, even though almost half the listed companies in that sector has issued profit warnings. Daimler seeks 2,000 workers for locations including Stuttgart, Mannheim, Berlin, and Munich. The most sought-after workers are development engineers, system architects, battery-engine specialists, 3D graphics experts and self-driving technology experts.

Health engineering firm Fresenius has 1,600 vacancies for engineers, IT experts, care workers and doctors. Deutsche Telekom is looking for 800 people in Germany, mainly software and cloud experts.

Grafik

Siemens, which came under fire in late 2017 after announcing 6,900 job cuts mainly in its power and gas division, is also hiring. It has 1,184 vacancies for software developers, engineers and electric engine specialists at sites across the country.

Wages growing moderately

This shortage of labor hasn’t led to pay increases, however. Salaries for skilled workers have been rising at annual rates of just 2 to 3 percent for more than a decade, according to recruitment consultancy Kienbaum. Around 1,000 German firms polled by Kienbaum expect a slight acceleration in wage growth to 3.3 percent for 2019, slightly above 3.1 percent for the overall market.

“Wages have increasing more than in times of mass unemployment but given the strong development of the labor market, there's certainly room for improval,” said IAB labor export Enzo Weber.

However, the WSI Institute of Economic and Social Research found that real incomes in professions listed as suffering from skills shortages increased by 6.5 percent between 2013 and 2017, higher than the general increase of just over 5 percent for skilled workers in all professions.

There are several reasons why rising demand for labor doesn’t always mean commensurately higher wages. Firstly, productivity in Germany hasn’t been growing as fast as employment, meaning that many firms can’t afford massive pay hikes.

Germany’s collective bargaining system is a further factor. “Wage hikes are negotiated for sectors, not for individual professions,” said Weber of the IAB. That means when giant metalworking union IG Metall pushes through new wage contracts, they apply to all workers in that industry — and not specifically to skilled jobs in demand.

Ulf Sommer covers finance for Handelsblatt. Frank Specht writes about the German labor market from Berlin. To contact the authors: [email protected], [email protected].