Economic boom Germany looks to immigrants to tackle skilled labor shortage

Germany is facing a major shortage of skilled workers as companies struggle to fill around 1.6 million vacancies. But immigrants could be the solution.
Immigrants could spark further growth.

Germany’s construction industry is booming. The window manufacturer Gugelfuss in Bavaria could benefit from this, but recently the company with 300 employees and €40 million in annual sales had to turn down orders. "We could hire far more people," said chief executive Anton Gugelfuss. But he can’t find the technicians, site managers, and mechanics he needs.

"The economy is booming, the willingness to spend is high and German companies have full order books," said Michael Marbler, partner at the consulting firm EY. "However, the current situation on the labor market limits growth." Smaller businesses, which compete against well-known larger companies for skilled workers, have difficulties filling open positions.

The labor shortage could hit the brakes on growth in Europe’s biggest economy, the labor market report of the German Chamber of Industry and Commerce (DIHK) has found. Almost every second of the almost 24,000 companies surveyed in Germany has difficulty filling vacancies. Around 1.6 million jobs cannot be filled currently, according to DIHK. Some companies have already given up looking for new skilled workers simply because there are no qualified applicants.

The integration of refugees is not only an opportunity to secure skilled workers but also socio-politically an important challenge. Achim Dercks, deputy managing director, DIHK

Staff in industries like construction, hospitality, security services, transport, logistics, childcare and education are particularly scarce. As a result, the personnel shortages have an impact far beyond the companies and sectors affected. They could also hamper the implementation of the coalition agreement of the new government. After all, how can the planned broadband expansion be implemented without qualified technicians? How can the education offensive succeed if there are hardly any teachers left?

Immigrants could be the solution. The DIHK’s greatest hope is the controlled immigration that Angela Merkel’s Christian Democratic alliance and the Social Democrats have promised in their coalition agreement. The list of fields lacking qualified personnel, for which relaxed immigration criteria apply, should be expanded to include catering and logistics, the chamber demands. Since many German occupations that require formal training do not exist abroad, the new grand coalition should also create qualification options to achieve comparable degrees.

As a result of the large influx of refugees in 2016, the total number of inhabitants in Germany increased by 500,000 people. More than 1.8 million people had moved to Germany in 2016, of which more than 1.7 million people held a foreign passport, according to the Federal Statistical Office.

Meanwhile, around 1.3 million people left Germany in the same year. More than half of all migrants, 51 percent, had an EU passport, while 9 percent came from other European countries. Among the non-European immigrants, Asians made up the largest group with 26 percent, while 5 percent of the migrants came from African countries.

Since fewer EU citizens move to Germany or return home, it becomes crucial to recruit professionals from outside Europe. Germany has made some progress in facilitating employment of refugees. Last year, around 10,000 asylum seekers started job training, three times as many as the year before. DIHK’s deputy managing director Achim Dercks said: “The integration of refugees and asylum seekers is not only an opportunity to secure skilled workers in the coming years but also socio-politically an enormously important challenge.”

Martin-Werner Buchenau reports from Stuttgart for HandelsblattFrank Specht writes about the German labor market from Berlin and Stephanie Ott is an editor for Handelsblatt Global in New York. To contact the authors: [email protected][email protected] and [email protected].