• 01/01/2023

    A Simple ‘Business as Usual’ Approach Cannot Solve the Labor Shortage

    Friedrich P. Kötter warns of dramatic skills shortage despite record employment. The facility services entrepreneur explains why 1.82 million job vacancies mean red alert and how his company trains 250 apprentices annually to counter this. Read his solutions for the labor market and preventing prosperity decline.

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  • Demographic change/retirement: Demographic change is already leaving its mark today and will further exacerbate the situation. Experts predict a loss of seven million workers by 2035. Political decisions, such as retirement at 63 without deductions, act as a catalyst. By mid-2022, a total of around two million people had taken advantage of this option—about 400,000 more than initially predicted when it was introduced.
  • Working hours: In terms of average weekly working hours, Germany ranks in the lower midfield compared to other EU states and neighboring countries. The trend towards further reductions in working hours or even the four-day workweek thus poses a risk. The same applies to the still inadequate full-day childcare offerings, which force part-time work and, as a result, leave much skilled labor potential untapped.
  • Workforce potential: At the end of 2022, around 2.45 million people were officially classified as unemployed, primarily covering recipients of unemployment benefits I and II (now citizen’s income, formerly Hartz IV). Even this represents a huge potential that employment agencies and job centers, given the largely stagnant figures despite the highest demand for labor, seem to be managing rather than actively placing. Additionally, this number from the Federal Employment Agency (BA) does not reflect the entire reserve. The BA publishes an additional statistic, “unemployment in a broader sense,” which includes all people in training and employment programs or those not counted due to age-related reasons. In 2022, this figure was about 320,000 higher than the official unemployment figure. In total: Including training programs, etc., the labor potential rises to nearly 2.8 million people.
  • Labor market placement: While the Federal Employment Agency reports around 781,000 job vacancies, the Institute for Employment Research (IAB) states the aforementioned 1.82 million. The discrepancy could—among other factors—indicate a loss of confidence in the employment agency by businesses. This is because employment agencies and job centers often do not provide quick and individualized placements. This is also demonstrated by higher success rates in nonprofit initiatives (see below).
  • Foreign workers: The reinforcement through immigration remains far too low. According to the IAB, 400,000 workers would need to immigrate annually on a net basis and—most crucially—be successfully integrated into the German labor market. For this integration to succeed, the sustainable financial promotion of language courses and similar measures must be prioritized.