Germany’s new coalition government wants to bring in 400,000 qualified foreign workers every year to make up for a demographic mismatch and a lack of workers in key industries, Germany Wants to Attract 400,000 Skilled Workers from Abroad which could hurt the country’s recovery from the coronavirus pandemic. According to Christian Duerr, parliamentary leader of the co-governing Free Democrats (FDP), the talent deficit has hurt our economy. The only solution to the issue of an aging workforce is a modern immigration policy… Duerr said, “We need to get to 400,000 skilled personnel from other nations as quickly as possible.” German Chancellor Olaf Scholz’s Social Democrats, Duerr’s FDP, and the environmentalist Greens agreed in their coalition agreement on policies like a points system for specialists from outside the European Union and raising the national minimum wage to 12 euros ($13.60) per hour to make working in Germany more appealing.
- Germany’s government has agreed to ease its immigration regulations to recruit qualified workers to its jobs market.
- The cabinet wants a points system a la Canada to hire people who speak German or possess the necessary qualifications.
- According to experts, Europe’s largest economy, Germany, requires an additional 400,000 foreign workers annually.
- Interior Minister Nancy Faeser said the changes will result in “the most modern immigration law in Europe.”
- Conservative opposition leader Friedrich Merz criticized the measures, claiming that Germany was underutilizing its potential and had more than two million unemployed people.
He claimed that while it already benefited from the EU’s commitment to freedom of movement, individuals did not want to relocate there because “the paperwork is horrendous, the taxes are too expensive.” The workforce in Germany is getting older, and there are shortages in the Technology, healthcare, and construction industries. Hubertus Heil, the minister of labor, estimated that by 2035, seven million skilled workers will be required. Rainer Dulger of the BDA employers’ confederation said, “We need people who will help us to retain our success in this country.” The three-party coalition in power seeks to enact an “opportunity card,” based on a points system, which would evaluate non-EU candidates by considering things like education and linguistic proficiency.
There would be a streamlined process for recognizing credentials from abroad, and unskilled workers would also be permitted to enter to fill certain positions.The suggestions may be presented to someone other than the Bundestag, the German parliament, for several months. Still, the minister of economics, Robert Habeck, said there is a pressing need to address the issue: “We have been aware of the impending demographic issue for years, but not enough has been done.” The proposed immigration reforms follow closely on the heels of ideas to speed up the citizenship process for immigrants living in Germany. Instead of waiting up to eight years, Chancellor Olaf Scholz said people could become citizens in some situations after only three. The proposed law would shorten the five-year waiting period for applicants demonstrating integration and German language proficiency. Also, the government intends to amend the constitution to permit dual citizenship, which is currently virtually prohibited in Germany. This week, Mr. Scholz claimed that immigrants “are bringing Germany ahead” and that Germany had transformed into “a land of hope” for those seeking to start new lives. However, not everyone in the administration, including the Social Democrats (SPD), Greens, and liberal Free Democrats, is pleased with the citizenship amendments (FDP). Bijan Djir-Sarai, the general secretary of the FDP, cautioned that his party would accept the “devaluation” of German citizenship.
He said now was not the time to simplify citizenship laws since the administration had not yet succeeded in deporting people with no legal basis to be in Germany and reducing undocumented immigration. Professionals hold the key to growth and employment, innovation and competitiveness, prosperity, and a high standard of living. Securing a sufficient supply of competent labor will be one of the most significant difficulties that policymakers, businesses, and scientific communities will face in the decades to come as demographic development proceeds.
While there isn’t a nationwide skills shortage in Germany, finding qualified, trained individuals to fill open positions in some areas and industries is difficult. This is particularly true in STEM and health-related industries. Particularly in southern and eastern Germany, the situation is getting worse. The lack of skilled personnel is already having a significant impact on many businesses; more than 50% of them consider it the biggest threat to the growth of their enterprise. Businesses claim that the lack of skilled workers is becoming a greater danger to their ability to flourish. In 2010, 16% of companies reported that the lack of skilled workers posed a risk to their operations. These days, businesses view this as their most significant issue, as evidenced, among other things, by the Association of German Chambers of Business and Industry’s autumn 2019 economic survey (in German).
The influence of changing demographics
The aging population in Germany is a significant factor that will significantly impact the existing skills shortage. The aging of society, a factor in demographic change, is making the skills gap worse. The working-age population, meaning those between the ages of 20 and 64, will decline by 3.9 million to 45.9 million by 2030, according to current projections. 10.2 million fewer people will be of working age in 2060.
The skilled worker is a critical component of the economy.
According to the Federal Government’s estimates, immigration from within the EU has been essential for recent encouragingly strong economic growth. Unfortunately, the quantity of immigration that is anticipated will not be enough to make up for the decline in the labor force as a whole brought on by demographic change. Several studies indicate that economic production would be higher if not for the skills gap.
Making use of potential
So, taking proactive steps to broaden the skill set to handle future problems is crucial. For this reason, the Federal Ministry for Economic Affairs and Climate Action sponsors the KOFA (www.kofa.de), a center of excellence for securing trained labor. Its goal is to support SMEs in acquiring top talent and maintaining their competitiveness by hiring, developing, and retaining employees.
The Federal Government is addressing this issue in some ways. It unveiled its plan for obtaining trained labor in November 2018. First and foremost, it seeks to increase the percentage of women and older persons who participate in the labor force. Additionally, it wants to use the potential refugees offer by integrating them into the workforce and promoting the immigration of competent experts from abroad. Also, the federal government is assisting businesses in reaping the rewards of a diverse workforce that includes people of all ages, genders, and nationalities and those with impairments.
There is a pressing need for vocational education.
The greatest need is for skilled professionals with a vocational degree. Yet, there is also a developing shortage of experts with a master craftsman certificate or a bachelor’s degree in various professions. The skills gap significantly impacts the healthcare industry, particularly nursing and care services for the elderly and sick. The need for carers will continue to increase as the population ages. Also, more individuals need to have the necessary technical and artisanal abilities. Doctors, engineers, and information scientists—important professions that will help shape Germany’s economic future—are in short supply on a higher level.
A lack of skills severely impacts the following professions
Graduate-level careers in medicine, engineering (mechanical, electrical, and automotive), IT, and software development/programming.
Crafts trades include pipe fitters, welders, mechanical technicians, lathe operators, and electricians/electrical installers.
Healthcare and senior care are examples of care services.
Thus, the dual vocational training system in Germany needs to be strengthened. The entire society is involved in this task. The Partnership for Initial and Further Training was established by the Federal Government, the Federal Employment Agency, businesses, labor organizations, and the Länder at the end of 2014 and was reaffirmed in August 2019. The Alliance’s partners are working together to make it possible for and persuade more young people to pursue one of the more than 300 professions for which vocational training is offered.
The skills gap is a problem in the south and getting worse in the east.
The lack of skills differs not just across occupations but also between regions. Strong economies in the southern German Länder are severely impacted. According to KOFA’s Länder profiles, domains with a skills shortage make up 86 and 88% of advertised positions in Bavaria and Baden-Württemberg, respectively. More than one in eight job openings in Thuringia, Lower Saxony, and Rhineland-Palatinate are for professions with a skills deficit.
UTILIZING POSSIBILITIES
Where in Germany is the largest untapped talent pool for skilled work?
The potential of women, older people, immigrants, young individuals without formal training in a trade, and those with impairments can all be better used. Diversity is a crucial component of a successful business. It’s critical to reach out to skilled people from around the world in fields where there is a skills shortage.
Women
Women have the largest talent pool with which to address the skills shortfall. Germany performed well in 2017, with a female labor force participation rate of more than 75% (women aged 20 to 64). Yet, more significant part-time employment during the past ten years is to blame for the increase in female jobs; there has essentially been no change in the proportion of women working full-time. Nearly every other EU nation has a higher proportion of women working full-time. Many women who work part-time would like to put in more hours. And over 42% of women between the ages of 25 and 49 who are not employed cited caring for children and other family members as their reason for not working. Most of the roughly five million working-age women now unemployed or looking for work are highly educated and trained. Therefore, making better use of women’s labor and abilities is in the business community’s self-interest. Here, improved options for balancing family and job are crucial.
Older people
All generations, young and elderly, will be necessary for Germany’s future. Elderly workers, in particular, can benefit from their extensive knowledge and many years of work experience. By 2025, 600,000 and 1.1 million skilled workers will be 55 to 64. Research conducted by the Mannheim-based ZEW for the Federal Ministry of Labour and Social Affairs has this statistic. The Federal Employment Agency’s figures show that older people’s labor force participation rates, particularly among women, have recently increased. Moreover, more males work past age 65, frequently in part-time positions.
Every business can take specific steps to capitalize on the potential of senior citizens. Age-appropriate job design, an enhanced work-life balance, more continuing education for older workers, targeted hiring of older workers, and proactive health management is all expenditures that benefit businesses, workers, and Germany as a whole.
Unskilled and semi-skilled employees
Many unemployed individuals who need a formal education are looking for extra work in industries that need more talent. According to the KOFA research 2/2019, in 30 out of 204 professional occupations with a skills gap, it is possible to close it by providing training for unskilled and semi-skilled individuals.
Individuals having a history of migration.
Additionally, migrants have a lot to offer in terms of potential. If persons with migratory backgrounds had more assistance with integration and training, tens of thousands more employees could enter the labor force. This entails, on the one hand, integrating refugees into the labor force. Since the spring of 2016, about 170 refugee recruitment advisors have assisted businesses in hiring refugees to fill positions in vocational training programs and other open positions to enhance the integration of immigrants into the training system and the labor market. These advisors help refugees find jobs and positions for vocational training in small and medium-sized enterprises (SMEs) throughout Germany. Since the end of 2017, they have also worked with large corporations. They also help refugees acquire the fundamental skills they need. In 2018, they assisted about 9,700 refugees in finding employment through job shadowing, internships, basic introductory training, regular training places, or jobs; 2,585 enrolled in dual vocational training. They also advise companies on language training, refugees’ residence status, skills, and support services.
The Federal Government’s plan for luring highly qualified foreign laborers
The Federal Government has created a policy to specifically attract qualified workers from third countries under the direction of the Economic Affairs Ministry. A systematic approach to encouraging attempts to attract skilled workers has been created for the first time. The strategy strengthens Germany’s international position as an attractive host country for migrant workers. The Federal Government intends to work closely with the business community to make the planned measures successful. In its activities, it observes international criteria that are to ensure that competent personnel is recruited in an ethically acceptable fashion. Five areas of action make up the strategy:
Analyzing needs and potentials: targeted or market-specific initiatives to attract skilled labor are required. So, the first step is to identify the professions experiencing a specific skills shortage and the Länder with a sufficient supply of trained employees.
Providing information and advice: information and advisory services will be expanded. “Make it in Germany,” the Federal Government’s portal for skilled workers and companies, is to become a central point of contact.
Creating opportunities means allowing skilled workers from other countries to move to Germany. Further training opportunities must be made available as necessary. As a result, the Federal Government is increasing both language and vocational training programs domestically and abroad.
Giving support: the Federal Government is taking new and innovative techniques to boost efforts to recruit experts in foreign countries. The Federal Government and enterprises are evaluating hiring procedures for a few partner countries and occupations with the help of the Federal Employment Agency. The foundation for long-lasting immigration pathways will be this.The Federal Government will be more committed to promoting Germany’s appeal as a host country for professionals through communication and marketing under the banner “Make it in Germany.” Thus, it will encourage its communication plan under the slogan “Make it in Germany.” A PR campaign is part of this as the Skilled Immigration Act is enacted.
DUAL VOCATIONAL TRAINING ABROAD
‘Skills Experts’ support the global training of skilled workers Companies that want to be able to compete need a skilled workforce. This also applies to German companies abroad. This is why the ‘Skills Experts’ support German small and medium-sized firms, mainly as they provide vocational training to young residents. There needs to be more skilled labor in many nations around the world. As a result, domestic companies and international investors, including those from Germany, are still trying to utilize the relevant markets’ potential fully. This is where the Skills Experts program comes into play. It intends, in particular, to support German Companies as they train young people in other countries in line with the German dual vocational training system. This program benefits German SMEs, particularly the partner countries and young people in those countries. Seven German chambers abroad will receive funding from the program for the secondment of vocational training experts (skills experts) (in Bosnia and Herzegovina, Indonesia, Kenya, Croatia, Malaysia, Macedonia, and Viet Nam). Plans exist to expand the service to encompass South Africa, Ghana, and Nigeria. The skills experts work closely with the Association of German Chambers of Industry and Commerce (DIHK) as the program partner to guarantee standards in the field of vocational training recognized worldwide and their certification in line with the German system.