Slight decline in skills shortage in Germany - KfW Research

Slight easing in the shortage of skilled workers. 32% of companies report shortages - an improvement, but long-term challenges remain

Frankfurt, December 9, 2024 - At the beginning of the fourth quarter of 2024, 32% of companies in Germany reported a shortage of skilled workers. This is according to the latest KfW-ifo Skilled Labor Barometer, based on a survey of around 9,000 companies. In spring, the figure was still 35%, with the high of 45.7% recorded in fall 2022.

The easing is particularly evident in industry, where declining sales and orders have reduced demand for workers. Nevertheless, 21% of companies there still reported bottlenecks - twice as many as the long-term average (9.7%).

Service sector still badly affected

The situation in the service sector remains tense: 39.1% of companies report difficulties in finding suitable specialist staff. Particularly affected are:

• Legal and tax consultancy/auditing: 73.6% of companies report a shortage of skilled staff.
• Road and rail transport: Over 50% of companies, such as bus companies, are affected.
• Hotel industry: Almost 50% of companies are facing staff shortages.

SMEs and large companies equally affected

The shortage of skilled workers is affecting small and medium-sized companies (32.1%) almost as much as large companies (31.5%). Despite the current easing, the shortage of skilled workers remains a brake on growth.

The reduced number of affected companies is no reason to sound the all-clear. With an improved economy and the retirement of baby boomers, the situation will worsen again.

Martin Müller from KfW Research

Müller proposes the following countermeasures:

1. Increasing labor force participation: Older workers and previously underrepresented groups in particular could be integrated more strongly into the labor market.
2. Qualified immigration: International skilled workers should be recruited in a targeted manner.
3. Increasing productivity: More investment in physical and human capital and the promotion of innovation are necessary.

About the KfW-ifo Skilled Labor Barometer

The KfW-ifo Skilled Workers Barometer is published twice a year and examines how many companies see their business activities affected by a shortage of skilled workers. The current edition is available online on the KfW website.