Shortage of skilled workers: economic slowdown instead of improvement in supply

The KfW-ifo Skilled Workers Barometer June 2023 shows German companies are struggling with a shortage of skilled workers, affecting service providers in particular. A decline can only be explained by the current economic weakness.

According to the KfW-ifo Skilled Workforce Barometer in April 2023, 42.2% of German companies were affected by a shortage of skilled workers. The figure was 47.4% in the service sector in particular, while it was slightly lower in the manufacturing sector at 35.1%. Although the shortage of skilled workers has decreased significantly due to the economic slowdown, it still remains very high in historical terms. Since 2021, the shortage has increased significantly despite the Corona crisis and the economic impact of the Russian attack on Ukraine.

Large companies were more likely to be affected (44.0%) than small and medium-sized companies (41.3%). There are significant regional differences, with companies in eastern Germany suffering the most from a shortage of skilled workers at 47.8%, while companies in Hesse, Rhineland-Palatinate and Saarland were less affected at 35.4%. This reflects the fact that the eastern German states are particularly affected by demographic shrinkage and an aging population.

Shortage of skilled workers affects companies' business activities

In most sectors of the economy, a significant proportion of companies continue to report impairments due to the shortage of skilled workers. Particularly hard hit are legal and tax consultants, auditors and architectural and engineering firms, transportation and warehousing companies, travel agencies and tour operators, lessors of movable property, and companies in building and garden maintenance and the manufacture of data processing equipment, electronic and optical products.

Although the shortage of skilled workers has been reduced by the economic slowdown, it remains a challenge for many companies. Large companies are somewhat more affected than small and medium-sized enterprises, and in the eastern states the skilled labor situation is particularly precarious due to demographic factors. In view of the expected recovery of the economy in the further course of the year, it can be assumed that the shortage of skilled workers will increase again both cyclically and due to demographic conditions.

The further development of the Skilled Worker Immigration Act is a real gamechanger for our economy! With the newly introduced points system based on the Canadian model, we are enabling people to find jobs in Germany.

Melis Sekmen, Chairwoman of the Economic Committee, MDB

Bundestag passes skilled labor immigration law

Last Friday, the Bundestag passed legislation to further develop the Skilled Worker Immigration Act to combat the acute shortage of skilled workers and labor. The alarming shortage of skilled workers and labor, with more than 1.9 million vacancies, requires action. In addition to improving domestic education and training, the focus is on modernizing immigration law to counteract the shortage.

The KfW-ifo Skilled Workforce Barometer June 2023 can be downloaded from the Kfw website. The debate, the vote and all speeches on the skilled labor immigration bill can be found on the website of the German Bundestag.