Skilled Labour Shortage – A Self-Inflicted Crisis?

1 The Problem is Real

Hardly a day passes without complaints about the so-called shortage of skilled labour in Germany. The availability of (affordable) qualified workers has been a topic of discussion for many years. Indeed, there are numerous indicators pointing to this issue. The perceived lack of skilled workers affects several industries.

It is evidently influenced by various factors, including demographic changes, technological advancement, and globalisation. Yet few commentators delve into the possible causes. A proper solution requires first understanding the problem.

Thus, here is an attempt to collate current knowledge, explore the past, assess the options, and evaluate their impacts and side effects.

1.1 What are these skilled labour shortages?

I did some research and received a sober response: ‘The term “skills shortage” refers to the lack of workers with specialised qualifications and skills required for certain activities. This mainly affects occupational groups in technical, manual, engineering and medical fields. The shortage of skilled labour differs from a general labour shortage in that it is not just about available workers, but about those who are trained for specific, usually demanding and qualified activities.’

Aha, it's not (just) a shortage of labour, but of those who are ‘trained for specific, mostly demanding and qualified activities’. Hmmm, so, someone should have trained them. But who’s job should this have been?

Germany obviously suffers from a dual labour shortage. In addition to highly qualified professions, there is also a shortage of workers in less specialised areas such as catering, logistics and agriculture. Although these professions do not require a specific university education, they often suffer from less attractive working conditions, which reduces their appeal.

Somehow, the whole system doesn't seem to be working (anymore). The machinery is already creaking. But why? Who has thrown sand in the gears?

1.2 Evidence of the Skilled Labour Shortage in Germany

So, where do we find evidence of this phenomenon, which seems to threaten the entirety of the German economy?

First, there are official sources such as the Federal Employment Agency or reports from economic institutes, alongside corporate press releases, newspaper articles, and unofficial conversations within companies.

1. Statistics from the Federal Employment Agency:
   
   
   • The Federal Employment Agency regularly publishes reports [01] demonstrating that many sectors and regions cannot fill vacancies due to a lack of qualified applicants.
     
     
   • According to recent skilled labour monitoring, there were approximately 1.2 million unfilled positions by the end of 2021. A significant portion of this is evidently due to a shortage of qualified workers.
     
     
   • A closer look at the types of vacancies provides some initial clues to possible causes. Particularly affected are sectors such as IT, engineering, healthcare, craftsmanship, and certain technical professions – fields that are either arduous and poorly paid or require specialised, deep expertise gained through many years of experience.


2. Bottleneck Analysis:
   
   
   • The so-called "Bottleneck Analysis" [02], also conducted by the Federal Employment Agency, identifies professions and regions where the shortage is most acute. This analysis shows that in certain technical fields and the healthcare sector, demand significantly exceeds the supply of qualified labour.


3. Reports from Economic Institutes:
   
   
   • Economic institutes, such as the German Economic Institute (IW) or the German Institute for Economic Research (DIW), regularly publish studies [03] addressing the skilled labour shortage. These studies indicate that the shortage could impede economic growth in Germany, as companies struggle to expand production or implement new projects.
     
     
   • According to an IW study, if current trends persist, Germany could face a shortfall of about 3 million qualified workers by 2030.
     
     
   • Chancellor (still) Olaf Scholz has repeatedly stressed, in speeches [04] and during international visits, that Germany relies on international skilled labour to combat the shortage and safeguard the country’s competitiveness.


4. Surveys and Reports from Companies:
   
   
   • Various surveys and reports, such as those conducted by the Chambers of Industry and Commerce (IHK) or the German Chamber of Industry and Commerce (DIHK) [05], show that many companies are struggling to fill open positions. This is seen as a considerable risk to economic development.
     
     
   • A 2021 DIHK survey revealed that 56 percent of companies surveyed identified the skilled labour shortage as their greatest challenge.

1.3 Well-Documented, Yet Unexplained

The shortage of skilled labour in Germany is, therefore, well-documented and regularly discussed by various actors in politics, business, and academia. The causes cited include demographic shifts, technological advancements, and the increasing specialisation of the labour market.

Germany’s demographic change, marked by an ageing population and low birth rates, is indisputable. The fact that more people are retiring, while the number of young workers entering the workforce is insufficient to meet demand, exacerbates the shortage of skilled workers.

Projections suggest that the working-age population in Germany will decline significantly by 2030, which will further intensify pressure on the labour market.

This shortage − so the official narrative goes − has substantial economic repercussions, forcing Germany to pursue solutions such as skilled labour immigration, the promotion of vocational training, and adjustments to labour market policies to meet the demand for qualified workers.

So, immigration is seen as the solution: to address the skilled labour shortage, Germany increasingly, and once again, turns to the immigration of qualified workers from abroad. This is evident in political initiatives such as the Skilled Labour Immigration Act [06], which came into force in March 2020. This law is intended to facilitate the entry of foreign skilled workers into Germany and help them settle.

Here the point becomes clearer: it is not merely a lack of labourers, but a shortage of skilled labour. The specific nature of these qualifications remains open to interpretation, a point we shall revisit.

2 German Experts for the World

Germany, it seems, no longer produces enough skilled labour for its own needs. This was not always the case. There were times when German experts were in demand worldwide and could be dispatched abroad. A brief yet enlightening foray into the Russian language, specifically an examination of German loanwords, provides some clues.

2.1 German Loanwords in Russian and Their Origins

In fact, the Russian language has adopted several words from German, particularly during periods of close contact between Russia and the then various German-speaking countries. This linguistic exchange was particularly pronounced in the 18^th and 19^th centuries, especially under the reigns of Peter the Great and Catherine the Great, both of whom sought to modernise Russia by adopting Western—particularly German—models.

German experts were invited to the country, and for technical terms lacking Russian equivalents, they introduced the corresponding German words.

2.2 Historical Context

Peter the Great’s Reforms (late 17^th - early 18^th century):

Peter the Great was influenced by his travels to Western Europe and introduced many ideas, including technical and military innovations. He invited German engineers, craftsmen, and military experts to Russia to assist in his modernisation efforts, which led to the adoption of many German terms into Russian.

Catherine the Great’s Reign (mid- to late-18th century):

Catherine the Great, of German descent herself (born Sophie of Anhalt-Zerbst), continued Peter’s policies of bringing Russia up to the technical level of the West, particularly Germany. During her reign, many German settlers and advisors came to Russia, further contributing to the adoption of German vocabulary.

Military and scientific influence:

In addition, German was generally an important language of science, technology and military affairs in Europe at that time. Russian military and academic institutions used German terminology, often without having to resort to dispatching German experts, particularly in areas such as engineering, architecture, medicine and the military.

2.3 Examples of German loanwords in Russian

For example, German words such as “Schlagbaum” (шлагбаум, pronounced: shlagbaum), especially for a railway crossing or a barrier, as well as “Gurt” (гурт, pronounced: gurt) “Stempel” (штамп, pronounced: shtamp), for stamp or a standardized form/template, but the Russian word цех (tsek) is also traced back to the German word “Zech” or “Zunft”. It stands for workshop, guild or factory department.

Of course, military terms are also included, such as Єельдшер (feldsher), obviously derived from the German "Feldscher" for paramedic or medical assistant. The Russian word "маршрутка" (marschrutka) is derived from the German word "Marchroute" and refers to a minibus or minibus that travels on a fixed route. But everyday words have also found their way into equally everyday use in Russian, such as курорт (kurort), from the German "Kurort", бутерброд (buterbrod), from the German "Butterbrot", картофель (kartofel), of course, for "potato" or inevitably шнапс (shnaps) for a strong alcoholic drink - the German "Schnaps".

The reasoning behind this, which had left its mark on the Russian language at the time, was that German skilled workers were in demand as experts in the Far East and other countries.

In addition, there is ample historical evidence that German skilled workers were sought after worldwide in earlier centuries, not only in the Russian Empire.

• USA and Canada: In the 19^th century, many Germans emigrated to the USA and Canada, where they made significant contributions to the economic and social development of these countries as farmers, craftsmen, engineers and entrepreneurs. German immigrants were particularly in demand in agriculture and crafts.


• Latin America: German skilled workers were also very popular in Latin America, especially in Brazil, Argentina and Chile. They contributed to the development of infrastructure, industry and educational systems.


• Prussian military reforms: In other European countries, German officers and military advisers were valued, especially after the Prussian military reforms in the early 19^th century, which served as a model for many other countries.

Back then, our experts were able to swarm out and enrich the Russian language with wonderful German words such as ‘potato’ or ‘schnapps’. Today this is no longer possible - why not?

It is not merely because Germany has been geopolitically cut off from its traditional "hinterland".

There are other, more profound reasons why we seem to have lost our cultural and intellectual influence. Demographics alone do not provide a sufficient explanation.

When German experts move abroad today—young researchers, for instance—their relocation more closely resembles an act of escape.

3 The Exodus of Skilled Workers from Germany

Data from the reputable Federal Statistical Office and the OECD show that Germany has experienced both emigration and immigration of highly skilled workers in recent years. While net immigration remains positive overall, there are sectors where significant emigration occurs.

The most frequently cited reasons for emigration include better career prospects, more attractive research conditions, higher salaries, improved work-life balance, and a more stable or favourable social environment. In fields such as IT, medicine, and engineering, skilled workers often feel compelled to go abroad to achieve their career goals.

Countries like Switzerland, the USA, Canada, and, in some cases, Scandinavian countries are popular destinations for German experts. These countries often offer higher salaries, better working conditions, or more attractive living conditions.

It goes without saying that the shortage of skilled labour in Germany is exacerbated in some areas by the emigration of highly qualified workers. Although Germany offers attractive jobs, the working conditions, salary levels and career opportunities in certain target countries are often more attractive.

Nevertheless, according to the statisticians, net immigration is positive. The migration of skilled labour is also not a sufficient explanation on its own.

In university research and corporate research and development (R&D) however the situation seems to be more critical.

3.1 Special case of university research

In academic research, there is clear evidence that scientists and researchers from Germany often go abroad to work under better conditions. The USA, the United Kingdom and Switzerland are frequent destinations. These countries often offer more funding for research, better equipped laboratories and greater international networking.

In Germany, on the other hand, German scientists often report [07] that career opportunities are limited, particularly due to the rigid system of fixed-term contracts and the high level of competition for permanent positions (e.g. professorships). Researchers abroad are often able to lead independent research groups earlier or receive better remunerated and more long-term positions.

What sounds so sober, alarms far-sighted observers of the scene. Jan-Martin Wiarda, education journalist and author for the Tagesspiegel, is no exception. He explained on his blog [08] that 71 per cent of all temporary postdocs have seriously considered leaving academia in the past two years. And only 16 per cent of doctoral students still want to become professors.

According to him, this threatens Germany with a very specific shortage of specialists in science.

3.2 Special case of corporate research and development (R&D)

In the area of corporate R&D, it is not so much the individual decisions of skilled workers that are fuelling the brain drain, but rather strategic corporate decisions.

For example, multinational corporations like to relocate their R&D departments to countries that offer better tax incentives, lower regulatory hurdles or better access to highly qualified labour (sic!). As a result, highly qualified German labour goes abroad to work in innovative and well-equipped R&D departments.

German companies that invest heavily in R&D also frequently co-operate with international partners or relocate parts of their research to countries with better framework conditions. This can lead to German researchers being forced to go abroad to work on projects that could not be realised in Germany. It is therefore fair to say that the shortage of skilled labour is partly exacerbated by the fact that we already have too few skilled workers here!

The fact that many German scientists work abroad through international cooperation between universities and research institutions, often supported by international research programmes or scholarships, should be assessed more neutrally. This mobility can have positive effects (exchange of experience, networking) as well as negative ones (brain drain).

4 German politicians on a guest worker recruitment tour

We can already guess that some of these trends have been at work for some time. It may therefore not be possible to compensate for them or even reverse their direction with short-term knee-jerk measures.

Elected politicians in our country and in many other countries, however, only have one legislative term in which their voters expect them to perform the miracles that they promised in the election campaign, nebulous though they may have been. In their distress, they resort to supposedly short-term solutions, such as recruiting skilled labour from all over the world.

German Chancellor Olaf Scholz, for example, has already actively campaigned for recruiting skilled workers for the German labour market in several speeches and during various trips abroad.

4.1 Five illustrating examples

1. In a speech at the International Crafts Fair, Olaf Scholz emphasised the need to recruit skilled workers from abroad in order to close the gaps in the German labour market. He emphasised that Germany is an attractive location for foreign skilled workers and that the country wants to facilitate the immigration of qualified workers.


2. During a state visit to India, Olaf Scholz made it clear that Germany was interested in increasing the immigration of Indian skilled labour, particularly in the fields of IT, engineering and healthcare. He emphasised the need to facilitate the issuing of visas and the recognition of qualifications in order to promote the influx of Indian skilled workers to Germany.


3. During a visit to Canada, Olaf Scholz spoke about the possibility of closer cooperation in the area of skilled labour exchange. He emphasised that Germany would like to attract skilled workers from Canada, particularly in the fields of renewable energies and technology. At the same time, possible bilateral programmes that could facilitate the exchange of skilled workers were discussed.


4. At several EU summits and meetings of the European Commission, Olaf Scholz emphasised the need for a common European strategy to recruit skilled workers from third countries. He emphasised that Germany and the EU must become more competitive in order to attract skilled workers from the Global South and Asia.


5. During a visit by Olaf Scholz to Kenya in May 2023, he underlined the importance of attracting skilled workers from Africa to the German labour market. Scholz's efforts to attract skilled labour from Kenya should demonstrate the growing recognition of the potential of African countries as important partners in the global economy and in solving the skills shortage in Germany.

As a national government should not be a one-man show, other German politicians also - more or less legitimately - felt compelled to raise their voices here.

• Hubertus Heil, the Federal Minister of Labour and Social Affairs of the Federal Republic of Germany, has repeatedly emphasised that Germany is dependent on qualified immigration in view of the shortage of skilled workers. He has spoken in various international forums and at bilateral meetings with countries such as Vietnam, India and Mexico about the possibility of increased immigration of skilled labour to Germany. It is not clear to me what impression he has made with this.


• As German Foreign Minister, Annalena Baerbock has repeatedly emphasised the importance of skilled labour migration to Germany in her talks with foreign governments. She has campaigned for cooperation in the area of skilled labour recruitment, particularly in countries of the Global South. She has emphasised that the recruitment of skilled workers must be in line with a fair and ethical migration policy that also takes into account the needs of the countries of origin - hmmm, will that ever be possible?


• Of course, Christian Lindner (hopefully) in his role as former finance minister could not be missing here. He also emphasised the economic necessity of recruiting skilled workers in various speeches and interviews. He wants to position Germany as an attractive location for international skilled workers by campaigning for tax incentives and better conditions for foreign labour - according to his meanwhile unfulfillable promise.


• Nancy Faeser, German Federal Minister of the Interior and for Home Affairs, also wanted to have a say here, as her responsibility would be to reform German immigration law in order to facilitate the immigration of skilled labour. In any case, she has promised to reduce bureaucratic hurdles and speed up the recognition of foreign qualifications - a mantra that is now frequently heard.


• Let's close this colourful series with the Federal Minister for Economic Affairs and Climate Protection, Robert Habeck. It was particularly in the context of energy and climate protection that he emphasised that Germany is dependent on international specialists. These are needed both in research and in the practical implementation of the energy transition - so we obviously can't do it alone.

4.2 Successes and challenges

However, the success of such efforts depends heavily on the implementation of specific measures, such as the recognition of qualifications and the creation of attractive working conditions for foreign skilled workers in Germany. This is where Germany's actual weaknesses become apparent.

Rarely do we have a regulation problem, rather we often have an enforcement problem: we simply do not manage to implement in reality what we have set out to do or even prescribed by law. All too often, when an issue calls for urgent action, our representatives, but also the candidates, react helplessly with further regulatory proposals.

Nevertheless, there are some successes to be mentioned:

At first glance, the demonstrable increase in skilled labour is positive. For example, the number of skilled workers coming to Germany from India, particularly in the IT sector, has increased. The Skilled Immigration Act [09], which came into force in March 2020, has facilitated the influx of qualified workers from non-EU countries. It provides a legal basis that builds on the Chancellor's recruitment measures.

Nevertheless, significant challenges remain. Despite all efforts, there are still bureaucratic hurdles that impede the influx of skilled labour. These include complicated visa procedures and the recognition of foreign qualifications, which are often time-consuming.

In addition to Germany, other countries such as Canada, Australia and the USA are also competing globally for skilled labour. These countries often offer more attractive conditions. The often-underestimated issue of integrating [10] immigrant skilled workers, who frequently find interpersonal relationships in this country somewhat chilly, also poses particular difficulties. They may have been attracted by an attractive job, but probably very few of them had explicitly chosen or even imagined the local culture.

5 Déjà vu - haven't we seen it all before?

For those who have been walking this planet for a while, some of this may sound familiar. Haven't we had something similar before? And indeed: What is past is prologue [11]. We could also call it Déjà vu: The recruitment of guest workers in Germany in the 1950s to 1970s was one of the most significant migration movements of the post-war period and had a lasting impact on German society. The current debate about the recruitment of skilled workers from abroad does indeed have some parallels with the recruitment of guest workers at that time, but it should also offer the opportunity to learn from the experiences of that time. Let's look at the history of guest worker recruitment and its consequences, as well as the lessons we can learn from it.

5.1 What was it actually like back then with the "guest workers"?

After the Second World War, West Germany experienced rapid economic growth, the so-called economic miracle. In order to meet the increasing demand for labour in industry and construction, the Federal Republic concluded recruitment agreements with various countries from the 1950s onwards, including Italy (1955), Spain (1960), Greece (1960), Turkey (1961), Morocco (1963), Portugal (1964), Tunisia (1965) and Yugoslavia (1968).

The guest workers were supposed to work temporarily in Germany and then return to their home countries. The German government expected that these workers would strengthen the domestic economy without having to be integrated into society in the long term.

In reality, however, many guest workers stayed in Germany permanently, brought their families and became part of German society - some more and some less permanently. This permanent settlement led to a growing number of people with a still clearly recognisable migrant background in Germany.

5.2 Successes and challenges

The recruitment of guest workers at the time was undoubtedly an economic success for Germany. The guest workers made a significant contribution to the development and growth of the German economy, particularly in areas such as industry and construction. Guest workers thus helped to stabilise the labour market and secure prosperity during the boom years of the economic miracle.

The expectation that guest workers would only stay temporarily meant that integration was not seen as necessary for a long time. Language barriers, cultural differences and a lack of integration policy meant that many guest workers and, interestingly, even more so their descendants had difficulties integrating fully into German society. In the decades following recruitment, social tensions arose that were partly due to this very lack of integration and the lack of equal opportunities for people with a migrant background. These problems have by no means been solved and in fact seem to have worsened since then.

The history of guest worker recruitment in Germany clearly shows that immigration brings with it both great opportunities and challenges. The mistakes made back then, in particular the lack of integration and the short-term perspective, should be avoided today. Immigration clearly needs to be accompanied by long-term integration measures across generations. Integration clearly begins with the selection of candidates who are able and willing to integrate. They must be prepared to become an active part of a secular, liberal and democratic society based on the principles of the European Enlightenment.

The lessons of the past should offer valuable insights. These also apply to the current debate on the recruitment of skilled labour from abroad. A successful immigration policy should take a long-term view, promote integration from the outset and position Germany as an attractive and open country for talented people from all over the world. This does not come for free. I'm not sure if everyone involved realises this yet.

5.3 Migration from Poland to the Ruhr region

Once we have already gone this far back to show the possibilities and, above all, the limits of immigration of skilled labour from abroad, we can briefly take another step back in time.

Anyone coming to the German, so-called Ruhr region for the first time will quickly realise that a large number of surnames there are of Polish origin. In fact, these names point to a significant migration movement that took place in the late 19^th and early 20^th centuries. This migration was closely linked to the industrialisation and economic boom of the Ruhr region, particularly in connection with the coal and steel industry.

The main phase of Polish immigration to the Ruhr region began in the 1870s and lasted until the 1920s. It is estimated that around 500,000 to 600,000 people of Polish origin immigrated to the Ruhr area. Due to the rapid economic growth in the Ruhr region, there was a considerable demand for labour. At the same time, many people in the rural areas of the Polish territories that belonged to Prussia at the time (Poznan, Silesia and West Prussia) were affected by poverty and were looking for better economic prospects. Most of these Polish immigrants, often referred to as "Ruhr Poles" in Germany, worked as miners in the coal mines or as labourers in the steel industry. The work in these industries was hard and dangerous, but it offered the migrants better earning opportunities compared to the conditions in their home country.

The living conditions of Polish workers in the Ruhr area were often difficult. Many lived in simple accommodation and were housed in special settlements, the so-called "colonies". These settlements were often segregated by nationality, which made integration more difficult. Despite the difficult conditions, many Polish migrants maintained their language, culture and religion. Polish associations, churches and newspapers were founded, which helped to preserve Polish identity. At the same time, many migrants began to integrate into German society over time.

However, Polish immigrants in Germany were often confronted with prejudice and discrimination. They were often referred to as "alien workers" or "Polacs". Nevertheless, they played a crucial role in the economy of the Ruhr region. Many of the descendants of Polish immigrants are now firmly integrated into German society. Some still maintain their traditions. For most Germans, only their surnames indicate a Polish origin. Migration has had a lasting impact on the Ruhr region, both culturally and socially.

6 Limits of Cultural Fit

The two historical waves of immigration briefly mentioned were triggered by the economic needs of German industry. Today's short-sighted call for an influx of skilled workers from all over the world also has economic causes. We believe that the influx of workers is the quickest and cheapest solution.

It should also be clear, however, that there are certain limits to "cultural fit" - that is, the cultural fit of new members into an existing organization or society. How far can a society stretch in its openness without endangering its own identity and basic values? Maintaining an open society and liberal civil liberties requires that certain core values are non-negotiable and actively defended.

An open society is based on democratic principles, the rule of law and respect for human rights and, of course, secularism. Values such as gender equality, freedom of expression and freedom from discrimination are central to a liberal society. These values must be considered non-negotiable. It is crucial that these values are also recognized and lived by new members of society, even if there may still be some catching up to do in this country. Immigrants who do not respect these values or even actively undermine them can weaken the foundations of society in the long term. Diversity must therefore not lead to a relativization of basic values. It must be taken into account that deeply rooted and often only intuitively felt values are an essential core component of culture. These values therefore form the actual limits for successful integration and thus for the maintenance of introduced cultural assets. They are best summed up in the following formulation as the "Böckenförde paradox" [12]:

"The liberal, secularized state lives on conditions that it cannot guarantee itself."

According to it, a democratic, liberal state assumes certain moral and social values in its citizens - such as civic responsibility, mutual trust and a sense of common goals. However, these values cannot be enforced or prescribed by the state itself. They must come from the wider society.

7 Ethical questions about poaching skilled workers

Political and ethical questions also arise with regard to the countries of origin. While we are busy poaching skilled workers from countries such as India, Kenya or Mexico who are urgently needed in Germany, shouldn't we ask ourselves whether they are not just as urgently needed in their home countries?

This "brain drain", the migration of qualified skilled workers, can ultimately have significant negative consequences for the countries of origin, especially if these countries themselves have a shortage of qualified workers. This is particularly true for the health sector, where the loss of doctors and nurses can significantly worsen the supply situation.

Countries such as India, Kenya and Mexico urgently need their skilled workers for their own economic and social development. The migration of these skilled workers can slow down progress in these countries and further exacerbate the inequalities between the countries of the global North and South.

Germany and other Western countries are faced with the challenge of developing an immigration policy that meets their own demand for skilled workers without harming the countries of origin. This could be done through programs that compensate the countries of origin for the loss of skilled workers, e.g. through training and investment programs. However, there is no evidence that such measures have already been implemented anywhere or even deliver the desired effects.

8 The "home-made" causes in the company

8.1 Ignoring the labour market

For convinced believers in market economies, supply and demand are regulated by the price of the goods or services. Hardly any German business leader can say that he is not a dyed-in-the-wool supporter of a liberal market economy. On the surface, the labour market is also such a market. In reality, however, this does not seem to be the case.

Mockers once described the shortage of skilled workers as a "Ferrari shortage": "You would like one for under €10,000 but can't find one." Hmmm, what a pity, is all I can say. How can the labour market be so mean?

Doesn't anyone notice that this can't work? No, of course not. Because the budget is set at the very top, where you obviously can't take care of processes and personnel recruitment, passed down to the bottom and applied there stoically and insensitively.

In addition, in the tried and tested "cover your ass" manner, the requirements are raised high enough, so that you can't be held responsible for any mis-hires. And when death-defying the applicants are courageously pouring in, they are pressed into the Procrustean bed [13] of will and representation [14]. If, as is predictable, the urgent position cannot be filled? Those at the bottom shrug their shoulders – those at the top employ their well-trained political whining. Insight? Nada!

But the market is ignored in another way: As we know, economic development does not simply go up in a linear fashion. No, it moves in waves. Good times, bad times, or in biblical terms in the Book of Genesis (Genesis 41): seven fat years and seven meagre years. In the seven years of abundance, people are hired as if there were no tomorrow. In the seven years of severe famine, unfortunately, people have to be laid off a lot.

When these are over, you can hire again. But where have the highly qualified experts with uninterrupted years of experience in some highly specialized field of expertise gone? If they even exist, or have ever existed, they are certainly well employed. Perhaps one or the other is still prepared to leave their cozy corporate environment for a hefty premium and move to a strange, unfamiliar company.

But the colleagues who were originally laid off may now have a flaw in their CV. Nobody dares hiring people with such a personal flaw. No, we'd better take a look at India or Kenya, or we'd just look the other way.

8.2 Unfriendly working conditions

Unattractive working conditions - In some jobs, particularly in nursing, trades or childcare, work is often strenuous, but the pay is comparatively low. The combination makes these jobs understandably unattractive for many people. The fact that this constellation leads to a shortage of workers has long been publicly lamented, but is not effectively addressed.

Work as drudgery and servitude? There is increasing rebellion against this image. More people value a good work-life balance and family-friendly working conditions. The term "work-life balance" in itself is already revealing, as it means that there can only be one thing at the same time - either work or life. That used to be different. Before the start of industrialization, life and work were still one and the same, although not always more pleasant than today. Gary Hamel pointed this out impressively in his groundbreaking work "The Future of Management" [15] back in 2007. It is quite obvious that this must change again.

Dysfunctional and therefore counterproductive management is more widespread than outsiders can usually imagine. Through micro-management, a toxic working atmosphere or, as in the Peter Principle [16], a simple inability to carry out one's duties, misunderstood leadership can ultimately drive even committed employees into internal exile. On the other hand, the demands on a socially acceptable corporate culture have increased. Many a committed participant in the national value creation process has the understandable wish to see their children on more than just the weekend. In jobs in which these aspects are not sufficiently taken into account, companies find it difficult to recruit qualified workers.

8.3 The non-colleagues for emergencies

HR stands for Human Resources. Even if we were to agree that people should be viewed as a production factor in the triad of land, labour and capital, HR does not live up to its own claim in terms of breadth and depth: it does not deal with all people - only with the "permanent" employees [17].

The total number of workers is now much larger than the number of the hard core of employees with an employment contract. The increasingly important contractors, interim managers, interns, freelancers, etc. are often not well supported - or even not considered at all.

But even permanent employees no longer hold so firmly to the permanent job they were once assigned. They change jobs more frequently than before, they need or want more flexibility in their working conditions, and have to change roles more often within a company.

The boundaries of the operational deployment of the different members of the overall workforce in the company are becoming more and more blurred - even though the types of contracts for their commitment remain strictly separate, due to the legal situation.

The idea of holistic, total workforce management [18] is a real necessity. In fact, there are companies that have courageously taken on a pioneering role here and have broken new ground in human resources management - pioneers who take the battle for talent seriously and are perhaps "a step ahead".

8.4 The curse on those who leave

There are numerous studies [19], [20] that indicate that employee turnover in companies in Germany and other western countries has increased significantly in recent decades. This increase is attributed to various economic, social and cultural factors, including globalization, changes in work culture, the shortage of skilled workers and technological progress.

Attitudes to work have changed considerably in recent decades. Many employees strive for a better "work-life balance". To achieve this, they are prepared to change employers if they are dissatisfied with the conditions. Or they simply want to develop professionally. [21] Younger employees in particular (millennials and Generation Z) tend to change employers more often.

Interestingly, the shortage of skilled workers is also a driver of the shortage of skilled workers - namely at other companies: Since qualified workers are in high demand in many industries, it is easy for them to change employers more often.

Of course, there are the usual suspects as reasons: employees are automated away or laid off because the company has miscalculated.

"Wat den Eenen sin Uhl, is den Annern sin Nachtigall" is a traditional saying from northern Germany. For all those who are regrettably not versed in the northern German dialect (or their own language?), it means something like "What is an owl to one person is a nightingale to another", which means that perceptions and assessments are subjective and can vary depending on the person or institution.

It seems that this is also the case with employee turnover. When employees leave a company, it is often not viewed favourably. Some companies send a real curse to employees who leave voluntarily or even denounce them to their now former colleagues or even to their new employer. Isn't this kind of behaviour counterproductive in the interests of the company? Aren't there cases where employees return to their old employer after a few years?

And doesn't it make sense to part ways "on good terms" for other reasons too? The management consultancy McKinsey is known for having former colleagues in management positions at many companies. Occasionally, they use this position to refer contracts to their old employer. So, what does McKinsey do right that others don't? There are even companies that have set up a well-developed alumni management system. What exactly is that? For which companies might it be worthwhile? How do you deal with departing employees from today's operational perspective?

If companies mistreat departing employees out of the "cheated lover" syndrome, for example by spreading rumours, sending them negative reviews or discrediting them with future employers, they can cause damage on several levels:

Careful potential applicants may consult platforms such as Glassdoor or Kununu before placing their hopes in a new company. Not everyone will take reports of a toxic corporate culture, vain micro-managers or the curse at leaving as a personal challenge.

However, nasty comments towards departing employees are also noticed by current colleagues. Does this lead to the employee loyalty that is so often talked about or perhaps a loss of trust?

According to the saying, you often see each other twice in life. There are increasing cases in which former employees return to their old employer after a few years. Since they have effectively demonstrated through their interim absence that they are no longer indispensable in their old position, nothing now stands in the way of their re-entry at a higher position.

Such a constellation may seem like a happy coincidence. But the likelihood of this happening can also be increased if companies go one step further and maintain an alumni network. For McKinsey, at least, it is a successful model. Former McKinsey consultants are still seen as part of the "McKinsey family". The company recognizes that these "former employees" have great potential. Explicit alumni management [22] can therefore be worthwhile.

The minority of companies that take the battle for talent seriously have recognized that the professional handling of departing employees has far-reaching effects on the company and its reputation, possibly on business development as well as on employer branding.

8.5 Unused automation opportunities

Now one might ask whether there is not a connection between the availability and cost of labour and the automation of business processes. Not surprisingly, this question has been intensively discussed and investigated in academic literature. In fact, there are several theories and empirical findings that point to a close connection between these factors. This is particularly true in the context of the current shortage of skilled workers and the role of artificial intelligence (AI) in automation [23].

The use of AI could indeed enable the next level of automation, especially in areas that have not been automated or have only been partially automated.

That all sounds good. But there is a minor paradox to be considered. To the extent that simple, repetitive operational activities are automated, the jobs that previously dealt with them are eliminated. But they are not eliminated without consequences for the companies (and certainly not for those affected). Instead, significantly fewer, much more highly qualified new colleagues have to be hired to design, monitor and optimize the automated processes.

The manoeuvre may pay off financially. But these new workers may be rare, their training takes several years and they may be highly sought after.

It may therefore be that a shortage of workers leads to automation, which in turn causes a shortage of skilled workers. For example, increasing digitalization and technological progress are increasing the need for highly qualified specialists in areas such as IT, engineering and technology. These jobs often require specialized knowledge and skills that may not be available in sufficient quantities.

The automation of processes in day-to-day operations has not yet been exhausted across Germany, but is stagnating. It is apparently still cheaper to employ workers where machines are too expensive, too inflexible or not available in specialized areas.

But now the next wave is already rolling in. It has long been talked about, the automation of back-office and administrative processes, which seemed to be becoming more and more common, driven by ever new legal and other compliance requirements. With applications based on artificial intelligence, these jobs are now also being "taken to task." However, the following still applies here: In many cases, humans are the better choice - for the time being. So, the race is still open.

9 Germany-wide ignorance

The shortage of skilled workers is not a purely German phenomenon. It affects many countries around the world, particularly developed economies. There are global trends that cause or exacerbate the shortage of skilled workers in various countries. In many cases, however, the shortage of skilled workers is also "homemade", i.e. the result of national political, economic and social developments.

In addition to the "birth strike" - demographic change - which is often blamed for this, it is important to take a closer look at the genuine shortage of skilled workers "made in Germany".

Here is an overview of the most important causes:

9.1 Glass ceilings for women in the workplace

Even where women are not tied to the stove by the Bavarian-Catholic triad of “children, kitchen & church”, it is not exactly easy for them to pursue their professional ambitions. Free day-care places are still a rare exception, as is company-organized childcare. They are often just as expensive as privately organized childcare.

This means that the income of these working mothers often has to be spent on precisely this childcare. It then continues with the start of compulsory schooling. Normally, schools do not offer sufficient all-day care or spontaneously cancel lessons. In such cases small children suddenly find themselves unattended outside the school gates in the roaring traffic.

consequently many, even well-educated women, have to take long breaks to look after their children, with correspondingly high hurdles when it comes to reintegrating them into the work process.

But even if women decide to remain childless because they want to pursue a career or for other reasons, they are often and usually in secret not given the same opportunities straight away. Because of their normally lower aggressiveness, they often come up short in the general rat race for attractive professional positions.

A sober evaluation reveals that by these practices' companies lose valuable personal resources. Or at least they don't make use of them to the same extent as those of their male colleagues - an effective contribution to the much-lamented shortage of skilled workers. For the few lucid companies with foresight on the other hand this situation also represents an opportunity to gain valuable human resources by taking countermeasures.

9.2 Neglects in education and training

The German education system was once considered a model for other nations, particularly because of its compulsory schooling, but has increasingly fallen behind [24] in international rankings [25] in recent decades.

This is particularly true of the so-called dual system [26]. Today's system essentially arose with the industrial revolution and the introduction of the Trade Code of 1869, which for the first time also provided for a type of compulsory vocational training.

Formally, vocational schools were introduced in Germany [27] in the 19^th century, although the first attempts at vocational training existed as early as the Middle Ages in the form of craft guilds and trade associations that trained apprentices.

In order to meet the demand of the large number of new factories for qualified workers, a factory-like form of training was created.

What was initially considered a successful model for securing skilled workers due to its practical relevance and the high transition rate into the labour market has now come under some criticism [28].

Critics complain that the content and structures of vocational training are not always adapted quickly enough to technological and economic changes. In addition, in Germany and many other countries, there is a growing tendency to prefer university to the dual training system. This could lead to the reputation of vocational training suffering and a shortage of skilled workers. And finally, in certain new sectors, such as IT or biotechnology, the traditional vocational school may no longer be sufficient to prepare for complex requirements.

Overall, the failures begin very early, from around the age of 4. This is the age at which the city-state of Singapore, which ranks high in the PISA rankings, has introduced its own framework curriculum for kindergarten. It sets learning goals for children aged four to six. In addition, Singapore has measures to train highly qualified early childhood educators, as it has been recognized that good teaching is essential for effective early education. This approach seems to be paying off.

In the 2000s, a discussion about elite universities gained momentum in Germany and culminated in the introduction of the so-called Excellence Initiative in 2005 to catch up with the gap between German universities in global rankings and elite institutions in the United States and Great Britain such as Harvard, MIT and Oxford.

This process may help some top graduates to keep up with the tough international competition. But it does little to help the German economy as a whole. Rather than elite universities, we probably need elite kindergartens modelled on Singapore, Finland or Sweden.

Selection instead of training?

If you compare Germany with leading PISA countries such as Finland [29] and Singapore [30], you might suspect that the German school system focuses on selection rather than education. The early decision for a type of school in the three-tier school system (grammar school, secondary school, elementary school) together with the limited permeability between the educational paths reinforces this impression. Apart from the personal tragedies - the job market is losing out on reviled "repeaters" or even dropouts as skilled workers.

Then there are the teachers.

Why are teachers actually paid less than bankers, whose income is on average 2.1 times higher in Germany? Is Germany's future really served by the fact that we afford dilapidated school toilets but freely spend billions on bailouts of "system-relevant" bankers [31]? This apparently reflects a social importance of school education at the level of Feuerzangenbowle.

Teachers are instrumental in shaping future generations, a long-term investment that does not yield immediate financial gain. In contrast, bankers work in a financial environment where there is a lot at stake, which is risky but can bring quick, high returns - at least in good times.

Strategic thinking does not seem to be widespread at the societal level, short-term actionism more so.

It is therefore no surprise that the country suffers from a shortage of qualified teachers, especially in STEM subjects. German teacher training has also not adapted quickly to current educational needs.

This is noticeable, for example, in the lag in digital infrastructure and resources in German schools. The Covid19 pandemic has clearly demonstrated this. Purely rhetorically, the reform of digital education has been put at the top of the agenda - we will only feel the effects very late.

Father is transferred, child is held back.

When a family moves from Hamburg to Munich, for example, they risk their children's academic success. Due to the federal nature of Germany, the school requirements in the individual federal states vary greatly. Although there are efforts to standardize standards between the federal states, they come far too late for the labour market in the here and now.

In-house trainings?

Now one could come up with the daring idea that if there are no such super heroes as we are looking for on the labour market, we may just train them ourselves. After all, we do so with the classic apprentices.

Yes, that's right, we do that with apprentices too. But that is no longer a success story. According to the Federal Institute for Vocational Training (BIBB), the number of newly concluded training contracts has been declining in recent years. In 2023, around 471,000 training contracts were concluded - a significant decline compared to previous decades [32].

Accordingly, many companies complain about a lack of qualified applicants, especially in technical professions (e.g. mechatronics, electronics) and in skilled trades. Apprenticeships remain unfilled because the school leavers (who apply) apparently lack basic skills.

This starts with the ability to speak and write German and continues with (simple) mathematics and scientific basics. There are also deficits in teamwork, reliability and problem-solving skills, i.e. social skills. But there is often also a lack of sufficient IT basics - and this in an increasingly digitalized working world [33].

Why is this the case?

The first thing that comes to mind is the quality of school education. We have already established above that this is often not very good. In addition, there is often an unfavourable "socioeconomic background". What comes across as so stilted here means nothing less than that entire population groups from so-called educationally disadvantaged classes have simply lost touch with this society - a new precariat that is tolerated with a shrug of the shoulders as a parallel society.

One reason for the decline in the number of people interested in training is that many of the apprenticeships are simply no longer as attractive as they once were. After all, apprenticeships are not easy years. Word seems to have gotten around. It's no wonder that many young people who are "capable of training" are turning to academic careers. This is then sold to us as a "change in values".

So, there is obviously something rotten in the state of Germany.

But there are success stories too.

In addition to the classic dual training, there are a few more programs for professional training and further education in Germany.

Dual study programs are, in a sense, dual training taken up a level, i.e. a combination of university studies and in-company training. The current focus is on technical and business courses. The Federal Statistical Office has reported around 108,000 dual students for 2023. Companies value dual studies as a valuable link between theory and practice - but this does not seem to be enough. The training programs are still lagging far behind the technological evolution.

What is there else?

Then there are trainee programs, further training and retraining, often financed by the employment agency, but only reactively, and internal training programs, preferably in large companies, especially in professions that are strongly affected by technological change.

But from here the scene starts fading - especially when it comes to personal initiative. We Germans believe in the state, but we don't like our state. We think it's something alien. We don't want to understand that we, the community, are forming the state. So that's us. And if that's us, we should do something too. The often-cited labour market is overwhelmed by this.

9.3 Forced retirement - blessing or curse?

People here and now live to be almost 100 years old. Starting school late, after 13 years of school (sometimes only 12), studying and looking for a job, many do not enter the workforce until they are 30, then work for 35 years and enjoy their "well-earned retirement" during the third third of their lives.

Not all of them are so worn out by then that they can only convincingly fill the role of dachshund leader or cornerman - with the exception of tilers, roofers or classic coal miners. "Seventy is the new fifty" is the motto for others. Well preserved over the years in their musty offices, many still feel as fit as a fiddle. Some still had so many plans, but were then mercilessly dismissed when they reached retirement age - in any case, we cannot be accused of being unimaginative in creating the shortage of skilled workers.

But first of all, when must or may an employee - the self-employed are affected by these regulations only very indirectly - retire from working life in this country?

In Germany, the statutory retirement age is currently 67 years (staggered depending on year of birth). Many employees leave the labour market as soon as they are entitled to a pension.

However, there are also regulations that allow voluntary continued work if the employer agrees.

A special form of this is the so-called flexi-pension, which since 2017 has allowed older employees to work beyond the standard retirement age while at the same time receiving a pension and thus at least gradually retiring from working life.

Conversely, models that enable early retirement still exist, often through partial pensions or part-time retirement regulations. However, these are being handled more and more restrictively. But we should be aware of the fact that there are also jobs that cannot be performed into old age for purely physical reasons.

What is the situation in other countries, the non-Germany out there?

Sweden is often cited as a pioneer. The pension system there allows flexible working into old age, and there is no rigid retirement age. Employees can choose their retirement age flexibly between 61 and 68. More interestingly, further training or retraining programs are also widespread for older employees.

The situation is completely different in France, where the statutory retirement age is 62. But since people there are also getting older, this limit is under political pressure. Older employees are generally less integrated into the labour market there, and early retirement schemes are common. There have been several attempts to raise the retirement age [34] in recent years. However, the planned reforms met with massive resistance [35] from the population. For example, in response to the pension reform of 2023. The French government under President Emmanuel Macron planned to gradually raise the retirement age to 64. In addition, the required contribution period for a full pension was to be increased from 42 to 43 years. This led to nationwide protests and strikes, particularly organized by unions who felt the reform was unfair.

The Netherlands, on the other hand, encourages older workers to continue working through flexible pension schemes and attractive tax incentives for companies that employ older workers. There are no reports of heated reactions there.

In the United States, there is no statutory retirement age at all. Employees can decide individually when to retire, but this is often determined by their financial situation. Interestingly, there are anti-discrimination laws there, such as the Age Discrimination in Employment Act (ADEA). It is intended to protect older workers from age discrimination. However, there are still practical obstacles for older workers.

Japan, with one of the oldest populations in the world, has completely abolished statutory retirement. Companies often offer contracts for older workers, often at reduced salaries. Special programs promote the integration of older workers into the labour market, especially in part-time jobs.

In Australia, similar to the United States, there is no statutory retirement age. Flexible pension and continued employment models enable older workers to stay in the workforce longer.

Perhaps we could look across borders and learn something from countries that are already living in the future demographically. We can confidently assume that there is still potential to be tapped here before we ask our governments to go begging in other, faraway countries.

10 The madness of job advertisements

Let's take a quick look at the job advertisements that are placed for talent searches in Germany. You quickly get the impression that they are sometimes not very helpful in actually filling vacancies with the right qualifications.

10.1 Contradictions in job advertisements

There are obvious contradictions such as "project manager according to Scrum". Scrum [36] is an agile method that aims to avoid rigid hierarchies and strict project management. In Scrum, the role of the project manager is replaced by the self-organized team, which is supported by a Scrum Master. We can interpret such contradictions as indications that those responsible for the job advertisement have not fully understood the agile principles or that there is a lack of internal coordination. Unfortunately, confusion of this kind is not uncommon.

10.2 Static knowledge vs. dynamic potential

Even in this dynamically changing environment, instead of looking for the applicants' potential to solve new tasks, frequently static knowledge is required, as was done back in elementary school. The number of fields of activity in which techniques and methods quickly become outdated is increasing, and those cycles are becoming shorter. Focusing exclusively on current knowledge can be problematic, to say the least. Instead, it would often make more sense to look for the applicants' potential to learn new technologies and methods and to adapt quickly to changes. But that seems to be not that easy - and therefore usually is not done. In such areas of work, companies could at least formulate more flexible requirements that emphasize the candidates' ability to learn, adapt and willingness to innovate. The emphasis on "soft skills" and the willingness to continuously learn could be more important than many years of experience in a rapidly changing field.

10.3 Excessive experience requirements

The same applies to the experience requirements. For example, many years of experience (> 5 years) are required in areas where knowledge changes every two years. And an applicant with 10+ years of experience in a field as young as data science will beat someone with 5 years. Instead of requiring a rigid number of years, companies could of course place more emphasis on the practical application of knowledge and the ability to quickly integrate new developments. Part-time or project-based experience could also be valued more highly. But that doesn't seem to be so easy, because unfortunately the reality is usually different.

10.4 Ignoring market forces

The market forces of the personnel market are also often ignored. What is in demand is also expensive. Fighting against this is pointless and leads to a kind of "Ferrari shortage", because in fact Ferraris below 10,000 euros are extremely rare on the market. Job advertisements often demand highly qualified specialists under conditions that do not correspond to the market value of these qualifications. The "salary structure", determined by an internal dynamic of envy, is based more on the salaries of colleagues and, above all, superiors, rather than on market forces. These then set unrealistic upper limits.

Hiring usually takes place when the economy is picking up. Then experts are needed with a lot of experience, without gaps in their CV, who are highly sought after but should be immediately available. Their career path must also be consistent. This means that they must not have done any other work in their lives. But where were they during the economic downturn? They either "overwintered" the bad times with short-time work with an employer with perseverance and strength. They are unlikely to change jobs for a few dollars more.

Or they were unemployed or had to get by with another job. Yes, then they do not meet the criteria of continuity. Well, then the positions remain vacant and nobody can do anything about it.

10.5 Over-specification

Job advertisements that have a very narrow and specific qualification requirement can deter potentially good candidates who do not meet all the criteria but still have valuable skills and experience. This over-focus can unnecessarily narrow the talent pipeline. This particularly affects specialists who specialize in certain systems. If the systems are new or rare and are reinvented every two years with a new generation of software anyway, who is supposed to have gained 5 years of experience with them during the last 5 years?

People who have developed a mild cynicism over the course of their exposure to the job market may find reading job advertisements a certain amount of entertainment. However, anyone seriously looking for a job will find this confusion of things little fun. XING users can read a wonderfully angry short article here [37].

11 Onboarding - the often-missed opportunity

As a rule, a lot of energy is invested in the selection and hiring of new employees - and is often wasted during onboarding. The hiring process is often similar to sales. It is more about getting a good deal in the short term - with often negative consequences in the long term. The demands made by both sides are rarely subjected to a realistic test. Reality only sets in after the contract has been signed, and onboarding is often a particularly sobering experience.

I personally have even experienced a company investing a lot of energy in recruiting me as a new employee, but then when I happily stood in the door on day one, they could hardly remember it. "Oh yes, we hired you. Hmmm, where do we put you now? We're sure we'll find a job for you too." In fairness, I should mention that I was also greeted on day 1 with a bouquet of flowers on my desk and a carefully prepared induction program.

The first impression is important. There are more to come, both positive and negative. However, I have learned that the first impression is often the lasting impression. And what's more: it says a lot about the corporate culture [38], the strongest force in the company.

The management consultant Hermann Simon had already found this [39] in 1990, when he pointed out that the driving actors in the economy are not just well-known names such as Siemens, Daimler, Bayer, SAP, Porsche, but that small and little-known companies, often from the deepest provinces, also play a significant role. He coined the term "hidden champions" for them.

Simon attributed a large part of the unexpected success of this group of companies to the special features of the recruitment process at "hidden champions".

"Hidden champions" are medium-sized companies that are often among the world market leaders in their niche markets, but are little known to the general public. They are characterized by the following features:

One of these is long-term personnel planning. These companies place value on long-term employee loyalty and invest accordingly in their development. Great importance is attached to ensuring that new employees are a good fit for the company not only in terms of their expertise, but also in terms of culture.

When the new colleague is finally on board after several rounds of getting to know each other, in which potential future colleagues are also involved, a comprehensive induction program follows. New employees go through structured induction phases to get to know the specific requirements and the company culture. And it doesn't stop there. Continuous investment is made in further training to promote innovation and specialization.

Specific elements of the corporate culture in medium-sized companies contribute to the high level of employee loyalty. Flat hierarchies mean that decisions can be made quickly, which increases adaptability. An open communication culture that promotes direct exchange between employees and managers helps ensure that new employees stay with the company for a very long time - or leave quickly if this close involvement does not suit their nature.

12 Skilled labour shortage or the end of work?

Then there is a disagreement about expectations for the future of work (time horizon 5 to 10 years). Economists often claim, although probably incorrectly, that countries could get into trouble if their economies do not grow continuously. A "young, growing population" is often cited as a key factor for success, while nations with an ageing population are predicted to face difficult times.

Apart from the fact that infinite growth on a planet with finite resources seems logically impossible (only fools and economists firmly believe this), it is by no means certain whether this situation is more of a curse or a blessing.

Our world is already overpopulated. There are already too many of us. The Earth's capacity to sustainably support all these people at an appropriate level has not only been reached, but exceeded. From this point of view, nothing could be more welcome than a peaceful and voluntary reduction in the world population. The working population would shrink disproportionately, which raises fears that the shortage of qualified workers would worsen.

On the other hand, there are also widespread fears that the rise and use of artificial intelligence could lead to massive job losses or even the disappearance of entire professions. The majority of the working population would soon have to live on an unconditional basic income.

"So, what now?", one might ask. After all, both scenarios cannot occur at the same time. But their effects could well offset each other. So is the race still open and there is still no reason for hysteria?

Let's listen to the arguments from both sides.

12.1 The AI-related unemployment scenario

Basic assumption:

This scenario is based on the idea that AI and automation will make many existing jobs redundant in the next 5 to 10 years. Routine work and tasks that involve highly structured or repetitive activities, whether in production, the service sector or even in certain areas of management, would be particularly affected - "knowledge workers" could also be affected.

Consequences:

In this scenario, demand for labour would fall while technology-related unemployment rises. This could lead to a scenario in which a universal basic income (UBI) becomes necessary to secure the income of the unemployed population - but not their self-esteem.

Criticism:

Critics of this scenario argue that while previous technological revolutions have made jobs in certain sectors redundant, new jobs have always been created in other sectors. They hope that this time too, new forms of work will emerge that require human creativity, social interaction and emotional intelligence. - But this time it could well be different.

12.2 The demographically driven labour shortage scenario

Basic assumption:

This scenario assumes that demographic change, especially in ageing societies such as Germany, Japan, Korea and China, will lead to a significant decline in the workforce. Many industries are expected to face a shortage of young, skilled workers, especially in sectors such as healthcare, care, construction and technology - if the automation of these activities cannot keep pace with developments.

Consequences:

In this scenario, the demand for labour would exceed the number of available workers, which could lead to higher wages, increased immigration policies and possibly an extension of working life. Companies could have difficulty finding skilled workers. Economic growth and quality of life could be hampered.

Criticism:

This scenario may not sufficiently take into account the impact of automation and AI on reducing labour demand in certain areas.

12.3 Possible interactions and compensations

Complementary effects:

It is possible that the two scenarios are not necessarily mutually exclusive, but could have a complementary effect in some ways. For example, AI could help replace workers in areas where demographic change is leading to bottlenecks, particularly in physically or cognitively demanding jobs. This could mitigate the effects of the labour shortage, while at the same time creating new jobs in other areas that require creative thinking and human interaction.

Requalification and retraining:

To meet the challenges of both scenarios, more attention could be paid to the requalification and retraining of workers. For example, workers whose jobs are threatened by AI could be deployed in areas where human labour is urgently needed. Experience shows, however, that only a portion of the affected workers find fulfilling and adequately paid work in this way.

Changed work structures:

AI and automation could not only lead to job losses, but also fundamentally change the way we work. Flexible working hours, increased project work, and the increasing importance of creativity and problem-solving skills could lead to a labour market that can better adapt to both demographic and technological challenges. This optimistic version is often expressed by AI advocates - but not proven, how could it?

Social adjustments:

The introduction of concepts such as the unconditional basic income could be a response to the unemployment caused by AI, while at the same time incentives for lifelong learning and employment in old age could be created to counteract the labour shortage. Yes, social upheavals on a larger scale will probably take place. There is a fear that these will have to assert themselves violently against the resistance of established forces - as was the case before in the wake of serious, technology-induced change, such as industrialization in the late 19^th century.

The race is wide open. It is reasonable to assume that professional change will cause a lot of unrest - and that there will have to be political answers that we do not yet know.

13 Outlook and recommendation

Germany is suffering from a shortage of skilled workers caused by a combination of demographic, social, technological and educational factors. The observations described in the previous chapters reflect a number of common social and business problems. They range from basic qualifications through school, university and/or dual training, to the discouragement of entire population groups, such as women, the clumsy way many companies deal with the personnel market, unfriendly working conditions and the often-questionable current practice of job advertisements, applicant selection, training and employee retention.

The shortage of skilled workers is widely lamented, but otherwise fatalistically accepted like a natural phenomenon. Its causes lie in medium to long-term failures by government agencies at various levels, as well as by companies themselves - in other words, it is home-made.

In order to remedy the shortage in the long term, a societal rethink is required above all.

Measures are also required that range from modernizing and promoting dual training to improving working conditions. Forward-looking planning, as far as possible, and better adaptation to the needs of the labour market are also likely to prove crucial in alleviating the shortage of skilled workers and thus securing a factor for Germany's competitiveness. The necessary measures can certainly extend to targeted immigration and integration of skilled workers - but by no means necessarily.

The future of work is characterized by many uncertainties. Two alternative scenarios - AI-related unemployment and demographically-related labour shortages - could become reality in the next 5 to 10 years, at least in some areas. However, it cannot be ruled out that these complementary scenarios will partially compensate or overlap each other. Instead of viewing the two scenarios as contradictory, it could be helpful to see them as two sides of the same coin.

In any case, it will depend on how flexible and adaptable politics, society and the labour market are in responding to these challenges. As before, of course, every individual is required to do its part. However, we will probably not be able to place the full burden of change on the individual.

Due to the expected force with which the changes in the labour market will lead to social upheaval, we will probably be required to act as a community to a much greater extent than before.

14 References

[01] Bundesagentur für Arbeit. (2021). Fachkräftemonitoring 2021. Retrieved from https://www.arbeitsagentur.de/vor-ort/fachkraeftemonitor

• The Federal Employment Agency's report provides comprehensive data on the shortage of skilled labour in Germany and shows that there is a significant shortage of qualified workers in many sectors. This source is particularly relevant as it contains official statistics and analyses of the labour market situation.

[02] Bundesagentur für Arbeit. (2021). Engpassanalyse 2021: Berufe mit Arbeitskräftemangel. Retrieved from https://www.arbeitsagentur.de/vor-ort/engpassanalyse

• The bottleneck analysis shows in detail which professions and regions in Germany are particularly affected by the shortage of skilled labour. This source emphasises the regional and sector-specific differences and is key evidence of the skills shortage in certain sectors.

[03] Institut der deutschen Wirtschaft. (2021). Fachkräftemangel in Deutschland: Auswirkungen auf das Wirtschaftswachstum bis 2030. Retrieved from https://www.iwkoeln.de/studien

• This study shows the potential economic impact of the shortage of skilled labour on the German economy up to 2030. It provides concrete figures and forecasts and is a useful resource for understanding the economic consequences of the shortage of skilled labour.

[04] Scholz, O. (2021, March). Rede auf der Internationalen Handwerksmesse. Retrieved from https://www.bundeskanzler.de/bk-scholar-internationale-handwerksmesse

• In this speech, Olaf Scholz emphasizes the need to recruit skilled workers from abroad in order to solve the shortage of skilled workers in Germany. The source is well suited to support Scholz's political position on skilled immigration.

[05] Deutscher Industrie- und Handelskammertag. (2021). Fachkräftemangel in Deutschland: DIHK Umfrage 2021. Retrieved from https://www.dihk.de/fachkraeftemangel-umfrage

• This survey by the DIHK shows that the shortage of skilled labour is one of the biggest challenges facing companies in Germany. The figures from this survey support the assertion that many companies are struggling to fill vacancies.

[06] Bundesministerium der Justiz. (2019). Fachkräfteeinwanderungsgesetz[Skilled Immigration Act]. Bundesgesetzblatt, 2019(I), 1307–1354. Retrieved from https://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl119s1307.pdf

• The Fachkräfteeinwanderungsgesetz, enacted in 2019 and effective from March 1, 2020, is a pivotal German federal law designed to facilitate the immigration of skilled workers from non-EU countries. Its primary objective is to address labour shortages in various sectors by simplifying the process for qualified professionals to enter and work in Germany. The Act broadens the definition of "skilled workers" to include individuals with vocational training and those with higher education qualifications. Key provisions include the removal of the priority check (Vorrangprüfung), which previously required employers to prove that no suitable candidate from Germany or the EU was available for a position, and the introduction of an accelerated procedure for skilled workers, aiming to expedite the immigration process. This legislation represents a significant shift in Germany's approach to labour migration, emphasizing the country's need for qualified professionals to sustain economic growth and competitiveness.

[07] OECD. (2020). Brain Drain in Germany: Migration of Highly Qualified Workers. Retrieved from https://www.oecd.org/germany/brain-drain

• This OECD report analyses the brain drain from Germany and shows which factors contribute to scientists and other skilled workers moving abroad. The source is important for shedding light on the causes and consequences of the brain drain.

[08] Wiarda, J.-M. (2022, June). Postdocs auf der Flucht: über die Abwanderung aus der deutschen Wissenschaft. Retrieved from https://www.jmwiarda.de/postdocs-abwanderung

• In this blog post, Jan-Martin Wiarda describes the critical situation of postdocs in Germany and how many of them seek a career abroad due to poor working conditions. The article is useful in highlighting the specific skills shortage in science.

[09] Bundesministerium für Arbeit und Soziales. (2020). Das Fachkräfteeinwanderungsgesetz. Retrieved from https://www.bmas.de/fachkraefteeinwanderungsgesetz

• This law came into force in 2020 and aims to facilitate the immigration of skilled labour from non-EU countries to Germany. This source provides a legal framework for the discussion on policy measures to combat the shortage of skilled labour.

[10] Sachverständigenrat deutscher Stiftungen für Integration und Migration (SVR). (2021). Fachkräftezuwanderung: Chancen und Herausforderungen bei der Integration. Retrieved from https://www.svr-migration.de/fachkraeftezuwanderung

• This study analyses the challenges that immigrant skilled workers face when integrating in Germany. Among other things, it sheds light on cultural and social factors that influence the success of immigration and provides valuable information for the discussion on the integration of skilled workers.

[11] Shakespeare, W. (1611). The Tempest. In The Complete Works of William Shakespeare (Act 2, Scene 1). London: Oxford University Press.

• · In William Shakespeare's play The Tempest, Act 2, Scene 1, Antonio tries to persuade Sebastian to assassinate King Alonso in order to seize power himself. By "What is past is prologue", Antonio means that all previous events have merely set the stage for their planned deed and that their destiny has led them to this moment.
  
  In the wider context, Antonio is saying:
  
  "(And by that destiny) to perform an act,
  Whereof what's past is prologue; what to come,
  In yours and my discharge."
  
  Here, Antonio rationalises to Sebastian and the audience that they are destined to act by everything that has happened so far; the past has set the stage for their next action, just as a prologue does in a play.
  
  In contemporary usage, the quote is often interpreted to mean that the past creates the context for the present and that past events set the stage for future actions. It is often used to emphasise the importance of understanding history in order to understand the present and predict future developments.

[12] Böckenförde, E. W. (1991). State, Society, and Liberty: Studies in Political Theory and Constitutional Law. Berg Publishers.

• This work contains Böckenförde's key writings on the relationship between the liberal state and society, including his famous paradox about the limitations of state power in fostering the social conditions necessary for democracy. A must-read for understanding the theoretical foundations of the liberal state.

[13] Wiegand, J. (2024, 1. February). Prokrustes: Die vollständige griechische Legende. FOCUS Online. Retrieved at 13. Decembre 2024 from https://praxistipps.focus.de/prokrustes-die-vollstaendige-griechische-legende_173872

• In Greek mythology, Procrustes was a giant highwayman who forced travellers to lie on a bed. If they don't fit the length of the bed, stretch their limbs or lift off protruding parts to adjust them. Today, the term "Procrustean bed" is used in educated language to describe a rigid pattern into which something or someone is forced even though it doesn't fit. The phrase is a reminder to respect diversity and individuality instead of forcing them into predetermined templates.

[14] Schopenhauer, A. (1819). Die Welt als Wille und Vorstellung. F. A. Brockhaus.

• In his major work, The World as Will and Representation (1819), Arthur Schopenhauer puts forward the thesis that the world exists in two respects: as representation and as will. The "representation" refers to the individual's subjective perception of the world, while the "will" is understood as a fundamental, irrational principle underlying all being. Schopenhauer argues that the will is the driving force behind all phenomena and is manifested throughout nature. This view highlights the importance of the irrational will over rational cognition and emphasizes the subjective construction of reality. Schopenhauer's philosophy had a significant influence on subsequent thinkers, including Friedrich Nietzsche, who critically examined Schopenhauer's ideas in his works.

[15] Hamel, G. (2007). The future of management. Harvard Business School Press.

• In The Future of Management, Gary Hamel, an influential management thinker, argues that traditional management approaches are reaching their limits in the face of rapid technological and social change. Hamel shows how companies can gain competitive advantage through innovation, flexibility, and engaging employees as strategic partners. He draws on examples from leading companies such as Google and Whole Foods to illustrate what new management approaches look like in practice. The book is essential reading for leaders who want to create future-oriented organizational structures to remain successful in global competition.

[16] Peter, L. J., & Hull, R. (1969). The Peter Principle: Why Things Always Go Wrong. William Morrow.

• In this groundbreaking book, Laurence J. Peter and Raymond Hull describe the dynamics of promotion in hierarchical organizations. The book is a humorous yet insightful analysis of how people end up in positions they are not suited for and shows the negative impact this can have on the efficiency of organizations. It is essential reading for understanding inefficiency in hierarchical structures.

[17] Corporate Culture Institute. (2017, September 5). Who's going to wake up human resources? Corporate Culture Institute Blog. Retrieved from https://corporate-culture-institute2.blogspot.com/2017/09/whos-going-to-wake-up-human-resources.html

• This blog post from the Corporate Culture Institute addresses the growing problem of inertia in the HR departments of many companies. The article calls for a fundamental re-orientation of HR strategies, especially with regard to attracting and developing talent, in order to meet the challenges of the 21st century. This resource is particularly valuable for the discussion on the need for innovation and strategic reforms in HR management.

[18] Corporate Culture Institute. (2023, May 10). On total workforce management (TWM). Corporate Culture Institute Blog. Retrieved from https://corporate-culture-institute2.blogspot.com/2023/05/on-total-workforce-management-twm.html

• This blog post provides a detailed introduction to the concept of Total Workforce Management (TWM). The author explains how companies can ensure holistic and flexible management of their workforce by integrating HR strategies and technologies. TWM is presented as a key approach to meeting the dynamic demands of the modern labour market. This resource is particularly suitable for discussions about future-oriented HR strategies and technological transformations in the HR field.

[19] Institut der deutschen Wirtschaft Köln. (2020). Arbeitskräftemangel in Deutschland: Ursachen und Folgen. Retrieved from https://www.iwkoeln.de/studien

• This study analyses the shortage of skilled workers in Germany and its impact on the labour market. It shows that qualified specialists from abroad are changing employers in order to benefit from better working conditions. The fluctuation rate has increased in recent years, particularly in technology-intensive sectors.

[20] Randstad. (2020). Randstad Employer Brand Research: A global snapshot of workforce trends. Randstad. Retrieved from https://www.randstad.com/research

• This report examines global trends in employer branding and shows that employee turnover has increased, particularly in Western countries. It examines the reasons for this development and shows that younger employees in particular are looking for more flexibility and development opportunities.

[21] LinkedIn. (2020). Global Talent Trends Report 2020. LinkedIn. Retrieved from https://business.linkedin.com/talent-solutions/reports

• The LinkedIn report analyses global trends in employee turnover and shows that in Western countries such as Germany and the USA, turnover has increased significantly. This is attributed to the desire for professional development and better working conditions.

[22] Corporate Culture Institute. (2023, May 4). What is your alumni concept? Corporate Culture Institute Blog. Retrieved from https://corporate-culture-institute2.blogspot.com/2024/12/what-is-your-alumni-concept.html

• This blog article examines the value of an alumni network for companies. The author discusses how former employees can become valuable brand ambassadors and strategic partners when companies build sustainable alumni programs. The article emphasizes the importance of long-term relationships with former employees to strengthen both the company's knowledge and networks. This resource is particularly useful for HR and corporate strategies in the area of employee retention and brand development.

[23] Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company.

• In this book, the authors explain how technological advances, particularly in the areas of automation and artificial intelligence, are changing the world of work. They argue that the second wave of automation could replace not only physical work but also cognitive tasks, which will have a significant impact on the labour market and the skills shortage.

[24] Busemeyer, M. R. (2015). Skills and Inequality: Partisan Politics and the Political Economy of Education Reforms in Western Welfare States. Cambridge University Press.

• Busemeyer's book provides a comparative analysis of vocational education systems and educational policies in Western countries, including Germany, and examines how political dynamics influence educational reforms and inequality.

[25] OECD. (2019). Education at a Glance 2019: OECD Indicators. OECD-Publishing.

• This report provides comprehensive international data on education systems, including Germany

[26] Deissinger, T., & Gonon, P. (2016). The German dual vocational education and training system as “good practice”? Springer.

• This work examines the German dual system in an international context and highlights which aspects could serve as a model for other countries.

[27] Greinert, W.-D. (2005). Mass vocational education and training in Europe: Classical models of the 19th century and training in England, France, and Germany during the first half of the 20th. European Centre for the Development of Vocational Training.

• Greinert analyses the historical development and significance of the German dual system and compares it with the models of other European countries.

[28] Pilz, M. (Ed.). (2016). Vocational education and training in times of economic crisis: Lessons from around the world. Springer.

• This edited volume explores the impact of economic crises on vocational education and training (VET) systems globally. The chapters examine case studies from various countries, providing insights into how VET systems adapt to economic challenges and contribute to labour market resilience. It highlights best practices and lessons learned, making it a valuable resource for policymakers, educators, and researchers interested in the intersection of education and economic development.

[29] Dobbins, M. & Martens, K. (2012). Education Policies in Germany and Finland: The Transnational Dimension of PISA. Comparative Education, 48(4), 447-464.

• This article provides a comparative study of Germany's and Finland's responses to PISA and examines how transnational benchmarks have driven reforms. It is valuable for understanding different policy approaches and outcomes.

[30] Tan, C. (2018). Educational Policy Borrowing in China: Looking West or Looking East? Routledge.

• Although Tan's analysis focuses on China, it includes references to Singapore's education system as a model for high performance, with an emphasis on adaptability, teacher quality and an effective assessment culture, which contrasts with the German model.

[31] Statista, (2024). Kosten und Risiken der Bankenrettung in Deutschland je Institut 2017

• This statistic shows the total costs and risks of the bank rescue as a result of the 2008 financial crisis in Germany per institution (as of the end of 2017). By the end of 2017, the costs to public budgets caused by the banking crisis totalled around 59 billion euros. The costs of stabilizing Commerzbank amounted to around 4,562 million euros.

[32] Bundesinstitut für Berufsbildung (BIBB). (2023). Datenreport zur beruflichen Bildung. Bonn: BIBB.

• A comprehensive overview of the current state of vocational training in Germany.

[33] Baethge, M., & Wolter, A. (2015). Das deutsche duale Berufsbildungssystem: Vorbild für eine Reform der Berufsbildung in Europa? Springer VS.

• Analysis of the strengths and weaknesses of the German system in a European comparison.

[34] Rentenreform in Frankreich 2023. (2023). In Wikipedia

• This source provides detailed information about the planned reforms and public reactions to them.

[35] Proteste gegen die Rentenreform in Frankreich 2023. (2023). In Wikipedia

• This source provides detailed information about the planned reforms and public reactions to them.

[36] Beck, K., Beedle, M., Bennekum, A. van, Cockburn, A., Cunningham, W., Fowler, M., … Thomas, D. (2001). Manifesto for Agile Software Development. Retrieved from https://agilemanifesto.org

• This seminal document outlines the principles of agile software development, emphasizing collaboration, adaptability, and customer-centric approaches. It has been instrumental in shaping modern software development practices and remains a foundational reference for teams adopting agile methodologies across industries. The manifesto promotes values such as "Individuals and interactions over processes and tools" and "Responding to change over following a plan." Its influence extends beyond software into broader project management and organizational strategies.

[37] Xing News. (Amonath, I.). Woran du merkst, dass ein Unternehmen keine neuen Mitarbeiter will. Xing. Retrieved November 21, 2024, from https://www.xing.com/news/article/woran-du-merkst-dass-ein-unternehmen-keine-neuen-mitarbeiter-will

• This article (in German language) on Xing News discusses signals and behaviours in companies that may indicate that there is no serious interest in hiring new employees. The analysis provides valuable insights for both job seekers and employers to make hiring more transparent and effective.

[38] Eaton, T. (2018, 5. Juni). Does Company Culture Matter in Your New Hire Onboarding? Dropbox Sign. Abgerufen am 12. Dezember 2024, von https://www.hellosign.com/blog/how-and-why-to-instill-company-culture-in-the-new-hire-onboarding-process

• In this article, Tina Eaton emphasizes the importance of integrating company culture into the onboarding process of new employees. She argues that a well-structured onboarding process that conveys company culture is critical to long-term success and employee retention.

[39] Mai, J. (o. J.). Hidden Champions: Definition, Liste, Beispiele und Tipps. Karrierebibel. Abgerufen am 12. Dezember 2024, von https://karrierebibel.de/hidden-champions/

• Jochen Mai is the founder of Karrierebibel and author of several bestsellers. In this article he defines the term "hidden champions", provides a list and examples of such companies and gives tips for applicants who want to pursue a career with these often-unknown global market leaders