There is a shortage of skilled workers everywhere in the German economy. Economists believe the bottleneck could escalate into a real crisis. The peak will only be reached in years.

Germany is on the verge of an energy transition. Thousands of wind turbines have to be built, thousands of solar panels screwed onto roofs, and thousands of kilometers of electricity and hydrogen lines laid. But who should do that? The German economy lacks the staff.

According to economists, the shortage of skilled workers will become an obstacle to growth – for years to come. The baby boomers are only now retiring. The situation will worsen at least until 2025. “By then it will be a huge issue,” said Katharina Utermöhl from Allianz in a survey by the German Press Agency.

“The shortage of skilled workers will have a very strong impact on the economy in Germany in the medium to long term,” says Christoph Siebecke, economist at the Oldenburgische Landesbank. “Despite the Corona crisis and the Ukraine war, there has never been a shortage of skilled workers in the last 30 years than they are today,” says Fritzi Köhler-Geib, the chief economist at the state banking group KfW. “In April, 44 percent of all companies complained that their business activities were being impaired by a lack of skilled workers.”

It is already lacking everywhere – from truck drivers to IT technicians, from lawyers to plumbers. The labor shortage index of the Institute for Labor Market and Occupational Research is already above the level before the Corona crisis. The number of vacancies nationwide is also higher than before the pandemic.

Employment Agency: Record value expected in bottleneck analysis

In its bottleneck analysis, the Federal Employment Agency expects a record value for this year, both in terms of the number of vacancies and the number of new positions to be filled. The statistics also show that almost all sectors are affected – from hospitality and industry to cleaning professions. Many positions remain vacant for three months or more before they can be filled. Especially in industry, hospitality, transport, but also in management departments, this problem has recently increased significantly.

A whole bundle of measures will be required to solve the problem. “We need a higher labor force participation of women. That’s more important than ever,” says Veronika Grimm from the Federal Government’s Expert Council. For a long time there has also been a call to increase working life. «The working life must increase. This can help alleviate the shortage of skilled workers.” There is also a need for a debate on immigration policy. “The focus must be on immigration from outside Europe, because the shortage of skilled workers will worsen across Europe,” says Grimm. Siebecke also emphasizes: “One of the most important things is to get a law for qualified immigration on the way.”

More digitization needed

However, more digitization will also be necessary. In public administration, for example, this could “move mountains,” believes Grimm. Köhler-Geib is also of the opinion that the available workforce must be used even more productively through innovations and investments. “Companies are already doing a lot to ensure the flexibility that is needed for longer working hours,” says Marc Schattenberg, economist and labor market expert at Deutsche Bank. “In order to counteract the shortage of skilled workers, targeted training and further education is important in order to use the workforce for the tasks for which they are needed.”

However, Allianz expert Utermöhl believes that the problems caused by the Ukraine crisis, supply chain bottlenecks and inflation will slow down the economy even more in the short term. “The downside risks clearly dominate.” Schattenberg also assumes that low growth for the German economy is also possible in 2022 – but only if there is no stop in the supply of Russian energy.