The Skilled-Worker-Shortage Problem Within Europe’s Largest Economy (& How to Solve it)

I stumbled upon an interesting DW article highlighting one of the biggest rising problems that the German economy is currently facing — that of the declining number of skilled and experienced employees.

Although the number of regularly employed people is constantly increasing (reaching a new record of almost 34 million in 2021), the number of vacant job positions continues to go up, with more and more businesses reporting a shortage of skilled workers.

A 2021 survey across 7,500 companies conducted by the joined forces of the research institute Civey and the Bertelsmann Foundation revealed that 66% of German businesses experience trouble finding a sufficient number of skilled workers. This percentage went up by 11% from the previous year, indicating that this negative trend is only getting stronger.

Almost 27% of businesses report the shortage of people with a university degree, while 48% of companies surveyed state they lack employees with vocational training.

If we take into account that only 16% of companies are actively recruiting skilled workers from foreign countries and that 67% of businesses don’t think they’ll have sufficient skilled workers in 2022 — some critical underlying causes for this issue start to emerge.

Breaking the Biggest Recruiting Barriers

The good thing is that these underlying issues are immediately accompanied by potential solutions which involve alleviating legal difficulties that are currently hindering the process of hiring foreign workforce, as well as using HR analytics software to better understand the backgrounds of potential employees.

(Image Source: Osterus)

However, despite the implementation of the German Skilled Immigration Act (active since March 1, 2020) which simplifies the process of qualified non-EU specialists moving to Germany, numerous German businesses are still quite hesitant to recruit foreign skilled workers.

According to the survey mentioned above, the two main reasons for this include:

  • concerns about language barriers and linguistic communication
  • Inability to correctly assess the applicant’s qualifications

We can overcome both of these barriers by deploying a platform like Osterus. HR analytics tools help companies streamline their recruiting process in terms of qualifications assessment and building diversity scores based on gender and nationality, while also focusing on factors like previous work, education, skills, languages spoken, candidate’s and employee’s familiarity with different jobs and companies, seniority in a particular job description, etc.

(Osterus’ comparison of Spoken Languages between two companies)

When we realize that 5 out of 10 businesses are not hiring foreign workforce due to the lack of quality data about non-EU applicants or the overwhelming difficulties recognizing and assessing foreign professional qualifications, we can begin to understand just how powerful a solution for these issues Osterus can be.

Diminishing the Hurdles

A multifaceted approach to this issue can increase the influx of adequate foreign personnel, especially through the following efforts:

  • Simplified and accelerated procedure for domesticating skilled workers.
  • Breaking the communication barrier through language training.
  • Improving the process of talent recognition and the assessment of professional qualifications.
  • Encouraging foreign applicants to prepare themselves better and improve their chances of getting hired

Training Partnerships Between Germany and Foreign Countries

Consistent implementation of the Skilled Workers Immigration Act should act as a catalyst for transnational training partnerships. Migration experts also point out that one of the crucial components of this process is to make skills acquired abroad more easily recognizable.

This shift in the mindset across the decision-makers within legal and business ecosystems could help enhance the mutual understanding between German businesses and foreign workers. And with 57% of the companies surveyed claiming how transnational agreements that focus on the placement/training of skilled workers would help them find the right people, the solution for this problem shouldn’t exactly be rocket science.

Data science, on the other hand, would be something to think about here.

When tackled and deployed properly, HR-focused big data platforms could prove to be critical for the streamlining of these processes.

Automating Talent Recognition and Recruitment Processes

Finding the right person for the job is not a walk in the park, even within ideal environments. Let alone hiring people with more (so to speak) obscure backgrounds and CVs. This is why using handy HR analytics tools can vastly improve the process of talent recognition and the assessment of professional qualifications.

We encourage businesses across the globe, not just within the German market, to check out what Osterus can do for them and learn how this platform can help them demystify obscure CVs and better understand the talent and skills that hide behind them.

And what can applicants do?

Foreign workers must also do their due diligence and prepare themselves adequately from their end to further improve the cards they are dealt and find employment more easily. We need to make this a two-way street, as currently, it looks more like a cul-de-sac.

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