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Germany – Skills shortages hitting small-to-medium sized enterprises

10 September 2013

The increasing shortage of skilled workers is costing Germany’s small and medium sized businesses (SMBs) billions of euros, according to a survey by consultants Ernst & Young. The survey revealed that 64% of SMBs responded that the skills imbalance would result in revenue loss.

The Ernst & Young Mittelstand (SMBs) barometer estimates that revenue lost as a result of the imbalance could be as much as €33 billion. The survey among 700 Mittelstand businesses revealed that with the parliamentary elections looming on September 22nd, many are holding back investments until they know the tax policies of the next government.

Mr Englisch said: “Entrepreneurs are anxious because they don’t know what to expect. They are waiting for a planning perspective for the next few years before making any investment decisions.” According to Mr Englisch, there are currently one million job vacancies in SMBs.

Looking forward to the next six month, 40% of businesses report optimism, up from 34% in January, with only 7% responding that economic conditions will get worse. This positive outlook is reflected in higher revenue forecasts and recruitment plans.

Germany is increasingly looking abroad to recruit skilled workers. Last week, the federal state of Thüringen opened its ‘Welcome Centre’ in the city of Erfurt, a contact point for foreign workers looking for jobs in the Eastern German state. Jobseekers arriving from abroad are able get advice and information about living and working in Thüringen, helping them to feel at home more quickly.

Mathias Machnig, Thüringen’s secretary of commerce, said at the opening of the centre that the demand for skilled labour was growing. While he anticipates a lack of skilled workers in other parts of the industry, there is already a shortage of qualified care workers.

Foreign workers and trainees could help Thuringia’s economy, Mr Machnig said. However, previous experiences with international workers have shown that the integration of foreigners in Thüringen is not easy, he added.

Thüringen has the lowest proportion of foreigners in Germany with 2.3%, just over 52,000 people living in the state are not German. The main reasons for this, according to Mr Machnig, are lower wages in Thüringen than elsewhere in Germany, and the bureaucratic hurdles that must be crossed in order to get foreign vocational qualifications recognised.

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