A study by the Institute of the German Economy (IW) has revealed that Germany’s skilled labour force could shrink significantly in the next 20 years. The study highlighted the need for immigration and an older retirement age.

Skilled worker shortage in Germany

A study by the Institute of the German Economy (IW) has found that Germany’s shortage of skilled workers could worsen significantly in the coming decades. The study found that businesses could lose an eighth of their skilled workers by 2040, and this is without the effects of the coronavirus pandemic being taken into account.

The IW researchers examined three different scenarios, concerning the consequences of the “baby-boomer” generations’ imminent retirement. One scenario, in which the current pension scheme is kept, and immigration levels are low, saw the number of skilled workers in Germany shrink by 4,2 million, or 12 percent, by 2040. In another scenario, which saw the development of immigration regulations and a later retirement age, the researchers said the number of skilled workers between the age of 20 and 69 could be kept constant over the next couple of decades.

However, the researchers said that a third scenario would be more likely. This scenario sits in the middle between the two already described and would see the number of skilled workers in Germany fall by 3,1 million, or 8,8 percent.

Preparing for the future

The study brings attention to the fact that the supply of skilled workers will structurally change in the coming years. With more young people attending higher education, the number of academics is expected to rise, whilst the number of professionally qualified specialists is expected to fall over the next 20 years.

A similar study by the Berlin Chamber of Commerce (IHK), found that, by 2035, the number of skilled workers in Berlin could fall by around 377.000 in the coming years. Jörg Nolte, managing director for economics and politics at IHK, has called for affordable living spaces and sufficient childcare to counter the problem. "It is important to us to stimulate the framework for the creation of new jobs."

He also called on businesses to adapt to the individual needs of their employees, whether than be flexible working hours, or work from home regulations. Schools also need to make better, career-orientated offers to students. “Many young people are not even aware of what talents they actually have and many then opt for easier paths than an apprenticeship, for example," Nolte said.