Help Wanted: Will Dearth of Experts Starve German Economy?
The success of Germany's economy has long been driven by small and mid-sized companies dependent on skilled labor. But a developing shortage of experts represents a threat to the country's economic future. With babies in short supply, immigration could be the answer.
Three long years. That is how long Carl Stahl GmbH München, one of the myriad lesser-known companies in Germany that keep the country's economy humming, has been trying to fill a trio of job openings. They need an expert in testing technologies. They need a specialized machinist. And they need a rope and cable expert.
But they can't find them. "The market is completely empty," says company head Rupert Hetterer. "We currently have full employment in southern Germany and it is extremely difficult to find people."
Hetterer's company, which belongs to the larger Carl Stahl Group, makes all manner of specialized cranes, cables, lifters and pulleys. As a family owned operation employing close to 100 people, it belongs to the category of German small and medium-sized firms known as the Mittelstand that drives exports and is widely seen as a key reason that the country has managed to avoid slipping into the economic distress afflicting much of the rest of Europe.
Increasingly, though, the Achilles heel of these companies is being exposed. They are extremely dependent on finding or developing highly trained personnel so as to remain a step ahead of competitors overseas. Yet the experience of Carl Stahl is not unique. Many companies have begun complaining in recent years of a growing shortage of qualified specialists in Germany, and projections that it could grow worse are enough to keep German economists and politicians up at night.
And, as has become increasingly plain, the development might be enough to force the country to accelerate its shift toward targeting immigration as a solution to the problem.
'10,000 Every Month'
"By 2025, we will need roughly 1.5 million experts from abroad," the new president of the Association of German Chambers of Commerce and Industry, Eric Schweitzer, insisted in an interview with the mass-circulation Bild newspaper in early April. "That means roughly 10,000 every month."
Though Schweitzer is anything but an impartial observer, the numbers do indeed look grim. According to the Federal Employment Agency, demographic realities in aging Germany mean that the labor force will decline by 6.5 million people by 2025. The agency also cites studies indicating that there will be a lack of 2 million skilled workers by 2020 and a shortage of 5.2 million a decade later.
"We will not be able to meet the demand with domestic supply," says Vera Demary, an expert on the German labor market with the Cologne Institute for Economic Research. "We will definitely be dependent on bringing in more immigrants."
That's a conclusion many German companies, chambers of commerce and other bodies representing a variety of economic sectors have already reached on their own. This winter and spring has seen an explosion of programs and consultants intent on bringing in technicians, craftsmen, healthcare workers and IT specialists from elsewhere in Europe.
Of particular note is a campaign launched by the Munich Chamber of Crafts which seeks to be a one-stop-shop for Bavarian companies interested in hiring specialists from regions of Spain suffering from high unemployment. Launched in December, the program handles recruitment, sets up interviews for companies in need, takes care of travel arrangements for workers coming to Germany and even helps with language difficulties. Already, the program has received hundreds of applicants and began placing workers last month.
Project leader Katrin Budick is quick to note that it is "but a drop in the ocean," but adds that the goal is for the newcomers to feel welcome. Rather than a repeat of the "guest worker" model pursued during Germany's postwar economic revival -- one which presumed that immigrant labor would eventually return home -- Budick says that "the goal is that the applicants will be employed long term, that they feel at home and that they become prosperous here."
The Importance of Language
There are indications that Budick's program could be on to something. According to Frank-Jürgen Weise, head of the Federal Employment Agency, the ongoing euro crisis and associated economic difficulties in Southern Europe resulted in a significant jump in immigration to Germany from that part of the Continent in 2012. Leading the list was Greece, with a 16.7 percent spike, and Spain, with almost 11 percent. Furthermore, Germany's Goethe Institute noted in December that it has seen record numbers of people signing up for its German language courses, particularly in countries hit hardest by the euro crisis.
Still, it is not clear that immigration will truly be able to sate Germany's growing hunger for specialists. For one, as Carl Stahl's Hetterer points out, language is a vital factor, particularly given that many of Germany's small and mid-sized companies have not adopted English as their official language in the way that many large international corporations have done.
"Immigration is certainly one possible solution," Hetterer said, making it clear that he supports a more open immigration policy. "I would welcome it very much if someone from Spain were to come over and look for a job for us. But they have to have taken German classes first and be well qualified for the job."
For another, Germany has long been reticent about opening its doors to significant immigration of the kind that might be needed to compensate for the country's demographic challenges. United Nations population projections forecast that by 2020, there will be about 60 percent more people leaving the working population in Germany than entering it, the worst mark among all countries belonging to the Organization for Economic Cooperation and Development (OECD). Yet an OECD study released in February noted that Germany continues to lag behind other industrialized countries such as Canada, Australia, Britain and Denmark in recruiting overseas experts.
Worryingly, a survey conducted for the report found that the most common reasons given by companies for not looking beyond Germany's borders was that they "haven't even considered it" and that it was "too complicated." "Germany's prosperity depends to a considerable extent on whether it manages to remain competitive despite its ageing population," warned OECD Secretary General Yves Leterme when presenting the report.
- Part 1: Will Dearth of Experts Starve German Economy?
- Part 2: Competing for Experts
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