Skilled labour shortage in Germany

The German labour market could face a shortage of around 16 million skilled workers by 2060, which is largely due to demographic changes. One remedy is the immigration of qualified skilled labour. But what exactly does that mean? What are skilled workers? And why is there a shortage of skilled labour? In this article, we answer some important questions on the topic of Germany’s shortage of skilled workers.

In Germany, you qualify as a ‘skilled worker’ if you have completed at least two years of vocational training or if you have a university degree. The field of specialisation does not matter here – although it is common for people to think of professions like nursing staff or carers. This begs the question: what does ‘shortage of skilled workers’ mean?

A shortage of skilled workers does not refer to all workers or all jobs. In fact, it only affects some professions, such as nursing staff, childcare workers, doctors and drivers. So why is there a shortage of skilled workers in these particular professions?

The ongoing shortage of skilled workers in Germany is mainly due to demographic changes. As the Baby Boomer generation retires, the German labour market will experience a gap for the next 15 years. The following generations (Gen X and Gen Y) and their lower birth rates make it impossible to close that gap. According to the German Institute for Employment Research (IAB), there currently are around 45.7 million people of working age in Germany. By 2060, that number will go down to around 40.4 million.

The other problem is that baby boomers are contributing to Germany’s ageing population. This means that our society will soon be in need of more nursing staff – a sector that already faces a shortage of skilled labour as it is.

Another reason for why the labour market is missing skilled workers is that apprenticeships are becoming less attractive to young people. In 2023, about 35 percent of positions were left unfilled (source: IAB). Instead, more and more people decide to attend university once they finish school. Having a university degree is often associated with higher earning potentials and more prestige. By comparison, nursing and skilled trades, for instance, are not as highly regarded in our society.

Many countries are dealing with a shortage of skilled labour, both within Europe and even globally (e.g. Canada and New Zealand).

As mentioned before, a shortage of skilled workers is not universal but affects certain sectors. According to surveys conducted by the German Economic Institute (IW), the following professional categories are in high demand right now:

• social work and social pedagogy
• childcare and education
• geriatric care
• building electrics
• healthcare and nursing
• sanitary, heating and air conditioning technology
• IT (information technology)
• physical therapy
• automotive engineering
• professional driving

However, according to IW, other professions, such as sales and child education/childcare, might be in need of skilled workers as early as 2026.

The only sustainable way to increase Germany’s current labour force is by attracting qualified workers from other countries. Taking on the role of an attractive country for foreign skilled workers to move to has not always been an easy feat for Germany.

The language barrier alone is higher in Germany than in many other countries. English-speaking countries like the UK, Canada or New Zealand have an edge here, as do Scandinavian countries where English is already widely spoken. But because that is not the case in Germany (yet), skilled workers have to learn German to communicate well on the job and in everyday life.

Germany is also known for its complex bureaucracy, for instance, recognising academic or professional qualifications from other countries. The country follows strict guidelines on when a qualification can be recognised as it is and when extra qualifications are necessary. Applying for a visa also comes with its own hurdles. The ‘bureaucratic jungle’ can be quite daunting, especially to anyone who is not proficient in German.

But skilled workers also face cultural challenges in some of the country’s regions, as not all federal states are equally welcoming.

In 2023, the German government passed the Skilled Labour Immigration Act to remedy the situation. And in 2024, the ‘Chancenkarte’ (Opportunity Card) was introduced, allowing skilled workers to enter Germany without a permanent job offer. Instead, it gives job seekers one year (as opposed to the previous three months) to find employment on German ground.