German dilemma highlights Europe skills gap

Germany needs to attract at least 400,000 skilled immigrants annually if it is to retain its position as Europe's largest economy, according to the head of the nation's Federal Labour Agency.

David Sapsted

31 August 2021

Demographic changes, centred on an ageing workforce and a low birth rate, means that Germany will face massive skills shortages unless it begins recruiting talented immigrants, Detlef Scheele, chairman of the agency, told the Süddeutsche Zeitung newspaper.Mr Scheele said the demographic changes meant that Germany would have about 150,000 fewer working-age residents by the end of this year alone. "It will be much more dramatic over the coming years," he added.

Germany: running out of workers

"The fact is, Germany is running out of workers. We need 400,000 immigrants per year, significantly more than in recent years. From nursing care and climate technicians to logisticians and academics, there will be a shortage of skilled workers everywhere."Mr Scheele - aware that immigration could be a controversial issue in the federal elections in late September - insisted that "this is not about asylum but targeted immigration to fill gaps in the labour market".According to official forecasts, Germany’s workforce is projected to shrink by about four million by 2030 as the baby-boomer generation retires.“German companies will have to increasingly look outside of the EU to meet their demand for skilled labour,” said Ulrich Kober, head of integration and education at the Bertelsmann Stiftung think-tank. “Migration from other EU countries doesn’t cut it anymore.”

Employment: a global problem

The problem, of course, is not unique to Germany. The US and Australia are facing post-pandemic labour shortages and much of the EU is confronted by similar demographic changes to Germany - particularly when it comes to an ageing population - while the UK's woes have been exacerbated by a post-Brexit exodus of European workers.Bloomberg reported that the situation poses a political challenge for European governments. They may find themselves under pressure to double down on attracting foreign workers despite high skills shortages, according to the Brussels-based Migration Policy Institute Europe.“Governments will need to carefully consider the sensitivities around continuing to recruit from abroad,” it said.

EU workforce to decrease by almost 50 million

Academics from across the continent wrote in an article for Euractiv, a pan-European media network specialising in EU policies, that the continent's ageing society would "result in huge skill shortages, hamper our productivity and, frankly, our economic relevance in the world".
Over the next 30 years, the European Union's indigenous workforce would decrease by almost 50 million, the article said."If we want to have any chance of maintaining the ratio of active workforce compared to the elderly, we need migration. Otherwise, our current pension and health schemes will need either to change dramatically – or crumble," it added."So, we need migration. But we are by no means the only ones wanting to attract talent. Others are beating us to it. The US, Canada, the UK, Australia and other high-income countries are constantly exploring ways to better attract talent at all skill levels."The academics argued that the EU should ease and streamline the immigration system, and actively invest in building skills abroad.
"In addition, people should be able to register their interest to work within the EU, without having to know their future employer up front. By creating a one-stop-shop Talent Pool, the EU could pre-screen candidates’ qualifications, skills, and languages, match them to European employers, reduce bureaucracy, increase transparency, and create a more centralised legal migration framework," they said.