Skilled labor shortages: 7 tips on what you can do

The shortage of skilled labor are weighing heavily on many companies in Germany. With our helpful tips, we show you how to effectively find suitable personnel - even when labor market conditions are difficult to manage.

If you clicked on this article, your company is probably urgently looking for well-trained employees-and may have been doing so for some time. You are not alone: the shortage of skilled workers is affecting the entire German economy. Even though the number of companies complaining about a shortage of qualified employees is declining slightly in the current difficult economic situation, Germany still suffers from a historically high level of labor shortages. This is the result of the ifo economic survey from January 2025, for example.

In this article, we explain:

• what exactly a skills shortage is;

• the causes of the current skills shortage;

• how a shortage of qualified workers can harm your company; and

• seven steps you can take to actively attract new employees.

What is a skills shortage?

Skilled workers are employees who have completed training or further education in their field. This can be a degree, an apprenticeship, or a comparable qualification.

The term skilled labor shortage therefore refers to a persistent shortage of qualified workers. This means that the demand for such workers is permanently higher than the supply.

What are the causes of the current shortage of skilled labor?

There are several causes for the current shortage of skilled labor. The most important one is our ongoing demographic change: particularly in western industrialized countries such as Germany, the population is aging, while, at the same time, fewer and fewer children are being born. With the baby boomer generation (born between 1955 and 1969) reaching retirement age, this means that there are fewer and fewer workers available on the labor market.

Globalization also plays a role. As a company, you are now competing for qualified workers not only with competitors from your region, but also with those from all over Germany, Europe, and the rest of the world. As a German company, you initially benefit from the fact that Germany gains more workers through labor migration than it loses. However, this effect can be strongly regional. For example, companies in eastern Germany are hit particularly hard by the fact that more people are avoiding or leaving the region due to the rise of the AfD.

How does a shortage of skilled workers harm your company?

If your company is unable to fill important positions with the right personnel, it will harm your business. This can happen even in the short term if you are unable to maintain your productivity level due to acute staff shortages. If you try to maintain your level anyway, it often means that your existing employees have to work harder. This may work for a while, especially if your workforce is highly motivated, but in the long run, it will lead to overload and frustration. In the worst case, stressed employees will resign or suffer burnout, further exacerbating your staff shortage. In the long term, the shortage of skilled workers will definitely harm your competitiveness.

Our seven tips for dealing with skilled labor shortages in your company.

If you don't want your company to fall into the trap of skilled labor shortage, you need to take active countermeasures. Here are our seven tips to help you close your gap.

Tip #1: Check where and how artificial intelligence (AI) can help you

Many companies are currently testing ways to use AI to close their labor gap - at least partially. This means they are providing their existing team with a generative AI tool such as ChaptGPT from OpenAi to increase their productivity. The idea is that AI takes on tedious tasks so that employees can focus on more productive activities. You should also consider this option for your company. However, you should carefully consider whether generative AI is really suitable for your company - and how it will affect your productivity in the long term.

After all, it is not clear whether AI actually increases work productivity. For example, some studies suggest that software developers who use AI for programming work less efficiently than without AI - even though they subjectively feel that they are being more productive. A study by the Harvard Business Review also concludes that AI makes employees more productive, but demotivates them.

For you as a company, this means that you should carefully consider whether and how AI can really benefit you.

Tip #2: Reduce staff turnover through employee retention

To alleviate staff shortages, it helps if the employees who currently work for your company stay. There are a number of things you can do to retain loyal employees. Measures such as a transparent salary structure, flexible working hours, home office options, mentoring programs, and, of course, a good corporate and leadership culture are particularly helpful.

Tip #3: Invest in further training

Another way to deal with the shortage of qualified specialists is to train them yourself - by investing in your existing employees. Training and education measures not only offer proven employees the opportunity for personal development. You also ensure the long-term competitiveness of your company by investing internally in the development of exactly the skills you will need in the future.

Tip #4: Collaborate with educational institutions

If the number of young, qualified talents is shrinking, your company needs to be ready as soon as they enter the job market - ideally right after they finish their studies or training. To do this, you should work closely with relevant educational institutions, such as universities and vocational schools. Offer students internships or a position as a working student, support them with their final theses, or give guest lectures yourself. This allows young talent to come into contact with your company at an early stage and gain positive experiences with it.

Tip #5: Expand your applicant pool

If you can't find the qualified specialists you need, it also helps to expand your pool of applicants. For example, you can give motivated career changers a chance or try to recruit specialists from abroad. In any case, you should be prepared to organize further training or recognition of their qualifications as well as a very good onboarding process for these potential employees.

In addition, you can make your company (and your website) more accessible. This will make you an attractive employer for employees with disabilities who can enrich your team with their skills.

Tip #6: Approach potential employees directly

Another option is to expand your recruiting efforts - for example, by sharing your job openings on social media, actively sourcing candidates yourself, or hiring a professional headhunter.

Tip #7: Invest in your employer brand

If you are constantly lacking qualified employees, this may also have something to do with your employer brand. Perhaps your company appears opaque from the outside or simply unattractive as an employer. Or maybe your company remains "invisible" on the job market because you invest little in the appropriate communication, effectively resulting in skilled workers looking for a job to not notice you at all.

There are a number of things you can do to change this, such as:

• Strive to create a positive corporate culture that makes you more attractive to job seekers as an employer.

• Introduce tangible benefits such as profit sharing and working from home.

• Communicate externally and internally as an employer.

• Set up a separate career page on your website.

• Launch a targeted employer branding campaign.

(H2)Get over your skilled labor shortage - your path to employer branding success

The skills shortage is a serious problem that affects many companies in Germany. However, that doesn't mean you can't do anything about your individual shortage. With the right measures, you can attract qualified employees and get them excited about your company.

Are you looking for help with employer branding and communication? Our PIO BELOVED team will work with you to find the right solution for your company. Simply contact us for a no-obligation introductory meeting.

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