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Germany Running Out of Skilled Workers

Germany has the EU’s lowest youth jobless rate—6.8% in 2017 against an EU average of 16.8%, while the number of vacancies for training positions was at its highest for more than 20 years
Germany’s twin-track vocational training system involves up to three and a half years of on-the-job learning in firms alongside theory lessons at vocational school.Germany’s twin-track vocational training system involves up to three and a half years of on-the-job learning in firms alongside theory lessons at vocational school.

Nina Lorea Kley urgently needs young people to train as vehicle builders at her company’s factories in northern and eastern Germany. She has enough orders and money to hire 20 this summer but can only find 14.

Feldbinder makes 2,000 customized trailers, railway wagons and containers a year but won’t be able to keep that up without new recruits, especially because many employees are due to retire in the next few years, Reuters reported.

“If we don’t manage to fill jobs that become free we’ll have to think about which orders we can fulfill,” said Kley, 41, a managing director at the firm her father co-founded four decades ago. “We simply wouldn’t be able to take on certain orders anymore due to a lack of staff.”

Feldbinder is not alone. More than a third of German companies could not fill all of their training places last year while almost one in ten received no applications for such roles, a survey by the DIHK Chambers of Commerce found.

Last year, the number of vacancies for training positions was at its highest for more than 20 years.

Germany’s twin-track vocational training system, which involves up to three and a half years of on-the-job learning in firms alongside theory lessons at vocational school, is credited with giving Germany the EU’s lowest youth jobless rate—6.8% in 2017 against an EU average of 16.8%.

Widely admired abroad, the training system is being exported in various forms to Europe, Asia, Africa and the US. But its popularity is waning at home as young people increasingly prefer the higher status of a university degree.

That could hurt growth in Europe’s largest economy by exacerbating a skilled labor shortage, which is partly caused by hundreds of thousands of aging employees leaving the labor market every year.

“It’s a dangerous trend—Germany is running out of skilled workers,” said DIHK President Eric Schweitzer. “At first, orders lie around for longer, then firms have to reject them outright—to the point where entire sectors run into problems.”

In response, the government has vowed to strengthen the training system and make it more attractive during this legislative period, which runs to 2021.

Vocational Training

It plans to invest in equipment so vocational schools can adjust to the digital age, put a minimum trainee wage into law, boost career guidance at secondary schools, promote part-time training to help people reconcile their work and family life, and reduce the problem of regional imbalances in the jobs market by improving mobility.

The education ministry is working with 16 countries including Greece, China, India, Mexico, Russia, South Africa and the United States to reform their vocational training systems to make them more like the German system.

Foreign interest in the system has grown since the global financial crisis and its success lies partly in the heavy involvement of companies, which ensures it produces workers who can be deployed immediately.

Since 2013 the education ministry has been supporting a project called VETnet whereby German Chambers of Commerce in 11 countries develop pilot vocational training projects with local companies.

They now offer 45 different occupations, with mechatronics fitter (technology combining electronics and mechanical engineering), tool mechanic and industrial mechanic the most popular. More than 820 companies are involved, with 7,400 trainees in China, Greece, India, Italy, Latvia, Mexico, Portugal, Russia, Slovakia, Thailand and the United States.

“The German government supports the internationalization of vocational training because it guarantees competitiveness, social harmony and economic stability even during crises,” Thomas Rachel, the deputy education minister, told Reuters.

But the DIHK’s Schweitzer said the system is no longer as highly regarded in Germany as it used to be and it was vital to turn that around by showing young people how good their career and financial prospects are on the scheme. “We need to ensure vocational training is as valued at home as it is abroad,” he said.

Students Seek Higher Degrees

A government push that started in 2008 to get more young people into university also contributed to the rise in student numbers. People with relevant professional experience can now study for some degrees despite not having higher education entrance qualifications.

Companies and industry groups complain that schools focus too much on sending young people to university and should also stress the benefits of the dual system, which offers training for 327 occupations at more than 426,000 companies.

“Of course we need engineers and mathematicians but not only them—we also need very well-qualified skilled tradesmen,” said Rainer Dulger, head of Gesamtmetall—a metal industry employers’ association.

Many firms are also preparing for a mass exit of experienced employees from 2020 as the post-World War Two baby boomers retire. There are around 300,000 fewer school leavers each year than people going into retirement, the DIHK said.

Last year nearly 49,000 training positions, especially in the manual trades, hotel and catering sectors, were vacant—the most since 1995. At the same time, the number of applicants without trainee contracts rose to almost 24,000, highlighting a mismatch between employers and candidates.

 

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