Wanted! The global competition for skilled workers

There are no uniform figures. Basically, the countries whose working population is shrinking due to demographic change have a problem. Technical developments and newly created job profiles also have a major influence: industrialized countries in particular, which promote and accelerate digitalisation, are increasingly looking for skilled workers in these areas. At the same time, the green transformation, for example, makes some jobs redundant while also creating new ones. It affects different branches of industry and is quite different in individual countries. Comparisons between countries are therefore difficult. It would be too short-sighted to simply compare the number of unemployed people to the number of vacancies in order to determine the shortage of skilled workers.

Many European countries, as well as other industrialized countries, are experiencing similar demographic change: the workforce is ageing and will shrink. This is due to how births have developed since the mid-1950s and how many people are immigrating. Italy, for example, has a low birth rate, and the working population there will shrink in the future. In Japan, demographic change has been felt for some time – as has the shortage of skilled workers. There we can see what to expect due to demographic developments.

Sectors of the economy that are very labour-intensive, such as social professions. Technology can only be used to a limited extent there, as it can hardly replace interpersonal contact – for example in nursing, at the doctor's or in education. On the other hand, as mentioned, jobs are being lost in various industries. However, the workers who lose their jobs are often unable to go directly to the areas where there is a shortage of staff because they lack the qualifications. As a result, some industries require fewer staff overall due to the use of AI – and still have a shortage of skilled workers at the same time. In short, the problem has many facets.

Many countries are engaged in a global competition for workers.

Yes, especially economic aspects. The extent of the shortage of skilled workers depends, among other things, on the industry structure in the respective region. In addition, social security systems and pension policy provide different incentives for skilled workers from abroad. See Great Britain: in the wake of Brexit, the country is pursuing a more rigid immigration policy, which increases the shortage of skilled workers. Many countries are engaged in a global competition for workers. This is particularly challenging, not least for the countries from which people are emigrating.

To countries and regions that are driving their green transformation and where the digital economy is developing very dynamically. For example, Scandinavia, where the working environment is generally considered to be very socially acceptable. In the Baltic States, the digital infrastructure is very advanced. The US is attractive when it comes to biotechnology, among other things. However, some Asian countries also offer innovation hubs in various sectors.

There are many starting points. If rules and regulations strengthen rather than inhibit the economy, this increases its attractiveness. As well as programmes that promote investment or an innovative environment, and the recognition of professional qualifications already acquired.

A welcoming culture is important.

A welcoming culture is important. The framework conditions set by administration and bureaucracy also have an influence. By administration, I don't just mean formalities, but also issues such as income tax or social security contributions. Social aspects also play an important role. For people from abroad, it is interesting to know whether there is a local expat community. This should not be underestimated, because here, for example, they often gain informal knowledge more quickly. For many, it is also relevant how well family reunification can be organized. In addition, it remains crucial that the industries and sectors in demand in the country develop dynamically.

Of course, pay is a lever because it is comparatively transparent internationally, especially for highly qualified workers. General working conditions are also a factor, such as time flexibility or workplace equipment. It is also an incentive if companies specifically respond to cultural needs and the employees in the company interact socially.

We spend a lot of time working – that's why it's always an opportunity for a company to create a good, contact-building atmosphere. In this way, it can help employees feel at home. Because it has to be said very clearly: once you have the decision to migrate, there could be a variety of destinations for you. Greater mobility is also conceivable if conditions are more attractive elsewhere. International competition in this field is becoming ever greater.

This can certainly be generalized, although there are regional differences and reasons for migration can be multifaceted. These are likely to include income opportunities, political and economic stability in general, or a lack of network effects if certain sectors of the economy are not yet so developed. Ultimately, this can be seen in the fact that many people are migrating from such regions. On the other hand, these countries usually have a fairly young population and therefore do not yet have such an ageing problem – they are better able to meet the demand for skilled workers from their own labour force potential.

Yes, in two respects: dynamic digitalisation can lead to higher productivity – fewer people can produce more – and this should also be more attractive to foreign skilled workers. Digitalisation increases productivity, especially in areas that are already technology- and capital-intensive. If the economy develops well in the areas where digitalisation can be used effectively, this will support the economy as a whole. This, in turn, makes it easier to finance pensions and the social security system as a whole – which is becoming more challenging due to demographic change, because fewer workers pay social security contributions. Digitalisation as a broad technology is therefore a competitive advantage and a glimmer of hope.

Yes and no. In the care sector, for example, digitalisation could relieve employees of administrative tasks. In general, the proportion of administration in the healthcare sector is high. AI, in particular, can also help evaluate health data so that nurses and doctors can devote more time to direct contact with individual patients. In short, the facilities can certainly potentially free up time for their employees. But there is no substitute for social interaction by humans themselves.

We need to make these professions more attractive.

We have a high demand for nursing staff, and we need to make these professions more attractive. For example, through higher wages or shorter working hours - but then the cat bites its tail a bit, because reducing hours means the total number of working hours is below what is needed. It would be expedient to make these professions more attractive to people from other sectors of the economy who can no longer find employment there because technology has replaced them or because the sectors no longer exist in the long term. But that is easier said than done.

Then we have a problem. Let’s take Germany as an example: the working population is likely to fall by 3 to 4 million people over the next 20 years due to demographic change. Currently, we still have around 46 million people in employment. In addition, people want to work fewer hours per day or week. This would have a further dampening effect on the total volume of labour available.

Then we have a problem.

And as a result the potential growth rate would fall markedly, i.e. what is possible in terms of long-term growth in an economy. This is because this rate depends not only on technological progress and investment, but also on the potential labour force. Potential growth in Germany was 1.4 percent in the past and is currently around 0.7 percent. In the above scenario, it could fall even further to 0.4 to 0.5 percent. This is not enough to catch up after periods of economic weakness, for example. The consequences could be stagnation and declining competitiveness.