Shortage of skilled labor: How companies find qualified employees

Blog post   •   Sep 26, 2018 14:45 CEST

Everyone is talking and writing about the shortage of skilled labor. This is allegedly particularly shaking medium-sized companies who are at a disadvantage compared to corporate groups when it comes to the so-called "war for talent".There are lots of statistics on this subject. According to the Cologne Institute, in April 2018 the German economy was lacking 314,800 skilled workers in the so-called MINT sectors of technology, computer science, mathematics and natural science. Basel research institute Prognos has calculated that by 2030 there will be three million too few skilled workers, researchers, and technical and medical workers.

It is true that, currently, German companies often find it difficult to fill positions with well-trained skilled labor. However, for me, there is a disparity between the facts of this situation and the extent to which responsibility is taken in tackling the problem. I often hear the situation being lamented and, even among medium-sized B2B, the discussion stops short of identifying and introducing the required measures.
The finger is quickly pointed at politics. This can, of course, make a big difference - for example, making it significantly easier to use foreign skilled labor. But there are other approaches that I do not think are realistic. The idea, for example, of extending working life and so increasing retirement age. How can we explain to a colleague in production, who has worked there for 40 years and is struggling with the physical effects of having done so, that we're sorry but please could he work three or four years longer? In reality, this will just lead to companies paying out more in sick pay.

Think about education for a moment. In Germany we have created an education system where it is primarily "low-maintenance" and streamlined pupils that are successfully educated. In contrast, pupils with so-called learning difficulties stand little chance and are passed over by the system. At the same time, over recent years, companies have managed to significantly raise the entry requirements for job applicants. What someone graduating high school with the lowest level qualification used to be able to do, can now only be done be someone with a good intermediate level qualification. And things that would have formerly been entrusted to an intermediate level high school graduate, are today only given to those who have achieved the highest level. Does a warehouse employee driving a forklift truck really need to have fluently mastered a foreign language, be able to write essays or be an ace at curve sketching? No. He needs to master his trade instead! For a start, I understand education to be just that - young people matching their skills to a trade or profession and then developing and progressing them. This is even more important against the backdrop of the modern move towards lifelong learning. Each hierarchical level in a company should offer continuous additional training, developing people, and changing and adapting organizations.

Also, the changes at university level are not, in my opinion, all positive. It is still not clear to me why, in Germany, we phased out the internationally renowned diploma and replaced it with the master's degree. In my view, there is no comparison as universities now have different priorities and the quality of the teaching is still not equal. The rigid curriculum sometimes reminds me of a school timetable, where the young people leave out, especially from the point of view of companies, an important aspect of study, self-organization.

The bottom line is that mistakes and bad decisions were made in the past. It happens. In government as well as in business. However, just blaming politics for the lack of skilled labor is, as far as I am concerned, over simplifying the problem. The important question, however, is how do we tackle the situation in an appropriate way and, as companies, find sensible, targeted and lasting ways and means to solve the problem of the shortage of skilled labor?

For me, the central question is, is there really a shortage of skilled labor in Germany or is saying so just an easy way of covering up the failures of individual trades?

The truth, I think, lies somewhere in the middle. There are sectors where the demand for skilled labor exceeds supply, IT for example. I have looked at lots of other company sectors where I cannot identify a shortage of skilled labor.

Currently, many companies are taking the easier, short-term solution - poaching each other's employees. Always combined with higher wages and better job titles. There is often great amazement at the short length of time some employees spend in positions and the rapid salary development they experience but it is a logical outcome of the situation. In many cases there is an unhealthy gap between the value of a particular role to a company and the salary paid.

So, what is an appropriate way to tackle the shortage of skilled labor? In my view, the phrase itself provides the only logical solution, namely investing in training and further education. This happens all too infrequently. There are companies out there that have given up on occupational training and, instead, trust their luck to the open labor market or to head hunters. I find this development concerning.

In my view, there is not a "real" demographical problem in Germany! In my opinion, the problem that we need to solve is addressing and supporting our young people, training them beyond just an adequate level. An aging workforce coupled with changing leisure habits is not a new problem and so companies that are skimping on training and further education should hardly be surprised when it results in unfilled positions. Furthermore, the idea of lifelong learning for existing employees is often bandied around but is all too infrequently put into practice.

At ALBIS PLASTIC GmbH we use different options, one being training and further education in house, another being external approaches.

We are expanding our training and trying to assess, as best as we possibly can, the demands of each area. We make every effort to offer all our trainees a position in our company once they have completed their training but, naturally, one or two have other interests to pursue. Studying, travelling etc.... At the end of the day it is about creating prospects, giving opportunities, investing time and money in young people - tackling the shortage of skilled labor problem in an appropriate way, in a situation where we as a company can take action, in this case training. No excuses, no arguments, just coming up with a solution and acting accordingly.

We are currently training 30 young people at our Hamburg and Zülpich sites. On a regular basis, we check whether the training needs to be altered to meet changing conditions and the best way to make those alterations. As a manufacturing company, we pay particular attention to commercial and technical training (machine and plant operators, industrial mechanics and warehouse specialists). Our commercial trainees are given the opportunity to work in one of our foreign subsidiaries for six weeks as part of their training. Not only does this serve to broaden and further develop their language skills, much more we want our new recruits to understand that their future careers are not limited to Hamburg or even Germany, but that there are opportunities worldwide.

When it comes to lifelong learning, we continue to support our employees after training, whether that be through further professional development in their area of expertise, twin-track studying or master craftsman training.

Currently, it is becoming increasingly challenging to find employees for physical roles often associated with shift work. It is certainly something that we need to seriously rethink. We need to invest more money, time and commitment to find suitable candidates.But they are out there!

For these reasons, we are trying out a new starting point with "Joblinge". As part of the Hamburg youth employment agency, JOBLINGE is making an important contribution, especially for so-called older applicants - unemployed young people who left school a few years previously and have not found further training.

We are very interested to see if this could be a successful model for us.

It is my opinion that companies need to open themselves up more to new ideas and not just stick to the tried and tested methods.

Trade fairs are a successful model for us. To inspire people, you need to be open and offer insights. And this is especially true when it comes to young people. Job fairs and conferences are a good place to establish initial contact and give young people some guidance. The important point is that job fairs are an opportunity for small and medium-sized companies to present themselves and demonstrate how they are different from the big companies. Care should be taken to establish which job fairs make sense for individual companies so as to not waste time and effort. Under the current circumstances, the effect may not be immediately obvious. However, over the medium to long term we have seen a significant increase in our name recognition including outside the plastics industry and so we are benefiting from a constant presence at such events.

This brings us to a very important but often overlooked point, the further development of the current workforce. Often, an employees' full potential is not demonstrated in their current position. Also, they may not have the "right" school -leaving qualification or the grades from 10, 20 or 30 years ago are not the ideal we are looking for today.

We have had very good outcomes from investing in our employees and developing them further. And so we use internal resources to fill vacant positions. For example, we initially trained a machine operator to become a metal worker (today -industrial mechanic), and he was eventually qualified to take the role of assistant head of maintenance.

Finally, I would like to clear up the nightmare that is digitization. In my view, there is no nightmare! Just as in centuries gone by, we have to adjust to a continuous process of change but presuming that robots and algorithms will one day do all our work is, in my view, simply wrong! To be successful, we will always need well-trained employees.

Digitization is a normal development process and not an evolutionary revolution. Unfortunately, it is often used as a good excuse for no longer needing to recognize or understand complex technical concepts and so to stop learning about them. Technology still needs to be understood and controlled and it needs to stay comprehensible to be successfully used. I personally believe that the chief engineer on a container ship should only use the digital applications available to him on-board as support. He should be able to sense, smell and hear when the machines are not working properly without the technology, because he understands in detail how the machines work. This does not mean that we do not need digitization, but that it is not new and we do not need to fear it.

In the plastics industry we are reliant on highly qualified employees at every level. An employee in production needs to work at least as thoroughly and precisely as their colleague in accounting.

In conclusion, I am of the opinion that the so-called "war for talent" will get worse if, as companies, we do not take action.

The winners will be those who invest promptly in their employees in a targeted way and handle their human resources with respect. The companies that try to cut corners and rely on other companies to bring qualified employees to the job market will, in the long-term, be left behind because they simply will not be able to fulfill their recruiting needs.

As Human Resource managers and employers, we have to get used to the fact that, in order to preserve our competitiveness, there is a lot more to be done in exposing the problems and complaining about them. We need to be proactive and with any luck, amongst medium-sized companies at least, there will be lots of active employers and no slackers.

Udo Knak is Head of Human Resources for the global HR activities of the ALBIS PLASTIC Group and holding company OTTO KRAHN (GmbH & Co.) KG.Knak is a 50 year old business graduate, married with 2 children, living in Hamburg. He has been with the company for 10 years.In addition to his duties at ALBIS, he is a member of various committees, for example, the Hamburg chamber of commerce education committee and the German rubber industry's bargaining committee (ADK).

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