Big business joins forces to bridge Germany’s growing skills gap

The costs of the initiative will be shared by the companies involved on a case-by-case basis. So if a factory closes, a dialogue will begin on what to do with its workers and then involve another company which may be seeking new skills.

Continental and Deutsche Bahn, for example, have set up a partnership to retrain staff no longer needed at the auto parts maker for jobs at the railway group, with the costs split.

“We know the social cost of unemployment, and we want to avoid that,” Ariane Reinhart, board member responsible for human resources (HR) at Continental and chief spokesperson of the business-led initiative, told Reuters.

Reinhart, who said that she believed the scheme to be the first of its kind, pointed to data showing unemployment cost the German economy 63 billion euros ($68 billion) in 2020.

While German unemployment is relatively low, at 5% in March, there are warnings of a wave of job losses if companies do not move quickly to adapt to stringent climate targets and step up in areas like software in the face of new competitors abroad.

A study by think-tank Ifo Institute warned that 100,000 jobs linked to the internal combustion engine could be lost by 2025 if carmakers failed to transition fast enough to electric vehicles and retrain workers.

The initiative comes as the number of open vacancies in Germany is rising steadily, from around 320,000 in 2009 to 850,000 in March this year, national statistics show.

Engineering, metalwork and logistics are among the sectors seeking high numbers of people in Germany, alongside care work, catering and sales.

The demand for skilled workers is coming from overseas companies too, highlighted by Tesla’s decision to build its European electric vehicle and battery plant in the state of Brandenburg, where it will create 12,000 new jobs.

This will ramp up competition for skilled workers with rival carmakers Mercedes-Benz and Volkswagen who both have factories of their own only hours away.

Retraining across sectors and within companies is also a means of maintaining good relations with Germany’s powerful unions, who often sit on company boards and have negotiated multi-year job guarantees for staff.

“Some of these people have no prospects any more in the combustion engine world,” said Fevzi Sikar, head of the workers’ council at Mercedes-Benz’s Marienfelde plant, where assembly line production workers are being offered retraining in software engineering.

“But they are reliable employees, and it just makes more sense to retrain them … the market is sucked dry.”

Sikar said Mercedes is seeing enthusiasm among younger workers who want to become more resilient by gaining new skills. While older workers faced with a job loss or change may opt to retire early, younger colleagues need a future elsewhere.

While the scheme can provide some of the skills that Germany needs, attracting talent from abroad is also essential, Thomas Ogilvie, board member in charge of HR at Deutsche Post, said.

Germany’s new coalition government has pledged to make it easier for workers from abroad by enabling dual citizenship and improving access to apprenticeships.

“Leaving it to the free market is not enough – it would not be what’s best for workers, or the economy,” Reinhart said.

Germany’s federal labour agency declined to comment.