The shortage of skilled workers is easing: companies are breathing a sigh of relief, but the danger remains!

The shortage of skilled workers is easing: companies are breathing a sigh of relief, but the danger remains!

In Germany, the shortage of skilled workers in companies is easing, as KfW Research reports. The main reason for this development is the current weak economy and the associated decline in orders. At the beginning of the second quarter of 2025, 27.2 percent of companies said they were suffering from a staff shortage. In comparison, it was 32.0 percent in the fourth quarter of 2024 and even 49.7 percent in the summer of 2022. This data comes from the KfW-ifo skilled workers barometer, which surveys around 9,000 companies, including 7,500 medium-sized companies, every quarter.

The situation in the industry is worrying, as the weak economy is leading to declines in sales and orders as well as layoffs or hiring freezes. Uncertainties caused by US economic policy also contribute to the tense situation. Dr. However, Dirk Schumacher, chief economist at KfW, warns that the shortage of skilled workers could worsen again as soon as the economic situation improves. He calls for urgent measures to increase labor force participation, skilled immigration and increases in productivity.

Industry-specific impacts

In the service sector, 32.9 percent of the companies surveyed complained about a lack of personnel, which represents a decrease from 39.1 percent in the fourth quarter of 2024. Lawyers and tax consultants are particularly affected: 64.6 percent report a shortage of skilled workers, compared to 73.6 percent in the fourth quarter. This industry is considered to be the most affected in Germany.

The KfW also highlights that in the skilled worker shortage in the second quarter of 2024, 35 percent of companies report hindrances due to a lack of skilled personnel. This is a decrease of approximately 1 percentage point compared to January 2024 and 15 percentage points compared to July 2022, yet the skills shortage remains at historically high levels. In the service sector in particular, 42 percent of companies have suffered disruptions, while in the manufacturing sector only 25 percent are affected, which is below average.

Regional differences and outlook

In retail, 28 percent of companies report a shortage of skilled workers, with retail at 30 percent and wholesale at 27 percent having similar figures. In the construction industry, the affected figure is also 27 percent. Small and medium-sized companies are affected at 34 percent, while large companies have only slightly higher numbers at 36 percent. The areas most affected are legal and tax advice as well as auditing, where 71 percent of companies report a shortage of skilled workers.

Regional differences are also significant: 40 percent of companies in eastern Germany are affected, compared to 32 percent in Hesse and Rhineland-Palatinate. The difficulties in East Germany go back to a decline in the working population and low immigration. Dr. Fritzi Köhler-Geib, chief economist at KfW, emphasizes the ongoing relevance of the issue of a shortage of skilled workers. A future economic recovery could further exacerbate the skills shortage, depending on measures taken to improve labor force participation and immigrant integration.

In summary, despite a reduction in the shortage of skilled workers, the uncertainties and challenges associated with the economic situation continue to concern companies. It remains to be seen how the economy will react to these developments.