KfW study: SMEs shy away from foreign skilled workers despite a lack of staff

Germany's population is aging. In order to close staffing gaps, companies rely on workers from abroad. But some companies are holding back even though they lack skilled workers. A study by KfW shows why this is.

According to a study by KfW, a good one in ten medium-sized companies in Germany (11.5 percent) employ foreign skilled workers. These are primarily companies with 50 or more employees. 61 percent of them stated that they had foreign skilled workers in their company. “The smaller the company, the less likely skilled workers from abroad play a role for them,” says the development bank’s representative survey, in which around 13,000 companies took part.

“The economic weakness means that the shortage of skilled workers is currently lower than it was a few years ago,” said KfW chief economist Dirk Schumacher. "The need for qualified workers will increase again as the economy continues to improve."

12.4 percent of companies stated that they would not hire foreign skilled workers - even though there was a need. 45.5 percent of those emphasized that they currently have no need for foreign skilled workers.

A good 69 percent of companies cited language barriers as an obstacle to recruiting foreign employees, while almost half (47.5 percent) criticized bureaucratic and legal hurdles. The KfW referred to often lengthy procedures relating to residence permits and work permits. These barriers should be dismantled in view of demographic change and the increasing shortage of skilled workers, demanded Schumacher.

Industrial companies particularly often employ foreign skilled workers (21 percent). This is followed by trade (14.3) and construction (13.3), according to the study, which was carried out in January among companies from all sectors with a turnover limit of 500 million euros.

There are hardly any differences between East and West Germany. In the East, the proportion of companies that employ foreign skilled workers is only slightly lower at 9.6 percent than in the West at 11.9 percent. According to KfW, the difference is primarily due to the industry structure. In the West, the proportion of larger medium-sized companies in industry and the service sector is higher.