According to the latest Engineering Monitor from the VDI and the German Economic Institute, the shortage of professionals in engineering and IT professions has eased somewhat.
Employers reported around 148,000 vacancies in the first quarter of 2024, which is a decrease of 15.6% compared to the previous year. However, there are still significant staff shortages, particularly in energy and electrical engineering. However, the significant increase in the proportion of foreign professionals since 2012 can counteract the shortage in some areas.
Shortages also have a financial impact
Companies are feeling the effects of the shortage of professionals: according to the VDI and IW, the current staff shortage is leading to an annual loss in value added of around 9 to 13 billion euros.
“The decline is certainly also due to the economic situation, in which companies are reluctant to hire new staff. Nevertheless, there are positive signs,” says VDI Director Adrian Willig.
The bottleneck ratio (vacancies per 100 unemployed) remains at 333. Engineering professions in the fields of energy and electrical engineering (bottleneck ratio 558), construction/surveying/building technology and architecture (bottleneck ratio 433) as well as mechanical and automotive engineering (368) and IT (303) are experiencing the greatest shortages.
Immigration cushions shortage of professionals
Immigration of foreign professionals (excluding refugee countries and the UK) to the German labor market has developed positively.
“In the coming years, digitalization and climate protection will further increase the demand for employees in engineering and IT professions. The shortage of professionals can only be mitigated through a variety of efforts. We need to get more young people and women interested in the engineering profession. From batteries to wind turbines: engineers can make essential contributions to our innovation location everywhere. It is also clear that we need more foreign engineers to come to us, says Adrian Willig. “And fortunately, we are on the right track here.”
Immigration in recent years has made a significant contribution to securing professionals in the engineering and IT professions. From the end of 2012 to September 2023, the absolute number of foreign employees in engineering professions rose from 46,489 to 114,648, an increase of 146.6%. The percentage of foreign engineering employees in relation to all engineering employees rose from 6% to 11% during this period.
Of the total increase in employment in engineering professions (263,760 employees), around 26% (68,159 employees) were accounted for by immigrant specialists. Most of them come from India, Turkey, Italy, China, France and Spain. The average gross income of employees subject to social security contributions in academic STEM professions is between €5,411 (25-44 years) and €6,750 (45+). At the same time, 13% of patents registered in Germany in 2020 were filed by foreign specialists. “We need to make Germany even more attractive as a business location by reducing bureaucratic hurdles, encouraging professionals to come and foreign students in STEM subjects to stay,” emphasizes the VDI Director.
“The loss of value added would be significantly higher without immigration,” adds Prof. Axel Plünnecke from the IW. “Without the high dynamics in the employment of foreign professionals in engineering and IT professions, the number of missing employees in these professions and thus the loss of value added due to the shortage in engineering and IT professions would be twice as high,” he continues.
Proportion of foreign employees particularly high in southern Germany
The highest proportions of foreign employees in engineering professions are found in Bavaria, Hesse, Thuringia, Brandenburg and Berlin. According to Plünnecke, immigration has proven to be an important factor in securing professionals, especially in the Munich metropolitan area, which is strong in research and patents. With 11,681 people, this is where the most foreign engineers work - more than in the whole of Hesse and almost twice as many as in Lower Saxony. Overall, 23.7% of those employed in engineering professions in the district of Munich are foreign nationals, while Starnberg has the highest figure in Germany at 29.3%.
The proportion of foreign employees is also high in other regions: the Ilm district in Thuringia has 25.1 %, the Main-Taunus district 23.4 % and the region around Frankfurt an der Oder 22.8 %. Of the twelve districts/cities with the highest proportion of foreign nationals in employment subject to social security contributions in engineering professions, six are in Bavaria, three in Hesse and one each in Thuringia, Brandenburg and Berlin.
Help with integration: VDI launches mentoring project
The VDI has initiated the VDI-Xpand project to help immigrant professionals integrate into the workplace and society.
“We need qualified specialists, but we also need to integrate them into workplaces and society. The VDI with its regional structures offers the best conditions for networking engineers with people who have the same interests,” says VDI labor market expert and project manager Ingo Rauhut.
At the heart of VDI-Xpand is a mentoring program that provides immigrant engineers with a VDI member with professional experience. The mainly online program is supplemented by on-site networking events. The approach, which is funded by the nationwide “Integration through Qualification” (IQ) funding program, was successfully launched as a pilot in North Rhine-Westphalia in 2024.
In addition to these efforts, a wide range of measures are needed to get young people in Germany interested in technology and science, adds VDI Director Adrian Willig.
“In order to close the professional gap, it is also important to have many more women in the engineering profession. We regularly show role models and support women with a targeted mentoring program, the VDI WoMentorING,” says Willig. “And it starts with the very youngest. Arousing interest in technology is our aim.” Overall, a range of measures is needed to keep our innovation and business location competitive.
