The baby boomer generation is gradually retiring, leaving behind large gaps in the labor market that a younger workforce is only partially able to fill. On behalf of the Hessian Ministry of Social Affairs and Integration, Goethe University’s Institute for Economics, Labor and Culture (IWAK) has prepared forecasts of what to expect in the various regions and occupational fields by 2028. The upshot: It is still possible to take the necessary and apparently also urgently needed countermeasures.
Compared to demographic change, the war in Ukraine and the Corona pandemic have only a minor impact on Hesse’s labor market. The age-related retirement of many employees from the baby boomer generation is creating large gaps that can only be partially filled by the smaller number of young people entering the labor market. The result is a shortage of skilled workers, known by the German term “Fachkräftemangel”. Within the federal state of Hesse, this development varies according to the geographic region and the occupational field. Compiled by Goethe University’s Institute for Economics, Labor and Culture (IWAK) on behalf of the Hessian Ministry for Social Affairs and Integration, regional occupational forecasts provide a precise picture of the likely future scenario. They create the “transparency needed to enable the development of new or the re-sharpening of existing skilled labor strategies and their alignment with medium-term developments,” says Kai Klose, Hessian Minister for Social Affairs and Integration.
The forecasts (available at www.hessische-berufsprognosen.de, in German) were made available to the public in mid-January 2023. They show that Hesse’s skilled labor shortage will increase to 200,000 workers between 2021 and 2028 – of which skilled workers with vocational qualifications will make up about 130,000, while skilled workers with university degrees will account for just under 70,000. By contrast, at around 20,000, the number of people without a degree who could potentially take on skilled labor tasks after gaining additional qualifications is comparatively low. In any case, the option of gaining additional qualifications is only available in the major cities; Germany’s rural regions are also experiencing a shortage of people without vocational qualifications. As a general rule, the further away one moves from urban areas, the greater the shortage of labor and skilled workers becomes.
As far as the various sectors are concerned, the shortage of skilled workers is hitting the social occupations particularly hard. Forecasts predict that there will be a shortage of 13,000 employees in the healthcare sector and more than 16,000 in the education sector by 2028. The gaps here are particularly large, not only because many employees will retire in the coming years due to age, but also because the demand for healthcare and education services will continue to rise. After all, the number of older people in need of healthcare services is increasing, and the further expansion of daycare also intensifies the need for more educators. A tailored range of childcare options allows women to work more extensively – another important element in the fight against the skilled worker shortage. Attracting and retaining skilled workers is also a priority in the skilled craft and IT professions, where an increase in demand for skilled workers is also expected as a result of the energy transition and digitalization.
That being said, in 2028 the peak of age-related retirements of the baby boomer generation will still be a long way off. “We don’t expect to reach the peak for another ten years. Yet, even when we look at the period after 2033, the rate of retirements will only decline slowly. Even in 2040, there will still be about 10,000 more people than today who will retire for age-related reasons,” explains IWAK head Dr. Christa Larsen, adding that Hesse’s labor markets will be largely determined by demographic developments until well into the 2040s.
It takes targeted strategies to equip the Hessian economy to meet this challenge – and these need to be implemented quickly. Regional strategies could be a specific instrument to help secure skilled workers. Doing so requires a smooth interaction between all labor market players. Located within the Hessian Ministry of Social Affairs and Integration, the Office for Securing Skilled Personnel in Hesse provides essential support on behalf of the regional government. This year, each district and each independent city will be given the opportunity to conduct an expert workshop on the future, the purpose of which is to develop targeted measures that meet existing needs or to update existing measures in a way that fits the needs.
“We can be proud of the fact that, together with the state of Hesse, Goethe University is creating transparency regarding the skilled labor situation and that a coordinated strategy for securing skilled labor is being developed. In this way, our cooperation can make an important contribution to securing skilled labor and thus to the stability of Hessen as a business location,” says Prof. Bernhard Brüne, Vice President of Goethe University Frankfurt.
The forecasts of occupational trends between 2021 and 2028 (in German) can be downloaded from www.hessische-berufsprognosen.de.