A lack of skilled workers is causing companies to lose sales, face additional costs, make slow progress and overwork existing employees. The growing shortage of skilled workers in Germany is creating problems for more and more companies. Two approaches are particularly promising for dealing with this development when it comes to knowledge workers: remote hiring and working with freelancers.
Background and consequences of the talent shortage
In Germany, talent shortage has intensified in recent years and according to prognoses there will be a further worsening. A survey of almost 22,000 companies published in January 2023 by the German Chamber of Industry and Commerce (DIHK) shows that 53 percent of companies have staff shortages. Based on its survey, the DIHK assumes that there are around two million unfilled positions. This matches figures released by Germany’s digital association Bitkom, which reported around 137,000 vacancies in the IT sector alone in November 2022 – with an average vacancy time of seven months. That’s how long it takes on average to fill an IT position in Germany.
There are many reasons for unfilled positions. One central aspect is demographic change, which is causing that the German society to get older and older. The baby boomer generation is gradually retiring, and the declining birth rate of recent decades means that fewer young people are joining the workforce.
The following aspects also play a role and intensify the talent shortage:
- New requirements: Technological progress is creating jobs that have not existed until recently. For many profiles in demand, there are not (yet) sufficient quantities of well-trained specialists.
- New working models: More and more people are working part-time. In addition, self-employment and freelancing are becoming more attractive and these people are no longer available for employment on the labor market.
- Early retirement: Many people want to stop working well before the standard retirement age, and high-earning specialists in particular can afford to do so.
- Working for foreign companies: Experts in demand may migrate abroad or work from home for international companies thanks to the rise of remote work.
The shortage of skilled workers has economic consequences for companies: Orders cannot be accepted due to a lack of personnel, which leads to a drop in sales, and new projects are delayed. This puts a strain on the entire German economy and jeopardizes the country’s competitiveness and innovative ability.
Companies are being forced to pay ever higher salaries to attract and retain talent. It is becoming increasingly difficult for small and medium-sized companies to keep up with the competition and prevail against better-paying corporations.
The ongoing talent shortage also places an additional burden on the existing team, which has to take on extra tasks. This can increase the risk of overwork and burnout and reduce employee satisfaction.
If you want to learn more about talent shortage and how to deal with it, get our free white paper here.
Freelancers can be a solution
The longer a position remains unfilled, the more the company is slowed down. Working with freelancers gives you access to new talent. This allows projects to be tackled earlier and tasks to be taken on by freelancers until permanent team members are found. It may even become clear that a certain field can also be covered by freelancers permanently, and that this is the better solution. This creates a hybrid workforce of permanent and freelance employees that combines the best of both worlds.
Freelancers have the following advantages:
- Larger talent pool: Freelancing offers high flexibility and promising income opportunities. That is why it is becoming interesting for more and more talents. These individuals are no longer available on the labor market for permanent positions. The only way to work with them is to hire them as freelancers.
- Fast project start: Filling a permanent position can take months, especially for profiles that are in high demand. In contrast, freelancers can often start working within days. This can prevent a project from being blocked and help the company move forward more quickly.
- Specialists on demand: Freelancers are often top talents with high expertise in their field and a steep development curve. Those who hire them benefit from these skills and knowledge, which employees can only offer after many years of working in different positions.
- Flexible structure: When a certain part of the workforce consists of freelancers, companies remain agile. They can hire additional people as needed or easily terminate the collaboration with some when a project is completed or the financial situation requires a budget cut.
- Cost savings possible: Many companies fear high costs with freelancers, as their hourly rates are at first glance significantly higher than those of employees. However, this concern is usually unfounded. Since freelancers are only paid for productive hours and no ancillary wage costs are incurred. You can find an exemplary cost comparison here.
But where do companies find the right freelancers? There are many ways, but when it comes to IT professionals, CodeControl is a very good place to start, offering comprehensive support and a money-back guarantee. On the freelancer platform 9am, you can find talent from all fields.
Finding talent through remote hiring
The pandemic has made remote work a reality in many companies. A lot of organizations are taking the step toward a remote setup beyond the times of COVID, or are at least go for a hybrid structure, i.e., with a mixture of employees in the office and at home or traveling. This makes it possible to look outside the home country for talent that will join the team as regular members rather than freelancers.
Remote hiring means hiring employees who work outside the office. They may live in another city, but also in another country or even on another continent. The advantages mentioned here are particularly pronounced for employees from other countries.
Remote workers allow companies to overcome the talent shortage and drastically increase their applicant numbers. But there are other beneficial aspects as well:
- Expanding the talent pool: Remote hiring gives companies access to significantly more potential employees. Even those who only search nationwide considerably increase their chances of finding the right person. Within Europe or even worldwide, the effect is of course much greater.
- Saving costs: If team members live in a country with a lower wage level, they are willing to work for a lower salary than the standard in the company’s country would be. For them, this salary is nevertheless attractive, so both sides win.
- Making the team more diverse: Employees from different countries and cultures broaden the company’s horizons. Diverse teams are more successful, and remote hiring is a good way to integrate different perspectives.
CodeControl supports you in the search for remote talent and delivers pre-screened candidates that match the job profile. More information can be found here.