Fri. Dec 8th, 2023
    The Impact of Automation on Germany’s Labor Market

    With Germany grappling with an acute labor shortage, companies are increasingly turning to automation to fill the gaps left by the retirement of the post-war “baby boom” generation. S&D Blech, a machine parts producer, is set to replace the retiring head of its grinding unit with a robot. This trend is reflective of a wider labor squeeze in Germany, where 1.7 million jobs were left unfilled in June, according to official data. More than half of German companies are struggling to find suitable candidates for vacancies, which is estimated to cost the country’s economy nearly 100 billion euros ($109 billion) per year.

    The challenges faced by S&D Blech in finding a replacement for the grinding unit head can be attributed to both the scarcity of skilled labor and the undesirable nature of the work. The job involves physically demanding tasks in a hazardous environment, making it unappealing to potential candidates. As a result, the company has opted for automation as a long-term solution.

    The push towards automation and digitalization is not exclusive to S&D Blech. Many small and medium-sized companies in Germany, including bakeries, laundries, and supermarkets, are also adopting automation technologies. As robots become more affordable and easier to operate, these family-run businesses are leveraging automation to ensure their survival in the face of labor shortages.

    Given the aging population and low birth rates in Germany, the Federal Employment Agency predicts a decline of 7 million workers in the labor force by 2035. These demographic changes, coupled with similar shifts in other developed economies, necessitate the adoption of advanced automation technologies. Nela Richardson, chief economist at ADP, highlights that these innovations are transforming the world of work and will require everyone to adapt and evolve in their roles.

    While automation offers numerous benefits, such as increased productivity and efficiency, it also sparks concerns about job displacement. However, attitudes towards automation are changing, with workers and trade unions increasingly recognizing its potential to address labor shortages and improve working conditions. A survey conducted in Germany showed that nearly half of the employees viewed robots as assistants rather than competitors.

    As automation continues to evolve and become more user-friendly, the adoption of robotics in various industries is expected to increase. Germany already holds the title of the world’s fourth-largest market for robots. The trend towards automation not only helps fill labor gaps but also transforms the nature of work and requires organizations to reimagine their strategies for a rapidly changing labor landscape.


    Q: Why are companies in Germany turning to automation?
    A: Germany is facing a labor shortage, with many jobs left unfilled. Automation offers a solution to fill these gaps and ensure the continued operation of businesses.

    Q: What challenges do companies face in finding suitable replacements for retiring workers?
    A: Companies struggle to find candidates due to a scarcity of skilled labor and the physically demanding and hazardous nature of certain jobs.

    Q: How will automation impact the labor market in the long term?
    A: Automation technologies, such as robotics and AI, will transform the world of work, requiring individuals to adapt and evolve in their roles.

    – Reuters: link (URL of the domain, not subpage)
    – ADP: link (URL of the domain, not subpage)