To tackle labor shortages, Germany must integrate more of its workforce into employment.

The promotion of employment among parents and caregivers is essential for securing skilled labour in companies. Especially for women, there is substantial potential, as they often work part-time with fewer hours. Comprehensive and continuous employment furthermore promotes gender equality in the labour market. After all, it supports not only a stronger presence of women in leadership positions but also pay equity between the sexes.

To increase employment – including self-employment – particularly among women, conditions for balancing family and work for parents and businesses need to align. Developing and improving infrastructure for childcare focusing on daycare centres and elementary schools, as well as services for caregiving relatives, is necessary to adapt to the needs of parents and companies. Securing skilled labour for daycare centres is also an essential factor for balancing family and work.

Additional legal claims for leave for employees or comparable European or national legal guidelines are viewed critically by most of the economy. They can lead to new bureaucratic and financial burdens for businesses. The same applies to potential quota regulations. There is a risk that they could impose additional bureaucratic efforts on companies and prevent appropriate corporate solutions.

To ensure a skilled workforce and secure staffing in businesses, it is essential to leverage the potential of older employees. Incentives for continued employment and flexible working options in later life are needed to retain these individuals and their valuable knowledge within companies. Increasing employment among older people also alleviates the pressure on statutory pension schemes. These schemes must be designed to withstand demographic changes without imposing higher labor costs on businesses.

Managed immigration can contribute to ensuring the availability of labour and skilled workers in German companies. Appropriate national and EU-wide frameworks are needed for this purpose. A coordinated approach from EU Member States in immigration policies can help make the EU an attractive destination for international workers. Additionally, opportunities offered by the freedom of movement for workers within the EU should be further utilized.

On a national level, it is important that statutory regulations are implemented efficiently and without undue bureaucracy, while being consistently reviewed – adjustments are rapidly necessary in case of deficiencies. This includes, for example, the complexity of the overall regulations, the salary thresholds in the so-called experience column of the Skilled Immigration Act, the requirement for tariff commitments for deviations from statutory regulations, as well as the immigration into training. Administrative processes throughout the immigration procedure should be faster, more transparent, and simplified, with digitalisation making a significant contribution. Institutions involved in the immigration process, such as German diplomatic missions abroad, foreigner authorities, and employment agencies, should be equipped with the necessary resources and cooperate smoothly. Companies need fixed and easily accessible contact persons to provide information about the procedure (for instance, one central foreigner authority per federal state).

Additionally, operating a clearinghouse should establish a permanent institution for companies and skilled workers that resolves practical issues promptly during ongoing immigration processes. This institution should exchange with all administrations/agencies involved, possess clear responsibilities and capabilities. Abroad, focussed information should be provided regarding Germany as a work, study, and training location, as well as pathways to skilled workers immigration. Promoting language acquisition in the respective countries already abroad is also essential. Furthermore, it would be helpful to strengthen (centralised) support and advisory structures domestically and internationally, particularly for SMEs, to assist with labour and skilled workers availability. Such structures should concern, for example, recruitment abroad, but also promote the integration of foreign skilled workers into professions and everyday life domestically, including language acquisition, and contributing to welcoming culture.

Often, housing shortages become bottlenecks for labour and skilled worker immigration. Therefore, sufficient housing should be available, requiring, among other things, an investment-friendly climate as well as quick and unbureaucratic construction and approval procedures.

Staffing positions for work and training in companies is becoming increasingly difficult. Therefore, it is important for companies to consider refugees as candidates in an uncomplicated manner during the recruitment process. Lawmakers have already introduced some facilitation measures (such as residence permits for training, permanent employment toleration, and the opportunity residence law). Still, inconsistent administrative practices remain an obstacle from the perspective of companies to integrating refugees into the labour market. Based on the experiences of local IHKs and their own projects, the German Chamber of Commerce and Industry has suggestions for making the framework conditions more training- and employment-friendly:

• Improving the accessibility of immigration authorities, setting up "Key Account Management" / clearing houses for companies (similar to skilled worker immigration)
• Removing employment barriers, especially residence requirements and prohibitions
• Improved framework conditions: unbureaucratic access to language promotion offers, sufficienthousing, and childcare.
• Secure long-term perspectives for refugees in training and gainful employment.
• Support for the recognition of qualifications from the country of origin and additional training in Germany
• Uniform EU regulations for refugees' access to the labour market.

Businesses, especially small and medium-sized enterprises, are significantly burdened by bureaucratic requirements in labour and social legislation, restricting their flexibility (compare chapter "Reduction of Bureaucracy and Better Regulations"). Recording and documentation obligations should therefore also be reduced in labour and social legislation. 

This includes considering provisions that, whilst not directly imposing documentation obligations, inevitably lead to bureaucratic burdens, such as minimising liability risks (e.g., client liability under the Minimum Wage Act).

Furthermore, businesses require the option to distribute working hours more flexibly across weekdays and organise resting periods more variably within a weekly maximum limit. Additional obligations and economic burdens, such as electronic recording requirements for working hours, are widely rejected by companies. In social legislation, it would be prudent to reduce the high reporting, information, and certification burdens on companies; simplify the U1 and U2 levy procedures; and make mandatory levies, like the artists' social contribution, more business-friendly. EU regulations and varied national labour and social legislation (reporting, verification, and occupational safety obligations), for instance regarding employee posting, the A1 certificate for postings, business trips, and mobile work abroad, create legal uncertainties, bureaucratic loads, and additional costs for businesses. There is a need for uniform, easily implementable EU-wide provisions to provide services and standardised procedures for employee postings, remote work, and cross-border employment to ensure fair competition for businesses within the internal market. Necessary mobility and flexibility must be guaranteed for these cross-border activities. 

An essential response to labour shortages lies in increasing productivity, enabling high value creation even with reduced labour input. Digitalisation, automation and the use of artificial intelligence (AI) offer great productivity potential for businesses. These should therefore be seen as opportunities and innovative ways to secure jobs and skilled labour. The same applies to public administration, which can, for instance, accelerate and make more efficient economic approval processes or skilled worker residence procedures. A more efficient and, hence, less personnel-intensive administration would also make more workers and skilled personnel available for the commercial economy.

To capitalise on these opportunities, there is a need for an innovation- and investment-friendly environment, appropriate digital infrastructure, and good digital and AI skills among employees.

Digitalisation has already changed the way we work, not least through the increase in mobile and flexible working. With corresponding offers regarding such employment forms, businesses can position themselves as attractive employers for sought-after skilled workers. A reliable and straightforward legal framework is also necessary, enabling businesses and employees to find suitable solutions that consider business requirements, customer demands, and employee needs. However, new legal claims (such as the entitlement to home office) would send the wrong signal, as they fail to reflect the diversity of businesses and burden them with costs, bureaucracy, and a loss of flexibility.

The demographic change is altering age structures in workforces. A changed working and living environment impacts employees’ physical and mental health. Extended working life poses higher demands on the working environment. Strategically anchored Workplace Health Management (WHM) offers an approach to address these challenges. Tailored Workplace Health Promotion (WHP) can reduce sick leave days and increase skilled workers' tenure within companies. In certain industries, the use of digital technologies and products may serve as preventive health protection, enabling physically demanding tasks to be performed at older ages. SMEs particularly require practical support, comprehensible information and action guidelines, networking opportunities to exchange experiences, as well as transparency and clarity regarding appropriate contacts, for instance, when cooperating with health insurance funds or external providers, exploring funding opportunities or qualifications. Regional players like Workplace Health Promotion coordination offices of health insurance funds or other associations are still not sufficiently well-known. Further national and European regulations in workplace health would be considered inefficient by businesses, adding undue burden particularly on SMEs.

Social security contributions are a key factor regarding labour costs. It is essential to prevent an increase to ensure competitiveness.