Keeping skilled workers — why the region decides

Accepting a job is also deciding on a place to live: housing, family, leisure, belonging. A good business in a region without life has it harder than a solid one in a lively region.

Securing skilled workers is therefore never only a question for the individual employer, but always one for the region too.

A company can pay good wages and still find no one if the infrastructure, cultural life and prospects around it are missing. These factors arise from the interplay of many — not from going it alone.

That is why it pays for businesses to think beyond their own fence: what strengthens the region strengthens them in the end.

The Mittelstand does not expect this to sort itself out. In a special survey for the KfW-Mittelstandspanel, small and medium-sized companies expect the working-age population to shrink by an average of 8.2 per cent over the next ten years. Almost three in five expect difficulty finding suitable applicants within five years.

And it does not stop at unfilled vacancies: 9 per cent of the companies surveyed consider their existence definitely threatened in the medium to long term, a further 23 per cent regard that as likely. Taken together, almost one Mittelstand company in three sees its future threatened by the shortage of workers.

What companies conclude from this is the remarkable part. 40 per cent of those affected consider it likely that they will take on fewer orders in future. 31 per cent would cut production, opening hours or availability; 13 per cent would close sites. At that point the shortage is no longer a staffing question but a question of how much economic activity a region can still carry.

At the same time companies are doing what a single employer can do: 45 per cent want to raise their profile as an employer, 35 per cent to recruit beyond their region. Both help — but both move within the same pool of applicants. Anyone expected to come from another region is not deciding about a job but about a place to live. That is exactly where what a single business can achieve on its own comes to an end.

Training that stays; cooperation that shares knowledge; an environment in which culture and the economy work together — that keeps people more than any single pay rise.

Keeping skilled workers is, in the end, the same as strengthening a region: you think of businesses, people and place together.

KfW Research: Mittelstand stellt sich auf Herausforderungen durch demografischen Wandel ein, Fokus Volkswirtschaft No. 489, 11 March 2025, based on a special survey for the KfW-Mittelstandspanel. All figures in this section come from it. Available at kfw.de.

These are company expectations, not measured outcomes: firms were asked what they consider likely over the next five to ten years. Nobody knows today how much of it will happen. The value of the figures lies in showing what the Mittelstand itself is reckoning with.