risk for growth
A shortage of skilled workers is becoming more and more of a problem for startups
4/2/2022 8:29 am
Founders and startups are also finding it increasingly difficult to find qualified staff. The shortage of skilled workers is now even slowing down growth in around half of the companies. Less bureaucracy when recruiting abroad could help the industry.
Whether IT specialists or marketing experts – according to a new study, the search for specialists is becoming increasingly difficult for startups in Germany. In a survey by the Federal Association of German Startups, a good half of the young companies stated that the lack of qualified people was a big or very big problem. For start-ups with at least 25 employees, it was even 85 percent.
The clear majority of all companies (68 percent) believe that the problem of the shortage of skilled workers has grown over the past twelve months, according to the survey of almost 300 startups. Accordingly, the gap in well-trained people, for example for IT, marketing, sales and accounting, is the biggest hurdle for the business before financing bottlenecks. According to the survey, almost 90 percent of startups have vacancies. It was said that there were a good 1,900 of the study participants alone.
Hurdles when recruiting abroad are often too high
A lack of skilled workers slows down growth in around half of the companies, and almost 40 percent fear a dwindling ability to innovate as a result. As a way out, almost half of the startups offer more flexible and mobile working or recruit more abroad – especially larger companies. “The lack of talent is massively slowing us down in Germany – we have to react as quickly as possible,” said Christian Miele, CEO of the startup association. A special skilled worker visa is needed that takes into account the specific characteristics of founders and employees in startups.
Portugal, Spain and the Baltic countries are better positioned here. While in Germany it takes three months on average to issue visas and often up to eight months for specialists from India or Africa, other EU countries need between 10 and 30 days. “We hire 70 percent from abroad and our positions are also filled. However, a shortage of skilled workers is one of the greatest risks for growth and the pace of innovation,” reported Axel Hefer, CEO of the hotel platform Trivago.
The hurdles when recruiting abroad are often too high, agrees Magdalena Oehl, deputy chair of the startup association and founder of the startup Talentrocket. While the effort within the EU is often high, bureaucratic hurdles, the recognition of qualifications and lengthy procedures make recruitment outside of Europe “a Sisyphean task”. A more pragmatic recognition of qualifications could help. According to the industry association, startups employ around 415,000 people in Germany.
Start-up industry has a structural disadvantage
The scene is regarded as an innovation driver for the economy and has grown strongly in recent years. According to the auditing company EY, startups received a record amount of 17.4 billion euros in venture capital in 2021. Up-and-coming companies such as delivery services or smartphone banks received amounts in the hundreds of millions from investors.
However, when it comes to venture capital, Germany still lags behind countries like the USA. A shortage of skilled workers is a widespread problem in the German economy, but the start-up industry has a structural disadvantage: compared to corporations or medium-sized companies, jobs there are less secure and salaries tend to be lower.
However, as soon as startups are financed with venture capital from investors, they can “pay decent salaries,” emphasized a spokesman for the association. The larger start-ups in particular pay competitive rates, which is evident in the recruitment of staff from high-paying sectors such as banking and consulting.