German firms hone tools to defuse demographic time bomb
By Michael Nienaber
WUPPERTAL, Germany (Reuters) - For more than 130 years, Knipex, a family-owned company in western Germany, has made pliers for craftsmen around the world. Recently it has developed a different set of tools to help it cope with an aging workforce and skilled labor shortage.
The management toolkit includes above inflation wage rises, subsidized meals and an on-site nursery, as well as training for older workers to operate machines doing work they used to do and flexible working conditions beyond the statutory minimum.
It shows how companies in Europe's biggest economy are increasing their efforts to adapt to a long-heralded shortage of people of working age now that an economic upturn has driven employment and vacancies to record highs.
Low birth rates and increased life expectancy are affecting many advanced economies, but a survey by staffing firm ManpowerGroup found German companies were far more worried about attracting and retaining talent than their peers in the United States, France, Italy or Britain.
"Our strategy to avert a shortage of skilled labor can be summarized like this: We simply want to be seen as the best employer in the region, by our own employees and by outside candidates," Knipex's head of personnel Kai Wiedemann said.
While globalization and digitalization have eroded wages and benefits in many developed countries, Holger Schaefer, labor market expert at the Cologne Institute for Economic Research noted the demographic time bomb was ticking elsewhere too.
"It's somewhat like a look into the future if you look at what German companies are doing," he said.
Pay rises are the most noticeable shift. Last year, wages rose in real terms by 2.5 percent, the most in over two decades. Continued...