KfW Study: SMEs Hesitate on Foreign Workers

TVS News AI, editorially supervised, presents KfW Study: SMEs Hesitate on Foreign Workers.

The shortage of skilled workers is a permanent topic in Germany – but when it comes to employees from abroad, the Mittelstand – Germany's small and medium-sized enterprises – holds back noticeably. This affects millions of small and medium-sized businesses that form the backbone of the German economy.

A new study by the state development bank KfW now shows just how big this gap really is. According to Handelsblatt, roughly one in ten medium-sized companies employs foreign workers. Smaller firms in particular are holding back, according to the study. The study is titled "KfW Study: SMEs Hesitate on Foreign Workers".

What's behind the hesitation – and what does it mean for the debate about the skilled labor shortage?

What does the KfW study specifically show?

KfW asked medium-sized companies about the employment of foreign workers. The result is clear: Only about one in ten medium-sized companies has any foreign employees on its team at all. Smaller firms in particular hold back more than average, according to the study's findings.

This creates a clear gap between the much-vaunted skilled labor shortage and actual hiring practices – especially because the Mittelstand employs a large share of Germany's workforce.

What reasons does the study cite?

According to Handelsblatt, several reasons lie behind the hesitation. The details are not revealed in the available reports. What's clear, however, is that especially among smaller SMEs, the hurdle of integrating international employees appears particularly high – whether due to bureaucratic obstacles, lack of experience with international recruitment, language barriers, or other motives remains open for now.

What does this mean for the labor market?

The finding comes amid a debate that has been running for years: Politicians and business leaders warn that Germany can hardly meet its demand for skilled workers without immigration from abroad. When it is precisely the Mittelstand – the broad mass of companies – that hesitates so strongly on international employees, the lever for broader immigration becomes smaller.

Our conclusion

The KfW study reveals a contradiction that often gets lost in the skilled-labor debate: While staffing shortages are lamented everywhere, only about one in ten medium-sized companies employs any workers from abroad at all. Smaller firms are even more hesitant than larger ones. What the specific reasons are will continue to occupy the discussion – but it's clear that the Mittelstand plays a key role when it comes to how Germany intends to tackle the personnel shortage.