Part 1: The German labor market is missing tens of thousands IT talents
When people in Germany talk about digital transformation, they usually do so from a strategic point of view. Technologies such as big data and artificial intelligence or keywords such as platform economy are on everyone’s lips. There is discussion about which products and services need to be developed in order to keep up internationally. My paymentandbanking colleague André M. Bajorat recently wrote a very interesting article on the subject of innovative product development.
After all, a recent Bitkom-study shows that German companies are much more open to digital change and digital innovation today than they were last year.
This is good. But when I look at the digital strategy of large corporations or banks, I often ask myself whether the third step isn’t taken before the first. Because as the founder and managing director of a Fintech company, in my everyday life, I’m primarily driven by a certain question:
“Where do employees come from, who implement digital business models and product developments?”
According to another Bitkom-study, 82,000 jobs are currently vacant for IT experts in Germany. On average, it takes companies five full months to find a suitable employee.
A Deloitte study confirms that the “talent pool of available IT experts” in Germany is way lower than it is of many other OECD countries. Their share of all employees is 0.7 percent – which is just the 20th place among all participating countries. With data specialists things look a little bit better, but here is the gap to the top groups (Netherlands, USA) very large as well.
There are several reasons for this, some of which I would like to list here:
In politics and economy:
- Germany is traditionally strong in mechanical engineering and agricultural industries. Spoiled by the success of recent decades, we have spent too much time developing our core know-how and, to a certain extent, have been closing our eyes to digitization. Also, a correspondingly low focus was placed on the appreciation, training and maintenance of IT talents.
Compared to traditional industries, IT specialists do not have a strong lobby. The umpteen digital professions are largely unknown to the public. Who else but insiders would know, that you can earn your money as a Java, Python and SAP developer, quality assurance expert, with IT security, big data or machine learning, IT project manager, product owner or UX designer?
- The school education is inadequate: My 14-year-old daughter has one hour of IT lessons per week. This is not nearly enough to cover a modern digital education. Girls and women in particular are still far too unenthusiastic about digital professions and training paths, even though they have, especially in the new occupational fields, good entry and promotion opportunities.
In the companies:
- Out of date processes and structures: In order to survive in the digital world, speed is top priority. Too many companies still hold on to traditional processes and it takes forever for products or services to pass through all hierarchical levels and be approved in the sense of the “lowest common denominator”. It is not for nothing that more and more companies try out across-team, “agile work”, where some are more successful and others less.
- It also takes the right error culture: To be fast, corporations and banks have to take risks and have to have the courage of leaving gaps. The N26 bashing of recent months shows how little fault tolerance the traditional financial sector has, how much its mindset has to change. If IT employees are not allowed to make mistakes, which frustrates and contradicts the claim to be agile and innovative.
- Tasks and job profiles: All too often, digital talents are still the “IT girl for everything” in German companies and are seen as a kind of academical special waste, which you don´t really know where to put. Job profiles, tasks and goals are inaccurately defined.
The lack of incentives: Today, digital talents around the world can choose how and where they want to work. In order to find enough people, companies must have a compelling story, a good salary, good reviews on employee portals, and a certain cosmopolitanism. Especially suitable employees from abroad are often discouraged by high taxes, strong regulation and a lack of English skills. We in Berlin already have problems finding enough suitable employees – how will the “hidden champion” in Schwarzwald feel then?
- The management has no idea, or as my paymentandbanking colleague Jochen Siegert nicely puts it: “The fish stinks of the head”. Ina a tweet the US-American tech expert Chris skinner states: “94 percent of bank managers have not yet gained any technical experiences in their careers. How are they supposed to create a digital vision? The already mentioned Bitkom study mentioned reveals that in 2019 only 15 percent of the companies surveyed had appointed a digital manager such as a Chief Digital Officer (CDO) or Head of Digitization. How can a company leader or personnel manager who is not familiar with IT hire the right employees?
Many top talents who were trained in Germany then decide for a job in Switzerland, England or in the US. While more and more companies are focusing on the “user experience”, i.e. the wishes of the customer, the “employee experience” does not seem to matter that much yet.
“The consequences of talent shortages are already dramatic for large corporations and banks. 48% of companies interviewed by Bitkom cite “missing skilled workers” as one of the biggest hurdles for using new technologies. At the same time, 60 percent of companies claim that digitization has suddenly turned outsourced companies into direct competitors.”
In order to be able to become a technology companies and not to lose even more market share, more incentives for IT talents and young academics urgently need to be created in corporations and banks. Because without the right employees, even the best strategy will fade.
Coming soon: Part 2: From the life of an HR manager (or something like that)