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1. Forthcoming policy developments

2. Ongoing debates

Forthcoming policy developments

Securing skilled labour

The problem of increasing skilled labour shortages occupies a central place in discussions on current labour market policy. On 12 October 2022, the federal government adopted its skilled labour strategy (Fachkräftestrategie). The federal government has introduced a raft of measures with its skilled labour strategy to support the efforts of companies and enterprises to attract and retain skilled workers. Vocational education is also gaining importance in this context.

The Immigration Act for Skilled Workers (Fachkräfteeinwanderungsgesetz), which came into force on 1 March 2020, makes it easier for skilled workers from third countries to enter the labour market. The new law also offers people from abroad the opportunity to enter the country for up to six months for the purpose of looking for a training place. It is also possible to apply for a residence title for vocational training and, after successfully completing at least two years of qualified vocational training, a residence permit for employment.

Short-time worker pay and investment support

Rising energy costs, largely driven by the effects of Russia's war of aggression against Ukraine, along with restrictions and uncertainties in international trade due to tariff policies, are having a significant impact on the national economy. The Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales) has introduced effective mitigation measures, including adjustments to short-time worker pay (Kurzarbeitergeld) and planned tax incentives for business investments. 

Ongoing debates

The world of work is currently undergoing a rapid structural transformation, largely driven by the increasing digitalisation of production and services (Digitalisierung von Produktion und Dienstleistungen) and use of artificial intelligence. These developments also have significant implications for the training and employment opportunities available to young people.

Under the 2020 Act to promote continuing professional development in structural change and the promotion of vocational education (Gesetz zur Förderung der beruflichen Weiterbildung im Strukturwandel und zur Weiterentwicklung der Ausbildungsförderung), commonly known as the Arbeit-von-morgen-Gesetz, the labour market policy instruments are being further developed to maintain the employability of employees and trainees in the face of structural change through continuing education and skills development. For young people, the Act particularly improves support options in the area of vocational training. The Act is part of the National Skills Strategy (Weiterbildungsstrategie), which is extended and developed on a continual basis. 

With the reform of the Child and Youth Services Act (Kinder- und Jugendhilfegesetz, KJHG), which entered into force in June 2021, the inclusion of young people and their enabling or facilitating “to interact in a self-determined manner in all areas of life that affect them, in accordance with their age and individual abilities, and thus participate in life in society on an equal footing” (Section 1(3)(2) of Book VIII of the Social Code (SGB VIII)) became a guiding principle of child and youth welfare and therefore of all occupational child and youth welfare services, especially youth vocational assistance and work-related youth social work.

The 17th Child and Youth Report (17. Kinder- und Jugendbericht), published by the German Federal Government, examines how young people are growing up amid current societal challenges, such as displacement and climate justice, digitalisation, changes in the world of work and demographic shifts. The report also assesses the effectiveness of child and youth services in reducing social disadvantages. It sets out ten guiding principles for a reliable and robust child and youth welfare system and provides relevant recommendations for policymakers, practitioners and the scientific community.

The national report "Education in Germany 2024" (Bildung in Deutschland 2024) highlights current topics and challenges in vocational training and youth employment:

• Individual employment prospects strongly depend on the existence of a formal vocational qualification. People aged between 25 and 35 without a vocational qualification are four times more likely to be unemployed than those with such a qualification.
• New entrants to the dual vocational training system have increased significantly but still remain below pre-COVID-19 levels. Considerable mismatches persist between available training positions and applicants without placements. The number of young people starting school-based vocational training has also stagnated, making the supply of skilled workers in the health and childcare professions a critical issue.
• Graduates of dual vocational training programmes who do not hold German citizenship have doubled over the past decade to 10%, representing an important source of skilled labour, however one that is still not fully utilised.
• The transitional sector in vocational education remains significant, with around 250,000 new entrants annually – especially young people with experience of war and displacement. However, their significantly lower transition rates into vocational training compared with other groups underscore the need for more targeted institutional support.