1.7 million job vacancies in Germany are slowing down the economy. At the same time, more than three million well-educated people want and could work, but do not apply. The country must bring together supply and demand in the labor market. But how? The solutions serve us all.

They have an education, they actually want to work, and there are many of them – are they perhaps the solution to the shortage of workers, which is increasingly becoming an obstacle to economic growth? We are talking about the so-called hidden reserve.

The Federal Statistical Office has now published impressive figures that suggest that there is some kind of untapped treasure lying dormant here that could get the economy moving again if someone taps it.

Labor market researchers understand the hidden reserve as employees who do not appear in the official statistics as employed or unemployed, but experience shows that they are available to the labor market under certain conditions and are therefore among the possible employed people. This includes people who do not register as unemployed because they are either not entitled to unemployment benefit or do not expect that they will be placed by the employment agency.

For example, it’s the 40-year-old mother who has been out of work for a long time and now feels left behind and doesn’t dare to apply for a new job. Or the 60-year-old roofer who likes his work but can no longer do it physically. Or the mini-jobber who would like to have a normal full-time job but can’t make the leap.

The majority of the hidden reserve has a medium to high level of qualification, i.e. at least a completed vocational training or a university or technical college entrance qualification, the statisticians have found. In Germany there are almost 3.2 million people aged 15 to 74 who say they would like to work but do not have an official job in the short term for various reasons.

Conversely, companies lack workers. The Institute for Labor Market and Occupational Research (IAB) still counted a good 1.7 million job vacancies in the fourth quarter of 2023. At the same time, almost 46 million people were employed in this country last year – more than ever since German unification in 1990, reports the Federal Statistical Office. So there is a shortage in the labor market.

The labor market researchers divide the hidden reserves into three groups. There are about 372,000 people in the first. They say that they are looking for work, but are unable to take up work at short notice, for example due to caring responsibilities. This group is predominantly female. One reason for this is the still high gender care gap in Germany: women spend 44.3 percent more time on unpaid care work every day than men. That’s a difference of 79 minutes per day.

This is time that women lack for paid work and has an impact on their pay, their professional opportunities, their economic independence and their retirement security. Bettina Kohlrausch from the SPD-affiliated Hans Böckler Foundation told “WirtschaftsWoche”: “This is partly because women still earn less because they work more often in poorly paid industries. It makes more sense to forego the woman’s salary.”

The second group in the hidden reserve consists of around 945,000 people. They say they would like to work, but they are not currently looking for work because they believe they cannot find a suitable job. The third and largest group includes 1.85 million people. These people are not looking for work and are not available in the short term, but they could generally imagine it.

The – anything but new – options for increasing the hidden reserve are, for example, care offers and flexible working time models, as Enzo Weber, scientist at the Institute for Labor Market and Occupational Research (IAB) in Nuremberg, lists. But he also did the math and came to the conclusion: “The professional development of women often takes a turn when they have children. The permanent losses are far more relevant than the reduction in hours while the children are young.”

For Weber, there should also be a focus on older employees who work in physically demanding jobs. They should be qualified for other activities in good time in order to be available to the labor market for longer. Health restrictions play an important role for both genders: for 35 percent of men and 20 percent of women in the hidden reserve, this was the main reason for their inactivity in the labor market.

The experts agree that the whole thing is annoying: “The hidden reserve should quickly become louder, because five to seven million will leave the labor market in the coming years,” says ING chief economist Carsten Brzeski. It must be tapped in order to at least somewhat offset the shortage of skilled workers. It will probably not be possible to mobilize everyone – but at least the almost million who say they want to work. “Retraining and active job placement are essential,” Brzeski added.

Lia Roth, who calls herself a “communications expert with transformation skills”, was a manager herself and is a mother, brings another idea into play. The fact is, she says: “There are a lot of goldfish swimming in this pool.” They just need an irresistible “bait” that attracts them and gets them to leave their comfort zone and embark on the adventure of the job market.

Roth promotes her idea of ​​returnships. It’s about special programs from companies that help employees refresh their qualifications. Something like this already exists: The US cloud computing company Salesforce calls its corresponding program “Bring women back to work”, and the consulting firm Accenture in Switzerland has the Embark program, which has the same goal. Roth speaks of “promising results for the companies”, of “highly qualified applicants and a high rate of permanent positions at the end of the program”. “These programs,” she adds, “challenged the belief that career breaks are detrimental to one’s career.”

The article “Your job will be better too! This is how the hidden reserve saves our economy” comes from Business Punk.