Every second medium-sized company fears for its existence

As of: May 15, 2024 12:48 p.m

Many medium-sized companies are very worried about the impending retirement of the baby boomers. In a survey, almost half fear for their existence.

Around ten meters high and full of small boxes, the shelves extend into the semi-darkness of the storage room. Constanze von Alvensleben practically grew up in the company: selling car parts is something she has known about since she was a child, and as a child she played on a pile of car batteries.

Now she is the boss and has a problem: the shop is running and growing. She’s just missing people. It could already hire ten additional people – and of its approximately 50 employees, almost a third will retire in the next five years.

If there is a lack of skilled workers, there is no point in making processes smarter. “It’s an incredible challenge to balance that,” she says. “Of course we try – we simplify processes, make them more intelligent. But without the people behind them, without the specialists, the smartest process is of no use.”

Baby boomers will soon be retiring

And Wobst Autoteile is not alone in this. The problem is particularly felt by medium-sized businesses across Germany: more and more skilled workers are retiring. Two years ago it did Institute of German Economy Cologne (IW) calculated that there could be 7.3 million employees by 2032. It is the baby boomer generation who are now retiring – and in some cases earlier, as the so-called “retirement at 63” beckons.

“Pension at 63” was the name given to the pension without deductions after 45 years of insurance, since initially people born before 1953 were able to retire at the age of 63 without deductions. The age limit for this is now 64 years and 4 months for those born in 1960. For younger people, the entry age will increase to 65 by 2029.

The medium-sized business association BVMW has now conducted a survey to quantify the problem. This is clear: 47.85 percent of companies say that they feel existentially threatened by the many retirements in the coming years.

37.13 percent are confident that they will be able to find successors for the new retirees. Only 15.03 percent have such a young workforce that they expect the consequences to be minor. More than 1,200 companies took part in the survey.

More flexibility required in pensions

The labor shortage could also provide an opportunity for older job seekers: at least 97 percent of companies in the survey stated that they would also be willing to hire employees from the 50+ generation – either because life and work experience is particularly important to them (39 percent ) or because age is not important to them as long as it fits (58 percent).

The federal managing director of the BVMW medium-sized business association, Christoph Ahlhaus, is calling for more flexibility from politicians when it comes to pensions and more incentives for pensioners who still want to work: “We have to think about how we can keep people who are able and willing in the labor market for longer ” says Ahlhaus. “Be it through attractive framework conditions or through political and legal requirements.”

For a long time, pensioners willing to work were unwelcome

For a long time, politicians wanted to protect the labor market from pensioners willing to work rather than make it easier for pensioners to work. There was a limit to how much extra early retirees could earn. In addition, part of the additional earnings was deducted from the pension. That was changed during the Corona pandemic: The additional income limit was first raised in 2020 and completely abolished at the beginning of 2023 – the aim was to create incentives. The goal: pensioners against the shortage of skilled workers.

But the idea has a problem in practice: Anyone who now retires has to pay tax on their pension. Anyone who continues to work will quickly see their income slip into a much higher tax bracket than before. The German Economic Institute estimates that the high tax burden reduces the incentive to continue working study 2023 and does not believe that the shortage of skilled workers can be alleviated in this way.

“Prosperity really at risk”

Constanze von Alvensleben, the managing director of Wobst Autoteile from Gießen, sees it similarly. It is particularly important to her to keep older employees in the company for longer: “We have highly qualified specialists of retirement age who would still like to take part, who feel fit, who of course also want to earn money,” she says.

Von Alvensleben would like to see better incentives: “Politics are making it so unattractive for these people that we can’t come together, and I see not only the prosperity of our company, but also of our society as being really at risk.”

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