Family businesses tackle the digital transformation

Many large family businesses in Germany are hidden champions: international leaders in highly specialised niche markets. They are making huge investments in R&D in order to secure their technological edge in the age of digitalisation. As studies carried out on behalf of the Foundation for Family Businesses show, one of the key challenges they face is the shortage of skilled workers.

How family businesses can tackle the shortage of skilled workers

Demographic change is reducing the supply of skilled workers. At the same time, however, demand for the specialists needed to handle the digital transformation is growing. This poses particular challenges for many family businesses. They may lead the international market in their respective niches, but very few people are familiar with their company names. What is more, they are often domiciled in smaller towns far away from the big cities.

A study commissioned by the Foundation for Family Businesses casts a spotlight on the shortage of skilled workers in industrial occupations. The authors of the study, which was carried out by the Cologne Institute for Economic Research (IW), show not only where the shortages are, but where there is still oversupply. The study, entitled “Skilled workers for the digital transformation”, makes specific recommendations for family businesses and, on the basis of an analysis of the employment market, also formulates clear demands for policy-makers.

By far the greatest demand is for workers who have completed apprenticeships in the fields of mechanical, automotive and electrical engineering. The number of reported vacancies in these occupational fields rose from 51,000 in 2011 to 80,000 in 2017, an increase of well over 50 percent. According to the team of researchers in Cologne, actual demand could in fact be as much as twice as high, because companies do not notify the employment agencies of all their vacant positions.

In the electrical engineering field, there is already a widespread shortage of skilled workers. In the IT field, companies are mainly seeking university graduates in information technology as well as software developers of all qualification levels. In R&D, on the other hand, there is a lack of technical draughtsmen, technical product designers and technical system planners – occupations that are all closely related to each other. While the shortage of skilled workers in occupations that are key to digitalisation tends to be more pronounced in western and southern Germany, the degree to which individual regions are affected varies depending on the occupational field. The interactive map of Germany above shows where there is particularly strong demand for mechanical and automotive engineers, and where there are more vacancies than can be filled. You will find maps for other specialist areas here.

Family businesses – renewal and digital expansion

At family businesses, the digital transformation is very often tackled when power is handed to the next generation. On behalf of the Foundation for Family Businesses, the Friedrichshafen Institute for Family Businesses at Zeppelin University has established that it is particularly the young generation of business owners who are willing and able to address the digital

The potential successors at family businesses are well aware of the need to act. Twenty-eight percent of the respondents stated that they were satisfied with the progress of digitalisation at their family businesses, while 43 percent said they weren’t. Their stated aim is to tackle the digital transformation by leveraging their companies’ traditional strengths, for example by upskilling their employees and equipping them for the changes ahead.