Germany: Transformative perspectives on the labor market

In our current series of interviews, we have already gained exciting insights into the diverse HILL network. Now our journey takes us to Germany, where we spoke to Carola Scheffel, Managing Partner on site. She has been supporting companies - from SMEs to corporations with her expertise for more than 23 years - and shares valuable perspectives on the German labor market with us.

How would you describe the economic situation and the labor market in Germany?

Overall, the economic situation in Germany is characterized by transformation. Rising energy costs, a shortage of skilled workers and adapting to digital and sustainable production methods are presenting companies with challenges. Small and medium-sized enterprises (SMEs) in particular are feeling the pressure to remain competitive, while at the same time the need for highly qualified specialists and managers is increasing. The demand for experienced experts in the fields of digitalization, automation and process optimization is outstripping supply, further intensifying the competition for talent in these key positions.

If we now take a closer look at the manufacturing sector: What is the impact of the skills shortage in the manufacturing sector, and how are companies dealing with it? What solutions does HILL offer to overcome this problem?

The shortage of skilled workers in the manufacturing sector leads to delays in production processes, rising labor costs and limited innovative capacity. Companies are tackling the problem through increased automation, targeted training programs for existing employees, international recruitment and cooperation with educational institutions to develop skilled workers at an early stage. Many are also investing in employer branding and flexible working models to position themselves as attractive employers and retain talents in the long term.

What solutions does HILL offer?

At HILL International, we offer companies in the manufacturing sector tailor-made solutions to effectively combat the shortage of skilled workers. Thanks to our international network and state-of-the-art diagnostic tools, we identify qualified talent that exactly matches the requirements and corporate culture. With our potential analysis and talent development, we help companies to find hidden potential within their existing team and develop it in a targeted manner. To support our clients with modern-day recruiting processes, we offer advanced, scaled and customized cost models (e.g. for start-ups), as well as the use of focused AI systems to generate more than a “state-of-the-art solution” for our clients. Through our long-standing, experienced global offices and partner networks, we find specialists worldwide and support companies in the integration of international specialists.

In your opinion, which sectors in the German market are currently most affected by challenges - whether due to the shortage of skilled workers, digitalization/automation or other factors?

The manufacturing sector is suffering from a shortage of skilled workers, particularly in industry and the skilled trades. Rising energy costs and the pressure to automate are key problems. At the same time, companies need to train existing specialists and implement more and more new digital technologies in order to remain competitive. There are also more and more challenges to overcome in the energy and supply industry. The energy transition is creating new regulatory requirements, high levels of investment in sustainable technologies and the search for qualified personnel to restructure supply networks. There is a high level of growth here, but this also needs to be covered on the personnel side.

What makes a good manager in today's economy? What skills and characteristics are particularly important to lead successfully in times of digitalization and constant change?

This question cannot be answered in one sentence, as this assessment depends on many factors (such as the values and culture of an organizational structure). The basic answer is that a good manager in today's economy is characterized by a combination of professional expertise, emotional intelligence, adaptability and flexibility. In times of digitalization and constant change, I consider visionary thinking, agility, flexibility and a willingness to change to be particularly important. In addition, digital skills are crucial today, as are emotional intelligence and empathy. Finally, a good management personality should demonstrate strong leadership, team orientation and good stress management.

With regard to the labor market of the future, what will be the biggest challenge for HR managers in 2025?

The biggest challenge for HR managers this year will be to successfully manage the shortage of skilled workers and the transformation of the world of work at the same time. Above all, employee retention must not be overlooked - mindful leadership is also an advantage here. Upskilling and reskilling workshops can be offered for this purpose. Furthermore, flexible and hybrid working models should be made possible wherever possible. Diversity and inclusion should also be present in the company. Strategic HR planning should not be underestimated in order to remain competitive in the long term. It is our expertise to support companies and managers in these times of change.

Do you think AI will revolutionize the hiring process, and if so, how can companies use this technology effectively to attract talented employees?

This is a particularly exciting question. In many ways, AI will complement and change the hiring process by making it more efficient, accurate and objective. Companies can effectively use this technology in various ways to attract talented employees. For example, AI-powered systems can automatically analyze applications, evaluate CVs and identify the most suitable candidates based on key qualifications. This significantly reduces the time needed for screening. AI can also analyze facial expressions, language and behavior during video interviews to gain additional insights into soft skills and personality. Finally, AI can assist with database maintenance.

But personal contact between people remains essential and the assessment of emotions is indispensable. Ultimately, we will all experience a combination of these possibilities.

What is your contribution as HILL International in your country to making companies more successful?

HILL International's approach goes far beyond pure consulting: we are partners at eye level who not only support companies, but also actively help them to achieve their goals. Our mix of experience, science and innovative tools makes us a reliable companion in a changing world of work. Companies that work with HILL International not only attract the right talent, but also create the basis for long-term growth and success.