The Future with Robots, Computers & AI

12.03.2025

Skill Shortage:
A Case for Digitalization

Q: Why has the workforce shortage persisted for years?

The increasing skills gap has been widely debated for years—yet those in charge have done little to address it. On the contrary, a former German government dismissed the issue as mere "employer scaremongering" and even introduced early retirement regulations. Meanwhile, official statistics indicate that nearly three million people in Germany are registered as unemployed. However, the actual number of individuals not engaged in employment is likely much higher. Nevertheless, the government has failed to create a structured pathway into the workforce through proper infrastructure, tax incentives, and the principle of "support and demand." The current political discourse focuses on attracting foreign workers, who may help mitigate but not fully resolve the problem. However, discussions on this topic have been ongoing for years, often with little more than political posturing rather than tangible solutions. A sustainable immigration policy remains nowhere in sight.

The shortage of skilled professionals is slowing down the German economy – and the trend is worsening. In 2024 alone, companies have already lost €49 billion in production potential due to this issue, and this figure is expected to rise to €74 billion by 2027. The only way to counter this negative trend is through consistent digitalization, process automation, and outsourcing.

A new study by the German Economic Institute (IW) confirms these dramatic losses in production capacity. The main reason: the growing skills gap. In 2023, approximately 570,000 job vacancies remained unfilled in Germany, and this number is projected to increase significantly in the coming years, mainly due to the retirement of the large baby boomer generation. According to the Federal Statistical Office, around 12.9 million workers will be affected by 2036 – representing nearly 30% of the skilled workforce available to the labor market.

However, the departing baby boomers leave behind not only a workforce gap but also the potential for a massive loss of knowledge. This could cause major disruptions in companies, especially in areas where specialized expertise and experience are crucial.

Why has the workforce shortage persisted for years?

The increasing skills gap has been widely debated for years – yet those in charge have done little to address it. On the contrary, a former German government dismissed the issue as mere "employer scaremongering" and even introduced early retirement regulations.

Meanwhile, official statistics indicate that nearly three million people in Germany are registered as unemployed. However, the actual number of individuals not engaged in employment is likely much higher. Nevertheless, the government has failed to create a structured pathway into the workforce through proper infrastructure, tax incentives, and the principle of "support and demand."

The current political discourse focuses on attracting foreign workers, who may help mitigate but not fully resolve the problem. However, discussions on this topic have been ongoing for years, often with little more than political posturing rather than tangible solutions. A sustainable immigration policy remains nowhere in sight.

“The Skills Gap in Germany has increased Tenfold since 2010. Companies can use Digitalization and Automation to compensate for the Skills Shortage.” Source: Institute of the German Econonomy

How can companies compensate for the workforce shortage and loss of expertise?

Companies must take the initiative themselves to counteract the workforce shortage and the impending knowledge drain caused by the retirement of the baby boomer generation.

One effective approach is systematic knowledge transfer to ensure that valuable expertise remains within the organization. Proven methods include mentoring programs, where experienced employees pass on their knowledge to younger colleagues, as well as knowledge databases that store critical information such as process documentation, best practices, and company guidelines.

Another key solution is the consistent digitalization and automation of internal business processes. Today's technologies enable the shift of many tasks from human workers to robots, computers, and artificial intelligence (AI). This applies not only to production and logistics but also to administrative and financial areas. While it may sound provocative, studies suggest that up to 40% of tasks in these areas can now be automated – if not in every individual case, then certainly as a general trend. Research also indicates that AI alone can increase the degree of automation by 30%.

Additionally, AI can help preserve the knowledge of experienced employees and make it accessible to younger colleagues. Specialized AI tools can automatically document processes as employees work on their computers, intelligently structuring and preparing this information for future use.

Of course, companies cannot achieve these benefits without first simplifying processes and modernizing their IT infrastructure. However, the return on investment (ROI) for these initiatives will be realized quickly.

What additional opportunities do Shared Services and Outsourcing offer?

Beyond AI, Business Process Automation (BPA), and other digitalization and automation methods, companies have further options to address workforce shortages. Shared services and outsourcing can provide significant relief, particularly for IT infrastructure management and ERP system operations. By leveraging external service providers, businesses can free up internal resources for innovation and new projects while delegating routine tasks to specialized partners.

Why is Change Management essential?

To fully leverage the potential of digitalization, automation, and outsourcing, a company needs a clear strategy and full executive support. Since major operational changes often face resistance from employees, a structured change management approach is essential – not as a one-time initiative but as an ongoing process of continuous improvement.

How can XEPTUM support your transformation?

In times of increasing workforce shortages, robots, computers, and AI offer unparalleled advantages for your business. These technologies are always available, unaffected by restrictions such as those imposed during the COVID-19 pandemic, do not fall ill, and do not require overtime pay.

In this newsletter, we introduce some key areas where automation can reduce human workload and deliver a high ROI:

Automation and optimization of logistics invoice verification in SAP
Relief through SAP Application Management Services (SAP AMS)
Efficient financial processes with AI and automation
Test optimization through AI

Discover how XEPTUM can guide you toward a highly automated and future-ready enterprise while preparing your workforce for transformation through targeted change management initiatives. Even amid a severe workforce shortage, this will enable you to maximize your business potential and expand your market share.

Contact us today to learn more! Benefit from our cutting-edge process and technology expertise. Together, we will develop a comprehensive digitalization and automation strategy and support you in its seamless implementation.

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