Convince and Keep

German Mittelstand struggles to lure IT experts to the middle of nowhere

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Out in the boonies. Source: Phoenix Contact

Tucked in the wooded hills of the Hunsrück mountain range in southwestern Germany, Günter Effgen, a maker of specialized grinding tools, got lucky. The Mittelstand company was looking for an IT systems analyst to help it develop its Internet of Things technology, but finding qualified takers was a challenge – perhaps understandably, given that it’s located in the middle of nowhere.

But in the end, its location in the picturesque, medieval village of Herrstein, with a population of 800, helped it strike gold: One applicant who fit the bill was interested because he grew up in the area.

Not many firms in Germany’s Mittelstand sector of small- and medium-sized businesses are likely to be that fortunate. The whole country is crying out for skilled workers, especially in IT. But the best-known industrial companies are based in big cities and snap up the few digital experts who come on the job market.

“To market themselves, firms should stress the advantages they offer employees. ”

Andreas Wartenberg, managing director of business consultants Hager

With one in five Mittelstand companies affected by the IT skills shortage, they need to play to their strengths to attract specialists, said Nelson Taapken, an EY expert on people advisory services. “Mittelstand firms have a huge opportunity to rival the big players if they find a creative, intelligent way to address applicants,” he said. They need to convey that they’re more nimble, less bureaucratic and less hierarchical.

Recruitment becomes easier if you allow hires to work remotely in attractive conurbations like Berlin, Frankfurt or Munich, Mr. Taapken said. Firms should also try to woo workers abroad, at special job recruitment fairs for small businesses. “Many are also benefiting from joining forces with other firms in regional clusters to recruit skilled workers together as a region,” he added.

It also makes sense to provide perks like childcare and rail discount cards, said Andreas Wartenberg, managing director of consultancy Hager Unternehmensberatung. “To market themselves, firms should stress the advantages they offer employees,” he said. Many Mittelstand companies aren’t doing enough of that.

A lack of IT personnel feeds into another problem where the Mittelstand needs help. As processes become increasingly digital, firms are failing to prepare employees for the technological advances that will eventually transform their jobs. “That leads to some employees initially responding skeptically to digital change,” said Vera-Carina Elter, an expert on family-run businesses at KPMG. “They see their job under threat and don’t want to be replaced by a machine.”

Phoenix Contact, an electrical engineering company, has tackled the problem by building a €35 million ($43 million) training center on its doorstep. “We use it to convey digital know-how to get older employees, in particular, onto a level with today’s college graduates,” said Phoenix’s managing director Gunther Olesch. “It’s about winning over people’s hearts to get them to embrace the change.” Hiring competent IT managers would help do just that.

Lara Sogorski is a freelance journalist. She has written for newspapers including the Kölnische Rundschau and the Süddeutsche Zeitung. To contact the authors: sogorski@handelsblatt.com

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