Politics and Analysis
150,000 Fewer Skilled Workers by 2035
26. September 2023
Staff shortages look set to get worse. The prognosis is for 150,000 fewer skilled workers by 2035, including in sectors crucial to the green transition.
Staff shortages are a major social problem, especially the lack of skilled workers, who are crucial for the ability of companies to expand and generate economic growth and prosperity. The green transition also calls for all kinds of skilled people, from blacksmiths, electricians and plumbers to business graduates and procurement specialists.
Unfortunately, however, the number of people with the requisite training is declining rapidly – and this trend looks set to continue.
Based on DREAM (Danish Rational Economic Agents Model) projections, DA calculates that the number of skilled workers will fall by 75,000 in 2030 compared to 2023. By 2035, it will have fallen by more than 150,000, a drop of almost 20%.
The falling number is partly down to demographics, as large cohorts of skilled workers are expected to retire within the next 10–15 years. Another reason is the failure – despite numerous ambitious initiatives – to boost the number of people enrolling in vocational education and training (VET) programmes. The current intake falls far short of the number of people leaving the labour market. In fact, companies are struggling to find apprentices, and positions are often left vacant.
Numbers down on most programmes
In the run-up to 2035, the number of skilled workers will fall in a range of sectors and industries already suffering significant shortages. For example, the number of blacksmiths will decrease by 8,300 (over 25%), electricians by 3,000, retail staff by 20,000, and industrial technicians from 18,700 to 10,700 – a fall of 8,000 people (43%).
The total number of skilled workers will fall by 18% between 2023 and 2035. The largest drops (40–60%) are expected in the jobs covered by the VET programmes' industrial technician', 'electronic technician' and 'technical designer'.
The trend illustrates the need to boost the numbers taking VET programmes. Although private companies have signed a record number of apprenticeship agreements in recent years, a wide range of companies report that not enough people are signing up for them.
Unless more people – young people after completing secondary- or high school and adults – take VET programmes, the number of skilled workers will fall even further. In recent years, Denmark has attracted large numbers of foreign workers, including skilled ones, but several countries from which we have recruited now face demographic challenges of their own.
DA's prognosis is based on DREAM's socio-economic projection for the number of people whose highest qualification is 'vocational education'. DREAM subdivides its projection according to current VET programmes, i.e. based on Statistics Denmark's register-based labour-force statistics (RAS), which calculate each programme's share of the total skilled workforce (aged 18–66). The calculation is broken down by sex and one-year age increments.
The projection depends on the age group. For those aged 30–66, it is assumed that the proportion of skilled workers in each age increment will remain relatively constant. This is based on the assumption that most people with vocational education and training have qualified by age 30.
In the 18–25 age group, a relatively high number are in education and training, as it is typically during these years that people complete VET programmes. As a result, it would be inappropriate to use the same approach as for the age group 30–66, for whom the proportion is linked to the cohort. Instead, the proportions are kept constant within each age increment.
For 26–29-year-olds, the projection depends on the level of educational activity within each vocational programme. VET programmes with high levels of educational activity for 26–29-year-olds follow the same approach to projections as for 18–25-year-olds. VET programmes with low/normal levels of educational activity are projected in the same way as for 30–66-year-olds.
As the model is based on expected changes in demographics for one-year age increments and sex within each VET programme, it incorporates even minor fluctuations within specific age groups. This means that it provides detailed insight into changes in the labour supply.