Across Germany, employers lament a lack of suitable job candidates, especially in engineering and IT professions. At the same time, women are underrepresented there. How do companies become more attractive to diverse groups of workers? To find out, economists at the Cluster of Excellence ECONtribute observe application processes in real time.

By Charlotte Pekel

In 2021, the proportion of women in STEM occupations was only 17 percent. In the same year, 88 percent of companies were unable to fill IT positions due to a lack of applications. The first number comes from the Federal Employment Agency, the second from the Federal Statistical Office of Germany. These values indicate a central problem in the German and European job market: In STEM occupations – i.e. jobs in the fields of science, technology, engineering and mathematics – there is a shortage in skilled workers – especially women.

At the end of 2022, the shortage of STEM experts in Germany reached a new peak. According to the think tank German Economic Institute, around 326,000 workers were lacking. The problem has been out in the open for years, but little has been done so far, although job vacancies in the public and private sectors have a serious impact on critical infrastructure, the education sector and health care. Business slows down and public revenues decrease. Particularly affected are skilled crafts and trades, the health care sector – and the IT sector.

If the market cannot regulate it on its own

The German Economic Institute also found that the high number of missing IT professionals results from challenges posed by challenges of climate change, digital transformation and demographic change. The need for IT experts and engineers for the development of climate-friendly technologies and products is increasing. These specialists are needed in particular for digital transformation: According to the report, they are drivers not only for resource efficiency, but also the energy transition. More and more companies were also pursuing data-driven and thus digitally supported business models.

In the past, diversity issues have not played a major role in economics. However, social pressure and the shortage of skilled workers have made the topic more relevant – not only in science, but also in companies. They are increasingly under pressure to incorporate diversity aspects in their hiring decisions.

“Companies are becoming more and more aware that they have to go the extra mile to find people and make the workplace attractive for them,” said Pia Pinger, Professor of Economics at the University of Cologne. “Employing and promoting more women and international experts in the job market would be a solution.” In order to find out how this can be achieved, she is leading a study with her colleague Matthias Heinz, Professor of Business Administration, at the Cologne-Bonn Cluster of Excellence ECONtribute: Markets & Public Policy. Larissa Fuchs and Max Thon, both doctoral Reseachers at the University of Cologne’s Faculty of Management, Economics and Social Sciences, are also involved. The researchers are working with a technology company that wants to recruit more women and workers from abroad. For example, the proportion of female executives is below 20 percent.

Study – The study ‘How can Organizations Increase Diversity?’ Emphasizing Job Flexibility and Pay in Job Advertisements by Pia Pinger, Matthias Heinz, Max Thon and Larissa Fuchs runs over a year and is funded by the ECONtribute Cluster of Excellence. 

“In our study, we combine findings from basic research with real social problems and make the results available to politics and the private sector,” Pia Pinger said. “This is characteristic of research at the ECONtribute Cluster of Excellence.”  The Economics Cluster is not just concerned with how markets work, but also with understanding how social divisions arise in economic systems and how such errors can be corrected. Taking into account the political and legal framework conditions, the Cluster thus develops concrete recommendations for action for representatives from politics, society and business.

High salary or more flexibility?

Skilled workers are scarce in many areas not only because there are not enough suitable candidates. The researchers believe that part of the problem is how companies draw attention to themselves and their job vacancies. Although the proportion of women in the STEM fields has increased, too few choose a job in industry or IT. Many prefer teaching positions or jobs other areas, Pia Pinger has found. “This also depends on whether it is perceived as attractive to work in industry.” 

First, the scientists looked at the application process. “The company did not specifically eliminate women,” Matthias Heinz explained. On the contrary: There were efforts to recruit them. That they remained unsuccessful prompted Heinz and Pinger to take a closer look at the job advertisements.

The research team examines whether job advertisements can successfully target specific groups of applicants. At the same time, students studying STEM subjects are asked in the laboratory whether they would apply for current job advertisements at the company. According to the researchers, the linking of findings from the laboratory with those from the real business environment makes the study unique in its field.

Laboratory studies with students who will soon be looking for a job have shown that women and men prefer different characteristics in job advertisements. “Men are more likely to go for a higher salary, while women show a preference for flexibility,” said Pinger. This is also due to the fact that women still shoulder most of the care work in household and family. And part-time models tend to pay less than full-time jobs. Thus, the broader framework conditions of the job market also shape the decision to apply for certain jobs or not.

For people with a migrant background and foreign workers, a high salary is also important. In addition, the location of the company plays a role. For the study, the company's job advertisements are randomly enriched with these characteristics and displayed on job portals. Each job advertisement is displayed several times, with different features of the job highlighted in each advert. The scientists monitor the real application process and interview 2,000 students studying STEM subjects in laboratories throughout Germany. “This way, we also see which potential candidates do not feel that the job advertisement speaks to them and why,” Pia Pinger explained.

Evaluating hundreds of job advertisements

The students answer questions about personality traits, their career aspirations and what is important to them in a job. They will then be presented with a current job advertisement from a company, and they will indicate what their impression is and whether they would apply for it. Matthias Heinz: “In the end, we want to see how many applications there are for different job advertisements for the same job and what types of people are interested in it.”
The scientists work in real time: They only present job advertisements to the candidates in the laboratory that are live. The survey must then be done quickly. Control variables are also recorded: Which job advertisement is online when and where, at which point does it appear in the job portal, or: Is the competition looking for similar people?
By the end of the year, Pinger and Heinz want to evaluate hundreds of job advertisements. If it becomes apparent that different job characteristics in job advertisements have a major effect on the number of applicants, the team wants to continue to research the topic. Because one thing is clear: The shortage of skilled workers will not be remedied on its own.

ECONtribute: Markets & Public Policy -  ECONtribute is the only Cluster of Excellence in economics funded by the German federal and state governments within the framework of the Excellence Strategy, supported by the universities of Bonn and Cologne. The cluster conducts research on markets in the field of conflicting priorities between economy, politics and society. The aim is to better understand markets and to analyse market failures in times of social, technological and economic challenges – such as increasing inequality, global financial crises and digital transformation – with a new approach.