"Companies are looking for noticeably fewer workers": Unemployment is also set to rise in Saxony in 2025

Andreas Dunte

Chemnitz/Leipzig. Fewer job offers, more unemployment: the situation on the labor market will become noticeably tighter in the coming year - says Klaus-Peter Hansen, head of the state employment agency in Saxony, in an interview.

Mr. Hansen, the weak economy has recently put a strain on Saxony's labour market - will things pick up again in the coming year?

I have to disappoint you. The labor market institute IAB has forecast a possible increase in unemployment nationwide and also for Saxony in 2025. For the Free State of Saxony, this means a possible increase in unemployment of over 10,000 to an average of 155,000 or even 160,000 unemployed people. This means that we will probably see an average unemployment rate in Saxony with a seven before the decimal point again. We currently have a rate of 6.5 percent. There are also major regional differences: in Chemnitz and Görlitz, for example, I expect to see double-digit unemployment rates again.

How did things look last year?

This year, around 100,000 people have lost their jobs in Bavaria. 84,000 people have been able to take up a new job. This means that around 16,000 have remained unemployed. In total, around 138,500 Saxons were registered as unemployed in November. The average figure for the whole year has not yet been determined.

The fact that the economy is in difficulties is also shown by the fact that we as an agency are paying more insolvency money because more companies are experiencing payment difficulties. - Klaus-Peter Hansen, Head of the State Employment Agency

It is said that many companies are trying to keep their employees despite the crisis?

In view of the shortage of skilled workers, companies are indeed trying to retain employees. However, this requires a healthy economic basis within the company. The fact that this basis has become more fragile can also be seen in job vacancies, among other things. Companies are looking for noticeably fewer employees.

How has the job market changed?

In good times, we receive around 100,000 job vacancies every year; this year, we have received 67,000 so far, with a downward trend. Companies are increasingly considering whether to fill vacancies.

This is not yet reflected in the unemployment statistics, is it?

That is true. For example, jobs of employees who retire are simply not filled again. They therefore do not appear in the unemployment statistics. A consequence of demographics. However, it can be assumed that it won't stay that way. I even expect a certain dynamic in the rise in unemployment.

Can you please explain that?

Many companies have so far tried to cut costs in-house, for example by streamlining structures. This has largely been exhausted. We are increasingly seeing investments being postponed or canceled. As a result, companies are receiving fewer orders. Sooner or later, less production also leads to fewer staff - unless the general conditions change. The fact that the economy is in difficulties is also reflected in the fact that we as an agency are paying more insolvency benefits because more companies are experiencing payment difficulties. However, this is still at a low level. We have seen different things in previous years.

You say that the unemployment rate in Chemnitz could rise significantly - is this due to the high proportion of industrial jobs in the region?

That is one reason. While the mix of sectors is greater in Dresden and Leipzig, and Dresden in particular has many employees in the public sector, there is a lot of industry in Chemnitz, which is currently suffering particularly from falling demand and high energy costs. Chemnitz also has a higher proportion of migrants. The proportion of unemployed people among our foreign fellow citizens is known to be higher. In times of recession, they also find it harder to find a job. So it is a mix of several factors that could lead to the increase.

During the coronavirus pandemic, many companies have reported short-time working, is that the case again now?

No. I don't expect a significant increase in registrations like in the coronavirus era. Because we have a different situation. During coronavirus, companies assumed that they would have to survive a temporary crisis. That was also the case during the financial crisis in 2007 and 2008. Now companies are facing a structural problem. They cannot estimate when the weak phase will be over.

In Baden-Württemberg, for example, the DGB is calling on companies to make greater use of short-time working. Wouldn't that also be an option for Saxony?

There are many large companies in Baden-Württemberg. In Saxony, companies have fewer than ten employees on average. Just five companies in the state have more than 2000 employees. There will be a high level of fluctuation. We, i.e. the Saxon employment agencies, are facing turbulent times. I don't want to sound pathetic: But if everyone is looking for a safe haven because the waves are getting higher, then we will go out to save the day.

How exactly do you want to and can you save?

First and foremost, we are an insurance company. We provide financial support for anyone who becomes unemployed. At the same time, it is important to quickly place Saxons who have become unemployed. For example, if an automotive supplier has to lay off employees, a supplier or another production company may be looking for workers with precisely these skills elsewhere. In addition, there is a need for workers in many sectors, even during a recession. Our job is to place employees who have been made redundant.

Which sectors do you mean specifically?

I mean, for example, the service sector, care facilities, administrations. Numerous other sectors are also desperately looking for staff. On the other hand, industrial companies and companies in sectors that are heavily dependent on consumption will be downsizing. We can help with retraining, for example.

How are things looking financially? Have the agencies been able to build up reserves again since Corona?

During the Corona period, we helped a lot with short-time working allowances. However, due to the many crises that followed, we were unable to build up the necessary reserves.

About the person

Klaus-Peter Hansen (born in 1962) is Chairman of the Management Board of the Chemnitz-based Saxony Regional Directorate of the Federal Employment Agency (BA). Born in Zittau, he began his career at the employment agency in Pirna in 1992. Since then, he has held various management positions within the Federal Employment Agency, including at BA headquarters in Nuremberg and as head of the Berlin-Neukölln Job Center. In 2014, he returned to Saxony as Operational Managing Director. In 2016, he took over the top management position.

Where do you see bottlenecks?

I'm not going to make a murderer's pit out of my heart: we need more money for the basic equipment of the job centers. In view of the development outlined above, it will be more difficult in future to place our customers in the job centers in the primary labor market. This refers to people with little or no qualifications, people with disabilities or with a socially difficult history. Without financial incentives, it is difficult to convince companies to give the long-term unemployed a chance, especially in a period of recession. We are concerned about the current financial situation. The state is in demand, but as we know, it has less revenue in times of crisis.

What does the situation mean for the training market?

So far, the crisis has not reached them. We currently have more apprenticeship vacancies than young people looking for a job. But the air is getting thinner. The training market follows the labor market with a time lag. We know from numerous companies that have often trained apprentices in excess of their own requirements in the past that they are no longer willing or able to do so.

In earlier decades, inter-company training was used as a countermeasure.

We are already in talks with the chambers. Something like this takes time. And we don't want to wait to build the lifeboats until the waves start to rise.