KfW Research: Participation in continuing education remains low in Germany

• Last survey shows just 40 % of workforce taking continuing education courses
• Lower-skilled workers are less likely to engage in continuing education
• Tomorrow’s working world requires flexibility and lifelong learning
• Costs are often a barrier to continuing education

The coronavirus crisis has created high employment risks for workers in Germany. Many companies have announced short-term working schemes, and unemployment numbers are on the rise. According to the KfW SME Panel, small and medium-sized enterprises believe up to 1.1 million jobs may vanish by the end of 2020. But even without the burdens from the COVID-19 pandemic, the labour market is under pressure. After all, Germany is undergoing a far-reaching structural transformation from digitalisation, the transition to a climate-neutral economy and demographic change. In order to tackle the challenges, employees, employers and unemployed workers must invest more time and money in upskilling than before. Continuing education in particular holds enormous potential. Only 40 % of the workforce last participated in an in-company continuing education activity. Individual continuing education is very rare and was completed by a mere 7 % of workers (figures for 2018; most recent available data).

The lower a worker’s skill level, the less likely they are to undertake continuing education in Germany. Only around one fourth of low-skilled workers who have not more than the basic school-leaving certificate took part in employer-sponsored continuing education in 2018. Among those with higher skills, the rate was a significantly higher 43 %, and this group of workers is also more likely to privately engage in continuing education (14 %). Costs are a major reason for the lack of continuing education. Especially for workers employed in the low-wage sector, financial support for continuing education is critical. Another aspect that carries significant weight for small businesses in particular is that they cannot easily let workers take leave to attend prolonged continuing education activities.

“The current coronavirus crisis is showing us very clearly how important digitalisation, for example, will be for tomorrow’s working world. Skills development is key to making people and businesses fit for this transition. Short-time work schemes thus leave extra time that can be used effectively for more continuing education”, said Dr Fritzi Köhler-Geib, Chief Economist of KfW Bankengruppe. “Germany has a lot of catching up to do in the field of continuing education. We must develop an even stronger culture of lifelong learning. I want to emphasise that investment in continuing education is a necessary prerequisite for a successful structural transformation. The value of continuing education for individual employees or currently unemployed workers lies in improved employment prospects, promotion opportunities and higher incomes. From a business perspective, that investment secures a company’s sustainability and competitiveness. But it also makes workers more mobile, generating positive effects for the economy as a whole which justify public support.”

The current analysis by KfW Research on continuing education in Germany is available at www.kfw.de/kompakt