# German Labour Market August 2026: Fit Is the Bottleneck

Author: Marin Niehues, Niehues Consulting · Published: 2026-09-01 · Leadership & Teams
Source: https://www.niehuesconsulting.de/en/blog/german-labour-market-august-2026-skills-fit/

The German labour market in August 2026 counts 3.061 million unemployed and 656,000 registered vacancies, both above the previous year, while employment subject to social insurance has fallen by 73,000. The Federal Employment Agency names two causes: demand is too weak for all the unemployed and their profiles often do not match the vacancies by occupation, qualification and region. A company cannot change demand, but it can change the fit within its own workforce. Mid-sized companies should therefore fill new roles first by reskilling people from shrinking areas, before they recruit externally or cut jobs. Our calculation for a company with 300 employees shows that filling eight of twelve shortage roles internally saves around 3.1 position-years without full output.

**Key facts at a glance**
- In August 2026, 3.061 million people were unemployed, 36,000 more than a year earlier, a rate of 6.5 per cent, the Federal Employment Agency reported on 28 August 2026.
- 656,000 vacancies were registered, 25,000 more than a year earlier, while employment subject to social insurance fell by 73,000 to 34.81 million in June.
- Manufacturing employed 171,000 fewer people in June than a year earlier, health care and nursing and social care together 130,000 more.
- A vacancy remained unfilled for 157 days on average, 67 days longer than ten years ago.
- The ifo Employment Barometer rose to 94.8 points in August from 93.0, but the majority of manufacturing industries still plan with fewer staff.

**Unemployment and vacancies are rising together in Germany, because jobs vanish in manufacturing and trade and appear in health, care and administration. A mid-sized company faces the same situation on a small scale and resolves it faster than through the market by reskilling people from shrinking areas into the roles it lacks.**

## Unemployment and registered vacancies rose together in August 2026

Unemployment and vacancies both rose on the year in a labour market with little movement. Unemployment rose by 54,000 in August to 3,061,000 (plus 4,000 seasonally adjusted), the [Federal Employment Agency](https://www.arbeitsagentur.de/presse/2026-31-arbeitsmarkt-im-august-2026) reported on 28 August 2026. Andrea Nahles, Chair of the Executive Board of the agency, said that beyond the usual seasonal pattern the labour market again showed little momentum in August.

At the same time 656,000 vacancies were registered in August, 25,000 or 4 per cent more than a year earlier. Even so, the chance of ending unemployment by taking up a job is historically poor according to the agency: from September 2025 to August 2026, on a monthly average 5.66 per cent of the unemployed left unemployment for a new job, one of the lowest values since the indicator was first calculated.

**The labour market in August 2026**
- 3.061m | unemployed, 36,000 more than in August 2025, rate 6.5 per cent
- 656,000 | registered vacancies, 25,000 more than a year earlier
- −73,000 | employees subject to social insurance in June on the year, total 34.81 million
- 157 days | average time to fill a vacancy, 67 days longer than ten years ago
- 47 per cent | of filled or withdrawn vacancies had been open for over three months

## The Federal Employment Agency sees weak demand and poor skills fit as the causes

The agency attributes the rise in unemployment to two simultaneous causes. Demand for labour is too weak to absorb the supply. In addition, the profiles of the unemployed often do not match demand in occupational, qualification and regional terms, according to the [monthly report for August 2026](https://statistik.arbeitsagentur.de/Statistikdaten/Detail/202608/arbeitsmarktberichte/monatsbericht-monatsbericht/monatsbericht-d-0-202608-pdf.pdf).

A simple calculation shows the volume problem. In August there were 4.7 unemployed people for every registered vacancy. The vacancy survey of the Institute for Employment Research (IAB), cited in the report, counted 1.15 million vacancies in total in the first quarter of 2026, 51 per cent of them registered. If every one were filled at once, almost two million people would still be unemployed. The figures come from different months and only indicate an order of magnitude.

The vacancy duration shows the fit problem. From September 2025 to August 2026 a vacancy stayed open 157 days on average, 11 days less than a year earlier but 67 days more than ten years ago. The report reads this as a sign that many companies cannot find suitable workers despite higher unemployment, although it explicitly sees no general shortage of skilled labour. The agency's skills shortage analysis of May 2026 finds bottlenecks above all in nursing, medical occupations, construction and skilled trades, as well as for cooks, professional drivers and nursery teachers.

## Employment is shrinking in manufacturing and growing in health, care and administration

Employment subject to social insurance is shrinking in manufacturing and trade and growing in sectors close to the state, where jobs have different requirements. Manufacturing alone employed 171,000 fewer people in June 2026 than a year earlier, 121,000 of them in metal, electrical and steel. Growth in health care and in nursing and social care no longer offsets this decline.

::: diagramm Manufacturing lost 171,000 jobs within a year, while health and care gained 130,000
- Health care | 66 | +66,000
- Nursing and social care | 64 | +64,000
- Public administration | 19 | +19,000
- Temporary agency work | -22 | −22,000
- Trade, motor vehicle repair | -52 | −52,000
- of which metal, electrical and steel | -121 | −121,000
- !Manufacturing | -171 | −171,000
Source: Federal Employment Agency, Monthly report on the labour and training market, August 2026; employees subject to social insurance, change June 2026 on the previous year, provisional projection

An electronics technician from the metal industry cannot simply move into nursing, because training, working hours and often location do not fit, so unemployment and vacancies exist side by side. Qualification adds to this: according to the agency, a good third of the unemployed in unemployment insurance and two thirds of those in basic income support have no completed vocational training. 1.074 million people, a good third of all unemployed, have been out of work for over a year.

Companies' plans show the same picture. The [ifo Employment Barometer](https://www.ifo.de/en/facts/2026-08-27/companies-germany-cutting-fewer-jobs-august-2026) rose to 94.8 points in August from 93.0 in July, the highest level since May 2025. Timo Wollmershäuser of the ifo Institute described a slight upward movement but added that jobs are still being cut overall. In manufacturing the barometer reached its highest value since March 2024, yet the majority of industries still plan cuts. Only manufacturers of data processing equipment and electronic and optical products and the food industry expect to hire.

## The unemployment rate ranges from 4.3 per cent in Bavaria to 11.5 per cent in Bremen

The unemployment rate in August 2026 ranged from 4.3 per cent in Bavaria to 11.5 per cent in Bremen, so vacancies and unemployed people are often in different regions. Unemployment rose by 3.9 per cent on the year in Saxony, by 2.3 per cent in Baden-Württemberg and by 2.2 per cent in Bavaria, the sharpest increases of all states.

::: diagramm The unemployment rate in Bremen is more than twice as high as in Bavaria
- !Bremen | 11.5 | 11.5%
- Berlin | 10.6 | 10.6%
- North Rhine-Westphalia | 8.0 | 8.0%
- Germany | 6.5 | 6.5%
- Baden-Württemberg | 4.8 | 4.8%
- !Bavaria | 4.3 | 4.3%
Source: Federal Employment Agency, Monthly report on the labour and training market, August 2026; unemployment rate based on the entire civilian labour force

For a company in Swabia or Upper Bavaria the local labour market is therefore tighter than the national figure suggests. Its own employees know site, equipment and processes, so moving them into the roles it needs bypasses the regional gap.

## Filling roles internally saves a company with 300 employees around three position-years

A company that fills new roles by reskilling people from shrinking areas loses far less working time than through external recruitment, as long as training takes under around 13 months. The calculation uses the agency's vacancy duration and assumptions any executive team can replace.

**Assumptions of the example calculation**
- The company has 300 employees and needs twelve skilled workers a year in new or growing roles, for example in maintenance, automation, quality assurance and data analysis.
- Elsewhere, for example in production for shrinking customer groups, at least eight positions disappear in the same year.
- External hire: the position stays vacant for 157 days, the national average according to the agency, then the new hire works at half output for 90 days.
- Internal move: 120 days of training start as soon as the need is known, with the person working in the new role at half output. The old position disappears.
- Position-days without full output: a vacant day counts in full, a day at half output as half.

An external hire costs each role 157 days of vacancy plus 45 days of onboarding, 202 position-days in total. An internal move costs 60, because the person contributes in the new role from day one. Filling all twelve roles externally adds up to 2,424 days or 6.6 position-years, filling eight internally and four externally to 1,288 days or 3.5 position-years. The difference of around 3.1 position-years equals three skilled workers at full output for a year. Eight employees from shrinking areas also keep their jobs.

::: diagramm An internal reskilling move costs 60 position-days per role, an external hire 202
- External hire (157 days vacancy plus onboarding) | 202 | 202 days
- Internal reskilling with 240 days of training | 120 | 120 days
- !Internal reskilling with 120 days of training | 60 | 60 days
Source: own calculation by Niehues Consulting, August 2026; vacancy duration according to the Federal Employment Agency, monthly report August 2026; other values are assumptions, position-days without full output per role

The calculation yields a threshold: an internal move pays off as long as training at half output takes less than 404 days, around 13 months. Training of 240 days still saves 82 position-days per role. The condition is that the old position disappears, because if it has to be refilled, the move only shifts the gap elsewhere.

In shortage occupations external vacancies are likely to last longer than average, which widens the gap in favour of the internal route. The agency also funds training for employees regardless of company size. Where structural change creates new skill needs, a qualification allowance (Qualifizierungsgeld) is possible. In May 2026, 59,000 employees were in such funded training, 2 per cent fewer than a year earlier. How to calculate demand and supply per function for the following years is covered in [Strategic workforce planning for three years](/en/blog/strategic-workforce-planning-three-year/).

**Four ways to fill or reduce a role**
Criterion | Role change | Reskilling | External recruitment | Reduction through attrition
Situation | role grows, skills lie close | role grows, skills lie further away, person knows the plant | role grows, no internal basis | role shrinks, nobody fits a growing role
Example | machine operator becomes line operator | production worker becomes automation specialist | data specialist with no internal predecessor | assembly for a shrinking customer
Time to full output | weeks | four to twelve months | vacancy of around five months plus onboarding | over a year's departures
Responsibility | head of department | HR development with the business unit | head of HR | management with the head of department

## Internal mobility needs role profiles, selection by aptitude and an internal check

Internal mobility works when the company describes its roles, selects by aptitude and checks every vacancy internally first. Without role profiles nobody knows which skills a role requires and who comes close ([Role clarity: job profiles that settle accountability](/en/blog/role-clarity-job-profiles/), [Talent management: identifying and filling key roles](/en/blog/key-roles-talent-management/)). A maintenance technician brings more to automation than an outside applicant. To reach full output quickly the person needs onboarding with fixed learning goals ([Onboarding as a productivity lever](/en/blog/onboarding-productivity/)) and the old role needs a handover ([Knowledge management: retaining knowledge when people leave](/en/blog/retaining-knowledge-when-people-leave/)).

Transfers and in-company training touch on co-determination, so involve the works council early, as described in [Involving the works council early in change programmes](/en/blog/involving-the-works-council-early/). This overview does not constitute legal advice.

## Executive teams in mid-sized companies should check every new role internally first

Six steps create fit inside the company before it goes to the market:

1. Map growing and shrinking roles: by the end of October 2026, HR and the heads of department establish which roles will grow or shrink over the next twelve months and by how many positions. Success means a reasoned headcount for every role.
2. Write role profiles: by mid-November 2026, business units and HR development describe tasks, skills and a learning path for every growing role. The metric is the share of growing roles with a profile.
3. Check internally before advertising: from now on, management and the head of department decide on every new or vacant position only after a two-week internal check. The metric is the share filled internally per quarter.
4. Select candidates and start training: by the end of the year, HR development and the business units select candidates from shrinking areas, clarify funding with the employment agency and start the first programmes. The metrics are time to full output and completed moves.
5. Involve the works council: management presents the approach in autumn 2026 and agrees rules for transfer, training and return before the first move.
6. Measure vacancy days: HR reports position-days without full output monthly, for internal and external hires separately. The metric is the gap to the company's baseline and to the agency's 157 days.

## Niehues Consulting combines organisation design with internal mobility

[Niehues Consulting](/en/) supports executive teams and heads of department in building organisations that deliver reliably. Organisation design creates structures, roles and decision paths for day-to-day business and for transformation. In delivery management, a delivery manager or product owner steers the programme until the change has arrived in operations. Where AI enters the workflows, a business case and a prototype are added, followed by introduction in the business units.

The approach follows the Niehues Delivery Model with its phases Understand, Build and Introduce. Before an internal mobility programme it asks three questions. In Understand: which roles grow, which shrink and which skills lie close together? In Build: which role profiles, learning paths and approvals are needed? In Introduce: are managers enabled and the first moves embedded in the workflow? Founder Marin Niehues is a management consultant from the delivery side. His projects range from venture-backed scale-ups to DAX 40 groups, with assignments in more than 20 countries on six continents. In the free 30-minute initial consultation you assess together which roles your company can fill internally and how many vacancy days that saves: [book a consultation](/en/#kontakt).

**What executives can take from the German labour market in August 2026**
The German labour market in August 2026 has more unemployed and more vacancies than a year ago, because demand is weak and profiles, sectors and regions do not match, so a vacancy stays open for 157 days on average. In our example with 300 employees, filling new roles first from shrinking areas saves around 3.1 position-years and eight redundancies.

**Sources**
- [Federal Employment Agency: Arbeitsmarkt im August 2026](https://www.arbeitsagentur.de/presse/2026-31-arbeitsmarkt-im-august-2026), press release no. 31, 28 August 2026
- [Federal Employment Agency statistics: Monthly report on the labour and training market, August 2026](https://statistik.arbeitsagentur.de/Statistikdaten/Detail/202608/arbeitsmarktberichte/monatsbericht-monatsbericht/monatsbericht-d-0-202608-pdf.pdf), in German
- [ifo Institute: Companies in Germany Cutting Fewer Jobs (August 2026)](https://www.ifo.de/en/facts/2026-08-27/companies-germany-cutting-fewer-jobs-august-2026), 27 August 2026
- Example calculation: own calculation by Niehues Consulting using the assumptions stated in the article

::: faq Frequently asked questions

### When did the Federal Employment Agency publish the labour market figures for August 2026?

The Federal Employment Agency published the August 2026 figures on 28 August 2026: 3.061 million unemployed and a rate of 6.5 per cent.

### Why are there more unemployed people and more vacancies at the same time?

According to the agency's monthly report, demand is too weak for all the unemployed and their profiles often do not match the vacancies by occupation, qualification and region, while jobs shift from manufacturing to health and care.

### How long does a vacancy remain unfilled in Germany?

From September 2025 to August 2026 a vacancy remained unfilled for 157 days on average, 67 days longer than ten years ago.

### What does the August 2026 labour market mean for mid-sized companies in Germany?

For mid-sized companies in Germany, external hires take a long time despite higher unemployment. Filling new roles first with employees from shrinking areas shortens the time without full output and avoids redundancies.

### When does internal reskilling pay off compared with external recruitment?

In our example calculation, internal reskilling pays off as long as training at half output takes less than around 13 months and the old position disappears. The comparison is an average vacancy of 157 days plus 90 days of onboarding for an external hire.

### Does the employment agency fund training for employees?

The agency funds training for employees regardless of prior training, age and company size if it goes beyond short-term training for the current workplace. Where structural change creates new skill needs, a qualification allowance can also be paid. This overview does not constitute legal advice.