Accompanying research Transformation through Skilled Trades

The skilled trades sector is a key pillar of the German economy. In 2021, there were approximately 568,000 skilled trades enterprises in Germany, employing around 5.4 million people. The skilled trades sector is therefore one of the country’s largest employers and also plays a central role in vocational education and training. Despite, or perhaps precisely because of, the positive economic development of recent years, the sector faces a number of challenges looking ahead. These include, in particular, demographic change and the resulting shortages of skilled workers and young talent, as well as the ongoing digitalisation of the world of work and occupations.

Against this background, the Federal Employment Agency (Bundesagentur für Arbeit, BA) and the German Confederation of Skilled Crafts (Zentralverband des Deutschen Handwerks, ZDH) launched the pilot project “Transformation through Skilled Trades” in 2021. The overarching aim of the pilot project was to test new approaches to attracting skilled workers and increasing the attractiveness of the skilled trades sector as an employer. The pilot project was implemented from late 2022 to December 2025. Implementation took place through several sub-projects focusing on different aspects of transformation and therefore addressing different target groups. The sub-projects were based at different locations and were implemented by the local employment agencies and regional skilled trades organisations.

In spring 2024, the Institute for Applied Economic Research (Institut für Angewandte Wirtschaftsforschung e. V., IAW) was commissioned to conduct a scientific evaluation of the pilot project and its sub-projects. The aim of the evaluation was to generate robust evidence on the implementation and effects of the sub-projects, identify areas for improvement, and derive recommendations for action. The evaluation was based on a research design combining different methodological approaches.

The evaluation shows that the “Transformation through Skilled Trades” pilot project provided important impetus for addressing skilled labour needs and transformation processes in the skilled trades sector. Although the intended quantitative effects in terms of attracting skilled workers and increasing the attractiveness of the sector were achieved only to a limited extent, the project generated important qualitative effects. Cooperation between the employment administration and skilled trades organisations was intensified, mutual understanding was strengthened, and valuable insights were gained into which approaches work under which conditions.

The sub-projects highlight, in particular, the importance of early and realistic project planning, sufficient human and financial resources, and reliable cooperation structures. At the same time, measures should be tailored to the relevant target groups, designed to be easily accessible and practice-oriented, and adapted to the respective regional and institutional conditions. The open and experimental nature of the pilot project enabled important learning processes and demonstrated that regional expertise and room for local discretion are key prerequisites for developing suitable solutions.

Five central areas of action can be derived for transferring the approach to other regions: establishing a clear yet flexible project framework, securing adequate resources, organising cooperation on a reliable basis, designing measures to meet specific needs, and supporting implementation through a learning-oriented approach. Successful underlying principles should not be transferred mechanically, but adapted to the respective regional structures and needs.

The results of the accompanying research were published in the IAW Policy Reports series.