The biggest challenges facing German SMEs

Skilled workers and demographic change

Technical, care, logistics and digital roles are increasingly difficult to fill. An ageing workforce also raises the urgency of transferring practical knowledge before experienced employees retire.

A useful workforce plan starts with tasks and capabilities rather than a vacancy count. Identify which roles stop production when absent, which skills take longest to learn and where retirement would remove undocumented knowledge. Then compare retention, training, job redesign and external recruitment. Each route has a different lead time. Assign an internal owner for onboarding so a successful hire becomes a productive colleague instead of another unresolved handover.

• Build apprenticeship and university pipelines
• Use targeted international recruitment where local supply is insufficient
• Document knowledge and strengthen retention

Digitalisation without losing operational focus

The challenge is not adopting technology for its own sake. Companies need secure, interoperable systems that improve production, customer service and decision-making without disrupting proven processes.

Choose a first digital project where the baseline is visible: quoting time, machine downtime, rework or order-entry errors. Document the process before selecting a tool, agree who owns the data and involve the people who use the system. A pilot should have a defined review date and an exit condition. Scaling a workflow that teams already understand is usually easier than introducing several disconnected tools simultaneously.

Energy transition and industrial competitiveness

Energy-intensive firms must balance reliability, cost and decarbonisation. Efficiency, electrification, renewable procurement and process innovation increasingly shape investment decisions.

Separate energy decisions into operational changes, equipment investment and supply arrangements. Metering can help a team understand when and where consumption occurs; a purchasing decision requires a wider view of maintenance, production constraints and operating assumptions. Record the scenarios behind each investment case rather than relying on one forecast. For programme eligibility and project conditions, verify the responsible provider’s current documentation before committing expenditure.

Succession and ownership transition

A viable succession plan takes years, not months. It requires leadership development, financing, tax and legal preparation, and a clear view of whether continuity will come from family, management or an external buyer.

A succession plan is also an operating plan. It should identify customer relationships concentrated with the owner, undocumented approvals and roles that need deputies. A potential successor needs time to understand the economics and earn trust with employees and customers. Keep a distinction between ownership transfer, day-to-day management and the outgoing owner’s future involvement. Those decisions can follow different timetables and require different advisers.

Supply chains and geopolitical risk

Export-oriented specialists face currency, tariff, logistics and supplier concentration risks. Resilience comes from visibility, scenario planning and selective diversification, not from withdrawing from global markets.

Supply-chain resilience begins with knowing where alternatives are genuinely available. Map critical components, sole-source tooling, lead times and the information required to qualify another supplier. Consider both direct suppliers and dependencies further upstream. A second supplier is only a working alternative when specifications, testing and commercial arrangements are ready. Regular scenario reviews can expose weaknesses before an urgent disruption forces a decision.