After a year of working and living in Germany, and after being part of a HR team in a company that was both rapidly scaling and had a high turnover of staff, I’ve come to know the quirks and nuances of the German recruitment landscape very well indeed. Not just the company I worked for either. As my interim role neared its conclusion I approached and was approached by several companies and got to see much of the recruitment culture from the other side. So what have I learned? Let us dive in and take a look.
Recruitment in Germany
First of all, big picture. Germany, like every advanced economy on the planet, has some skills shortages. The usual STEM skills (science, technology, engineering and medicine) are, of course, needed in any modern country. However, the German economy has shortages in all areas. In fact, according to the German Chamber of Commerce and Industry (Deutscher Industrie- und Handelskammertag), 56% of companies said that skills shortages were the most serious issue they face going forward. A very brief conversation of the laws of supply and demand is worth having here. In theory, jobs that need doing or that have few candidates available to fill them are jobs that companies are willing to pay more to fill, and so those jobs will be more attractive and encourage people to train for. In practice, a lot of these sorts of jobs require extremely specific skill-sets, quite a high level of education, or years of experience, and so planning to have just enough workers for each possible job just isn’t realistic.56% of companies said that skills shortages were the most serious issue they face going forward. #hr #skills Click To Tweet
For example, it takes roughly 6 years to take a bright, post-school educated, biological science geek and turn them into a qualified, though inexperienced, medical doctor. Merely bumping up the wages for doctors now won’t have raise the number of available doctors for years and, due to that time lag in wage increase and resulting workers, you can potentially create a situation were too many train for the profession and thus leave you with an expensive surplus in half a decades time. Governments are no better than the free market at solving the issue of adequate labour supply. Some efforts have been useful, such as subsidising engineering and scientific courses, or dropping tuition fees on nursing and medical degrees, but such measures have done little more than cause a slight reduction in the relevant areas facing a skills shortage. One major socio-political solution to skills shortages has been the creation of the European Internal Market. It allows European people to go where they’re industry and infrastructure need them, regardless of their nationality. This is ironically most clearly demonstrated in the UK, where the impending Brexit issue has led to a massive drop in the numbers of workers from abroad entering the workforce, with businesses actually closing as a result of lack of employees.
Workers from abroad
If one contrasts that situation with Germany and is its enlightened attitude towards international labour a clear difference can be seen which is actually enabling German-based businesses to exploit Brexit. Whereas a lot of countries are actively trying to prevent foreign people plugging skills gaps to appease the more xenophobic among their citizens, Germany is actively encouraging people to relocate to Germany. This not only enables business to get the people it needs with less hindrance but also means there is less demographic decline in the country. This culture of internationalism also brings in a lot of direct foreign investment, as Germany is seen as a safe bet for foreign investors.
Living and public services
Another advantage Germany has over most other countries is the general standard of living and public services available. Germany is seen as being a nice place to not only work, but also to raise a family and live. This has an effect on recruitment in unusual ways which are not often taken into consideration. For example, consider healthcare. The baseline level of state run healthcare is a very important factor in being able to attract people to jobs in the developed world. In the United States the pre-Affordable Care Act baseline level, without adequate insurance, was extremely poor, thus healthcare coverage was used as powerful leverage by companies to attract people or to keep them working. In the UK, where state healthcare provision is currently poor compared to that of most developed economies, the cost of private healthcare provision must be factored in to people who are considering taking up a job there. But in Germany (as well as many other EU states) it is something that generally doesn’t need to be thought about.
It’s not all good news though. When we zoom in and look at what happens on a day to day, more nut ‘n’ bolts level, Germany has several issues it needs to improve on. German businesses have a reputation for being slow to hire and not very good at keeping prospective candidates informed, and this reputation is not unearned. The period of time between first contact to final job offer can be months. Additionally, a three month notice period is pretty standard. This means that it can sometimes take up to six months to fill a role. For people looking to switch jobs this quite a long period of time to be in the limbo of uncertainty. This impacts companies too. Although in big corporate companies this recruitment time may not be seen as too much of a hinderance, to a small tech start-up this is far more of an issue.
As in any country, recruiting in Germany is a two way street – not only do you need to look attractive to candidates to tempt them to apply, you also need to show candidates that you are offering somewhere to work that they want to invest their time in. This is especially true in Germany. The combination of a skills shortage, comprehensive employee protection laws, and a strong economy has led to a situation where potential candidates often have their pick of the best jobs, and so more and more companies are paying closer attention to the candidate experience in an attempt to beat the competition for the best workers. A simple generous pay packet is not enough to attract the best people in Germany. Company culture, development opportunities, and leadership style are all important components in the quest for top talent. This adds additional work for talent and recruitment teams, as they have to spend as much effort on promoting a role/company as they do on assessing a candidate.A simple generous pay packet is not enough to attract the best people in Germany. Company culture, development opportunities, and leadership style are all important components in the quest for top talent. Click To Tweet
Unfortunately, just because the candidate has accepted a job offer that does not necessarily mean the job is done for the recruiter. Fresh offers, counter offers and hurried attempts to retain a staff member who has handed in their notice are more common in Germany than anywhere I have ever seen. There are several reasons for this, but the overarching reason is simply that the German economy and the country’s high standard of living has drawn in the worlds best workers who know their value. This had led to a situation where competition for the best people is as ferocious as the competition for the top jobs.
So in summation, what does the German labour market look like compared to the Western average?
- Easier to bring in top talent
- Structured legal framework
- Often more multicultural – encourage foreign labour
- Generally longer tenure
- Stable socioeconomic environment
- More focus on diversity and inclusion
- Terminations can be tricky to navigate
- Difficult to deal with performance issues
- Slow/sluggish processes and procedures
- Typically long notice periods
Both pros and cons
- Multilingual environments
- Stronger collective bargaining and union presence
- Generally higher wages
Overall despite the quirks of the German labour market there is probably no better place if you are looking for the world’s top talent. But that comes with a price. German recruitment is both costly and time consuming compared to the rest of the world.