Overview

Germany has the largest population of any EU country and traditionally has enjoyed one of the most robust economies in Europe. The German labor market has recovered well from the global financial crisis of 2008-2009. Employment rates are at an all-time high and unemployment, currently 4.4 percent, is at its lowest level in 25 years and continues to fall. Youth unemployment, at 7.7 percent, is the lowest in the EU and the third-lowest among OECD (Organisation for Economic Co-Operation and Development) countries.

Employment Outlook

Short Term

Technology and IT innovations drove most employment growth last year. Currently, all sectors except for mining and quarrying have positive employment outlooks, and the sectors with the best outlooks are finance and business services, according to a recent employment outlook report by Manpower. The hiring outlook is especially positive in Berlin and Munich. Frankfurt’s forecast, however, is the weakest since the crisis, with employers planning on cutting staff. The hiring outlook is average in eastern Germany and in the Ruhr region.

In Berlin, one in five employers plans to hire new staff by the end of this year.

Long Term

Germany’s economy is expected to continue enjoying solid growth, benefiting from a strong labor market, stable domestic demand and favorable financial conditions.

The recent arrival of refugees from the Middle East and Africa is generally viewed by the German business community as an opportunity for companies to continue to grow and prosper, especially in light of the chronic skilled worker shortage and a shrinking native population. There are 37,100 apprenticeship vacancies and nearly 590,000 unfilled positions in Germany. The head of the German central bank, Jens Weidmann, estimates there will be a shortage of 1.8 million skilled workers by 2020.

Expatriate Workers

German labor policy encourages skilled labor immigration although this was not always the case. Germany banned the recruitment of foreign workers in 1973, and SMEs in particular had great difficulty recruiting foreign skilled workers. Recent legal regulations regarding residency rights, employment permits, recognition of foreign qualifications and pathways for skilled worker immigration from outside the EU have been implemented with measured success.

Top 10 Most Required Occupations

1. Shop sales assistants
2. Nursing associate professionals
3. Manufacturing laborers
4. Heavy truck and lorry drivers
5. Agricultural and industrial machinery mechanics and repairers
6. Plumbers and pipe fitters
7. Metal working machine tool setters and operators
8. Freight handlers
9. Building and related electricians
10. Motor vehicle mechanics and repairers

 Source: European Commission

Talent Shortages

Germany has been experiencing a skilled labor shortage for many years. The industrial and health care sectors have been most affected by recruiting difficulties. The electrical industry, as well as the mechanical and plant engineering sector, have persistent unmet labor demand, and many occupations in the health sector have chronic vacancies. The primary reason cited for these bottlenecks are shortages in highly skilled labor, particularly for engineers and health care professionals in specific fields where working conditions may be unfavorable (e.g., personal care workers for elderly people). There is also strong demand for temporary workers.

Conclusion

Despite dealing with skills shortages, Germany is faring better than most countries in the EU and in the world as a whole when it comes to its economic outlook and job opportunities. The future looks bright for Deutschland as its low unemployment and the high skill level of its workers is likely to continue for the foreseeable future.