Business Location Germany – A Working World that’s Changing

Work, (c) Todd Quackenbush

Strong qualification level, high work motivation and much immigration from all parts of the world: The labor market in Germany in doing well, despite a few economic insecurities. What is the impact of the new networking structures and a new generation on the working environment?

Current developments on the German labor market

The German education system has an excellent international reputation. German specialists are in high demand all over the world. More than 80% of Germany’s entire workforce is professionally qualified or has a university degree. The qualification level is high. Above all, the dual study program system is highly appreciated and copied around the globe. Qualified workers have gained a reputation of being excellent and delivering precise performance. All these are criteria that are critical for any company. The demand for labor is therefore on a good level, and numerous vacancies attract job seekers. Today, Germany has 51,000 more vacancies than in the previous year. In particular, companies of the metal, traffic, logistics, hotel and gastronomic industries are seeking motivated employees. In view of the current labor shortage, filling all these positions will be difficult in some areas. Engineers, for example, are on top of the shortage list of the technological center that Germany has become. At the same time, however, this translates into good opportunities for qualified labor from abroad to get a foothold on the German market.

Immigration influences the labor market situation

Germany is increasingly facilitating access to the labor market for international qualified labor. The “Blue Card EU” simplifies entry into the German labor market for foreign university graduates. However, application of the Blue Card EU is tied to a gross annual income of 47,600 Euro. This is rather to the advantage of high-income experts from the fields of mathematics, information technology, natural science, technology and medical science. Maybe this is the reason why the approach has been falling through so far. Highly-qualified specialists used the extended legal immigration options only to a very small degree. According to the Federal Ministry for the Interior, only 475 academics took advantage of the possibility to obtain a six-months-visa for job search in Germany. The reason: Germany is not attractive enough for trained specialists from abroad, because these international experts have to overcome a few hurdles first. Language barriers and prejudice against the various forms of education are just two of them. Shockingly enough, the number of scientists immigrating into Germany is even decreasing. Residency titles for qualified foreign employees are still issued to those immigrants that are already living in Germany. Experience has shown that qualified foreigners from eastern European EU Member Countries, for example, can integrate into the labor market without much difficulty.

Nevertheless, the business location Germany remains an attractive option for many migrants. High growth rates and innovation potentials, for example, are characteristic for business startups. Almost one third of the founders of new businesses come from a migration background. International labor contributes to the diversity of Germany as a business location. Consequently, the Federal Republic must do more to attract qualified personnel from other countries – for example by offering qualified training or improved integration into the local working culture.

Generation Y demands adaptation of the work place environment

It is not only the labor shortage that is the cause that many vacancies have to remain open: The German population is aging, and less and less young people are born to replace them. This is not only a societal problem; it also affects the labor market. In the next ten to twenty years, many positions will not be filled. This upcoming generation has completely different expectations to an employer than the previous ones. It is crucial for a company’s success to understand GenY and its needs and expectations. It is the only way for a company to protect itself against future labor shortage. Companies can only recruit more skilled junior talents by introducing specific changes. GenY places great importance on ongoing training, team work, a good working climate, creative freedom, and the possibility of self-realization. All these factors have to be taken into account and integrated into the company structure. It is therefore necessary to rethink the working and leadership culture in these areas.

Networking in the work environment

In addition, the working world is undergoing a technological transformation. With the new communication and information technologies, completely innovative forms of cooperation are emerging. Social networks are the buzzword of our times. A large part of the work is organized via Internet and its networks. Worldwide, teams are working together online, making decisions and finding problem solutions together, while team members are dispersed over all parts of the world and will never meet in person. Social Media dominate everyday communication. Via these mobile channels, people are permanently available and online. This networking process will enhance the principle of hierarchy-free self-organization. This is not only to the employees’ advantage; customers, too, will be linked closer via Twitter, Xing, Facebook or Google+. They are in permanent contact with the stakeholders of their processes. Being separated physically has long ceased to be an obstacle. It has become possible to pass on knowledge, information and expertise directly to the customer. The leading IT Company, IBM, is an important example for these new forms of networking. With their “BeLiquid” program, they reduced their employees to a core staff and complement them with a large stock of free-lance specialists all over the world. The system is linked to the social networks. This allows a more efficient process design and the companies profit from an extended networked knowledge pool.

The technological change of the German labor market is thus a good opportunity for qualified staff from abroad. But to make Germany more attractive as a working place for international employees, structures of the work place, management and assignment of tasks must be reconsidered, so that all stakeholders can win.

Prof. Dr. Christopher Weilage
About Prof. Dr. Christopher Weilage 42 Articles
Christopher Weilage, professor for Business Administration and Business Communication, has his university focus on topics of international business and communication. Weilage acquired his MBA in International Business at the Moore School of Business of the University of South Carolina, USA and – subsequently – the IMBA International Business at Helsinki School of Economics and Business in Finland. The US-born American citizen graduated on e-learning at the chair for German as a Foreign Language of the Ludwig-Maximilians-University in Munich.