Talent shortage in Germany. What about the talent that is already here?

Highly skilled professionals are key drivers of innovation and competitiveness in a country. As the population ages, finding ways to ensure a supply of qualified labour becomes one of the most critical challenges for companies and governments.

In Germany, the number of people in the labour force will plummet significantly with the transition of the baby boomers into retirement. The Institute of German Economy (IW) describes the German labour market situation as being “on the brink of a major disturbance”. Projecting different scenarios up to the year 2040, the IW shows that it is particularly plausible that the number of active skilled workers will decrease by 3.1 million by that year.

When it comes to highly qualified professionals, even though there are differences between industries, many German companies cannot fulfil their need for the so-called expert positions from the national workers’ pools. As recognised by the Federal Government, this situation is particularly pressing for engineering, medicine, and IT-related professions.

The shortage of qualified labour is hampering economic activity. Several initiatives have started over the past ten years to hold it back, and some of them are focused on attracting international talent as part of the solution.

An example is the launch of the website Made in Germany. A portal aiming to encourage qualified professionals from around the world to work in Germany and help German employers integrate these professionals. Similarly, the Hand-in-hand for international talents is a project created by German chambers of commerce searching to recruit professionals from Brazil, India and Vietnam.

Despite those and similar initiatives, what else can be done?

Facilitating labour integration

According to the Expats & Spouses Monitor, our research of expatriates and expatriate partners (*) in Germany, 32% of them are not working. Out of this group, 72% were working before the expatriation and 81% are actively looking for a job. Particularly interesting is that 95% have higher education and 58% have worked at least in one other foreign country before Germany. This means that they are not only a highly-educated but also an internationally-enriched collective.

We also asked the 864 participants of our survey how difficult different situations were both in their first year in Germany and currently. The following chart shows the percentage of respondents who answered that the situations were difficult or extremely difficult in both moments.

DifficultiesofexpatstointegrateinGermanay

Although most situations become significantly easier over time, finding a job that matches expats’ qualifications remains an important challenge. Considering that the average time living in Germany of our sample is around 4 years, these figures suggest consistency in how international talent settled in Germany is untapped.

Expat partners

Our research also reveals that most expats don’t come alone: 85% of them are married or in a committed relationship, and 55% have children.

Expat partners (**) are largely female (88%) and well educated: 98% have higher education, with 59% holding a Master or a PhD. 90% of them are fluent in English or English native-speakers, 51% have an intermediate or advanced German level, and 80% were working before living in Germany.

Nevertheless, expat partners find it difficult to integrate professionally in Germany. According to the Expats & Spouses Monitor, 53% of expat partners are not working and the ones that are working report lower career satisfaction. While 72% of working expatriates are satisfied or very satisfied with the success of their careers in Germany, only 59% of expats partners affirm so.

These numbers show that there is room for improvement when integrating internationals into the labour market. The question is, why is this improvement not happening at the same pace as the demand for qualified labour is growing?

German initiatives to attract global talent are not enough to address the deeply-rooted issues causing this situation. Bureaucracy is still one of the major challenges for internationals in Germany, especially when it comes to the recognition of international qualifications. The lack of flexibility in recruiting processes is also an entry barrier. Internationals may have non-linear career paths and present different CV standards that are often overlooked.

Knowing more about expats, an opportunity

Being aware of the challenges that expats and their partners face is an opportunity for an economy experiencing a talent shortage. Expats are not only a source of talent; they also drive cultural diversity, which brings numerous benefits to society in a globalised world.

The Expats & Spouses Monitor offers up-to-date information and actionable analysis about expatriates and expatriate partners in Germany. We develop insights in permanent dialogue with stakeholders from companies, public organisations and academia.

If you are interested in knowing more, sign up for our mailing list and stay updated about the release of our reports.

(*) By expatriate, we mean foreign employees relocated by their company and self-initiated expatriates, individuals who move to Germany for a different reason than a corporate assignment. Expatriate partners came to Germany as partners of both types of expatriates.

Expatriate and Expatriate Partner are categories chosen by the respondent him/herself. To the question: Which of the following statements best describes the reason why you moved to Germany? survey participants had different possibilities to select from.

(**) Expat partners account for 35% of our sample.

Amaia Izar de la Fuente & Dr. Carlos Morales

Photo: Unsplash – Marcel Strauss

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Talent shortage in Germany. What about the talent that is already here?

June 30, 2021|

The German labour market has been coping with a shortage of talent for years. Despite institutional encouragement to recruit professionals from abroad, there is still room for improvement when taking advantage of the international talent already settled in Germany. Based on the Expats & Spouses Monitor findings, this article showcases the richness of highly qualified internationals and some of the difficulties they face when searching for a job and integrating in Germany.