Germany’s efforts to attract foreign skilled workers to address labor market gaps may face challenges, according to a recent study by the Organization for Economic Co-operation and Development (OECD) and Bertelsmann. The “Indicators of Talent Attractiveness” study ranks Germany 15th out of 38 OECD countries based on seven dimensions, including quality of opportunities, income, future prospects, family and skills environment, inclusiveness, and quality of life. While Germany was in the top 10 for international students, it fell from 12th place in 2019 to 15th in 2022. The study highlighted the need to attract highly-qualified specialists, businesspeople, start-up founders, and international students, with New Zealand, Sweden, Switzerland, and Australia topping the list and the UK and the US ranked 7th and 8th.

English is needed

Mara, a 30-year-old Romanian who previously lived in the UK, has a good job in advertising in Berlin, but after a year in Germany, she’s already planning to leave. She cited struggles with bureaucracy, finding an apartment in Berlin’s difficult housing market, and learning German as reasons for her decision. Additionally, loneliness played a role, as the pandemic forced her to work from home, hindering her social contacts. Despite taking courses in Bucharest, she hasn’t been able to improve her German since her work is mostly in English.

Despite the challenges she has faced, Mara was drawn to Germany because she believed the country, especially Berlin, had much to offer. However, Germany’s bureaucracy for foreigners is predominantly in German, which has made things difficult. While she understands that she cannot ask Germans not to speak German, she feels that a little more openness and flexibility would go a long way in helping foreigners. When she asks if people speak English, she’s often met with a quick and loud “no.” Nonetheless, she finds the combination of the East and West in Berlin to be a positive aspect of the city.

Effort to stay

Germany is facing a looming demographic shift that will leave millions of jobs unfilled in the coming decade as the last of the “baby boomer” generation retires by 2035. To fill the gaps in the labor market, the country needs a net balance of 400,000 immigrants to enter every year, according to calculations by the Institute for Employment Research. However, the latest prognoses by Germany’s official statistics office predicts a net yearly immigration rate of 290,000 people, potentially leaving 3.6 million people missing in the job market. Persuading people to come to Germany is only one part of the solution, as many skilled workers leave after just three or four years. A study by social scientist Paul Becker emphasizes that keeping skilled workers in Germany with their families is crucial for a successful skilled labor strategy.

Motivation

A new study shows that Germany is becoming less attractive to foreign talents. The “Indicators of Talent Attractiveness” study by the Organization for Economic Co-operation and Development reveals that Germany has slipped from 12th place in 2019 to 15th in 2021 among the 38 OECD countries, based on seven “dimensions” that foreign talents value. Germany needs a net balance of 400,000 immigrants annually to fill the gaps in the labor market, according to the Institute for Employment Research (IAB), but most foreign workers leave after only three or four years. A pre-study by the Institute for Applied Economic Research (IAW) found that factors such as residency permits, not being able to find suitable work, not being able to bring family over, high cost of living, and personal issues were among the reasons for leaving Germany. Discrimination was also a factor for some highly qualified people from non-European countries.

Government challenge

The German government is facing the challenge of persuading foreign skilled workers to stay in the country, as millions of jobs are expected to remain unfilled due to the retirement of the “baby boomer” generation by 2035. A study by the Institute for Employment Research indicates that the country needs a net balance of 400,000 immigrants every year to fill the gaps in the labor market. However, the Institute for Applied Economic Research found that most people who come to work in Germany leave after only three or four years. Researchers suggest that the government could make targeted consultations for those who lose their jobs, improve assistance for family members of skilled workers, and provide support for industry-specific programs for ex-pats.