Instruments and methods for a successful integration of international workforce to reduce the skilled labor shortage in Germany

A critical analysis

Bachelor Thesis, 2016

98 Pages, Grade: 1,7



List of abbreviations

List of figures

List of tables

1 Introduction
1.1 Problem statement and research question
1.2 Objective of thesis
1.3 Methodology
1.4 Structure of thesis and contents

2 Fundamental analysis of current state
2.1 Definition of skilled labor shortage
2.2 Analysis of German labor market
2.3 Particularities of selected professions and industries
2.3.1 Technical experts
2.3.2 Health care sector
2.3.3 Non-academic professions

3 Foreign employees in Germany
3.1 Historical development of labor migration
3.2 Current migration regulations
3.3 Chances to reduce the lack of skilled labor

4 Key factors for integration of international workforce
4.1 Identification of target group
4.1.1 Recruiting agencies
4.1.2 Business websites and social networks
4.1.3 Recognition of foreign qualifications
4.2 Origin of foreign employees
4.2.1 Active recruitment of job candidates from abroad
4.2.2 Foreign employees in Germany
4.3 Language
4.3.1 Language courses
4.3.2 Workplace-related language trainings
4.4 Culture clash
4.5 Costs
4.6 Sustainability
4.7 Interim conclusion and summary

5 Instruments for successful integration
5.1 Welcome culture
5.1.1 Explanation of term
5.1.2 Application in the organization
5.2 Mentoring
5.2.1 Explanation of term
5.2.2 Application in the organization
5.3 Employer attractiveness
5.3.1 Explanation of term
5.3.2 Application in the organization Job benefits Family oriented benefits Location of workplace

6 Conclusion
6.1 Findings and limitation of the study
6.2 Suggestions for further research
6.3 Outlook

7 Appendices

List of literature

List of abbreviations

illustration not visible in this excerpt

List of figures

Figure 1: Structure of thesis and contents

Figure 2: Vacancy length of occupational groups

Figure 3: Search strategy for foreign skilled workers

Figure 4: Thethree pillars of Welcome culture

Figure 5: Factors of employer attractiveness

List of tables

Table 1: Overview of services for a recognition of foreign qualifications

Table 2: Important countries for international recruitment

Table 3: Overview of key factors for integration of international workforce

1 Introduction

1.1 Problem statement and research question

One of the most essential factors for economic success of any business is the disposability of highly skilled labor.[1] Filling job vacancies with qualified professionals is an ever increasing challenge for many Human Resources managers (HR managers). The already existing skill shortage in many industries is not a cyclical problem that will eventually cure itself, therefore it has to be considered as a structural phenomenon. One of the fundamental reasons is based on demographic changes. Germany[2] is one of the fastest-aging and fastest-shrinking nation among OECD[3] countries.[4] The German population structure is facing an aging population and low birth rates. Since the 1970s, birth rates already undercut the number of necessary children to preserve the population. Since the end of the 1990s the yearly birthrate is 1.4 children per woman.[5] Germany’s population has been declining since 2004[6] and scientists predict that the children’s generation will be one third smaller than the parents’ one. Without substantial migration the age structure will change significantly.[7]

In 2008, Germanys’ working-age population (20-65 years old) was at 60.6 per cent. From 2030 on this number will decrease to 54.5 per cent. At the same time, the number of people older than 65 years will increase from 20.4 to 28.8 per cent.[8] This development is provoking substantial problems in social and retirement systems, since a growing number of people are making use of insurance benefits and less people of the working generation contribute to raise the financial resources. Another major problem is the increasing gap on the employment market, because not the whole leaving workforce can be replaced with adequate personnel.[9]

Scientists predict that in the next 20 years 13.4 million people are leaving the working life but only 7.2 million jobs can be filled with young national professionals. Under this condition, an estimated number of 6.2 million job vacancies cannot be filled until 2035.[10]

In order to reduce the negative consequences of the dramatic development on the German labor market, and to maintain and raise the competitiveness of the German economy, it is indispensable to activate additional skilled worker potential.[11] This task can be a tremendous challenge, especially for those businesses that are not used to work internationally, such as the public service or locally positioned enterprises.[12] A set of practical tools and methods for the integration of international employees could especially help those companies that are not used to recruit international employees.

The situation on the German labor market is not likely to improve. What began as an unfavorable demographic situation is gradually converting into a serious growing labor shortage.[13] Because of technological innovations, globalization and the required knowledge in many professions, the demand of qualified workforce is increasing.[14] In August 2015 there was already a shortfall of 156,200 skilled workers in the so-called STEM fields (science, technology, engineering, mathematics). Half of these unfilled positions regards to workers with an academic diploma or vocational qualification.[15]

The idea to reduce the lack of workforce in Germany through immigration is not a new one. As a consequence of the economic miracle in the 1960s and early 1970s until the first oil shock in 1973, Germany invited mostly South European guest workers, mainly in blue collar jobs,[16] to make up for the labor shortage.[17] After decades of a more restricted immigration policy at the turn of the 21st century a commission led by former Bundestag President Rita Süssmuth pointed out the need of recruiting immigrant workers and introduced a special work permission called “Greencard” for foreign IT-experts. As a second milestone a national office of immigration and integration was created. Several new types of visas for labor immigration where introduced to grant highly skilled workers from outside the European Union access to the German employment market.[18] Today Germany’s policy for highly skilled migrants is one of the most open among the OECD-countries. In international comparison the procedure is inexpensive as well as fast and refusal rates are low.[19] The experiences of the past years with skilled labor migration demonstrate that the simple implementation of migration-friendly regulations is not the only solution in order to attract foreign employees.[20] From the expected 20,000 IT-experts only 18.000 could be recruited through the implemented German Greencard in its four years of existence from 2000 to 2004.[21] It is rather necessary for companies to address the effort of recruitment directly to the international group of workers. This includes contacting potential candidates in foreign countries or contacting foreigners, that already live in Germany such as international students and offering them immigration friendly framework conditions to integrate them into the German labor market and make them feel welcome in the new country.[22]

A fundamental question in the process of integrating foreign workforce is that of how the German authorities use their power to shape the legal base. Are they reducing bureaucracy or are they creating obstacles for interested and urgently needed candidates looking for attractive job vacancies on the German labor market. Germany is one possible option for international high potential professionals and every country is bidding in a global competition for the best talents.[23] The Government plays an important role in converting Germany into an attractive immigration country for highly skilled and trained personnel.[24]

If legal conditions of employing international staff are established as it is the case today in Germany,[25] companies have the opportunity to benefit from it. This task implies a lot of effort of management and working teams regarding the needs of international employees.[26] Managers have to develop methods to identify adequate candidates and integrate them into the working system. In this context important questions have to be answered such as how companies can identify the right international personnel and which foreign countries employees should come from. Another pivotal question is how newcomers can effectively be integrated into the working process, so that they can be a sustainable solution to reduce the labor shortage of the German labor market.

1.2 Objective of thesis

The focus of the thesis is to elaborate a framework of tools and methods for a successful integration of international personnel to reduce the labor shortage of German companies. To reach this goal, different specific characteristics of the target group are examined. The research provides an analysis of the historical, political, economic and regional situation in terms of lack of labor to expose fundamental knowledge about the issue in different occupational groups. This analysis serves as a basis to understand which industries are facing a mismatch of labor and what kind of specific professionals are required. The economic significance of foreign employees for the German labor market has been confirmed by numerous publications. The thesis evaluates the essential aspects of the inclusion of foreign workforce and puts important information into a new set of arguments. The political discussion of the issue and the implementation of new migration-friendly labor market regulations demonstrate that politicians have been trying to provide better basic conditions in order to help affected industry sectors. Including foreign labor may generate some particular challenges that have to be considered. Understanding the problems and experiences of the last decades can give important insight into how the integration of foreign professionals can best be achieved. A repertory of fundamental examples and recommendations should give both practically relevant as well as scientifically based assistance to identify adequate candidates, fill job vacancies with perfectly skilled people and integrate them at long-term perspective.

1.3 Methodology

As the thesis requires detailed research about the past and present situation of the German labor market, labor migration and labor migration policy, the method is based on qualitative and quantitative investigation. Several officially recognized statistics provide the quantitative details. The theoretical background forms the basic knowledge of the thesis. It is based on academic literature, articles of scientific journals, laws and labor market regulations with corresponding commentaries. As the characteristic of the subject is influenced by highly dynamic and constantly changing factors, the inclusion of internet publications and press releases is mandatory to embrace the requirements in terms of currentness of data. The purpose of the theoretical part of the thesis is on the one hand to discuss important terminologies by clarifying general definitions and ideas and examine the initial situation. On the other hand, the comprehension of historical development of the German labor market and migration policy up to the present-day is crucial to match the empirical insight. Several expert interviews provide in addition to the literature research the possibility to obtain practical knowledge of the needs for applicable models, theories and ideas of the thesis. A selection of the previous conclusions is incorporated to complement empirical results and discuss the research question.

1.4 Structure of thesis and contents

The thesis is divided into six chapters. The introduction (chapter 1) includes the subchapters problem statement and research question (chapter 1.1), objective of thesis (chapter 1.2) and methodology (chapter 1.3). The second chapter provides a fundamental analysis of current state with a definition of the term “skilled labor shortage” (chapter 2.1) and an analysis of the German labor market (chapter 2.2). The chapter closes with an overview of particularities of selected professions and industries (chapter 2.3) such as technical experts (chapter 2.3.1), health care professionals (chapter 2.3.2) and non-academic professions (chapter 2.3.2). Chapter 3 is dedicated to the issue of foreign employees in Germany. Chapter 3.1 contains information about the historical development of labor migration, chapter 3.2 analyses current migration regulations and chapter 3.3 presents chances to reduce the lack of skilled labor.

Chapter 4 presents key factors for integration of international workforce. The identification of target group (chapter 4.1) can be realized with assistance of recruiting agencies (chapter 4.1.1) and through utilization of business websites und social networks (chapter 4.1.2). The recognition of foreign qualifications (chapter 4.1.3) is a crucial factor for successful integration. Chapter 4.2 provides information about the origin of foreign personnel. International job candidates can be actively recruited abroad (chapter 4.2.1) or companies can make use of foreign employees that already live in Germany (chapter 4.2.2). A fundamental basis to work in most professions is knowledge of the German language (chapter 4.3). Language courses (chapter 4.3.1) and workplace related language trainings (chapter 4.3.2) help to improve German skills. Other key factors for a successful integration are how to deal with a possible culture clash (chapter 4.4), calculation of the costs (chapter 4.5) and sustainability of international recruitment. Chapter 4 closes with an interim conclusion and a summary of the findings (chapter 4.7).

Chapter 5 is dedicated to instruments for successful integration. The first topic of the chapter mentions so called “welcome culture” (chapter 5.1) including an explanation of the term (chapter 5.1.1) and its application in the organization (chapter 5.1.2). The second field of chapter 5 is mentoring (chapter 5.2) with a definition of the term (chapter 5.2.1) and the introduction of this measure into the system (chapter 5.2.2). The third part (chapter 5.3) explains the term employer attractiveness (chapter 5.3.1). An application in the organization (chapter 5.3.2) occurs through job benefits (chapter, family oriented benefits (chapter and attractiveness of workplace location (chapter

The thesis closes in chapter 6 with a summary of the findings and limitation of the study (chapter 6.1), suggestions for further research (chapter 6.2) and an outlook (chapter 6.3).

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Figure 1: Structure of thesis and contents (Source: Own illustration)

2 Fundamental analysis of current state

2.1 Definition of skilled labor shortage

Scholars and policymakers agree that labor shortages are not easy to measure. A homogenies definition of the term does not exist in the literature. “Skilled labor shortage” expresses a situation of a mismatch between the available jobs (labor demand) and the available labor supply with a certain qualification in a particular industry or cross-industry.[27] Labor shortage can refer to qualitative or quantitative disproportions on the labor market in a country or region. Several reasons can provoke the disparities such as the demographic change (chapter 1.1) or economic growth with rising demand of employees. The economic literature differentiates temporary imbalance and lasting disproportion of available and demanded workforce.[28] Due to the lack of labor, companies constantly face major difficulties to fill their vacancies with adequate personnel. Either there is no job candidate available or the applicant does not meet the minimum required qualification.[29]

The single institutional authority to detect labor market trends in Germany is the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) in Nuremberg, which is the official research institute of the Federal Employment Agency (Bundesagentur für Arbeit, BA). The surveys are highly recognized among both entrepreneurs and politicians, as the only representative and reliable source to examine the causes and development of skilled labor shortage.[30]

Since there is no unique definition of labor shortage, the Federal Employment Agency does not regard every vacancy as a shortage. Open positions are considered as a characteristic of a well-functioning labor market. Only if available jobs and skills of the unemployed do not match, and if the reoccupation of jobs is hardly possible with considerable retardation, the state can be considered as real labor shortage. As important indications of a lack of skilled labor, the BA evaluates the average vacancy length which represents the number of days a position is available and the number of unemployed for a certain position. An imbalance on the labor market is considered to be a deficit of labor, if the average vacancy length of the profession exceeds at least 40 per cent of the average rate among all professions[31] and if 100 job offers count less than 300 job candidates.[32]

The statistics of the IAB and BA use different terms of skilled labor and labor shortages. The terms “lack of labor, labor shortage, shortfall and deficit” are used synonymously. The term “experts” are used for professionals with a university education of at least four years, “skilled or trained employees” refer to professionals with a vocational training of at least two years, and specialists are persons who attended a college of higher education, master school or technician school.[33] Since Germany offers a variety of vocational and trainings such as the dual apprenticeship or full vocational school programs, the system is not comparable to many other countries. Numerous professions that in other places require a university degree in Germany can be acquired with vocational trainings. That is why many specific job-related terms cannot be fully represented by any English words because the expressions simply do not exist in the Anglophone world.[34]

2.2 Analysis of German labor market

The research of the BA currently does not indicate a nation- and industry-wide labor shortage in Germany. In certain occupational groups a deficit of workforce is detected and in comparison to further BA-researches the situation in terms of lack of skilled labor has become more difficult. Due to the rising popularity of university education in Germany, the situation of experts with academic degree relieved.[35] The German labor marked is characterized by enormous regional disparities in terms of vacancies and unemployment rate. In general the South of Germany faces a tighter labor market than the rest of the country. For instance, the unemployed-per-vacancy rate in Bavaria and Baden-Württemberg was less than a third of the level in the eastern German States.[36] What unites all regions in Germany is the type of jobs most in demand: Electricians, mechanical engineers and other metal manufacturing-related occupations.[37]

The following diagram shows the development of vacancy length[38] of selected academic and non-academic occupational groups with labor shortage from 2014 to 2015. The findings and the individual characteristics are explained further on in this chapter and in chapter 2.3.

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Figure 2: Vacancy length of occupational groups

Source: Taken from: Bundesagentur für Arbeit (2015a), p. 7.

In comparison to the analysis of 2014 the vacancy length in six of nine professions reduced slightly. The situation in the other three professions is tighter, than it was in 2014. The average vacancy length increased from 80 two 82 which shows that there is no general easing of the situation on the German labor market.[39] The following chapters provide a deeper insight into the particularities of different professions. The research of the BA describes the current state and does not predict future developments since a reliable forecast depends on many factors such as employment behavior[40] or demographic and economic development.[41]

3.4 million individuals who were born in Germany emigrated to other countries looking for more favorable labor market conditions. This number represent a great loss of potential since many of them work in high skill occupations for which candidates are in short supply in Germany, such as engineering, health and personal care.[42]

Another challenge of the German labor market is the struggle of filling available places for apprenticeships. Due to the demographic change and individual preferences of candidates, in recent years, the number of available apprenticeships remaining vacant has grown continuously.[43] In 2014 a number of 37,101 places of unfilled vocational trainings left which represents an increase of 10 per cent compared to former years.[44] The largest number of shortage for apprenticeships was detected in service occupations, such as sales personnel, cooks, hotel clerks and hairdressers. In comparison to the labor marked of professionals where the situation in Western Germany is tenser, the Eastern German states report higher shortages for apprenticeships. Their demographic situation – which is even more unfavorable than that of Western states – may already impact the pool of potential apprentices.[45]

2.3 Particularities of selected professions and industries

2.3.1 Technical experts

Professions for technical experts include professions such as engineers of mechanics, automotive, mechatronics, automation, electrotechnology, information technology and software development. Since the parameter value varies in the different areas, the differences are explained below.

The vacancy length of mechanic and automotive engineers is 113 days (122 without labor leasing[46] ) which increases the average number of 82 days by 37 per cent. 100 job offers count 210 job candidates. In almost every Western German state a labor shortage in this field is indicated whereas the eastern part is not facing a lack of labor due to the economic structure.[47]

Engineers of mechatronics, automation and electrotechnology exhibit a vacancy length of 115 days (120 without labor leasing). 100 job offers count 143 job candidates. Labor shortage in this professional group is even tighter in several German states such as Hesse, Baden-Württemberg and Bavaria with only one job candidate per job offer. In other states e.g. the situation much more unstressed.[48] Scientists estimate a continuance of the positive trend of a reduction of labor shortage in the field since student numbers of technical engineering increased significantly.[49]

The sector of information and communications technology (ICT) is not facing a general labor shortage. Only in the area of information technology, engineering and software development labor supply is tight with a vacancy length of 124 days and only one job offer per job candidate. This situation affects almost all German states. Only in Berlin and Brandenburg there is still a higher potential of candidates. In comparison to the labor market situation of the mentioned professions, other areas which do not require necessarily a university degree such as systems analysis, IT-sales, network technique or It-administration do not face a deficit.[50]

2.3.2 Health care sector

The health care sector suffers a significant nationwide labor deficit in almost all professions such as nurses, physicians and elderly care nurses. Physicians are among the professions in Germany with the most significant labor shortage as the BA statistic proves with a vacancy length of 144 days and 1 job offer per 2 job candidates.[51] The need for nurses rises for those with apprenticeship and even more for specialized nurses in certain areas such as anesthesia or intensive care which require a special additional training. The vacancy length of nurses is of 105 days and less than 1 job candidate per job offer. A big challenge is also to fill job vacancies of elderly care nurses with a vacancy length of 123 days and only 50 job candidates for 100 jobs.[52]

As the statistics demonstrate, occupation of job vacancies in the health care sector is a difficult task since many positions especially those of physicians cannot be filled with semiskilled employees. Only in some areas like nursing, unskilled workers are integrated to reduce the workload of the teams.[53] As a result of the labor shortage several hospitals already had to close departments such as a hospital in Nastätten (Koblenz, Rhineland-Palatinate) in which 24 hours standby attendances in the maternity clinic were no longer guaranteed.[54]

Forecasts predict the increasing demand of workforce in the sector, since aging generations and shrinking birthrates are provoking an increasing demand of health care services and a reduction of skilled labor supply. According to a survey of the multinational professional services firm PricewaterhouseCoopers (PwC) and the economic research institute (Wirtschaftsforschung - WifOR), in 2020 the health care sector will face a deficit of 224,000 fulltime jobs.[55]

2.3.3 Non-academic professions

According to the BA statistics, labor shortage in Germany occurs not only in highly qualified occupations, but also in a number of apprenticeship-level occupations such as electricians, plumbers, sanitary and heating installation and railway traffic.[56]

A deficit of professionals in the sector of energy technique occurs almost in all states expect for Berlin and North Rhine-Westphalia. The vacancy length is 115 days (40 per cent above average) and 47 job candidates for 100 jobs. In comparison to 2013 the vacancy length increased by 5 days and the proportion between job offers and job candidates declined.

The field of plumbing, sanitary and heating installation also exhibits a labor shortage almost in all German states. The vacancy length is by 123 days (49 per cent above average, 11 days more than 2013).[57]

In the field of railway traffic occurs a nationwide shortage of occupations for monitoring and maintenance as well as for train drivers. Railways profession indeed represent a small labor segment, but the vacancy length for train drivers (153 days, 86 per cent above average), which is the highest number of the whole BA-statistic. The vacancy length for monitoring and maintenance is by 135 days (64 per cent above average).[58]

Managers testify that the hardest jobs to fill in Germany are not limited to highly skilled experts. Rather professions requiring medium level qualification such as an apprenticeship are difficult to find.[59]

3 Foreign employees in Germany

3.1 Historical development of labor migration

To understand the context in which labor policy of today is being carried out, the historical context, beginning with the time after the World War II, should be given. Due to the structure of the German population, influenced by low birth rates in the 1930s and great loss during World War II, the German working-age population had suffered a great reduction. Post-war Germany benefitted from a continuous labor supply provided by structurally unemployed and inflowing refugees from the east, which was the key element in the rapid and steady expansion of the economy. In 1960 the unemployment rate fell below 2 percent for the first time. The construction of the Berlin wall implied the end of the labor influx from east.[60] Under the impact of the German “economic miracle” implying high demand for un- and low-skilled labor, bilateral recruitment agreements were signed.[61] As a consequence foreign workers (guest workers) from Italy, Spain, Greece, Turkey and Yugoslavia played an important role in manufacturing and construction jobs.[62]

When the first oil crisis occurred in 1973, Germany reacted by stopping recruitment of foreigners from abroad. This recruitment ban meant the end of the guest workers area. One of the few legal channels for immigration after 1973 was for nationals from other EEC (European Economic Community) countries and other selected high-income countries which filled the gap for special labor marked needs.[63] With the fall of the so called “Iron Curtain”,[64] Germany found itself in the center of a new migration corridor. A wave of asylum seekers and people with German ancestry from Central and Eastern Europe and from the former Soviet Union such as Kazakhstan and Kirgizstan entered into the country.[65] Until the end of the 1990s the official government position was that Germany was not a country of migration but exceptions to the recruitment ban from 1973 became increasingly numerous. In 1990 a new framework for labor migration was established with the Aliens Act (Ausländergesetz) and the residence permit for work purposes (Aufenthaltsverordnung). During the 1990s only EU citizens and foreigners with an unlimited residence (granted after at least five years of residence in Germany or acknowledged refugees) did not need a separate work permit.[66]

By the end of 1999, concerns about lack of skilled labor emerged, since more than 10 per cent of all firms claimed a lack of skilled labor. Especially in the ICT sector a shortage of 70,000 experts was estimated. Against this background, a German “Green Card” for foreign ICT specialists was launched in early 2000. The program which allowed up to 20,000 ICT specialists from countries outside of the European Economic Area (EEA) to work in Germany for maximum of five years. The new technology bubble burst immediately after the Green Card was introduced and the target of 20,000 permits was never reached with 17,931 approved work permits.[67] Even though the Green Card was eliminated in 2005 with no quantitative impact on the German labor market, it set off a new immigration debate. There was a broad agreement among politicians, labor unions and employers that a fundamental revision of the labor immigration framework was needed and that Germany should open up for highly skilled migration.[68]

3.2 Current migration regulations

Since 2005 the immigration law in Germany has been changing significantly. A legal framework with gradually reduced obstacles for labor immigration presented the possibility for a considerable liberalization.[69] Today Germany is the second largest immigration country among OECD member states after the USA (United States of America).[70]

The freedom of movement for workers in the European Union gives each citizen of a member state the right to take up a paid employment in another member state under the same conditions as nationals and to remain within the territory of a member state if they have been employed.[71] The unconditional freedom of movement for European workers (except Romania and Bulgaria) is valid since May 1st 2011.[72] Citizens form Romania and Bulgaria do not need visas since 1st January 2014.[73] Due to an agreement between the EU and the European Free Trade Association (EFTA), citizens from Iceland, Liechtenstein, Norway and Switzerland are allowed to work and remain in Germany as well.[74]

Since 1st August 2012 highly skilled workers of non- EU- States have a new visa option.[75] If their university degree is officially recognized in Germany they can apply for the “BlueCard”. Owners of the card have the right to receive the same salary as EU citizens who do the same job. The validation of the card is four years or in case of a temporary job it is limited to the time of the working contract plus 3 months. An extension or establishment permission is possible.[76] Another condition to obtain the BlueCard besides the university degree is an employment contract or a binding job offer with a minimum annual salary of €49,600. For specialists of shortage occupations, such as scientists, mathematicians, engineers, doctors and ICT professionals the minimum annual salary is of €38,688. Family members are allowed to work in Germany without any restrictions.[77] EU Blue Card holders can apply for a permanent residence permit after 33 months. Individuals with B1 level language skills can obtain a permanent residence permit after 21 months.[78]

The lack of labor in Germany does not only occur in professions that require university degrees. Also specialists for non-academic professions in Germany are in great demand.[79] As an answer to this mismatch, specialists with a completed vocational education and training from countries outside the EU may migrate to Germany to work since 2013. This kind of working permission is valid for professionals in so-called bottleneck occupation with a shortage of specialists such as electricians, nurses or train drivers.[80] The Federal Employment Agency provides a list with all professions in demand for this kind of visa.[81] As a condition, they have to prove a workplace or a binding offer for a job and their training must be equivalent with the relevant German qualification.[82] The vocational recognition can already be applied from abroad, with or without a job offer. Since September 2013, a full labor access is also valid for family members.[83]

3.3 Chances to reduce the lack of skilled labor

As immigration policy changed and converted Germany from a restricted country to an immigration-friendly country for highly skilled labor, companies can make use of this opportunities to reduce their labor shortages.[84] The German government provides several websites, brochures and videos to inform potential candidates already in their home countries about the professional perspective in Germany. It provides information about which sectors are looking for skilled workers and the conditions candidates from abroad have to fulfill to take up a job in Germany. Even multilingual websites are available.[85] Companies can get all necessary information online or benefit from the special assistance of the Federal Employment Agency concerning employing of foreign personnel.[86]

A big number of refugees entered Germany in 2015 to apply for asylum. The Federal Office for Migration and Refugees predicts approximately one million refugees for 2015.[87] The education status of immigrants varies considerably. Just like the relationship between younger and older native-born people, young immigrants are generally much more educated than immigrants nearing retirement age. Migrants tend to be more concentrated in the younger and economically active age groups compared with natives.[88] The ministry expects 20 per cent of the immigrants to possess a higher education such as university degree.[89] 55 per cent are younger than 25 years old[90] which has a demographic impact, not only by increasing the size of the population but also by boosting the working-age population. Young people could be integrated into the labor market to fill the gap of candidates for vocational trainings.[91] As a result, migrant workers can make an important contribution to the labor market both for high- and medium skilled occupations.[92]

As the approval process takes up to a year, companies can make use of the benefits of BlueCard to recruit experts or working permits for specialists which are included in the positive list of occupation with labor shortage (chapter 3.2). Processing time of the mentioned visas are a lot faster and the application process can be fostered by the companies.[93]

The research of fundamentals (chapter 2 and 3) in terms of population structure, labor market and migration indicates that integration of foreign employees is affects all German companies, institutions and employers. The question is what the best way to integrate foreign personnel is and how the target group can be identified. The following chapters 4 and 5 provide the answers.

4 Key factors for integration of international workforce

The process of selection and integration of foreign skilled workforce is driven by various key factors. The following chapters mention a selection of crucial topics involved parties have to take into account. The explanation of options gives answers and provides solutions for basic questions concerning the international recruitment process.

4.1 Identification of target group

The identification of adequate foreign workforce depends on different parameters. Under the current system, the approval of work permits for citizens from third countries[94] is based on their working contract with a German employer. The simple proof of certain qualifications and skills is not sufficient to obtain a visa. The task of selecting the most highly qualified candidates is left to the employer. Maybe this is the reason why many companies hesitate to make great use of recruiting from abroad.[95] HR managers are confronted with differences of education and grade systems and face the challenges of language barrier in terms of interpreting references and certifications.[96] Without an international recruitment network and trusted intermediaries in public and private sectors international recruiting may seem difficult for companies.[97]

The German public employment service especially helps companies without international contacts to get in touch with possible candidates. Through the International Placement Service (ZAV) free positions can be announced in other European countries. Foreigners who are interested in working in Germany can ask for assistance to find a job there. Because of the crisis in many South European countries, a lot of highly skilled workers are considering this option. The ZAV organizes roadshows and participates at job fairs in other European countries. The current focus is Spain, Greece and Portugal where the ZAV works in close collaboration with the local labor agencies. In recent years for example numerous physicians and nurses from Greek or Spain could already be recruited for the work in German hospitals. Through a European labor mobility program the ZAV is able to refund costs for language courses and journeys to job interviews.[98]

With the introduction of the BlueCard in August 2012 a previous six-month job-search visa is possible for experts who want to apply for this permit. The new visa helps companies to include foreign candidates with official recognition of their qualifications to the recruitment process. Since the persons are already located in Germany it is a lot easier to organize a job interview or a visit and to let the candidate have an impression of the company, workplace and colleagues.[99]

4.1.1 Recruiting agencies

Due to the liberation of labor migration policies and the internalization of the German labor market in consequence, the demand for international recruitment services is high. In recent years a whole service industry of international recruiting agencies came into existence.[100] As an alternative to the public ZAV services a company can benefit from the contacts and experience of private agencies. One crucial factor to select the right recruiting partner is an agency that is be represented in the countries from where a company wants to initiate the search for job candidates. This is possible through branches abroad or at least through local representatives with cultural agility who know the language and important details of mentality and habits of the residents abroad. Local agents can easily establish first contacts with potential job candidates. This provides better chance to do a first selection and present interesting occupational profiles to businesses in Germany.[101]

Three different types of recruiting agencies can be distinguished depending on their geographical focus such as global recruiters, regional recruiters and local recruiters. Global recruiters represent the biggest 15 to 20 corporations such as Kienbaum Executive Consultants GmbH, which provide representations in the most important economic centers of several continents. Those firms are especially focused in the search of top-level positions and possess databases with candidates from different industries. Middle management positions and below do not match with the search profile of Global recruiters.[102]

Regional recruiters have their main focus in geographical determined regions and countries. In comparison to global players, their coverage is smaller, but they can offer a very effective candidate search, as they know market particularities of certain industries and occupations. The recruiter firm size is not necessarily the most important factor for successful recruitment.[103] The German Medical Alliance (Deutsche Medizin Allianz) for example is a professional recruiting agency focusing on European personnel for the health care sector. Their service does not only include the procuration of professionals with local representative in the target countries such as Romania or Greece. In addition, language and culture training after the arrival in Germany and assistance with the acknowledgement of foreign qualifications is part of their service.[104]

Local recruiters are firms with few offices and a focus on a particular geographical area. They are specialized on certain industries in a variety of professions from skilled occupation to top management positions. Many of those smaller recruiting agencies do not possess a big database of candidates since cost and effort to maintain it up-to-date is high.[105]

In search of the best recruiting partner companies should ask for the reputation of the selected firm. Have any other companies made good experiences? Can the agency prove positive results? Are local offices and representatives in the target countries available and does the service include additional assistance like cultural and language trainings? Those questions are important factors in the choice of the right partner. Another important issue are the costs. The fees for successful candidate placement by a recruiting agency differ between 10 and 30 per cent of the annual gross salary.[106] Companies should not pay the entire amount in advance. A part of the total payment should be paid after the probation period of the selected employee has successfully finished. This method lets the involved organization do their job with long term perspective[107] Companies using recruitment services can make master agreements with the firms to establish a long term collaboration. The goal is to reduce the cost for the individual recruitment process and initiate trustful and sustainable search operations.[108]

4.1.2 Business websites and social networks

A fundamental research tool in the process of international recruitment is the companies own business website. For many job seekers a website is the first information channel to explore new employment options. Until July 2015 the welcome portal “Make it in Germany” as a first source of information for many foreign professionals counted 7.7 visits since its existence in November 2012.[109] Companies should not disappoint potential job candidates with poor content but put a big effort in the first impression as possible employer. The commonly titled button "About our Company" should clearly reflect the company's structure, employer brand,[110] and include sections regarding the company’s culture, major benefits available flexibility.[111] Some companies may skip the employment branding opportunities and direct job seekers immediately to available job offers which can put the employer at a disadvantage when competing for labor. Especially many foreign job candidates depend on the online available information about the company. Testimonials from employees in form of little articles or short video sequences can enrich the website and increase the authenticity.[112]

The section “Career” of the website should contain a list of available positions with all necessary information of the job, the conditions and the application process. Job postings offer a tremendous value for the HR search. Compared to other methods, online job announcements are relatively inexpensive and give the employer access to a huge international field of candidates. The possibility to send online applications via email or online forms offer a fast and cheap application channel for both companies and job seekers.[113] Another advantage of job announcements on business websites is that several career web portals crawl business websites and list job announcements automatically in their search results. The largest international job platform “” for example lists job offers of employer website free of charge, which is a huge benefit for international recruitment.[114]

The translation of the website or a part of it can be an important instrument to increase the coverage of job announcements and company information. Even though language requirements for job candidates who work in Germany are high, online-accessible information in other common languages like English or Spanish would help to improve the range of influence on the web.[115]

The use of social networks can enhance the recruitment of international employees. Professional social networking sites allow job seekers to connect with employees of potential employers. An example is the US professional net “LinkedIn” (, which provides an international job-search engine that allow people to search for contacts who work for employers who published job announcements.[116] The European alternative of a career network is “Xing” ( which is extremely popular with the German speaking parts like Germany, Austria and Switzerland.[117]

The social network Facebook is not known as a tool to get professional contacts. However being the largest social network of the world with more than 1.42 billion users worldwide (March 2015),[118] it has the great advantage of an incredible coverage because most people of the target group of foreign professionals possess an account. The utilization of Facebook as a communication channel can be a good alternative to get in contact with potential candidates.[119] Facebook offers the possibility to establish groups which can be used both from professionals and from companies to get in touch with potential employers or employees. There are several groups such as foreign medical doctors in Germany exchanging information about the visa procedures, recognition of foreign job titles and possible places to work.[120]

The following survey among 292 small and medium size enterprises (SMEs) shows and overview of different strategies for recruiting of foreign skilled workers.[121]


[1] Cf. Ravasi, C., Salamin, X., Davoine, E. (2015), p. 1335.

[2] Until the German reunification (3rd October 1990), the term Germany refers to West Germany. After
the German reunification, it refers to East and West Germany.

[3] The abbreviation OECD stands for Organization for Economic Co-operation and Development, which
is an international economic organization representing 34 countries (see appendix 1) with the goal
to stimulate economic progress and world trade; cf. Robbins, S. P., et al. (2014), p. 132.

[4] Cf. OECD (2013a), p. 34; Robra, A., Böhne, A. (2013), p. 3.

[5] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 4; Statistisches Bundesamt (2013), wp.

[6] Cf. OECD (2013a), p.34 – 35.

[7] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 4.

[8] Cf. Statistische Ämter des Bundes und der Länder (2011), p. 8.

[9] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 4.

[10] Cf. Krabel, A. (2015a), p. 538.

[11] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 4; Clark, B., et al. (2000), p. 3.; Krabel,
(2015b), p. 452; Penton's Welding Magazine (2008), p. 8; Preißing, D. (2010), p. 23; Robra,
A., Böhne, A.
(2013), p. 3.

[12] Cf. OECD (2013b), p. 20.

[13] Cf. OECD (2013a), p. 36.

[14] Cf. Robra, A., Böhne, A. (2013), p. 3.

[15] Cf. MINT Zukunft (2015), wp.

[16] Refers to working class persons who execute manual labor.

[17] Cf. Jacoby, T. (2011), p. 9.

[18] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 4-5; Jacoby, T. (2011), p. 9.

[19] Cf. OECD (2013a), p. 15.

[20] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 5.

[21] Cf. Koch, E., Speiser, S. (2010), p. 65.

[22] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 5.

[23] Cf. Constant, A., Tien, B. (2011), p. 7-8; Popp, M., Tietz, J. (2013), wp.; appendix 10.

[24] Cf. Preißing, D. (2010), p. 23.

[25] Cf. OECD (2013a), p. 15.

[26] Cf. Teng, Y. M., Koh, G., Soon, D. (2014), p. 86-87.

[27] Cf. Constant, A., Tien, B. (2011), p. 9-10; Richter, A., Weiß C. (2009), p. 64.

[28] Cf. Richter, A., Weiß C. (2009), p. 64.

[29] Cf. Lorenz, M., Rohrschneider, U. (2009), p. 9-10; Arthur, D. (2012), p. 56.

[30] Cf. Constant, A., Tien, B. (2011), p. 10; Institut für Arbeitsmarkt- und Berufsforschung (IAB)
(2015a), wp.

[31] Average vacancy length of all professions 82 days (August 2015); see figure 1.

[32] Cf. Bundesagentur für Arbeit (2015a), p. 19; Nordmeier, D., Weber, E. (2013), p. 7 et seq.

[33] Cf. Bundesagentur für Arbeit (2015a), p. 6.

[34] Cf. Kirpal, S. (2011), p. 28-30; Hoeckel, K., Schwartz, R. (2010), p. 44-46.

[35] Cf. Bundesagentur für Arbeit (2015a), p. 6-7.

[36] Cf. Berlin, Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt and Thuringia.

[37] Cf. OECD (2013a), p. 38.

[38] Vacancy length measures the period from the moment a certain job vacancy has to be filled until
the BA gets the information of the successful occupation of the job; Bundesagentur für Arbeit
(2013a), p. 7.

[39] Cf. Bundesagentur für Arbeit (2015a), p. 7.

[40] The term employment behavior refers to occupational mobility, migration, preferences of
working life execution; Bundesagentur für Arbeit (2015a), p. 8.

[41] Cf. Bundesagentur für Arbeit (2015a), p. 7-8.

[42] Cf. OECD (2015b), p. 5-20.

[43] Cf. OECD (2013a), p. 36.

[44] Cf. Bundesministerium für Bildung und Forschung (2015a), p. 4; appendix 2.

[45] Cf. OECD (2013a), p. 36-37.

[46] Due to the labor shortage in the industry, many businesses contract employees via labor leasing
companies, to reduce short term need of experts. The BA does not include temporary employees to
detect labor shortage; cf. Bundesagentur für Arbeit (2015a), p. 22.

[47] Cf. Bundesagentur für Arbeit (2015a), p. 9-10.

[48] Cf. Bundesagentur für Arbeit (2015a), p. 10.

[49] Cf.; Brenke, K. (2015), p. 70-73; Bundesagentur für Arbeit (2015a), p. 10;
Franken, A. (2013), p. 32.

[50] Cf. Bundesagentur für Arbeit (2015a), p. 10-11.

[51] Cf. Bundesagentur für Arbeit (2015a), p. 13; Haberland, P. A., Jürgensen, J. S. (2015), p. 7;
figure 1.

[52] Cf. Bundesagentur für Arbeit (2015a), p. 14; Dahlkamp, S. (2015), wp.; Institut der deutschen
Wirtschaft e.V.
(2015), p. 16-17; Lummer, C. (2015), p. 32.

[53] Cf. Behrendt, I., Krystek, U. (2009), p. 368.

[54] Cf. Gaedt, M. (2014), p. 137.

[55] Cf. Burkhart, M., Ostwald, D., Erhard, T. (2012), p. 8.

[56] Cf. OECD (2013a), p. 38; appendix 3.

[57] Cf. Bundesagentur für Arbeit (2015a), p. 12.

[58] Cf. Bundesagentur für Arbeit (2015a), p. 13.

[59] Cf. OECD (2013a), p. 38.

[60] Cf. Kindleberger, C. P. (1967), p. 125-126; Schmid, G. C. (1971), p. 247.

[61] Cf. OECD (2013a), p. 62; Herbert, U. (1990), p. 122; Jacoby, T. (2011), p. 8.

[62] Cf. Schmid, G. C. (1971), p. 247.

[63] Cf. OECD (2013a), p. 62.

[64] The “Iron Curtain” (1946-1989), was the ​name of the ​border between ​Western ​Europe and the
​communist ​countries of ​Eastern ​Europe. The Iron Curtain made it very ​difficult to ​travel into or out of
​Eastern ​Europe; Cambridge University Press 2015 (2015), wp.

[65] Cf. OECD (2013a), p. 62; Chiswick, B., Miller, P. (2014), p. 1312.

[66] Cf. OECD (2007), p. 209.

[67] Cf. Bundesamt für Migration und Flüchtlinge (2005), p. 77-82; OECD (2013a), p. 64.

[68] Cf. OECD (2013a), p. 65.

[69] Cf. Alichniewicz, J., Geis, W., Nintcheu, J. M. (2014), p. 7; Bundesagentur für Arbeit
(2012), p. 13.

[70] Cf. El-Sharif, Y. (2014), wp.; OECD (2014a), p. 1; appendix 4.

[71] Cf. Arrigo, G., Giuseppe Casale, G. A. (2003), p. 124-125; European Union law (2012),
p. 473-474.

[72] Cf. Richert, A. (2011), p. 64.

[73] Cf. Bundesagentur für Arbeit (2013b), wp.

[74] Cf. Richert, A. (2011), p. 264.

[75] Responsible for validation of foreign university degrees in Germany is the Central Office for
Foreign Education Systems (ZAB) in Bonn; cf. Kultusminister Konferenz (2015), wp.

[76] Cf. Verein für soziales Leben e. V. (2012), wp.; Zentralstelle für ausländisches Bildungswesen
(2015), wp.

[77] Cf. Bundesamt für Migration und Flüchtlinge (2016), wp.; Federal Ministry of Education and Research (2015a), wp.; Federal Ministry of Education and Research (2015b), p. 1-2; Heidenreich, J. (2016), p. 45; Hibbeler, B. (2013), p. 174-175.

[78] Cf. Federal Ministry for Economic Affairs and Energy (2015b), p. 5-6.

[79] See chapter 2.3.3 and 2.3.2.

[80] Cf. Federal Ministry of Education and Research (2015c), wp.

[81] Cf. Bundesagentur für Arbeit (2015b), p. 1-8.

[82] Cf. Zentralstelle für ausländisches Bildungswesen (2015), wp.

[83] Cf. Federal Ministry of Education and Research (2015c), wp.

[84] Cf. OECD (2013a), p. 67.

[85] Cf. Federal Ministry for Economic Affairs and Energy (2015a), wp.; Bundesministerium für
Arbeit und Soziales
(2015), wp.; Missions of Confederation of German Employers'
(BDA) (2015), wp.

[86] Cf. Bundesagentur für Arbeit (2014), wp.

[87] Cf. Die Welt (2015), wp.; Federal Office for Migration and Refugees (2015a), wp.

[88] Cf. OECD (2014b), p. 1-4.

[89] Cf. Bundesvereinigung der Deutschen Arbeitgeber (BDA) (2015), p. 1.; Federal Office for
Migration and Refugees
(2015a), wp.

[90] Cf. Institut für Arbeitsmarkt- und Berufsforschung (IAB) (2015b), p. 4.

[91] Cf. Appendix 2.

[92] Cf. OECD (2014b), p. 1-4.

[93] Cf. Bundesvereinigung der Deutschen Arbeitgeber (BDA) (2015), p. 7-9.

[94] The term „third country“ refers to countries outside the EU.

[95] Cf. OECD (2013a), p. 98-99; Phillips, J. M., et al. (2014), p. 197.

[96] Cf. Mosert, B. (2002), p. 93; appendix 9-10.

[97] Cf. OECD (2013a), p. 98.

[98] Cf. Hibbeler, B. (2013), p. 172-175; Holihan, M. B. (2006), p. 70; appendix 8; appendix 13.

[99] Cf. Bundesamt für Migration und Flüchtlinge (2015a), wp.; Hor, J., Keats, L. (2008), p. 9-10;
OECD (2013a), p. 26.

[100] Cf. Hibbeler, B. (2013), p. 172-175.

[101] Cf. Bundesverband Deutscher Unternehmensberater BDU e.V. (2015), p. 4-6;
Mosert, B. (2002), p. 93-94; Yu, K., Cable, D. M. (2013), p. 31.

[102] Cf. Bundesverband Deutscher Unternehmensberater BDU e.V. (2015), p. 4-6;
Hunted Head (2009), wp.; Mosert, B. (2002), p. 94.

[103] Cf. Mosert, B. (2002), p. 95.

[104] Cf. Deutsche Medizin Allianz (2015), wp.; Hor, J., Keats, L. (2008), p. 165.

[105] Cf. Mosert, B. (2002), p. 95-96.

[106] Cf. Hor, J., Keats, L. (2008), p. 52; appendix 10.

[107] Cf. Hillebrecht, S. W., Peiniger, A. A. (2015), p. 55-56.

[108] Cf. Heidelberger, M., Kornherr, L. (2011), p. 235.

[109] Cf. Die Bundesregierung (2015b), p. 2; ManpowerGroup Solutions (2015), p. 2-3; appendix 8;
appendix 10.

[110] The term employer brand is commonly used to describe the organization’s reputation as
an employer. The image of an organization in the mind of current employees and key stakeholders
in the external market should be considered an “attractive place to work”; Headworth, A. (2015), p.
128; (see also chapter 5.3).

[111] Cf. Reynolds, D. H., Weiner, J. A. (2009), p. 55-56.

[112] Cf. Flynn, W., et al. (2015), p. 135; Reynolds, D. H., Weiner, J. A. (2009), p. 56.

[113] Cf. Holihan, M. B. (2006), p. 69-70.

[114] Cf. (2007), wp.; (2015), wp.

[115] Cf. Bundesministerium für Wirtschaft und Technologie (2013), p. 7; Hor, J., Keats, L. (2008),
p. 165.

[116] Cf. Bitkom Research (2014), wp.; Flynn, W., et al. (2015), p. 135.

[117] Cf. ManpowerGroup Solutions (2015), p. 2-3.; Waldman, J. (2011), p. 250.

[118] Statista (2015a), wp.

[119] Cf. Bundesministerium für Wirtschaft und Technologie (2014), p. 6.

[120] Cf. (2015), wp.

[121] Cf. Bundesministerium für Wirtschaft und Energie (2014), p. 100.

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Instruments and methods for a successful integration of international workforce to reduce the skilled labor shortage in Germany
A critical analysis
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international workforce, labor shortage, ageing population, labor market
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Daniel Weber (Author), 2016, Instruments and methods for a successful integration of international workforce to reduce the skilled labor shortage in Germany, Munich, GRIN Verlag,


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