Workforce in Germany

Germany has over 400 universities and universities of applied sciences (UAS). Over 52,000 engineers and 58,000 mathematicians and natural scientists graduated in 2009, with tendency to rise.

Through a combination of on- and off-the-job training in Germany’s so-called dual education system, hiring and training costs are reduced (especially for skilled craftsmen and technicians) and recruitment risks minimized. Vocational colleges closely cooperate with approximately 500,000 companies in Germany, ensuring that education always meets specific industry needs.

Highly flexible working practices such as fixed-term contracts, shift systems, and 24/7 operating permits contribute to enhance Germany’s international competitiveness as a suitable investment location for internationally active businesses.

Competitive Labor Costs

Germany is known for very stable labor costs. Wages have risen in most European countries since 2000, some countries - particularly those in Eastern Europe - experienced a rise of more than seven percent.In marked contrast, Germany recorded the lowest labor cost growth within the EU at just 1.6 percent.

Wages are generally negotiated freely. There is no overall statutory minimum wage. Minimum wage regulations exist only in certain industries. Please refer to our Terms of Employment chapter for more information.

• Terms of Employment

Measured in unit labor costs, Germany experienced a major increase in productivity the past decade. In marked contrast to other European countries which have experienced an overall increase in unit labor costs, Germany's unit labor costs decreased by a yearly average of 0.3 percent for the period 2005 to 2010. This made the economy more competitive - particularly manufacturing.

Hiring a workforce

Companies are supported in various ways during their search for suitable employees. The Federal Employment Agency (Bundesagentur für Arbeit) offers professional recruitment services free of charge. It is represented in the municipalities throughout Germany with its job centers.

• Federal Employment Agency

There are also numerous private providers of recruitment services. These companies normally charge the hiring company a fee of no more than two gross monthly salaries of the employee that they procure.

• German Association of Private Employment Agencies (German only)

In addition, companies seeking new personnel usually advertise open positions in newspapers, journals, company websites, or on internet job market websites. Ads for specialists and highly qualified staff are usually placed in national newspapers and professional journals, whereas ads for skilled workers or low-qualification jobs normally appear in local papers.

Public Support Programs

A wide range of labor-related incentives programs supports the development of a company's pool of employees offering qualification and training measures for new employees. In addition to this, under certain conditions, companies can also be supported by wage subsidies.

Labor-related incentives programs are carried out and adjusted by the local job centers according to investor needs. Please refer to our incentives chapter for more information.

• Labor-Related Incentives