Labor Market Availability

Labor Market Availability

Highly Skilled Workforce

Germany’s world-class education system ensures that the highest standards are always met. The German workforce comprises over 40 million people – making it the largest pool of ready labor in the EU. Additionally, companies in Germany benefit from the high levels of education in the workforce: More than 80 percent of the German workforce has received formal vocational training or is in possession of an academic degree.

Germany’s globally renowned dual system of vocational training consists of about 1.4 million apprentices and almost 8,800 vocational schools. In addition, about 2.7 million students are enrolled at one of Germany’s 425 universities. The majority are on courses with a technical focus. Germany’s share of university students in the sciences, mathematics, computer sciences, and engineering is the highest in the EU, with 36 percent of all students. According to OECD statistics, Germany has one of the highest rates of graduates with a doctoral degree in sciences and engineering.

Pie Chart: Workforce in Germany by Level of Education | © Germany Trade & Invest GmbH

Bar Chart: Scientists and Engineers as a Share of the Country's Total Employment | © Germany Trade & Invest GmbH + Eurostat (2010) Data refers to 2008. Population between ages 25-64

Dual Education System

To secure the economy’s demand for highly-qualified personnel, Germany traditionally relies on a dual system of vocational training - combining the benefits of classroom-based and on-the-job training over a period of two to three years. Every fifth German company participates in the dual vocational training system, which turns their best apprentices into specialists that fulfil each company’s individual needs.

The apprentices also benefit from the system. In 2011, about 68% of all apprentices received an employment contract after completing their training. Almost 1.4 million young people are currently on a vocational training course in Germany. Germany has Europe’s lowest youth unemployment rate and enjoys an excellent reputation as a result of the dual system.

There are currently around 350 occupations recognized by the system. The German government, in close cooperation with the German Chambers of Industry and Commerce (IHKs) and the German Confederation of Skilled Crafts (ZDH), ensures that exacting standards are adhered to rigidly, guaranteeing the quality of training provided across Germany.

The higher education system also applies the dual system of vocational training. There are currently around 64,400 students taking part in a dual study program. These are usually offered by universities of applied sciences. Most of the dual study programs cover engineering or business degrees because of the high level of integration within the 39,600 participating companies.

Chart: Dual System of Apprenticeship | © Germany Trade & Invest GmbH

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Motivated and Dependable Employees

German labor flexibility is reflected in higher than average employee motivation levels – exceeding those of most leading industrialized nations. In fact, according to the IMD World Competitiveness Yearbook, German employee motivation levels are greater than those of their counterparts in the US, China, Russia, Poland, France and the UK. A direct corollary of this is the fact that Germans work more than their international peers (40.4 hours per week) and lose less days per annum to strike action than other European nations (significantly below the EU-28 average according to Eurofound).

Bar Chart: Average Hours Worked per Week in the EU-28 | © Germany Trade & Invest GmbH

Stable Labor Costs

An excellent labor force and efficient production process standards have led to a major increase in productivity in the past decade – a marginal increase over the respective labor cost increase.

Since 2004, wages have risen in most European countries (EU-28). The growth rate averaged 2.8 percent. While some countries – particularly those in eastern Europe – experienced an increase of about seven percent, Germany recorded one of the lowest wage rises within the EU at about 1.8 percent.

This has led to falling unit labor costs, which represents a genuine competitive cost advantage – particularly in manufacturing. In marked contrast to other large industrialized countries in Europe, 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 2004 to 2013.

Bar Chart:Growth of Unit Labor Costs | © Germany Trade & Invest GmbH

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