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The Best Global Mobility Policies to Support Relocating Graduates and Interns
January 27, 2024
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Hello and welcome to PerchPeek’s July 2022 German Market Update! As relocation experts, we keep as up-to-date as possible on international market trends and factors influencing HR leaders, their teams and their employees, and we've brought this insight into a monthly newsletter.
Keep on reading to find out more about where Germany is heading in our July 2022 German market update.
As of June 2022, the number of people migrating to Germany was fairly stable year on year (at around 200,000 per annum). But with an aging population, the government is facing a major skills shortage of 390,000 vacancies in some key sectors.
As a result, in combination with January’s minimum wage increase to 12 euros, in the last few months the government has launched new rules which will allow skilled workers from outside countries to fast-track the immigration process in order to take a job in Germany.
This is expected to provide a significant increase in movers to Germany - the German government is predicting they will be doubling immigration to an estimated 400,000 new skilled workers a year!
How can companies take advantage of this?
Speedy recruiting: German businesses can use the new VISA options as a very attractive selling point to come and work for them - if approved, the VISA process can take as little as three weeks for these new outside workers. It’s now the fastest of any VISA process in Europe!
The rules also allow for spouses and dependents to join workers in the country.
Check out details of the fast-track procedure for skilled workers.
If Germany can manage to bring in the 400,000 workers they are targeting, this will not only help with their labour shortage, but also bring new businesses to Germany.
Ukrainians unemployed in Germany
The seasonal unemployment rate in Germany increased to a seven-month high of 5.3% in June, after 3 months at pre-Covid levels of 5%. This was caused by refugees from Ukraine registering with the labour office in search of work. This influx may mean more talent availability for German businesses.
The cost of living varies widely among the 16 German states, but the average across them is still lower than most of the other high-GDP European nations and Western countries. This is due to a very strong economic system, which has greatly aided in the post-Covid recovery, preventing major inflation throughout the pandemic.
However the crisis in Ukraine has massively hit German prices. The inflation rate reached an all-time high for the third month in a row in May 22, at +7.9%. This is mainly caused by the increase in the cost of energy products, but we also see price increases for many other goods, especially food.
PerchPeek’s German relocation team has been working extremely hard to find homes in the current market - Berlin and Munich in particular have always had competitive rental markets, but now it's even worse.
As well as the pre-existing housing shortage, this has been driven by an influx of businesses bringing people into these core cities post-pandemic. In addition, the major influx of Ukrainians into temporary and permanent accommodation has reduced availability.
At PerchPeek we recommend putting aside at least 6 weeks for both short and long term accommodation searches, and budgets in the region of the below for permanent accommodation:
On July 4th, Germany's top union official said entire industries were at risk due to Russia cutting natural gas supplies to the country. According to Yasmin Fahimi, the glass, chemical and natural gas industries are majorly threatened by Russia’s natural gas giant provider Gazprom cutting flows to the country in response to Western sanctions.
In addition to this, it’s been predicted that summer of 2022 would be particularly difficult for the economy, with manufacturing hit by supply bottlenecks and inflation reducing the population’s spending power. The purchasing power of disposable incomes is strongly affected by the high inflation mentioned above, and with inflation the real disposable incomes of families are expected to decline significantly.
It’s a challenging time for German people and businesses, caused by the challenges with the Ukrainian conflict. With companies and people seeing prices rise, it is super important to stay close to the needs of your employees.
The positive news is that the German government is taking steps to make sure people are still attracted to the country. Through the fast-track VISA, minimum wage improvements, and a historically strong economy, there's hope for brighter days ahead for businesses.
Thanks for reading - see you next month!
No matter where your business is located, or how many employees you have to move, the relocation experts at PerchPeek are standing by at all times to answer any and all questions that you may have about moving and taking care of your most important business asset, your team! Feel free to reach out for a call with us or book a demo to see exactly how PerchPeek can work for you and your teams!
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We hope you found this update insightful! We’d love to hear your thoughts.
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