🦜 PerchPulse - The Germany Market Update August 2023 🦜

A warm welcome to the August issue of PerchPeek’s Germany Market Monthly update!

Here’s where you’ll find the hottest updates around employee relocation and international talent strategy, insights from our experts on housing and cost-of-living news affecting your staff, the latest trends in global mobility, and tips and tricks on ways to support your teams.

A fly-by summary

●      Germany ranked in bottom five countries for expat life in 2023 in InterNations survey - revealing the extra focus GM leaders need to spend on helping employees settle in

●      The new points-based Chancenkarte will come into effect in March 2024, and severe backlash for Frankfurt’s online immigration portal - key updates for GM leaders

●      Germany’s housing shortage at highest level for 20 years, with 700,000 homes needed, but construction is set to slow - how to help employees navigate this tricky market

●      Plans launched for a new direct Berlin-Paris rail route, but a study reveals train travel in Germany is 51% more expensive than flying - how to help employees cut travel costs

Talent strategy: Germany ranked one of worst countries for expats in 2023 - how People leaders can help employees settle in better

Important insights incoming for global mobility professionals! The InterNations Expat Insider 2023 survey is out now, highlighting some uncomfortable truths around expat life in Germany. Here’s the lowdown, and what this means for GM leaders supporting relocating employees.

PerchPeek previously reported on InterNations’ Expat Essentials Index 2023, published earlier this year and making up a quarter of the full Expat Insider survey (full details in our April issue!). In this index, Germany was ranked as the hardest country to start a new life as an expat, largely due to difficulties with bureaucracy, finding accommodation and learning the language.

Now, the full Expat Insider 2023 survey has been published and it’s also bound to come as a bit of a blow for Germany-based People leaders. Germany ranks as the 49th out of 53 best countries for expats in the survey of over 12,000 respondents from all over the world.

Aside from the Expat Essentials Index, the survey looks at four additional indexes:

●      Quality of Life - leisure options, healthcare, transportation and personal safety

●      Ease of Settling In - local friendliness, making friends, and culture and welcome

●      Working Abroad - career prospects, salary, work and leisure, and work culture

●      Personal Finance - cost of living

Germany ranked relatively well for Quality of Life (18th out of 53) and Working Abroad (15th), while it hit the very middle of the table for Personal Finance (28th).

However, it was a low result for Ease of Settling In, where Germany ranked 49th. The country scored low on the three subsections - Culture & Welcome, Local Friendliness and Finding Friends - indicating that expats in Germany don’t experience a very warm welcome and find it difficult to make new friends, leading to feelings of unhappiness and loneliness.

PerchPeek insights

This latest poor ranking for expat life in Germany might be a little hard to swallow, but it’s super important knowledge for HR leaders, both when it comes to supporting relocating employees and attracting new talent from abroad - especially if your acquisition efforts are to be ramped up in the near future to take advantage of the new Immigration Act (read on for more on this!)

This survey really highlights the specific problem areas that People leaders can work to mitigate for relocating employees and candidates around settling in - here are our top tips:

●      Help relocating staff buddy up to share their experiences and advice for moving

●      Schedule events for relocating employees to get to know each other

●      Share details of local community groups and events for new arrivals

●      Share information about language learning classes and other learning opportunities

Talent strategy: Chancenkarte to be adopted in March 2024, and strong criticism of online immigration portal - key updates for GM leaders

Now that the Immigration Act has passed into law, an implementation timeline has now been announced, plus there’s been backlash against efforts to digitise immigration procedures. Here’s the scoop on these two key updates for GM leaders supporting relocating employees!

New immigration law to be adopted in March 2024

In our last issue we reported that the Immigration Act, comprising the new points-based Chancenkarte (Opportunity Card), new EU Blue Card rules and other significant changes, had passed into law, paving the way to attracting many more non-EU skilled workers to Germany.

A spokesperson from the German Interior Ministry has now announced that the new law is expected to be adopted by March 2024.

PerchPeek insights

While this timeline is slightly later than originally stated - as the previous estimate was that the law would be adopted in late 2023 - it’s nevertheless great to see that there’s continuing momentum for this groundbreaking development in the world of skilled worker migration.

Now that there’s a target of March 2024 to work towards, we would advise GM leaders looking to fill skills shortages by targeting talent from overseas to start reviewing compensation and benefit packages now to ensure that they’re in line with competitor companies, and to revise talent acquisition strategies to target those entering Germany via the Chancenkarte!

Frankfurt Foreigners’ Office online portal heavily criticised

After the revelation that the Frankfurt Ausländerbehörde (Foreigners’ Office) had a backlog of 15,000 unanswered email queries, the authority opened a new online portal in June 2022.

Unfortunately, the portal doesn’t appear to be making things any easier. A group of immigration lawyers has condemned the portal as a “contact avoidance mechanism that effectively makes it impossible for users to present their concerns” , and argued that it in fact made processes more confusing and convoluted, and could lead to serious issues for those migrating.

PerchPeek insights

When it comes to relocation, Germany has the unfortunate reputation of being slow and heavy in its bureaucratic matters, with a lot of paperwork and few digital processes. Managing relocating employees’ expectations on this point is certainly a priority for HR leaders!

While it’s encouraging to see that efforts are being made to digitise processes and catch up with the rest of Europe, it’s clear that much more needs to be done, and in reality it’s going to take time before reliable online processes can be implemented for those relocating.

In the meantime, here’s how to help relocating employees deal with bureaucratic headaches:

●      Hold an advisory call at the very beginning of a relocation to manage expectations

●      Share realistic information around timelines - and encourage patience!

●      Provide details of authorities to contact, and where paper documents are needed

For the person moving, having access to someone who can go through the relocation process with them - and just having someone to talk to and share queries and concerns - can be a massive benefit, in terms of invaluable emotional support as well as providing information!

Home-finding: Germany’s housing shortage at highest level in 20 years - how to help employees tackle this challenging rental market

We’re right in the busiest time of the year for employee relocation - and in the German rental market, things were rather crazy to begin with! Stay ahead of the curve this summer with the latest trends and updates tailored for HR and global mobility leaders to support relocating staff.

In the news

●      Germany’s housing shortage at highest level in 20 years - A study states that 700,000 new properties are currently needed to alleviate pressure on the housing market; in 2022, the total number of new properties completed was 290,000.

●      New housing construction rate to decline sharply - Despite the current property shortage, a new study by the ifo Institute predicts that the rate of housing construction will fall by 32% by 2025 due to increasing costs within the building industry.

●      Tenants’ rights to challenge illegally high rents extended - Renters are generally entitled to information on how their rent is calculated; now, the responsibility has been passed from tenants to request this information, to landlords to make it available.

Minimum rental costs - Q3 2023 (source: PerchPeek):

* Long-term prices are based on warm rent (Warmmiete) which includes utilities such as water, gas and heating. Electricity and internet are extra and will add €100-€200 per month.

For more rental cost data for Germany, give PerchPeek a shout here!

Insights from PerchPeek’s Germany experts

The suggestion that property construction will slow significantly is concerning, especially when considering the introduction of the Chancenkarte and heightened efforts to bring new talent from abroad to Germany. It seems like a perfect storm of increased demand and decreased supply.

It’s so important to provide relocating employees with tools and guidance, to increase their chances of securing a home in an incredibly competitive market. Here are two top tips:

●      Help employees compile a Bewerbungsmappe - a portfolio/dossier of all the documents they’ll need for a solid property application. It’s likely that landlords will request this collection of documents, so having it ready will make them appear desirable tenants!

●      Offer support in getting set up on ImmoScout24 and provide tips on creating property alerts, enabling employees to jump on great listings as soon as they’re posted!

Support your talent: Key train travel updates and top tips for helping relocating employees explore Germany - in a cost-effective way!

As Deutsche Bahn unveils new train routes to enhance connectivity between cities in Germany and beyond, the high cost of rail travel persists. Here we take a look at the latest updates and cost trends, and share our top tips for helping relocating employees settle in and explore their new surroundings in Germany, without breaking the bank. All aboard!

New direct Berlin-Paris services to be launched

●      A new long-distance direct train will link the German and French capitals

●      It’s expected to launch in December 2024, running via Frankfurt and Saarbrücken

●      A new direct Berlin-Paris night service is also expected to launch in 2024

New high-speed train lines planned, to connect northern European cities

●      Deutsche Bahn has revealed plans to launch a new high-speed ‘Metropolitan Network’

●      Development would take place over the next few years

●      The journey time between Hamburg and Copenhagen would be cut to just two hours

PerchPeek insights

Getting to know one’s surroundings is an important part of settling into a new city, so it’s great to hear of train travel developments that’ll benefit relocating employees in future. Plus, improving connectivity between cities not only helps assignees explore their new country, but also opens up opportunities for more flexible working and options for living further from the office.

In the meantime, the cost of rail travel is increasingly challenging for consumers. A new study by Greenpeace reveals that on average, travelling by train in Germany is twice as expensive as flying! This is due to relatively high train fares and airlines’ aggressive pricing tactics.

Here are PerchPeek’s top tips for helping relocating employees cut travel costs:

●      €49 Deutschland-Ticket - Share details of this scheme offering unlimited travel on regional (non-high-speed) trains and buses for one month for just €49

●      Saver Fare discounts - With Sparpreis (Saver Fare) tickets, employees can save 25-50% by pre-booking tickets for specific dates and times, up to 180 days in advance

●      BahnCard discounts: Employees can purchase a BahnCard to save up to 50% on regular prices, with various options based on travel frequency

●      Free train travel for children - Up to four kids under 15 travel free when named on one ticket with anyone age 15 or older

●      Group travel offers - Help employees buddy up and explore together with DB’s Group Saver Fare - groups of six or more travel from just €8.90 per person

We hope you enjoyed this month’s update!

If you have any feedback, comments or questions about what's happening in your location, feel free to reach out via the form at the bottom of this page.

Thanks for reading, and see you next month!

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