🦜 PerchPulse - The Germany Market Update July 2023 🦜

A warm welcome to the July 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

●     Momentous new Immigration Act, designed to attract more skilled non-EU workers to Germany, has passed into law - how this will impact HR and Talent Acquisition teams

●     Increased visa application volumes putting more pressure on immigration offices and leading to calls for digitisation - key updates for HR teams dealing with employee visas

●     Rental market update: Berlin rent index suggests prices may rise, a new neighbourhood for the capital, and how to manage relocating employees’ expectations this summer

●     School’s out for summer! How to support your employees with children over the summer break, and PerchPeek’s top cost-saving tips to help them keep the kids entertained

Talent strategy: Germany passes new Immigration Act to attract skilled migrant workers - what this means for Talent Acquisition & HR leaders

Germany’s new Immigration Act has now passed into law. Here we cover the ins and outs of the act, and how it could impact HR and TA leaders in their talent management efforts.

Why has this law been passed?

There’s a major worker shortage in Germany right now, estimated to be costing the country €86 billion per year. As such, there’s an urgent need to recruit skilled workers from overseas to fill these labour gaps, and immigration reform should make it easier and quicker to do this.

The Immigration Act was passed into law in parliament on 23rd June, with the first provisions - including the new points-based Chancenkarte - projected to become available in late 2023.

Here’s PerchPeek’s summary of the main changes that will affect HR and TA leaders:

New Chancenkarte (‘Opportunity Card’) introduced

●     This is a Canada-style 12-point system that grants points for criteria including work experience, qualifications, German language skills, age, and German connections

●     With the Chancenkarte, job seekers who can financially support themselves may move to Germany without a job offer, for up to a year while they look for work

●     Only those with a vocational qualification or university degree may apply

EU Blue Card (fast-track visa for highly skilled non-EU citizens) rules eased

●     Minimum gross salary threshold reduced from €58,400 to €43,800

●     Blue Card holders may bring their parents, as well as spouses and children

Other significant changes

●     Skilled non-EU workers no longer have to have their degrees officially recognised in Germany, if they have two years of professional experience and a degree that is state-recognised in their country of origin

●     Employment can be offered even if the applicant’s degree is in a different discipline to the role in question

PerchPeek insights

The Chancenkarte is likely to have a significant, positive impact on talent recruitment efforts. Allowing people to move to Germany to seek work means the local talent pool could be widened considerably, and business and People leaders should consider this in their strategy.

What’s more, the loosening of EU Blue Card restrictions, plus changes around recognition of qualifications, mean it should be easier to attract skilled talent from overseas. This is again great news for companies looking to fill skills gaps, and they should take this opportunity to review compensation and relocation policies to remain competitive and attract the best talent.

Talent strategy: Chancellor calls for digitisation of immigration processes - key updates and advice on visas for HR teams 

The introduction of the Immigration Act, plus the proposed citizenship law changes we noted in our last issue, have brought to light current issues around document processing delays, leading to calls for more efficiency. Here’s the latest for HR teams dealing with employee visas.

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!

However, increasing visa application volumes are pushing immigration offices to breaking point:

●     The Berlin Immigration Office issued 50% more visas in 2022 vs. 2021

●     Its department for student and skilled worker visas has a backlog of 10,000 emails

●     According to its director, the office is so overwhelmed, it’s almost ‘dysfunctional’

Now, with the introduction of the Immigration Act and a higher focus on bringing skilled workers to Germany from abroad, Germany’s immigration offices are likely to be busier than ever. As such, the Chancellor is urging them to digitise their services in order to increase efficiency.

It’s worth noting that this ties in with wider digitisation efforts in the EU: the Schengen visa application procedure is to go digital (but not until 2026). The current Schengen visa passport sticker will be replaced with an e-visa and there will be an online application platform.

PerchPeek insights

While it’s positive that the need for increased digitisation in German bureaucratic processes is being called out, realistically any changes will take time to materialise. As the Chancellor puts it, “This is a gigantic modernisation task that would involve investment and lots and lots of work.

In the meantime, here are PerchPeek’s tips for managing visa delays and supporting staff:

●     Be realistic on timeframes: expect delays and build these into relocation plans

●     Manage employees’ expectations on these timeframes from the outset

●     Encourage candidates to take advantage of the Chancenkarte, when available!

Home-finding: Spotlight on Berlin’s rental market, and how to manage employees’ expectations well this summer

Summer’s here, which means it’s about to get super busy in the German rental market! Many employees move at this time, so it’s likely to be even more challenging to secure a home.

To help you support staff relocating to Germany, we’re putting the spotlight on the capital with two hot topics, and our local experts reveal top tips for managing expectations this summer!

1 - New Berlin rent index released - potential impact on renters

Key insights from latest rent index (Mietspiegel):

●     Average rent in Berlin has surpassed €7 per square metre for the first time

●     This is the highest average annual increase since 2017

●     According to this index, prices in the capital have risen by 5.4% since 2021

Rent index data determines whether, and by how much, landlords can legally increase basic rents. Landlords may take this opportunity to propose rent increases, so it’s worth sharing this information with relocating employees who are renting or looking to rent.

2 - Details of new Berlin neighbourhood released - new opportunity for employees

The former freight depot Güterbahnhof Köpenick in Berlin’s southeastern district of Köpenick is to be transformed into a new neighbourhood (or Kiez) consisting of 1,800 new houses and apartments, as well as two schools and numerous Kindergärten providing 170 childcare spots.

The timeline is to be announced, but development is being accelerated by the local government to assuage Berlin’s ongoing housing crisis. It’s worth keeping an eye on updates and sharing this information with relocating employees when properties become available.

How to manage employees’ expectations this summer - from PerchPeek’s local experts

We’re approaching the busiest time of the year in the German rental market - and it was pretty crazy to begin with! Here are the key points to be aware of, and to share with relocating staff from the outset to prepare them well and to give them the best chance of securing a home.

●     Employees must allow plenty of time for searching, and need the financial means to stay in temporary housing! A general timeline is: 3-4 weeks for registration, opening a bank account and obtaining a SCHUFA credit check, plus 8-12 weeks to secure a property.

●     Landlords are highly unlikely to rent to those in their probation period at work, so employees need a sufficient temporary housing allowance for this period.

●     Most landlords stick rigidly to a rule stating that rent should be no more than 40% of a tenant’s net income; employees must take this threshold into account when searching.

Support your talent: How to support working parents this summer, and top tips to help them keep the kids entertained!

For employees with children, the summer break can present challenges that require thoughtful consideration and support from their employers. As an HR leader, understanding the needs of working parents during this time is crucial to maintaining a healthy and engaged workforce!

Here are PerchPeek’s top tips to share on keeping the kids entertained over the summer months, and how you can help support working parents juggle responsibilities at this time.

Deutsche Bahn launches 10-euro summer ticket promotion

●     Until 31st July, short-distance tickets on ICE trains will cost just €9.90

●     Journeys included: Augsburg - Munich, Cologne - Düsseldorf, Hamburg - Leipzig

●     While people of all ages are eligible, this may come as particularly welcome news for families as it could mean big cost savings on days out and short trips!

9-euro summer activity pass launched for children in Berlin

●     The Super-Ferien-Pass gives kids in Berlin unlimited free access to public pools and discounted access to over 180 activity workshops and events, animal parks and ice rinks

●      It costs just €9 and is available to all children under 18 registered at a Berlin address

●     It’s available from 26th June until Easter 2024 and can be purchased at Rewes supermarkets, via the JugendKulturService or the local citizens’ office

Free ‘Culture Pass’ worth €200 for 18-year-olds

●     As of 14th June, young people living in Germany who have turned or are turning 18 in 2023 can obtain a free KulturPass worth €200

●     This can be spent on tickets to cinemas, museums, galleries and theatres, as well as books, vinyl records and musical instruments

●     For more information, head to the KulturPass website here!

While these tips will come as a thoughtful touch for all employees with children, those new to the country may find them especially useful. They’ll present a great opportunity for the whole family to get to know their new surroundings and to get immersed in German culture.

And entertainment tips aside, it’s always important to be mindful of the delicate work-life balancing act that parents tackle over the summer. You can support employees by:

●     Offering flexible working options such as compressed workweeks

●     Providing information on local childcare services and summer camps

●     Setting up parental support networks or employee resource groups

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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