Hiring in Germany

Germany has one of the largest PropTech and ConTech ecosystem concentrations in Europe alongside the UK and France, whose three markets captured around 70% of capital investment in 2022. Renowned for its strong economy, efficient infrastructure, and skilled workforce, Germany has been a hub of employment opportunities, especially in recent years.  

In a competitive business environment, hiring the right talent is crucial for the success and growth of any organisation. Germany, with its robust economy and highly skilled workforce, offers a diverse talent pool for employers. However, navigating the hiring landscape in Germany requires a strategic approach. The purpose of this article is to explore how Germany’s job landscape differentiates itself from other European markets so that companies looking to expand into the German PropTech scene can tailor and adapt their hiring strategies to successfully build and grow their business.  

PropTech in Germany 

Residential PropTech takes up the majority share in Germany, with 66% of the overall PropTech market, an unsurprising statistic when we look at the high population figures of Germany and the demand for housing in the main cities. Berlin has been ranked among the top ten in Europe for smart city initiatives thanks to its focus on information and communication technologies, housing, and healthcare. Paired with the millennial generation entering the property market and placing more emphasis on digital infrastructure and the eco status of housing development, Germany continues to invest in new eco houses with a focus on smart, eco-friendly living. 

Germany, being at the forefront of technological innovation, is experiencing the impact of digital transformation across all industries. As a result, there is a growing demand for highly skilled professionals in fields like data analytics, artificial intelligence, cybersecurity, and software development.  

Demographic 

One of the most distinguishing characteristics of the German hiring landscape that sets it apart from other European countries is the fluctuation of salary and living costs based on region. For example, the cost of living in Munich is nearly 16% higher in comparison to Berlin, resulting in south Germany having 15-20% higher salaries. The average annual salary in the northern German city reaches almost 60,000€, while in the former East German region it is around 40,500€. 

The fluctuating wage landscape in Germany generates challenges for companies looking to expand into certain regions, as often they are unaware of the demand for hiring local talent. Companies who are uninformed and don’t understand the ‘dos’ and ‘donts’ around compensation strategies find themselves unable to attract and retain top talent.  

Recruitment 

A strong employer brand plays a vital role in attracting and retaining top talent. German job seekers value factors such as work-life balance, career development opportunities, company culture, and social responsibility. Employers should focus on effectively communicating these aspects of their organization through their website, social media presence, and employer review platforms.  

For companies looking to hire in Germany, here are some tips that will help attract and retain the top talent:  

• There’s no major city; business is everywhere 
• Notice periods are long; 3+ months 
• Start-ups are harder to sell to candidates 
• Salary split (OTE) can be 50/50, 60/40 or 70/30 percent  
• Business deals take longer than UK / USA 
• Having German customers is so important 
• In Germany, it is the norm to pay a candidate’s travel expenses. It boosts candidate experience and shows the firm is dedicated to the hiring process. 

Education & Employment 

Germany’s renowned education system produces a skilled and well-educated workforce. Employers can establish partnerships with universities, technical schools, and vocational training institutions to tap into emerging talent. Collaborating with these institutions through internships, apprenticeships, or cooperative education programs can provide early access to highly motivated individuals and cultivate a pipeline of future employees.  

The comprehensive education guidelines in Germany of basic general education, administrative regulations for school attendance, management of higher education raise some of the most accomplished students in the world.  In turn, the high standard of tertiary-educated adults entering the job market means that salaries are higher and more competitive, thus companies looking to hire talent in Germany need to ensure they make fully-informed and demographic-specific offers that remain in line with the norm.  

Successfully navigating the hiring landscape in Germany requires a comprehensive approach that considers legal requirements, employer branding, effective use of online recruitment channels, and strategic partnerships with educational institutions. By prioritizing cultural fit, emphasizing soft skills, offering competitive compensation, and promoting diversity and inclusion, employers can attract and retain top talent in Germany’s competitive job market. By implementing these strategies, organizations can build a strong workforce that drives business success and contributes to long-term growth. 

References 

Axeleo Capital, Dimitri Kremp; Discover our PropTech & ConTech Annual Review 2022. (6th March 2023) 

Carelend Germany; How does the Education System in Germany differ from that in other countries? (11th May 2022) 

Ever Estate; Cost of Living in Berlin, Germany in 2023. (28th April 2023) 

Vivid, Pablo René-Worms; 4 things you should know about the German job market. (18th March 2023) 

Unissu; PropTech in Germany.