🦜 PerchPulse - The Germany Market Update May 2023 🦜

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

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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.

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A fly-by summary

●     The skilled talent pool in Germany is widening thanks to a 6.3% YoY increase in the number of people migrating to Germany, but the skills shortage is still severe

●     Germany’s state childcare system “on brink of collapse”, lacking almost 380,000 spaces for children, and non-German-speaking new parents are struggling to claim benefits

●     Rental property prices have seen a record-breaking rise of +7% across Germany between January and March 2023; how to help home-hunting employees succeed

●     Berlin has been ranked as having the best public transport system in the world, according to a TimeOut survey - PerchPeek’s tips for helping newcomers get around

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Talent strategy: 6.3% YoY increase in the number of people migrating to Germany, according to Destatis

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Germany has long been a popular destination country for migrants from all over the world, and recent data released by the Federal Office of Statistics (Destatis) helps shed light on this trend.

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Here’s PerchPeek’s summary of the key facts and figures:

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●     2022 saw a 6.3% increase in the number of people who moved to Germany, or were born in the country to foreign-born parents, compared to 2021

●     18.4% of the population - 15.3 million people - were born outside Germany

●     Over the last 10 years, over 6 million people have migrated to Germany, 24% of whom came to look for work (the majority came to flee conflict or seek asylum)

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This increasing trend of migration to Germany is hugely positive for the country’s economy. Germany is currently grappling with a severe worker shortage - like a number of countries throughout the world - which is estimated to be costing the economy €86 billion each year.

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A study by the Cologne Institute for Economic Research (IW) states that the more qualified the job, the harder it is to find suitable talent. The fields most in need of new employees are IT, electrical engineering, construction and planning and supervision. In these sectors, for nine out of 10 vacant positions in Germany, there is a shortage of qualified candidates.

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PerchPeek’s advice to People teams:

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Given the current skills shortage, it’s refreshing to see that the talent pool in Germany is widening thanks to the increasing number of people choosing to migrate to the country. However, in order to effect real change within organisations and meet business goals quickly, it’s necessary for companies to look abroad and relocate talent in order to fill skills gaps.

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There are a number of government initiatives in progress to reform the work visa system, to help bring skilled talent to the country more easily. It’s important to stay on top of developments in this area, and to offer a comprehensive relocation policy - it’ll be attractive to prospective candidates and will ensure a smoother process, helping them hit the ground running!

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Support your talent: German childcare system near collapse, and expat parent language struggles

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Relocating to a new city can be challenging for most people, but for those with children there’s the extra layer of complexity of arranging childcare or schooling, and all the admin that comes with it! Here’s the latest on two recent news stories affecting parents, to share with employees:

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1- The German childcare system is close to collapse, lacking 380,000 spaces

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The federal government is being called on to increase funding for state childcare (to which children in German are entitled from the age of one) after an enquiry has revealed that Germany is lacking almost 380,000 spaces at nurseries, kindergarten and daycare facilities.

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Supporting relocating employees with children:

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●     Share guidance on finding childcare places ASAP, so staff can get a head start

●     Direct to a relocation services provider or local consultant to help secure places

●     Offer a flexible relocation policy that can help cover initial childcare costs

●     Offer flexible and remote working options to help parents juggle responsibilities

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2 - Non-German-speaking new parents struggling to apply for parental allowance

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Most parents who have recently had a child are eligible for a parental allowance (Elterngeld), designed to assuage the loss of earnings due to having a baby. The amount depends on numerous factors such as salary range, but can be 65-100% of the parents’ normal income.

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A new report from the German advice service Pro Familia states that while the number of parents claiming for Elterngeld is increasing, many non-German-speaking residents are really struggling with the application process, which is only available in German.

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Supporting relocating employees with children:

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●     Make sure employees are aware of the parent/child benefits available to them

●     Provide them with clear, comprehensive information on the correct processes

●     Where possible, arrange for a German speaker to help check their application

●     Direct employees to free advice services such as Pro Familia

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Home-finding: Rental costs have risen by a record-breaking 7% across Germany since the New Year

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German rental market update

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●     Asking rents have risen by over 7% between January and March 2023 across Germany

●     This is a record-breaking rise according to German property portal Immoscout24

●     Prices have risen by up to 12% YoY for existing properties and 20% YoY for new builds

●     Berlin and Stuttgart have seen the most extreme jumps, at +8-9% YoY

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Minimum rental costs - Q2 2023 (source: PerchPeek):

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* 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.

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

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Insights from PerchPeek’s Germany experts

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Looking at the data from the first few months of 2023, finding a rental property in Germany’s major cities is just as challenging as ever. There’s no real way for home-hunters to cut corners here; everyone needs to go through the same bureaucratic processes. It’s so important to:

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●     Manage employees’ expectations around timelines for finding a home

●     Provide guidance on how to stand out from the crowd at busy viewings

●     Help them through the more complex processes and paperwork required

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Support your talent: Berlin public transport - PerchPeek’s top tips for getting around and exploring, to share with newcomers to Germany

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For residents in any major city, it’s easy to become accustomed to the local public transport system and even focus on occasional niggles like delays, but for those who call Berlin home, there’s reason to celebrate - and it’s good news to share with relocating employees!

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According to a TimeOut survey of 20,000 city-slickers in 50 locations around the world, Berlin has the best public transport system across the globe. Respondents were simply asked “Is it easy to get around your city by public transport?” and a whopping 97% of Berlin locals agreed!

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In the TimeOut rankings, Berlin was followed by Prague, Tokyo, Copenhagen and Stockholm. Asian cities dominated the rest of the top 10 (Singapore, Hong Kong, Taipei and Shanghai), with Amsterdam coming in at number 10. The full top 19 can be found on TimeOut’s website.

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Facts and figures

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●     Berlin’s public transport network spans 175 stations across the capital

●     Germany made international headlines in summer 2022 when monthly travel passes (for all but cross-country travel) were offered for just €9 per month

●     The BVG, Berlin’s main public transport provider, has recently revealed plans to expand the current network to almost twice its current size!

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Supporting relocating employees

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A big part of settling into life in a new country is getting to know one’s surroundings and exploring the new environment (ideally, as efficiently and cost-effectively as possible!).

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Here are PerchPeek’s tips on how to support employees who are new in town:

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●     Provide information such as maps, current tariffs and direct staff to any handy apps

●     Advise on the most cost-efficient payment options (e.g. pay monthly vs. pay-as-you-go)

●     Make sure to share guidance on staying safe on public transport, especially at night

●     Share ideas for places to visit via the public transport network, to help get settled in

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We hope you enjoyed this month’s update!

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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.

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Thanks for reading, and see you next month!

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