Executive Search in Germany– 2016 Outlook


2015 was a good year overall for Germany economically.  Business ran “as usual” with a moderate growth expected to come in at around 1.7%. Unemployment continued to fall to 2.65 million or 6%, a rate not seen since 1991.  The demand for workers rose by 95,000 more than the previous year to reach 612,000. The number of people working rose to 43.4 million, 381,000 more than the year before. So overall, Germany has been doing well.

Dominating the news, of course, was the refugee crisis. Opinions are divided as to whether this is going to cause a hardship for Germany or whether it may even cause a welcome increase in young, in part well educated, people. Increasingly large corporates are jumping in with special programs to employ refugees and, according to news reports, are finding them to be well qualified and eager to learn and work.

Considering Germany’s ageing population and demographic problems, this might cause a bit of a shift for Germany.  The influx of this many people, and the expectation of more to come, has given the building industries a push forward, not that this was needed, since construction is at a level not seen since the mid-Nineties when East Germany was being built up.

A further uncertainty for Germany is the pollution scandal of VW. While it is unlikely to affect Germany as a whole, it has shaken German confidence a bit. No one really knows how this will play out. Being fairly dependent on the automotive industry, German companies are warily following all the twists and turns but in particular the sales figures of VW. These have been surprisingly strong (much worse was expected), so that for 2016 this scare could well fade.

The development of the Chinese market is being closely watched by many German companies which export to China or have Chinese manufacturing facilities. Still, while the dependence on the Chinese market varies by company, overall it is not expected to have a large impact on the German economy. Certainly more and more Chinese travel groups are being seen in Germany, a welcome boost to the tourist trade.

There will be lots of discussion in 2016 about the growing powers of the EU and the possibility of the UK leaving the EU (BREXIT).  It is doubtful for the moment, that this will have a big impact on the economy.

On a positive note for Germany, interest rates remain extremely low. The rates are actually too low for the German economy but this is causing Germany to grow. There are fears that the real estate sector may overheat as a consequence but so far there are no signs of this. It does however make for easier expansion for German companies with the concomitant search for Personnel.

In terms of recruitment we find that times of economic growth make recruitment difficult on the one hand because there are few people available directly.  On the other hand, it can be easier because people are not clinging to their jobs as much but are prepared to take a risk:  should the risk go wrong, they can always find another position. We are seeing a stronger influx of foreign companies coming into Germany. But of course many German companies are busy recruiting staff as well.

An interesting phenomenon is that older employees are actively sought at this point. This is a change from 10 years ago when employees who had passed their 50th birthday were extremely difficult to place unless they were in top positions. Today that magic mark has moved up to 55 or even older. This is a reflection of the fact that fewer young people are moving into the market place and that lack is being felt by companies.

According to at least one study, Germany has the lowest birth rate worldwide.  However, 2015 was a year in which the birth rate moved up again for the third time in row

Overall outlook for 2016 is therefore optimistic.