Category Archives: Europe @en

The refugee crisis and its consequences for the labor market

The refugee crisis presents the EU with a big challenge. Especially Germany and Austria have to cope with it. In September 163,772 new refugees have been registered.

Curse or Blessing for the labor market? The Balkaninvest-Team starts with this post a series of blogposts on this hot toppic!

refugee crisis and labor market
Refugee crisis and labor market

Differences in the refugee process between Austria and Germany

Refugees in Austria have three month after acceptance for asylum procedure access to independent and dependent work. They are offered time-limited work permits for the following areas:

  • Seasonal or harvest work
  • Working as journalist, artist, sports teacher or language trainer
  • Charitable work
  • EUR 100/month additional earnings
  • (holiday) internship
  • Voluntary work

Once they are granted asylum they are coequal to Austrians except for the voting rights and have free access to the employment and apprenticeship market. Refuges who are not granted asylum but who also cannot be deported to their homeland because of safety reasons are allowed to work and have unrestricted access to the apprenticeship market

In Germany approved refugees with residence permit are allowed to work without restrictions. Additionally there is the suspension of deportation. The suspension is granted to refugees who are not deported although their asylum application has been rejected. This refugees and refugees with residence permit have access to the labor market after three month.

A disparity to Austria is the priority check. German employees or employees from the EU member states have priority over refugees for vacancies.

But because of the current positive labor market situation and the high number of job vacancies (retrieved 9 September 2015) there could be changes in the priority check anytime soon.

Barriers for refugees on the labor market

Beside country-specific differences in job training and practicing it is also important to consider that many refugees only have compulsory education and often are faced with problems concerning the Latin alphabet. Many of them have professions which almost do not exist any more in Europe like carpet makers or fishermen. Most do not own documents or credentials.

In addition to that it can be difficult for them to work in a regulated work environment because of traumatic experiences and their consequences caused by the war.

Integration of refugees on the labor market

In the meantime there are offered online education and employment platforms like Workeer or Mygrade, which connect job seekers and employers and enable an easy application.

Once a refugee is recruited it is advantageous to nominate an employee which cares about the special needs, concerns and problems and simultaneously enable them an easy entrance into the employment market.

Graduates need in the German labour market 2015

According to a study by the Staufenbiel Institute in 2015, German employers are optimistic towards the developments in the labour market for graduates. Even though a decreasing number of companies expect an increasing need for graduates compared to the last years, pessimistic forecasts for most disciplines are an exception.

In 2015 particularly economists are in demand. For almost 45 percent of the offered positions, of which half are positions for internships, graduates with an economic background are needed. 3% of the companies forecast a rapidly growing demand for economists for the next five years.

Increasing demand for engineers and computer experts

Compared to the previous year the forecast for the demand for engineers and computer scientists is slightly less optimistic but still positive. For engineers, 35 percent of the employers (2 percent less than last year) expect a rising or significantly rising demand. Over the next five years, this amount will rise up to 63 percent which means a decreasing tendency in comparison to the forecasted increase in demand last year (68 percent).

The predictions for IT graduates remain nearly unchanged compared to the previous year. 38 percent of the companies expect rising and 8 percent significantly rising demand. The job prospects remain bright in the future: 51 percent of the companies expect an increase and 51 percent a strong increase for the demand of computer scientists.

Focus on interns

Almost half of all graduates jobs are provided for interns (44 percent). 6% of the jobs are for trainee programs and 18% for young professionals. The remaining workplaces are split up between graduates (27%), clerks (3%) and associates (2%).

In computer science, the distribution focuses less on internships (35%) but more on young professionals (31%). Workplaces for engineers are offered especially for interns (43%) and graduates (29%). Trainee positions are for IT graduates (4%) and engineers (3%) less frequently offered.

Employers prefer Master’s degrees

Inside application processes primarily Master’s degrees are preferred. 90% of the companies favour this type of degree over a University Diploma (76%), a University Bachelor’s degree (60%) and a Diploma of a University of Applied Sciences (55%).

This tendency can be also detected for engineers and computer scientists. 97% of all companies prefer engineers with Master’s degrees and 92% prefer IT graduates with Master’s degrees. The Diploma of a University of Applied Sciences in Computer Science (54%) and Engineering (63%) is clearly preferred over a Bachelor’s degree. A Bachelor’s degree in Computer Science is preferred by 47% and a Bachelor’s degree in Engineering by 36% of the companies.

Minimum wage in Germany from January 2015

With the beginning of 2015 Germany introduces for the first time in its history a general minimum salary. Until now Germany was one of the few European countries without such a standard. Employers are obliged to pay their employees an hourly gross salary of not less than 8,50 Euro beginning in January. According to calculations of the German government about 3,7 Million people are currently earning less than that and will benefit from the new legislation.

The minimum wage will be attuned to the salary level development on the German market on a regular basis by an independent commission with members from both labour unions and employer organization.

Minimum wage Germany
Minimum wage in Germany from 2015

Minimum salary valid for Bulgarians

The new minimum wage will cover all employees that work in Germany, no matter what nationality. Furthermore, also foreign companies have to comply with the requirements of the minimum salary law (with the official, not very reader-friendly name “Tarifautonomiestärkungsgesetz”) and pay their delegated staff at least the defined hourly salary of 8,50 Euro. This can be the case e.g. for Bulgarians that are send to Germany to do services – but working on a Bulgarian labour contract.

Correlation with Arbeitnehmerentsendegesetz

For several business branches a minimum salary is no news at all: The Arbeitnehmerentsendegesetz-law which was introduced in 1996 and fundamentally revised in 2009 defined minimum wages for several industrial sectors such as construction, cleaning, and health care.

The Arbeitnehmerentsendegesetz is binding for foreign companies once they are active on the German market. As the name indicates the intention of it was to avoid dumping competition of foreign companies that pay wages below German standards to their employees. The minimum wages vary depending on the particular industry but are in general higher than the newly introduced general minimum salary. In case that one of the defined rates is higher than the 8,50 Euro, employers will have to continue to comply with the well-known Arbeitnehmerentsendegesetz and transfer remunerations above the 8,50-threshold.

Accountability of companies under new minimum wage law

The new Tarifautonomiestärkungsgesetz which regulates the minimum wage points in its §14 “Accountability of purchaser” to the respective norm of the Arbneitnehmerentsendegesetz which is to be used here as well. Accordingly companies bear responsibility if other companies that fulfil service contracts for them violate the minimum wage norm. They may be charged for malpractice of sub-contractors with administrative offence of up to 500.000 Euros per case. It will be highly advisable that companies avoid this risk by including rights of exemption in their contracts with sub-contractors.

OECD criticizes Germany over low high-skilled immigration rate

The publication of an OECD report on the immigration of foreign workers to the German labor market has prompted keen media interest over the last few days.

After we reported only last week about the lack of sufficient interest of German IT companies to searching for qualified staff abroad, we are now presenting a comprehensive economical study of the OECD (Organization for Economic Co-operation and Development).

The study describes that the access to the German labor market as relatively easy (compared to other OECD member countries). Yet numbers suggest that in Germany, in spite of the alleged shortage of skilled workers, the market share of labor migrants from outside the EU and the European Free Trade Area (EFTA) accounts for a fifth and even tenth of the share of other studied countries such as Australia, Denmark, Canada and the United Kingdom.

SMEs account for considerable difficulties with migrant workers

The situation with Small and Medium Enterprises (SMEs) could be described as problematic. These types of businesses often encounter serious difficulties in finding suitable staff from abroad, which is apparent from the graph illustrating the results of the surveyed companies. .

Indeed, the shortage of skill workers is far more common in SMEs than in larger firms,

In contrast to big companies, SMEs have no international intercompany personnel exchange to facilitate recruitment of expat employees.Therefore the report recommends employers – especially SMEs – put more effort into looking for qualified personnel aboard if they cannot meet their need for skilled workers on the local labor market, the OECD says.

One of the many explanations of the problematic situation is that both at home and aboard the German immigration system is perceived as restrictive and difficult to access, argues the OECD report.

OECD recommends coining of an immigration strategy

Yves Leterme, Deputy Secretary-General of the OECD, advised for a consistent immigration policy during the presentation of the study on 4 February 2013 in Berlin. Without such an approach, meeting the projected shortage of skilled workers would be difficult: ‘The prosperity of Germany is largely dependent on whether it will be able to stay competitive despite its aging population.’

Read the full OEDC study ‘Immigration of foreign workers: Germany’ by clicking on the PDF thumb below.