Why Does Germany Fail to Attract Foreign Skilled Workers? Germany Needs a More Welcoming Culture

Various measures aimed at encouraging direly needed skilled workers to immigrate to Germany have not been successful to date. Dr. Holger Bonin, a labour market expert at ZEW, explains what firms can do to attract foreign workers without having to rely on government programmes.

Dr. Holger Bonin has been the head of ZEW's department of "Labour Markets, Human Resources, and Social Policy" since 2007. His research interests include employment problems among low-skilled workers, wage flexibility, the economic impacts of immigration and of the aging of society, and the willingness to employees to accept risk. Bonin  has been active as an expert advisor to the European Commission, the United Nations Development Program (UNDP), and several German ministries.

Many countries are successful in integrating workers from abroad into their labour markets, thus allowing them to profit from foreign skilled labour. Why does Germany have such a difficult time in this area?

First of all, we've been sending the message for too long that we are not a country that welcomes immigrants. In addition, relying on the immigration of foreign skilled workers as a means of securing the supply of skilled labour is by no means an undisputed policy, both in the political realm and in broader society. For this reason, recent improvements in the opportunities for highly skilled workers to immigrate to Germany have gone largely unnoticed abroad. Additional factors that play a role include the relatively low wages earned by workers at the upper end of the income scale (from an international perspective), high tax rates, and the language barrier. However, the conditions for attracting foreign workers to Germany have been getting better. Germany's booming economy has drawn international attention and should serve to encourage more workers to move here.

In large companies there are so-called diversity guidelines that aim to simplify cooperation between foreign workers and native German employees, as well as prevent discrimination. Have such efforts borne fruit?

The success of such efforts can only be judged on an individual basis. However, on the whole large companies tend to perform better at managing diverse workforces. Managing diversity is admittedly a complex process. Yet an open commitment to diversity and the definition of strategic guidelines by management are not sufficient unto themselves. In order to be successful, employees must breathe life into diversity guidelines with practical ideas and deliberate action. Many DAX companies have special managers to oversee diversity policies; this of course facilitates employee training and the monitoring of achievement.  

Should we thus be concerned about diversity at small and mid-sized enterprises?

Indeed, leaders at SMEs often focus on more efficient production while neglecting human resources management and marketing. SMEs are also unable to leverage economies of scale in the area of diversity management. First, we need to inform SMEs so that managers at such firms are aware of the advantages of a welcoming business culture. For example, the successful integration of foreign employees can help firms to win the battle to attract the best talent and aid in the effort to expand to new markets. Second, collaborative efforts are needed to reduce costs in the area of diversity management. One possibility is to form associations for the recruitment of foreign workers. Furthermore, SMEs could work together to offer joint intercultural training courses for their employees.

Is it possible to develop a welcoming business climate for foreign workers irrespective of the larger social environment?

Surely, but it is difficult. For this reason, efforts should be made at the national level to support firms in recruiting international employees. An essential first step would be for the political arena to send a clear and authentic message that Germany is a country that welcomes immigrants, and that we are working actively to respect and integrate immigrants in their diversity. Yet that alone, of course, is not sufficient. An open dialogue with social groups and citizens is necessary in order to translate these aims into concrete initiatives so that foreign workers truly feel welcome in Germany.