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German hourly labour costs outstrip EU rivals

Germany's average hourly labour cost was €31.70 in 2013, giving it the seventh highest rate among the 28 EU countries - and its costs are rising faster than the European average.

Published: 12 May 2014 11:02 CEST

German hourly labour costs outstrip EU rivals

Builders at work on the European Central Bank in Frankfurt. Photo:DPA

The federal statistics office, Destatis, reported on Monday that private sector employers in the country paid 34 percent more per hour than the European average, but three percent lower than in neighbouring France.

The country was neck and neck with Finnish employers.

And recent years have seen a steady growth in labour costs in Germany, with private employers paying on average 2.7 percent more per hour each year between 2011 and 2013. From 2004 to 2010 it only rose by an average of 1.4 percent each year.

Workers in Germany could also enjoy their biggest annual wage rise this year since 1992, Bild newspaper reported on Monday, because of low inflation and wage agreements made between workers and their employers.

“An upturn is finally in sight in Germany which could benefit the whole population,” Gustav Horn from economic institute the IMK said.

The highest overall hourly labour costs, according to Destatis, were in Sweden, whose employers pay an average €43 an hour, followed by Belgium (€41.2) and Denmark (€39.80).

The country with the lowest average hourly costs in the EU was Bulgaria at €3.70.

In the manufacturing sector, German industrial employers paid out an average of €36.20 per hour, placing them fifth in the EU after Sweden, Belgium, Denmark and France respectively.

The UK ranked almost exactly in the middle of the bunch at 13th, with average hourly costs in the private sector at €21.10, and labour costs in manufacturing standing at €22.

Labour costs consist of gross wages added to non-wage costs, including social security and pension contributions.

SEE ALSO: Ten things you should do in a German office

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Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions.

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds.

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local.

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with.

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