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Which sectors are looking to hire in Germany?

Despite growing concerns that Germany could face a recession in 2023, some sectors are increasingly optimistic and even looking to hire more staff.

Published: 30 January 2023 16:18 CET
A man works on the engine of an aircraft in a Lufthansa Technik workshop.
A man works on the engine of an aircraft in a Lufthansa Technik workshop. Photo: picture alliance/dpa | Daniel Reinhardt

What’s going on?

Last week, Federal Economics Minister, Robert Habeck (Greens), presented Germany’s annual economic report for 2023, which showed that gross domestic product is expected to grow slightly – by 0.2 percent – this year.

READ ALSO: Why fears of a recession in Germany are rising

Though Habeck said that the figures were “not good”, he said that the situation is better than had previously been feared – particularly for the jobs sector.

At the end of 2022, the number of people in employment reached a record high of around 45.7 million, and the labour market is expected to continue its upswing.

“This trend of job creation is expected to continue this year,” the German government’s annual economic report said and “labour demand is high in many sectors” despite the economic slowdown.

In line with this optimistic outlook for jobs, the latest employment barometer from the Ifo Institute for Economic Research rose in January to 100.2 points from 99.6 points in December.

The Ifo’s employment barometer is a survey which asks around 9,500 businesses in the manufacturing, construction, wholesaling, retailing and services sectors to report on their employment plans for the coming three months.

“The fading pessimism in the German economy is also reflected in the labour market,” said the head of Ifo surveys, Klaus Wohlrabe.

Which industries are looking to hire?

According to the Ifo’s Employment Barometer, the demand for staff rose most sharply in the manufacturing industry and is particularly strong among manufacturers of machinery and in the electrical and electronics industry.  Examples of those affected in the manufacturing industry include companies which manufacture vehicles and parts, chemicals and metal products as well as food and animal feed.

“New employees are being sought, particularly in mechanical engineering and the electrical industry,” Wohlrabe said.

READ ALSO: Five well-paid jobs in Germany that nobody wants to do

An example of an industrial company looking for skilled workers at the moment is aircraft manufacturer Airbus.

Airbus plans to recruit 13,000 new employees worldwide this year, the majority of which – 9,000 in total – are to be created at European sites.

The chairman of Airbus’ works council in Bremen, Jens Brüggemann, said that the company also hopes to create new jobs in Bremen, while for the Hamburg site, the company recently announced that it would create 1,000 new jobs this year due to a major order from India.

The need for new staff has also increased among service providers – such as transport and telecommunications companies,  accommodation and event providers, architectural and engineering firms, as well as legal, tax and business consultation services.  

In the IT industry, in particular, there are many open positions.

In fact, the report says that while some major firms are shedding jobs, other firms will want to employ the laid off staff. 

“The layoffs at large IT companies are an opportunity for many small and medium-sized companies to hire new employees,” the Ifo Institute said in its report.

READ ALSO: German software giant SAP to cut 3,000 jobs

In the retail sector, hiring and layoff plans are more or less in balance in the latest employment barometer, though another study by the Ifo last August found that 41.9 percent of companies in this industry reported problems with a lack of staff. 

In the construction industry, the report also showed that more companies are now willing to hire new staff despite the difficult environment – for example, due to rising material and interest rates. Last summer’s Ifo report also found that the 39.3 percent of construction companies were struggling with staff shortages.

READ ALSO: EXPLAINED: The German industries ‘most affected’ by skilled worker shortage

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READER INSIGHTS

‘Prepare for lots of paperwork’: What it’s like to be self-employed in Germany

Being self-employed or freelance in Germany has lots of positives but it can also be costly and difficult - especially during an economic slump. The Local readers share what it's like working for yourself in Germany in 2024 along with their advice.

Published: 24 May 2024 15:17 CEST
'Prepare for lots of paperwork': What it's like to be self-employed in Germany

Working for yourself in Germany can be a rewarding experience. But it’s fair to say that being self-employed is not for the faint-hearted.

With a lot of bureaucracy to wade through and high costs, those who decide to go it alone – whether through setting up a business or as a freelancer – can face hurdles.  

And it can get even more tricky during a cost of living crisis. A recent survey found that many self-employed people are facing difficulties finding assignments as Germany’s economy has slumped. 

READ ALSO: Almost half of freelancers in Germany struggling to find assignments

The Local asked readers to share their experience of being self-employed in Germany, what changes they’d like to see and their tips for others who are considering going down this path.  

‘Golden era is over’

There were mixed views on how the situation stands at the moment, although most said they had seen a dip in the market.

Freelance language teacher Joe, 54, based in Munich, said demand was still there “but less budget seems to be affecting some clients”. 

Andrew, 39, in Berlin, who is a freelance web developer, said “The tech market is tough right now, with the ‘golden era’ of the 2010s being over.

“I blame massive VC over-investment creating unrealistic demand in 2020 and now companies are cutting back.”

READ ALSO: Everything you need to know about becoming a freelancer in Germany 

Others said the slowdown was improving.

“I have a steady work stream for now and the market seems to be slowly improving, but there was a sharp downturn towards the end of 2021 and the market has been very noticeably harder since then,” said Michele, 33, who’s based in Berlin and is a freelance software engineer.

‘More difficult finding German clients’

Lots of people said they were looking for clients outside Germany.

Haylee, 34, a copywriter in Berlin, said competition was “super high” right now. 

“Luckily I can look for jobs in my home country (Australia) as well,” she said. 

Luc, 58, who’s based in Munich and works in business development for life sciences said it has been “more difficult to find German clients, but easier finding clients located in Asia that are looking for European entry and support”.

Self-employed or an employee? Being self-employed can be tricky but rewarding in Germany.

Self-employed or an employee? Being self-employed can be tricky but rewarding in Germany. Photo: picture alliance / dpa-tmn | Andrea Warnecke

For Erica, 40, looking outside Germany has also been a way for her to keep a steady stream of work.

The self-employed copywriter in Berlin said: “I have had a lot of prospects, new projects and clients in the past two years. I work across the US, UK and EU markets, among others, so I am not directly reliant on German clients. While other freelancers limited to the tech or generic marketing sectors have faced a downswing, my sector (corporate sustainability) is very active.”

Another respondent, Alex, 40, in Berlin, who works as a consultant for digital product development said it was harder to find assignments and that there was a higher expectation on creating content. 

Advances in technology are also a factor. A writer and journalist who has been freelancing for several years told us: “Several side gigs have been replaced by generative AI (blog posts and white papers).”

‘Everything falls on the freelancer’

When asked how Germany fares as a country to be self-employed in, respondents said it isn’t easy. 

“Compared to being a salaried employee it’s not that great,” said language teacher Joe in Munich. 

Most people mentioned the high cost of health insurance and other insurance contributions, as well as the extra paperwork. Others said it has become more difficult to find a tax advisor, and urged Germany to make processes around self-employed and freelance policies simpler. 

Gordon Barnes, 50, in Munich, who is an IT consultant said the biggest problem about being self-employed in Germany is “around pension and retirement planning”

“Everything is on the freelancer without any support,” he added. 

Jason Wright, 46, a freelance motorsport design engineer based in North Rhine-Westphalia said those going it alone need to be “prepared for a lot of paperwork and strict constraints on how you operate on a day-to-day basis”.

He said he’d like to see more support available in English “especially from the tax authorities”. 

READ ALSO: How to get a freelance visa for Germany from outside the EU

A woman working on her laptop.

A woman working on her laptop. Photo by Marcus Aurelius: https://www.pexels.com/photo/woman-using-macbook-pro-4063697/

Consultant Mike Moseley, 66, in Mülheim un der Ruhr, said he found the process of registering as self-employed and doing tax returns “intimidating”. 

Michele in Berlin said taking the first steps to becoming a freelancer in Germany is hard.

“This is not my first freelancing stint, so I’m quite accustomed to the processes, but the entry barrier is still fairly high,” said Michele.

Andrew in Berlin said, however, that once you get a tax advisor and fill in the correct registration forms, “it’s generally pretty straight-forward”.

Get a tax advisor, save and network

Many respondents advised getting professional advice on taxes. 

Alex in Berlin recommended networking to meet and talk with other freelancers, getting a separate bank account and trying to get a tax advisor “as soon as possible”. 

A few respondents to our survey recommended those who are eligible to apply for Germany’s artist social insurance fund, known as the Künstlersozialkasse (KSK), which provides artistic freelancers with an affordable way into the social insurance system.

“You can get copies of the application form in English if you need it, said a writer who wished to remain anonymous.

READ ALSO: KSK – How creative freelancers can pay less for German health insurance

The Local readers also recommended saving.

“Be sure to put something aside each month for retirement,” said Richard, 70, in Frankfurt.

Andrew in Berlin said people should set aside 25 percent of their income from the start for taxes, adding: “Another 20 percent will likely go to the Krankenkasse!”

Meanwhile, Erica in Berlin advised people to “think strategically through all aspects of business” when they venture into freelancing.

“Explore different pricing models beyond hourly, which doesn’t reward high experience or efficiency,” she said. “Connect with high-earning freelancers in your field and learn from them. Set boundaries with clients on timelines, scope, and service offers. Develop your own policies and processes to lead client engagements.”

Ultimately, the additional effort required to freelance makes some question if it’s worth it. Joe in Munich said: “Do whatever you can to avoid it…there is a lot of administration.”

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