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Labor Market Germany, Talent Recruitment

Tech Talent Shortage in Germany on New Record High

Digitization is challenging German companies to fill more than 100,000 tech specialists within the next years. According to a study by Bitcom, Germany’s leading digital association, the number of vacancies rose by 51 percent within just a year. And there is no end in sight to overcome this tech talent shortage any time soon.

As of January 2020, there are currently 124,000 open vacancies for IT specialists in Germany. This corresponds to an increase of 51 percent compared to the previous year, where there were recorded 82,000 open IT positions. The number of vacant IT positions has more than doubled within two years (2017: 55,000).

Those figures resulted from study on the job market for IT specialists that was carried out by the digital association Bitkom. 83 percent of the survey stated that they experienced a shortage of tech talents on the job market, compared to 67 percent two years ago. In addition, 65 percent expect the situation to worsen in the coming years.

Tech talent shortage in Germany slowing down growth potential


“The lack of IT experts no longer affects just the IT industry, but the entire economy as well as administration, authorities and science. As digitalization accelerates, the need for tech talents in Germany will continue to rise sharply in the coming years,” said Bitkom President Achim Berg. “Every unplaced tech position is putting a burden on each company’s revenue goals as well as on the ability to innovate while slowing down the necessary digital transformation. The shortage of tech talents threatens the competitiveness of the entire German economy.”

It is worth mentioning that tech jobs are much more difficult to place for German companies that other roles. According to Bitkom’s study, 40 percent of companies asked say that it takes longer to fill tech positions than other positions.

A year ago, the figure was significantly lower at 31 percent. The time for which an open IT position remains vacant on average has also increased from five to six months. In 18 percent of all German companies, tech positions generally remain vacant for more than half a year, a year ago this was only the case in 10 percent of companies.

“Tech, IT in specific, has much shorter innovation cycles in comparison to other departments within a company. Therefore, a vacancy for half a year or more is a small eternity and can lead to projects being relocated to other countries or failing to materialize.” says Berg.

Lack of software engineers


When looking for qualified tech talents in Germany, software developers in particular are amongst the most popular. Every third company with at least one open IT position (32 percent) is looking for programmers. This is followed by IT application managers (18 percent), data scientists (13 percent), product managers (12 percent), IT consultants and techservice managers (10 percent each).

“The high demand for software developers shows the serious changes that are taking place in the course of digitalization in companies,” says Berg. “Software is increasingly becoming part of the core business. This means that software development is moving into companies across all industries and is becoming increasingly important there.”

Gap between salary expectations and qualifications of applicants


The difficulties that companies encounter in filling IT positions are diverse. The most common concern is that applicants’ salary expectations are too high (72 percent) and do not match their qualifications (52 percent). 41 percent report a general lack of professional qualifications on the part of applicants and 27 percent report poor test results in the selection process, or lack of necessary knowledge of new technologies such as AI or Blockchain (9 percent).

One in three companies (32 percent) requires the applicants to have the necessary soft skills such as the ability to work in a team, and the willingness to go on business trips or even relocate for a new job. Nevertheless, one in eight companies (12 percent) actually receives no applications for advertised vacancies.

Using the right channels


In Berg’s view, companies are well advised to change the way they approach potential candidates. A vast majority indicated that candidates can only file a job application by e-mail (97 per cent) or in submitting an actual hard-copy application folder (83 per cent). On the other hand, only a minority uses online application tools (26 percent) or allows applications to be submitted via online business networks such as LinkedIn or Xing (6 percent). Just 1 percent use application apps.

“Companies must adapt their application procedures to match the new digital world. To get a first impression of a software developer, a printed cover letter with certificates and work samples is of little help. A concise mail with links to successful projects and their source code on appropriate platforms would be much more meaningful,” says Berg.

Changes in searching tech talents in Germany


Talent recruitment in Germany will change considerably in the upcoming years. For example, 70 percent of the companies assume that so-called active sourcing will become significantly more important. Companies are looking for suitable candidates in business networks or on online platforms, for example.

In addition, cooperations with universities (59 percent), headhunters and recruitment agencies (58 percent), career fairs (54 percent), online job exchanges (52 percent) and business networks (51 percent) are also becoming more important.

In contrast, traditional channels for employee searches such as the print edition of newspapers (84 percent) or trade journals (76 percent) will lose importance, as will the employment agency (42 percent) and the online editions of daily and weekly newspapers (36 percent).

Addressing the tech talent shortage


As a short-term measure, Bitkom recommends allowing more flexibility in labour law, for example by creating the possibility for IT specialists to freely organize their working time within the framework of a maximum weekly working time. In addition, the digital sector should urgently be exempted from the new provisions of the Temporary Employment Act that includes local employment setups such as PEO and Employer of Record in Germany.

This law has led companies to having less access to external specialists or having to replace external teams in ongoing projects. One in six companies (17 percent) says that the amendment to the temporary employment law (AUG) has further increased their own shortage of specialists. And 16 percent state that they have not succeeded in hiring freelancers or freelancers on a permanent basis.

“The new regulations in the temporary employment law were intended to prevent wage dumping and precarious employment relationships. But what may suit slaughterhouses and hairdressing salons with low wages is a burden on highly qualified and well-paid IT freelancers, and can be disastrous for their customers,” explains Berg.

Universal Hires – experts in tech recruitment and temporary staffing


As leading human resource consultancy, Universal Hires has established themselves as the industry experts when talking current challenging in placing highly skilled, urgently needed IT staff. The company is providing tailor-made staffing solutions to foreign companies struggling to navigate in Germany.

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Lisa Meier
Lisa Meier

Lisa Meier has more than ten years’ experience in providing strategic advice and legal guidance on international trade, administrative and legal matters to foreign companies, associations, and governments doing business in Germany. She advises companies in a broad range of industries on successfully navigating the German economic environment.

Lisa brings a wealth of knowledge to Universal Hires’ marketing and client success team. In her free time, Lisa spends time exploring the unique city-life of Berlin and all the diversity that the East of Germany have to offer.

About Universal Hires

Universal Hires is Germany’s leading staffing provider. With expertise in recruitment and employer of record services, the company levarges its market entry support.

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