Top Three Things to Know About Staffing in Germany

by Kevin Thacker, Affirm Consulting – business analyst intern

 

Higher Worker Costs and Benefits

In Germany, the minimum wage is considerably higher as compared to the U.S. In the United States, many states have a minimum wage around seven to eight dollars. In Germany, minimum wage is $10.47 when converted to U.S. dollars. Employees are also entitled to 100% of compensation for sick days and with a doctor’s note they can take up to a year of sick leave, if prescribed. German employers also typical offer more vacation days than most employers in the U.S, averaging around thirty (30) days a year of paid leave. Thus, increasing a company’s labor cost well above that of their U.S. counterpart. Also to consider is that German employers are responsible for a large chunk of your worker’s insurance, which may cost an additional five thousand U.S. dollars above and beyond the employee’s minimum wage pay.

Kevin Thacker on campus at Ludwig Maximillian University (Munich, Germany)

 

Labor Unions are Standard

Labor Unions are a standard in Germany. If you are planning on being anything more than a sole proprietorship, this is an important business factor to consider. Labor unions have very close working relationship with management, unlike some of their U.S. counterparts. So, its common for workers to go through the Union to present issues. Some in the U.S. might view this as not saying it “face to face”, however it’s standard in Germany. Many issues are immediately agreed upon instead of an arbitration. Some large big-box retailers tried to introduce their brand to Germany, however the U.S. companies’ anti-union polices were a stumbling block that led to a few of the well-known U.S. corporations failing to sustain their brand/business in Germany.

 

German Workers are Specialized

In the United States, we do not typically have specialized education, as the U.S. educational system (K-12) is predominantly a standardized curriculum. The German educational system however, is a bit different, as it’s not uncommon for people to stop schooling after the ninth grade and begin an internship or work full time. In Germany, there are also many more paths to trade schools and vocational training. The result for German employers is that if you have an opening for a trade job, you will likely have a large qualified applicant pool. This also means German businesses have to do less initial employee training because even younger workers will likely already have had a decent amount of work experience. With heavy German regulations, it also means new skilled employees will normally produce higher quality work, which can help offset German company’s increased labor costs and positively impact their bottom line (profit).

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If you want to learn more about how to hire employees and understanding the impact & costs to your business, check out the My Business CoachGrowing Your Business tutorial.