Like many countries in the EU, Germany is facing a mismatch between available jobs and the skills of those seeking them. Currently, there are some 40,000 open IT positions in Germany. The shortage of candidates with the required technical skills is a reflection of a distinct combination of factors including a strong economy, regional variations and social challenges which affect the tech sector quite as much as other industries.
Reaching out to a wider talent pool
Given the fierce competition, companies seeking to recruit for IT positions perhaps need to use a little more imagination with their offers. In a ‘candidate market’, managers should be prepared to improve the mix of incentives: on-the-job training, for example, is often now much sought after as are more flexible working conditions. Companies will also need to reach out to sections of society previously under-represented in the tech industry: women certainly – and, in some cases, those recent immigrants who already possess some IT skill sets.
At the same time, while there is still not much evidence of competition-by-salary in the north of Germany, the growing technology hub around Munich is seeing companies offer up to 15 -20 per cent higher pay levels for equivalent jobs.
Opportunities on the rise in start-ups
There is also a considerable growth in freelance work and employment by start-ups, according to Christophe Zwaenepoel, director of Computer Futures Germany, “Freelance work is increasingly common and now represents 70 per cent of our placings, while finding suitable candidates for start-ups, temp or permanent, makes up fifty per cent of our business overall.” A recent rise in venture capital funding, especially in the Berlin area, has caused a marked uptick in new IT businesses and the very low industry unemployment level means that good candidates are prepared to take the risk of contract or start-up positions. After all, in the event of failure they can be back in work in a matter of days.
“Freelance work represents up to 70% of our placings”
Start-ups are interesting because they tend to seek a distinctive type of candidate; those with a very technical focus but also willing to spend whatever hours are needed to get the new product or service to market before the funding dries up. The work is often pressurised and probably not sustainable beyond a few years, after which workers will often seek more conventional projects - ones that allow a better work-life balance.
What skills are in demand?
Like everywhere else, there are certain specific skills that are particularly in demand at the present time. In the first place, the digitalisation of services continues apace even in conventionally minded industries. For example, the pharmaceuticals sector is increasingly using ‘big data’ techniques to process test information while the banking industry is experimenting with ways to use similar techniques to improve customer services. The tool and household appliance maker, Bosch is using Internet of Things technology to integrate devices with household management systems for example. Cyber security is also an important growth sector. Experts in all these areas can expect rapid placings.
“The digitalisation of services continues apace even in conventionally minded industries.”
Tapping into the bilingual talent pool
However, Germany also needs to make more progress with languages to take better advantage of the wider talent pool of English speaking experts and consultants. As Christophe Zwaenepoel points out, “US and other companies coming to Germany will be going after the relatively small pool of bi-lingual candidates, but German companies cannot take much advantage – yet - of non-German speaking expertise because, even in relatively advanced companies, the internal systems are still typically all in German.”
For overseas companies, Germany is an attractive proposition because wages have not reached the very high levels found in the US for example, and other costs are lower still, offering entry to the European market for only around a tenth of the cost in California.
A fresh approach for a stable future
For the future, Zwaenepoel identifies an evolving need for a fresh approach to managing IT teams, especially when it comes to handling the teams responsible for traditional IT services as well as those tasked with innovation: “The two activities need different staff, managed in different ways. There are noticeable differences in the age and backgrounds of the typical employees for each type of work and they need different training, different forms of encouragement. Getting the approach right will help German companies innovate faster - while still benefitting from reliable, stable systems internally and improved service for customers.”