19th October 2023
In the second of our two-part series on contracting in Germany, we consider why the EU’s largest economy is such a hotbed for highly experienced contractors. What are the factors responsible for this talent and importantly what are the in-demand areas in terms of the specific skills sought by employers? As well as all the available opportunities and financial rewards, many choose to settle in Germany thanks to a high quality of life, including excellent healthcare and public transport. There are however strict employment regulations and contractors must ensure they remain tax compliant.
Although higher interest rates and the global post-pandemic slowdown have hit growth, the German economy nonetheless has an enviable reputation for its industrial might and exporting prowess. It is renowned for its expertise in industries such as auto manufacturing, engineering, chemicals, electricals, steel, metal and textiles. Its success lies in highly specialised industrial companies of all sizes that are world leaders in their fields, which in turn creates those opportunities for talented contractors. You would never write off the world’s fourth-largest economy!
Demand for contractors in Germany
So, in which sectors are we seeing this demand for top talent? In an economy powered by industrial expertise, it is not surprising to learn that engineering contractors are in short supply. Whether mechanical or civil engineering, skills are in high demand across a wide range of sectors, including the country’s automotive sector, the world’s leader in the field. The manufacturing of electronic components, devices and systems has also led to a rising requirement for electronics engineers. Pay rates for highly skilled engineering contractors are among the highest across all industries.
Alongside engineering, Germany has long been a destination of choice for IT and tech contractors. Those with relevant computer science backgrounds with experience in AI, machine learning, data analytics, data science and data visualisation are particularly in demand. But so too are programmers, software developers and applications support experts as well as those with knowledge of enterprise resource planning (ERP) software such as SAP (a German company no less). Cybersecurity is also another highly prized asset skill set given the rise in security breaches.
Germany is also pouring resources into a more sustainable, cleaner future with the country aiming to become carbon neutral by 2045. Green jobs and the development of green technologies are pivotal in helping achieve these targets. The renewables sector now accounts for around half of total consumption, mainly powered by solar and wind. Hundreds of thousands of people already work in the sector, mainly for small and medium-sized enterprises (SMEs) with many more being created. This has fuelled demand for innovative environmental engineers to minimise the effects of pollution.
Jobs for skilled contractors in Germany
Despite challenges such as rising prices and supply chain issues, there is still a burgeoning need for qualified professionals in the construction sector, both in commercial and residential property. There are some big construction investments in the pipeline, including the Regensburg quarter project in Nuremberg, Bavaria’s second biggest city (after Munich). The first phase of the near 400 apartment development is set to be completed in 2024. Meanwhile, the building of a third terminal in Frankfurt airport, due to start in 2026, will boost capacity and serve 19 million extra passengers.
But there are a plethora of opportunities in other areas of the economy too. Doctors, nurses and other medical professionals are very much in demand to help Germany’s healthcare system maintain exceptional service levels to patients. Digitalisation, digital healthcare and telemedicine have further created opportunities for IT and digital tech specialists. And given the status of Frankfurt as one of the world’s foremost finance hubs, banking and financial services specialists can land top roles. The same applies to contractors with suitable experience in accountancy, legal, HR and marketing.
In fact, so acute are shortages in some of the aforementioned sectors that the government has had to make changes to simplify its visa processes to facilitate the entry of skilled workers. Among the new rules, which are expected to come into force in 2024, is an ‘opportunity card’ allowing non-EU workers to stay in the country for up to one year for the purposes of finding work. The recognition of degree-level qualifications is also an area that is being relaxed to boost migrant numbers as is the requirement to be proficient in the German language, which has also been removed.
Contractors looking to offer their services in Germany must of course be aware of all the local employment laws of which there are many. If self-employed with a limited (GmbH) company, the individual has to register with the local tax office or Finanzamt to ensure they’re paying the correct tax and social security contributions. If obtaining work via a third-party recruitment company, then the labour leasing agency is required to hold an AÜG licence according to German federal law to be compliant (you can find out more in our previous hiring contractors in Germany blog).
With an abundance of job opportunities across so many sectors in one of the most advanced economies in the world, it’s a great time to be a contractor in Germany. But you must meet your tax and employment obligations! Our 6CATS International experts can advise on all compliance matters.
6CATS International is part of WorkwellTM Group
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