What's the outlook for the German job market in 2024?

Unfortunately, Germany's current economic slump is expected to continue through the first half of 2024, with many large firms already warning of coming layoffs. High inflation, fluctuating energy prices, and geopolitical instabilities continue to create challenges for German firms, and many of them don't expect an immediate recovery. Meanwhile, Germany's lack of tradespeople and skilled workers will continue through the coming year.

On a positive note, navigating the visa process is expected to improve for foreign workers in the coming year.

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Who hires foreign workers in Germany?

Among the German companies that tend to hire a lot of foreign workers are international tech and manufacturing companies like Siemens and BMW. International fashion giants like Adidas or Puma, also bring in a lot of international talent. All of these firms are based in the southern state of Bavaria, with Siemens and BMW headquartered in Munich, and Puma and Adidas headquartered in Herzogenaurach, which is close to Nuremberg.

In Berlin, a growing number of foreign workers have found employment among the city's burgeoning startup scene in recent years. But in recent months that momentum seems to have slowed. 

"Based on founders I speak to, startups of all sizes and funding stages will still be cautious with spending into 2024 as capital is still fairly hard to come by, and will likely not be looking to hire many people, if at all," Miriam Partington, DACH correspondent for sifted.eu told The Local.

Partington cites recent layoffs at Spotify and Delivery Hero as examples of the current trend among startups to layoff workers rather than hire more. That said, she noted that in a recent survey conducted by sifted, 20 percent of companies indicated that they plan to grow their headcounts in the next six months.

READ ALSO: What happens to your work permit if you lose your job in Germany?

Beyond startups, the wider German economy has been plagued by slow-growth this year, leaving a number of companies cautious about hiring workers going into 2024.

As reported by Reuters, the Cologne-based German economic institute (IW) published a survey of more than 2,200 firms suggesting more companies expressed negative expectations for the coming year than positive ones. Regarding job creation, 20 percent of companies said they expected to employ more people whereas 35 percent were expecting to employ fewer.

Expensive energy hits chemical and pharmaceutical giants

Since the beginning of Russia's war on Ukraine, rising energy prices have had a big impact on the German economy.

According to DPA, electricity prices for large customers in Germany are almost four times as high as in the USA, and almost twice as high as in France. This has hit chemical and pharmaceutical manufacturers especially hard, but cost increases in these industries ripple outward, affecting the German economy overall. 

This year energy prices have fallen, compared with the price peaks seen during the gas crisis of 2022, and pharmaceutical sales were a bit better than previously expected. But companies appear to be hedging their bets, with many companies suggesting that they don't expect an improvement until 2025.

This means some companies are scaling down. According to a report by Handelsblatt, administrative and office jobs are more likely to be cut than jobs directly related to production. 

Workers still desperately needed throughout Germany

One major thing to keep in mind, though, is that German manufacturers are navigating a huge shortage of skilled workers. 

In fact, foreign workers with specific skill sets may actually find it easier to find work in Germany next year, as efforts to attract and retain skilled workers have just come into effect. In particularly high demand at the moment are trades working with climate related technology; such as workers who install solar panels or heat pumps, or that work on energy grids.

READ ALSO: How Germany is making it easier for skilled workers to get an EU Blue Card

Plus there's still many IT vacancies that will appeal to software engineers around the world, as well as other STEM positions. For young workers, or those looking to re-skill, labour related to the energy transition and sustainable technologies appears to offer some of the most secure jobs. 

Hiring experts also advise jobseekers keep a lookout for vacancies at small to medium sized businesses in Germany as well as the larger firms.

Additionally, Germany continues to see demand for labourers and skilled workers across a variety of other sectors. There is a shortage of construction workers and craftspeople, for instance, as well as train drivers, teachers, social workers, and nursing and care workers.

In an effort to reduce the skilled worker shortage, and to help companies attract more foreign talent, the Skilled Worker Immigration law was enacted this November.

A new jobseekers visa is due to arrive in March 2024, while other visa and Blue Cards requirements have been relaxed or will be soon. The aim is that foreign workers currently living in Germany, or planning to make the move, will see a smoother visa process going forward.