Germany emerging as attractive destination for skilled workers

Germany is gradually easing its laws on citizenship, immigration and visas to attract migrant workers to address increasing labor shortages. As a result, the European nation is becoming an appealing destination for youth seeking jobs and education for countries like Nepal. Many Nepali students and migrant workers are currently heading to countries such as the US, Canada, Australia, and the Middle East. 

Germany needs 400,000 foreign workers annually to bridge its labor gap, according to the country’s Federal Employment Office. Recent data shows that 10,670 Nepali workers and students have already chosen Germany. Nepali citizens can apply for a German work visa if they meet any of the following criteria: completion of a recognized training course or study program, a degree equivalent to a German qualification, a degree recognized in Germany, at least five years of professional or academic experience, vocational training, and German language proficiency.

In 2023, the German Parliament passed legislation aimed at attracting workers from non-European countries. Germany is now looking at South Asia and Southeast Asian countries for skilled laborers to keep its economy moving. The new law prioritizes work experience over academic qualifications, allows foreign workers to bring their families, and offers a pathway to citizenship. Germany has also relaxed its citizenship policy—anyone with five years of work experience in Germany and strong German language skills can apply for citizenship. This shift is driven by an aging population, with baby boomers retiring and birth rates steadily declining.

Germany’s population is at risk of long-term decline, with a birth rate of only 1.5 children per woman—below the two children needed to sustain the population. Without immigration, this trend is expected to continue. After a baby boom in the 1960s, birth rates began to decline from the 1980s onward. According to DW, there have been significant changes in birth patterns in a long-term comparison with 2013. In 2013, 49.4 percent of births were first children, 34.4 percent were second children, and 16.1 percent were third or subsequent children. However, between 2013 and 2023, the proportion of first-born children has decreased, while births to third or later children have increased.

According to migration expert Frank Burgdörfer, most women in the 1970s had children in their early 20s, but today, they are more likely to have children in their 30s. Without migration, Germany’s population will continue to shrink, while the number of people requiring care is steadily rising, he added.

Germany’s labor market is now facing multiple challenges. Unemployment is gradually declining, while job vacancies are increasing daily. According to Burgdörfer, sectors with high demand include finishing and dry construction, geriatric care, industrial glass production, metal production and construction, building construction, and vehicle and aircraft manufacturing.

In eastern Germany, 39.7 percent of businesses are struggling with skilled labor shortages, compared to a lower 31.8 percent in Hessen and Rhineland-Palatinate, according to Burgdörfer. Employers in many eastern regions face particular challenges in recruiting highly skilled young workers due to a noticeable decline in the working-age population and low net migration. Structurally weak rural areas and small towns are especially vulnerable, potentially falling behind economically as a result, he added.

Official statistics show that the working-age population is expected to shrink by 1.6m to 4.8m over the next 15 years, while the number of people reaching retirement age (67 or older) will increase significantly throughout the 2020s and 2030s.

Germany plans to attract 400,000 skilled workers annually. But there are various challengers. High taxes and the difficult German language pose major barriers, especially as Germany competes with the USA, Canada and China for talent. Following the Russia-Ukraine war and other global conflicts, Germany has seen an influx of refugees. However, integrating them into the workforce has proven challenging due to language barriers and lack of vocational skills. While humanitarian immigration has increased, it has not translated effectively into meeting Germany's skilled labor demands.

Various German institutions, including the Goethe Institute, are working to support successful integration into the German labor market. According to Schengen News, Germany granted 80,000 work visas in the first half of 2024, with 40,000 issued to skilled workers—3,000 more compared to the same period of 2023.

Ralph Heck, chairperson of the Bertelsmann Foundation, said that population aging is evident across almost all German states. The percentage of people aged 65 and above is projected to increase from 22 percent in 2020 to 28 percent in 2040, while the working-age population will decline from 54 percent to 48 percent.

A March 2024 report by the Federal Institute for Population Research revealed that live births in 2023 fell to their lowest level since 2009. The birth rate dropped from 1.57 per woman in 2021 to approximately 1.36 in autumn 2023. According to the report, West Germany's birth rate has historically remained low, fluctuating between 1.2 and 1.4 children per woman for four decades after 1975.

Germany’s most in-demand professions include green jobs, nursing professionals, physicians, engineers, IT specialists, scientists, craftspeople, and various healthcare roles such as dental assistants, medical assistants, veterinary assistants, physiotherapists, occupational therapists, pharmacists and podiatrists. Nepal and Germany signed an agreement for legal labor migration in October last year. Labor ministry officials say Germany is looking to recruit some 3,000 workers from Nepal.