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HR Policies in Germany

hr policies in germany

Germany’s Human Resource Policies seek to strike a balance between investors’ interests and those of workers by clearly outlining each party’s responsibilities and setting limitations for them.

A company’s handbook may contain regulations regarding how many hours an employee can work per week; however, this could contradict statutory law and cause complications for all involved.


German labor and employment law is distinctively protective of employees compared with many Anglo-American countries, in that all statutory rules are binding and employers cannot deviate from them to their employee’s disadvantage. Furthermore, German jurisprudence and higher regional labor courts have developed principles with equivalent effects as statute law; such as holiday entitlement provisions from the Federal Act on Holidays (“Bundesurlaubsgesetz”) or Maternity Protection Act (“Mutterschutzgesetz”). Both acts contain legally-binding clauses.

Training is an integral component of Germany’s work environment, helping increase market competitiveness. Apprentices may retrain for future positions or receive additional qualifications during their working time; and the government places great importance on making sure vocational education remains market-relevant.

An increasing proportion of Germany’s workforce is getting older, requiring support to maintain physical and cognitive capacities. Furthermore, staff need to respond quickly and flexibly to changing workplace requirements; with changing demographics of metro areas workforce combined with shifts in social values as well as pressure for diversity management being one key aspect of human resource management in Germany.

Older Workers

After the economic crisis, older workers in Germany experienced dramatic improvement on the labor market. Employment rates increased while unemployment decreased dramatically – often referred to as a “German employment miracle”. A variety of programs tailored towards older workers specifically target in-work benefits and temporary wage subsidies which increase work incentives by replacing means-tested unemployment compensation payments with earnings in new employment positions. This phenomenon is often known as “German employment miracle”.

Still, older workers remain underrepresented and their participation rate falls quickly with age. One reason may be firms’ aversion to hiring older workers; perhaps due to an assumption they will be less flexible to adjust to organizational or technological change. Yet research demonstrates such fears are largely unfounded: Bertschek and Meyer (2009) demonstrate a firm’s IT intensity is unaffected by its age composition while Backes-Gellner and Veen (2013) confirms it.

Another reason for older workers’ poor labor market performance is a reduced likelihood of receiving career-focused positions with opportunities for significant advancement. This issue is compounded by life cycle contracts which use heavy backload compensation structures in order to induce employee loyalty, learning and effort; Heywood et al (2011) also find that employers with life cycle contracts tend to hire older workers for peripheral roles more frequently.

Foreign Workers

Germany has recently undertaken various changes intended to make Germany an more attractive workplace destination for skilled professionals, including making recognition of foreign qualifications easier and allowing workers to enter without prioritisation checks or proof of language skills. Furthermore, minimum salaries will be decreased in occupations experiencing high employee shortages.

Experts estimate that Europe’s largest economy requires it to import an additional 400,000 workers from overseas every year, so efforts have been underway to relax immigration rules and increase training opportunities for this target group.

Germany’s training policy emphasizes helping foreigners gain job experience and enter middle-skilled work, through apprenticeships, vocational and secondary schools as well as its German language learning program. Additionally, this initiative covers other training activities, including job-specific training and internships. Furthermore, the federal government is taking steps to lower barriers to hiring by creating a visa system for highly qualified workers. Residence requirements have also been relaxed in order to facilitate seeking vocational training opportunities, with lower language requirements and up to 20 hours per week of additional employment available to prospective students – this should help them integrate more fully into society while preparing them for professional life in the future.

Occupational Specialties

Occupations in this sector mainly encompass skilled craft and service occupations like carpentry, metal working, mechanical engineering, electrical engineering, IT programming/software development/programming etc. All of these occupations face a widespread skills shortage with carpenters being particularly affected. Furthermore, healthcare specialists with master craftsman certificates as well as bachelor degree holders (especially nursing/geriatric care providers ) being scarcely represented.

OECD’s Ageing Society Report highlights several causes for this skills deficit, such as digitalisation and decarbonisation as well as demographic shift. These trends are increasing demand for high-level cognitive and social interaction skills that are increasing skills shortages across certain occupations – particularly among low-qualified workers.

The new Skilled Immigration Act has significantly broadened the framework under which qualified professionals from other countries can come to Germany to work, in particular those possessing vocational training qualifications. Future agreements between the Federal Employment Agency and employment agencies in a third country will enable immigration of skilled professionals without priority checks, helping address skill shortages. These changes aim to address these shortages effectively. As part of its plan to bolster Occupational Health and Safety (OSH), further enhancements will be made to its system of basic support for enterprises (Grundbetreuung) and company-specific assistance (betriebsspezifische Betreuung). All aspects will be overseen by the Federal Ministry of Labour and Social Affairs.

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