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Spotlight on Germany

The economy in Germany has been very robust for a couple of years now. The general unemployment rate has decreased continuously from 7.9% in 2009 to 4.2% today. The numbers span from 3.4% in Bavaria to almost 9% in the eastern part of Germany.

Besides regional differences, the unemployment rates also differ between industries. In several industries, including Information Technology, Engineering, and the Medical and Nursing sector, the number of open positions exceeds the numbers of job seekers, resulting in a growing talent shortage in these areas. The average search duration for a new job in these sectors is below 3 months.

In other industries, such as Banking and Finance, Retail, and Telecommunication, there is an ongoing downsizing due to the digital transformation in these sectors. Finding a new job in the same industry is difficult, especially for employees who had a long tenure with their previous company; who are of a higher age (50+); or who are less qualified or less flexible. For these people, the average search duration for a new job is 9 to 12 months.

In general, layoffs are difficult to put into practice in Germany due to strong, employee-friendly labor legislation and well-organized works councils in most companies. When an organization goes through a structural change that is likely to result in redundancies, there are certain legal processes that it must follow. It has to announce the measure to the works council as well as to the labor agency. Most likely, this leads to a reconciliation of interests ("Interessenausgleich") and a social redundancy scheme ("Sozialplan") for the employees. Companies must strictly follow this scheme and have little impact regarding decisions whom to lay off and whom to keep.

In terms of transition services, companies can apply for governmental funding of a transfer agency (“Transfergesellschaft”). This funding allows for up to 12 months of wage indemnification for affected employees while they are pushing their career transition forward. This transfer agency is combined with career advice through a certified service provider, such as von Rundstedt. Transfer agencies are common measures for blue- and white-collar employees, especially in Germany-based companies with strong works councils.

Outplacement as a company-paid service is more common in large and/or international corporations than in German midsize companies. It is offered to all levels of employees. Typically, the amount of service depends on the employee level and has a wide range from two months up to unlimited programs for senior managers. Individual programs are standard; group programs or career workshops are an exception.

Innovation and the development of unique and client-centred services is key in outplacement offerings. One example:

Many large companies have closed agreements with unions to avoid compulsory redundancies. When it comes to restructuring measures, it is even harder for them to implement workforce reductions. Thus, there is an increasing need for companies to convince their employees to leave on a voluntary basis. This is especially difficult in light of the fact that because employees in Germany tend to be extremely job safety oriented, they tend to stick to their jobs instead of leaving.

In such cases, von Rundstedt recommends offering orientation consulting to all affected employees to help them evaluate career goals and career options. This service consists of a limited amount of one-on-one meetings and provides relevant labor market information. The orientation consulting should be provided by the employing company without any condition so that employees have free access.

Von Rundstedt is working hard on enhancing its job lead pipeline, using semantic matching technology and dedicated job hunters to provide every individual with quality job offerings and recruiter contacts. This meets the individual's expectations, increases the likelihood of individuals agreeing in a cancellation agreement, and raises corporate client's satisfaction.