To become the European Union’s new financial hub, Germany is waiving some rigid labor laws to make it easier for financial institutions to do business there and attract lenders to Frankfurt at a time when many banks are debating the benefits of relocation to Frankfurt, Dublin, Amsterdam, Paris, Luxembourg and other EU cities. Germany is exempting specific components of its labor laws, more particularly those mandating big payouts for redundancies, which previously made it more difficult to terminate workers.
There is ongoing discussion focused on promoting immigration of highly-skilled talent to the market. The booming economy, aging populations and limited domestic skills have placed pressure on employers to seek talent from beyond the nation’s borders to fill jobs that would otherwise remain open. Future business development may be threatened by a shortage of skilled workers, a fact recognized by nearly half of organizations surveyed earlier this year.
Local officials are targeting 2025 to reach ‘full employment’ of the workforce in Germany, a term defined as a jobless rate of less than 3%, a rate that has not been seen since the boom of the mid-1970s. Germany’s jobless rate is currently at a post-reunification low of 5.5%. This low number of available talent, coupled with the fact that nearly one-third of the workforce is between the ages of 52-71 years old, implies that promoting the immigration of skilled talent could become a focal point in the coming months.