Despite Early Optimism, German Companies Hire Few Refugees

A year ago, as Germany opened its borders to a surge of migrants and refugees, Chancellor Angela Merkel said,"Wir schaffen das" — "We can do it." More than a million asylum seekers arrived in Germany last year, and they're eligible to start working after three months.

Many expected that the influx of new arrivals would help Germany's economy, already the strongest in Europe. Big players in German business were enthusiastic. Dieter Zetsche, the CEO of Daimler, the big car maker, predicted a new "economic miracle." Frank Appel, the CEO of Deutsche Post, the huge courier company, praised the additional value for the labor market that the refugees would bring.

Germany, like most every country in Europe, has an aging workforce and a low birthrate and needs more young workers in the years to come.

But the miracle hasn't happened. The easy entrance to the German labor market was overestimated, especially for Syrian refugees, says Wido Geis of the Cologne Institute for Economic Research. The challenges include language skills, education, training and Germany's own bureaucracy.

One out of three German companies says it plans to hire refugees this year or next. But only 7 percent of all German firms have actually done so in the last 24 months, according to the Institute for Economic Studies in Munich, which polled managers earlier this year.

And a grand total of 54 refugees have managed to find employment with the country's biggest 30 companies, according to a survey in June by the daily Frankfurter Allgemeine Zeitung. Fifty of them are employed by Deutsche Post.

While small- and medium-sized companies have made efforts to bring in refugee employees, Germany's biggest economic players have not done enough, says economy minister Sigmar Gabriel. In July, he wrote to 30 Frankfurt stock exchange companies, urging them to hire more refugees.

"Without you," he wrote, "the bridge is not yet complete."

Language skills are the biggest challenge, says Geis, because 98 percent of the asylum seekers are not familiar with German. Eighty-six percent of German managers surveyed by the Institute for Economic Studies call the language barrier "very huge."

The assumption was that asylum seekers would primarily include people with relatively high education levels, comparable to German degrees. But in fact, many who arrived are unskilled and can understand neither English nor German.

Many unskilled refugees have been discouraged by Germany's dual apprenticeship system – which involves both on-the-job training and going to school – and would rather take a better paid job without further qualification right at the beginning. Some have taken low-skill "one-euro" jobs as a springboard into the labor market, though it's not a long-term solution.

"Many refugees need money quickly to send it back to their relatives in their home country or pay their bills and they do not see the advantages of an apprenticeship that starts with less pay," explains Susanne Eikemeier from the German Federal Agency for Employment. "We try to convince them that this would be better in the long run and we try to figure out what skills they actually have. The problem is that a mechanic from Afghanistan may repair cars, but he never went to a professional school and got a certificate."

So German companies cannot really compare him to other applicants. At the same time, refugees face financial pressures: Some have exhausted their savings to flee their home countries or must pay off human traffickers.

And there are administrative and bureaucratic hurdles. Companies want to know if the refugees they're considering hiring will be able to stay in Germany permanently. Otherwise, efforts to integrate somebody in an organization seem in vain.

The employment of refugees generally requires the approval of the Federal Agency for Employment and the immigration office. Even with a new law to facilitate integration in the labor market, companies in some regions still have to make sure there is no German applicant who is more qualified for the position. In theory, refugees are allowed to work after three months — but in reality, it might take a year.

To make matters even more difficult, refugees are unfamiliar with German procedures – so sometimes they miss job interviews or fill out forms incorrectly. Unlike in Sweden, where refugees are assigned guides to help them, or the U.K., which is training former refugees to mentor newcomers, refugees in Germany often navigate their new country on their own.

It may take years for most refugees to land full-time employment in Germany. A March 2016 report of the European Parliament says the likelihood of finding work quickly in the German labor market is minimal.

But work is the key to successful integration, German politicians and economists say. And the potential workforce is huge. Eikemeier is still optimistic. It is not a question of if somebody can be fully integrated, she says, but only when.