Fortress Germany - Skilled Immigrants? No Thanks
By Michael Sauga
Germany is lagging behind other major industrialized countries in its efforts to attract skilled workers. While other nations see highly qualified immigrants as a benefit, Germany regards them more as a threat -- and is setting the hurdles as high as it can.
Many engineering sectors in Germany are facing skills shortages. But companies face enormous problems if they try to hire foreign specialists.
It's only a tiny metal rod, but for Oscar Escalante-Mendieta it symbolizes his entry into the professional world. Escalante-Mendieta, a recent graduate in electrical engineering at the University of Karlsruhe and an employee of Detecon, a Bonn-based telecommunications company, is in Moscow searching for radio antennas for a Russian network provider. Together with coworkers from Germany, India and the United States, he is poring over circuit diagrams and manuals, pleased, as he says, "that there is so much to learn on my first job." Escalante-Mendieta's entry into professional life wasn't as pleasant an experience for his employer. While the engineer was settling into his new job in Moscow, Detecon's personnel department was embroiled in a bitter tug-of-war with the German immigration authorities. Because their employee of choice had a Mexican passport, officials used every loophole of German immigration law in an attempt to prevent Detecon from hiring him.
The immigration authorities flatly rejected Detecon's first application for permission to hire the Mexican national. Then they presented an alternative candidate and demanded that the company interview him for the position. Only after Detecon managers told officials that their supposed specialist barely understood English and was even unfamiliar with current cellular phone technologies did the immigration agency give in. It took another three-month marathon of negotiations before Escalante-Mendieta was finally approved.
Detecon's managers breathed a sigh of relief. After all, they still had a further 60-odd skilled positions to fill at the time. But Escalante-Mendieta, for his part, could easily have lived with rejection. "Then I would simply have gone someplace else," he says. After graduation, he says, he received "four lucrative offers from different countries."
The Detecon story is not unusual. Ironically, just as the German economy embarks on its strongest boom in years, the country is on the verge of spoiling its own future by making it difficult for German companies to hire foreign nationals. Every other major industrialized country in the world may be competing for a limited supply of highly skilled specialists, but in Germany -- which currently ranks as the world's leading export nation -- political parties are determined to satisfy the growing demand for highly skilled specialists mainly from a shrinking domestic labor supply.
The German government failed to make any significant changes to the status quo at last week\'s brainstorming meeting in the eastern German town of Meseberg (more...). And while the administration plans to make a few adjustments to the new immigration act, which recently became law after years of heated debate, the changes are minor.
One of the changes is the coalition government's decision to make it slightly easier for Eastern European engineers and foreign university graduates to move to Germany. But, at the same time, the measures were tied to so many conditions and limitations that they will likely attract very few highly qualified workers to Germany in the future. The Association of German Chambers of Industry and Commerce (DIHK) called it merely a "small step in the right direction."
In principle, Berlin's grand coalition is holding fast to a failed immigration policy that has long made experts shake their heads in disbelief. For decades, many of the foreigners who were allowed to immigrate were barely literate in their native language -- let alone German -- and soon became burdens on Germany's social welfare system. At the same time, the government set high hurdles for eminently qualified would-be immigrants from Eastern Europe and Asia.
In the international technology race, Germany resembles a sprinter who decides to attach lead weights to his shoes shortly before the start. While other industrialized nations lure highly qualified foreign workers with tax benefits and recruitment incentives, and while tens of thousands of well-educated Germans emigrate each year, the country is doing its best to discourage qualified workers from even attempting to immigrate.
The regulations are so unrealistic that even the country's leading exporters are increasingly running into problems with German immigration law. Tiemo Kracht, the managing director of Kienbaum, an executive search firm that recruits for German and foreign companies worldwide, is convinced that "Germany hasn't heard the starting gun yet."
Jessica Voss, a human resources manager at accounting and consulting firm Deloitte, knows just how poorly Germany's laws conform to the realities of a global economy. Deloitte's German division is attracting more and more clients from abroad and increasing the percentage of its business that it conducts outside Germany. And yet when Voss attempts to hire employees with the necessary language skills or foreign contacts, she often becomes bogged down in the maze of German immigration law.
Voss recently tried to hire a Russian business school graduate who had done postgraduate work in Berlin on a scholarship awarded by the German Academic Exchange Service. After the man had successfully completed an internship lasting several weeks at Deloitte's Berlin office, Voss wanted to hire him for the company's growing Eastern European business.
But German authorities, arguing that the candidate's foreign degree was not comparable with a German master's degree, refused to issue the necessary work permit. Only after months of negotiations with government agencies and lawyers did Voss finally find a way around the bureaucratic nightmare: Deloitte's Moscow office hired the Russian accountant and then transferred him to Germany.
The process left Voss angry and convinced that "anyone who is forced to find these sorts of alternative solutions and spend so much time dealing with bureaucrats will soon hardly be hiring any foreign candidates any more."
Given experiences like these, it isn't surprising that many German companies don't even recruit foreigners -- and that graduates from places like Poland and Romania make a wide berth around the unwelcoming German employment market.
International research shows that after the fall of the Iron Curtain, Eastern European university graduates emigrated mainly to the United Kingdom and Scandinavia, where they helped spur economic growth. Qualified professionals occasionally stumbled upon Germany, but only as cheap labor for German farmers.
According to statistics compiled by the Nuremberg-based Federal Employment Agency, only 5,088 foreign specialists were admitted to the country in the first six months of this year. This isn't even sufficient to offset the brain drain of highly qualified German citizens, and is a long way from meeting the demand for specialists in the country's current economic boom. There is a currently a shortage of 20,000 engineers in the heavy machinery manufacturing industry, with a shortage of similar proportions also felt in the information technology sector. According to a recent study prepared for Economics Minister Michael Glos, the loss to the German economy is estimated at €20 billion a year.
This is only the beginning, as an analysis by the Ministry of Education and Research indicates. Be it information technology, physics or chemistry, there has been such a massive decline in the numbers of registered and graduating students in the sciences that the ministry is now reporting "bottlenecks" and "shortages" across the board.
The ministry's report warns of a "dramatic" situation, which even a double-digit percentage increase in the numbers of university graduates would hardly defuse. "This is why, at least for a transitional period, the immigration of foreign specialists is completely unavoidable," says Jürgen Egeln of the influential Center for European Economic Research (ZEW). But politicians, especially those dealing with immigration, continue to ignore the calls from the business world. For more than a decade, international organizations and German experts have been calling on the German government to emulate modern, pro-immigration societies, like Canada and the UK, and create programs designed to attract qualified foreign workers.
But few efforts have been made in this direction so far. "Germany is not a country of immigration," say the leaders of the two main parties, the Christian Democratic Union (CDU) and the Social Democratic Party (SPD). Whether they realize it or not, their words are truer than ever.
More people are leaving Germany than coming into the country. All attempts to reverse this trend have consistently failed to be effective.
A program, introduced by former Chancellor Gerhard Schröder, to attract computer experts from Eastern Europe and Asia with American-style "green card" visas was terminated after failing to produce adequate results. And despite years of negotiations, the CDU and SPD have been unable to agree on a quota system that would allow a set number of especially qualified foreigners to be brought into the country each year.
Instead, Germany has retained immigration legislation that Klaus Zimmermann, president of the German Institute for Economic Research (DIW), calls an "immigration prevention law." Under the current law, for example, foreign graduates can only immigrate to Germany easily if they earn an annual salary of at least €85,500. This is the sort of salary that not even every managing director makes in Germany, so it isn't surprising that less than 500 foreign specialists qualified under the €85,500 rule last year.
The provisions that are designed to convince foreign students to remain in the country after completing their university education are no less off-putting. A recent change now gives them a full year after graduating to find work in Germany. However, once they have found a job, the regional employment agency is required to conduct a so-called "preference test" to determine whether an equally qualified German candidate can't be found to fill the same job.
Not only does the process usually drag on for months, but it often ends with the foreign applicant being turned down. As a result, close to 95 percent of foreign students, whose education often costs German taxpayers thousands of euros, end up leaving for other countries more hospitable to foreigners or returning to their native country.
And there's little hope that the recent government resolutions will convince more foreign graduates to stay. Although the grand coalition plans to get rid of the bureaucratic monster that is the preference test, it will also limit the amount of time foreign students are permitted to remain in Germany after graduation to three years. After that they are ordered to return to their native countries. Exactly how this new legislation is meant to inspire young Ukrainians or Koreans to pursue a career in Germany is a secret known only to the cabinet.
 Many German industry sectors are facing huge skills shortages.
The lowering of barriers to immigration for foreign engineers will also be relatively ineffective. The government, at least for the time being, is only opening the borders to candidates who come from the new Eastern European members of the European Union and who have degrees in specialties like heavy machinery manufacturing and electrical engineering. For everyone else, the German labor market remains as inaccessible as ever. And there's even more. Those who brave Germany's inhospitable laws nonetheless often end up caught in the cogs of the over-stretched employment and immigration bureaucracy. Chinese electrical engineer Yun Tang, who, after graduating from the University of Karlsruhe, took a "green card" job with Stuttgart-based electronics giant Bosch, experienced German bureaucracy at first hand.
Tang was so good at his new job that he was soon sent to Japan to work on a special project. But when he returned after a one-year stint in Yokohama and wanted to settle in Germany, the engineer had a rude awakening. The immigration authority informed him that, because he had temporarily moved his place of residence to Japan, he had forfeited his right to reside in Germany. Under the law, the agency told him, he was required to leave the country immediately.
Tang's employer managed to convince the agency to change its mind, but at a high price to Bosch. Contrary to the company's plans for Tang, he was not permitted to return to Japan for the foreseeable future. Tang, for his part, is no longer interested in overseas assignments. "You feel worried that they won't let you back in," he says.
The fact that foreign workers are penalized when their employers transfer them to other locations is only one of the curious features of German laws governing foreign residents. No less bizarre are the consequences of the new 250-page immigration law for the diverse reality of modern human resources management.
Germany's complex rules regarding residency, visa requirements and qualifications have little to do with the world of global export companies in which international teams of experts constantly commute between company headquarters and regional offices. Companies must conform to highly complex regulations that differentiate among whether employees are being brought into the country to do project work, training or research. In some cases, work permit applications must be filed at a central agency in Bonn and in others at a local employment agency. If a foreign employee travels to Munich to work on a project, for example, he is barred from attending a management seminar in Hamburg.
"There is a considerable administrative cost," says Peter Schoof, a human resources development expert with the Stuttgart-based carmaker DaimlerChrysler. The work involved in obtaining the necessary work and residency permits for DaimlerChrysler's foreign employees keeps three full-time employees busy the whole year round at the Stuttgart headquarters.
Even the departments specializing in foreign employees at major German companies are sometimes forced to capitulate when it comes to dealing with the bizarre conditions imposed on international staff exchanges. The program loosens the immigration rules for foreign employees -- but only if a company sends just as many German staff abroad as it brings foreigners to Germany.
Designed to protect the domestic employment market, the regulation actually does the opposite. To circumvent the requirements, some companies are "increasingly outsourcing international projects to other countries," says Bosch human resources director Marie-José Stevens.
Germany is isolating itself with its restrictive policies on foreign residents. But while Germany erects barriers, rival countries are doing their utmost to attract foreign specialists.
Under President Nicolas Sarkozy, for example, France's immigration requirements for well-paid foreign workers, students and their spouses have been improved. In Denmark, the national employers' association has established its own agency to lure specialists from around the world. Belgium and the Netherlands provide attractive tax benefits for qualified foreigners who come to these countries to work.
A proposal by Hesse state governor Roland Koch, who has spent years trying to introduce similar benefits in Germany, failed miserably in the upper house of the German parliament, the Bundesrat. It should come as no surprise that the world's elite graduates are drawn to the UK, Australia or the US, but rarely to Germany.
To attract more highly-qualified employees to Germany, experts like DIW president Zimmermann recommend a comprehensive package of measures. According to Zimmermann, Germany should lower its barriers to graduates seeking to immigrate, relax work permit requirements for foreign students and bring a solid contingent of foreign specialists into the country using a quota system. This is the only way, says Zimmermann, that "Germany can regain a positive image among highly-qualified foreign personnel."
But the chances that the government will heed the experts' recommendations are slim. Although the cabinet, at its meeting in Meseberg, decided to completely restructure access to the German labor market for specialists in the medium term, the two coalition parties disagree on how this should be achieved. The SPD favors a points system, which the CDU has consistently rejected until now. The CDU and its sister party, the Christian Social Union (CSU), want to lower the income thresholds for graduates seeking to immigrate. This, in turn, is unacceptable to the SPD.
A solution to the current impasse is not in sight, and so, for the foreseeable future, the current strategy of splendid isolation will remain in effect. Vice Chancellor Franz Müntefering summed up the status quo when he said last Friday that "tapping domestic potential" had to take preference.
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Wednesday, August 29th, 2007
Fortress Germany - Skilled Immigrants? No Thanks
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