in 2017


Key drivers

Labour market participation (5.1)

German firms should benefit from rising labour market participation rates this year.

Overall wage pressure (5.6)

Real wage growth slowed this year, although it remains higher than the country’s historical average.

Wage pressure in high-skill industries (9.8)

Wages grew faster in high-skill industries – notably finance and insurance, and professional and scientific activities – than in lower-skill ones, increasing pressure on firms in high-skill sectors.


Education flexibility


Labour market participation


Labour market flexibility


Talent mismatch


Overall wage pressure


Wage pressure in high-skill industries


Wage pressure in high-skill occupation


Klaus Breitschopf

Managing Director, Hays Germany

View from the Ground

The German economy continues to perform strongly. The economy has been growing continuously for years, with 2% growth this year, and the labour market is seeing the benefits of this positive development. Employment is at a record 44 million and the unemployment rate is correspondingly low at under 5% – the lowest level in years. The question now arises as to how demographic developments (baby boomers will start to retire in the coming years) and the digital transformation will affect the labour market. The important thing here is to quickly develop new skills among employees in order to remain competitive in these new markets.

Klaus Breitschopf, Managing Director, Hays Germany

COUNTRY profile

Germany’s labour market has tightened considerably, with the unemployment rate (ILO definition) declining to around 3.5%.

This is the lowest since reunification, reflecting a sharp rise in the number of employed workers, up 1.5% in 2017. There are no signs that demand for labour is slowing, with job vacancies increasing by 11% in 2017.

However, the lack of spare capacity in the labour market may start to hamper growth ambitions. Germany’s economic growth is expected to cool over the next five years from a peak in 2017. Over the longer term a working-age population that is starting to rapidly decline is likely to place additional constraints on Germany’s growth potential.

Key skills in demand

  • Software Developers
  • Integrator IT Security Specialists
  • IT Consultants
  • Project Managers
  • Business Analysts