Problem identified, but not yet solved: Are more foreign skilled workers coming soon?

 The new Skilled Immigration Act can only be the beginning. Further steps are essential.

Problem identified, but not yet solved: Are more foreign skilled workers coming soon?

Skilled workers from third countries outside the EU have to overcome difficult hurdles if they want to immigrate to Germany. That is why the immigration law reform aims to simplify the situation when it comes to recognizing professional qualifications, and also includes a scoring system. How practical are the plans from an employer’s perspective?

Whether the trades, the metal and electrical industry, the health and care sector, childcare, or STEM professions in the fields of mathematics, computer science, natural and engineering sciences and technology: Many industries are desperately seeking skilled workers. According to the German Government, there are almost 2 million job vacancies. Figures from the Federal Ministry of Economics indicate shortages in 352 of 801 occupational groups. The German government currently aims to draw on domestic potential via the Skilled Workforce Strategy that aims to expand the workforce with more women and older people. In addition, the new law to strengthen education and further training is intended to prepare employees for the transformation by enabling companies undergoing structural changes to release employees from work for further training while they receive training allowances instead of wages. Furthermore, the Institute for Employment Research has concluded that the German labor market has to also become more appealing to foreign skilled workers in order to close the growing lack of skilled workers. In response, the German cabinet approved the drafts of an Act and an Ordinance regarding the development of skilled labor immigration at the end of March. These drafts were submitted by the Federal Ministry of the Interior and the Federal Ministry of Labor and Social Affairs. At the same time, the German government is also implementing the EU Directive on the conditions of entry and residence of third-country nationals for the purpose of highly qualified employment. If the German Bundestag approves, the new law could come into force this year.

The reform is based on three pillars

The amendment intends to create three paths for labor migration:

  1. Qualification of skilled workers
    As in the past, the perfect path for skilled workers from third countries outside the EU is via a qualification recognized in Germany, such as the EU Blue Card for university graduates. However, people with a recognized qualification will be able to pursue any qualified employment in future. The recognized qualification no longer has to correspond to the qualified employment. This will provide employers with greater flexibility as this will enable them to assess whether immigrants are sufficiently qualified for employment. In addition, people with an EU Blue Card will be able to change employers more easily. In the future, IT specialists will be able to obtain a Blue Card even if they do not have a university degree but can provide proof that they possess specific non-formal qualifications. The minimum salary threshold to receive a Blue Card will be lowered to 56.6 percent of the assessment ceiling of the statutory pension insurance.
  2. Work experience
    The German government has realized that the very lengthy procedures for recognizing foreign professional qualifications represent a bottleneck for labor migration. Providing proof for non-regulated academic professions remains comparatively easy as an international university standard provides guidance. Nevertheless, the recognition procedure for non-academic professions consistently proves to be a major hurdle impeding the immigration of qualified specialists. Simply due to the fact that German dual training is an exception internationally. This makes it almost impossible for immigrants to present an equivalent degree. Although working migrants can enter the country with a partially equivalent qualification and update their qualification, the process of applying for a corresponding residence permit involves a number of pitfalls for companies and requires highly detailed knowledge.
    To remedy this situation, workers will be able to immigrate in the future if they possess at least two years of professional experience and a degree recognized in their home country. As such, the comparison with a reference profession in Germany will no longer be necessary in the future. However, this requires that either the salary amounts to at least 45 percent of the annual contribution assessment ceiling of the general pension insurance or the employer must be bound by collective bargaining agreements.
    In the future, a “recognition partnership” between the employer and the skilled worker will enable the employee to first enter Germany and start a job even before their professional qualification has been recognized in Germany. As a consequence, employers will be able to hire a skilled worker while they simultaneously undergo the professional recognition procedure at the Federal Employment Agency.
  3. Opportunity Card and scoring system
    The third path focuses on the potential of migrant workers when looking for employment: Those who do not yet have an employment contract in Germany will have the opportunity to spend up to one year in Germany while they look for work in Germany or have their foreign professional qualification recognized. During this time, they will be permitted to work up to twenty hours per week or work for a potential employer on a trial basis for a maximum of two weeks at a time.
    Based on the example of immigration countries such as Canada, the Opportunity Card is issued using a scoring system based on the following selection criteria: foreign professional qualification, knowledge of German and English, professional experience, association with Germany, for example through a longer stay in Germany, and not more than 40 years old. The potential of accompanying spouses or registered partners also plays a role. Another requirement is that their livelihood must be secured.

Short-term employment in industries with high demand

For the first time, this draft law offers industries facing particularly high demand the option of employing a contingent of workers from third countries for period of eight months, regardless of their qualifications. However, this provision only applies if the employer is bound by collective agreements and if the employees receive social insurance coverage from day one.

Evaluation from an HR perspective

One positive aspect is that the judgment of companies regarding whether an immigrant is sufficiently qualified receives more weight as part of the recognition partnership. Ultimately, the companies are in the best position to determine whether the job profile matches the knowledge and skills of a foreign applicant. Particularly for small and medium-sized companies which do not have their own HR experts, the formalities with long procedures involving numerous of official authorities such as immigration authorities, visa offices, employment agencies and embassies, will continue to remain a major obstacle when recruiting skilled workers. This is especially true for companies under a tight deadline to fill positions. Once a company has found a suitable applicant, it often takes months to obtain a visa appointment from the responsible German representation abroad. That is why it is so incomprehensible that the German government fails to use the reform as an opportunity to simplify the situation for German SMEs with the help of temporary employment. Temporary employment could serve as a gateway. After all, it has already proven its positive impact on the integration of refugees.

The reform of the Skilled Workers Act addresses important issues when it comes to making Germany more appealing for foreign skilled workers. Nevertheless, Germany will only become a more appealing option if the immigration bureaucracy also becomes faster and simpler. The last reform of the Skilled Workers Act from March 2020 also aims to fast-track the process for skilled workers in accordance with Section 81a of the Residence Act. However, this has changed little. Documents are still often sent back and forth by conventional mail. Therefore, the key challenges will consist of digitizing processes and making administrative procedures faster, more efficient and more service-oriented with the goal of helping companies to alleviate their staff shortages and to improve Germany’s image as an attractive immigration country for qualified specialists. We also answer exciting questions about HR issues in the podcast of the Arbeit und Arbeitsrecht magazine.