Recruitment can be a tricky business, especially when a company is venturing to unfamiliar countries and exploring new markets. This is where we come in to oversee the process for you - Bradford Jacobs’ expertise and over 20 years of experience in international recruitment services is indispensable for expansion into Germany.
Hiring the right talent in Germany to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in Germany yet. Our PEO and EOR service can be the solution for your company.
Are you curious about the recruitment process in Germany? In this guide, we will share the ground rules of hiring and recruiting talent in Germany. Our comprehensive knowledge of all German employment sectors and understanding of the culture and customs guarantees an untroubled transition.
The Recruitment Process in Germany
Employers in Germany can use a variety of recruitment methods to find the best applicants for their businesses, such as external recruitment methods (local job centers, recruitment agencies, job boards, LinkedIn, and other online advertising), as well as internal recruitment methods (such as providing career development opportunities and promotion to the company’s workforce).
From there, once the right candidate is found, the employer must follow thorough staffing and registration procedures, which include:
- Registering with the German Tax Office
- Registering with the Sozialversicherungen (Social Security Organization)
- Creating employment contracts
- Applying special expatriation status (if applicable)
- Calculating monthly salary and creating pay slips
- Researching available tax-free allowances
- Submitting wage tax returns and national insurance forms
- Corresponding with involved parties
- Creating annual accounts, administration, and year-end statements
- Creating payment schedule for wage tax, national insurances, and net wages
The recruitment process requires time and dedication, and how can you find these things in the array of all these complicated tasks? Well, allow us to provide the answer - by engaging an Employer of Record (EOR) such as Bradford Jacobs. By acquiring our services, we can convert your Germany expansion goals into an action plan with a few simple steps:
- Bradford Jacobs steps in as an EOR and acquires the right employees, ensuring they comply with German employment contracts, payroll, HR, tax, visa requirements, and work permits (if required).
- We manage all work-related registration formalities, whilst you have daily control of your employees.
- The employees complete their time sheets and expenses claims and we invoice you, the client. Once paid, we deduct all contributions to the German authorities and transfer the balance into employee’s account.
Within a few days, your company has international presence in Germany – in a prime position to explore further expansion without risking the expense or hassle of setting up your own subsidiary or branch office.
Legal Checks You Can Make on Employees
When commencing the recruitment process in a foreign country, employers must consider their legal obligations regarding personal information. Employers must carry out background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment.
These background checks may also only be carried out with the consent of the candidate, and all employee information must be protected according to GDPR and data protection laws.
Nevertheless, employers recruiting in Germany may ask for the following background checks or ‘information/pre-employment verification’ (following certain conditions):
- Criminal record checks: a private employer does not have the right of access to an applicant’s criminal record. The employer may, if at all, only be able to request a copy of the criminal record. This kind of background check may also only be requested if it is in direct relation to the applicant’s future tasks and responsibilities in the job in question.
- Employment history and qualifications checks: Employers have the right to verify statements made in their job application, such as the academic qualifications, and original copies of reference letters. In the case of reference checks, the employer cannot contact previous employers without the applicant’s consent.
- Credit history check: A credit history check is only permissible if future duties involve being in a position of particular financial trust.
- Social media background checks: Background checks on social networks are allowed only where there is a professional context, such as on sites like LinkedIn.
- Health checks: Requests for a health certificate and/or a medical/physiological checkup may be admissible if the position requires a certain level of physical and/or mental fitness. However, this must occur with the applicant’s consent, and the results of the checks may only be shared with the applicant’s consent.
- Immigration compliance: Employers are required to check that job applicants in Germany possess the necessary and immigration papers to work in Germany.
Personal data from rejected applicants may be kept only for six months, without the applicant’s express permission.
Basic Facts on Hiring in Germany
- An employer’s questions during an interview are regulated and restricted by data protection legislation – they must directly relate to job specifications and requirements.
- Terms and conditions of employment in Germany are regulated by national legislation, as well as trade unions and collective agreements.
- For onboarding employees, you will need the following documentation: A social security number, a tax identification number, personal identification, a work permit, and a residence permit.
- Employers must follow anti-discrimination laws throughout the process of recruitment, which prohibits discrimination on the basis of race and ethnic origin, gender, religion or beliefs, disability, sexual orientation, and age.
- Collective bargaining in Germany is an important part of recruitment in Germany. This mainly occurs at industry level between individual trade unions and employers’ organizations. Collective agreements, however, also provide for greater flexibility at company level.
There is more than one kind of collective agreement, depending on the issue being covered. Agreements covering pay last at least one year, and sometimes over two years or more – depending on the industry or sector. Collective agreements covering other issues normally last over five years, whilst others are valid until one side wishes to change the terms.
- Administration and enforcement of employment requirements are governed by The Federal Ministry of Labor and Social Affairs.
- Regarding employment contracts, the employer has a statutory requirement to provide an employment contract, in writing, no later than one month after the commencement of employment.
- Standard employment contract types include indefinite and fixed-term contracts.
- The standard working time is between 36 and 40 hours per week.
- Employers must at least meet the minimum wage for the employee’s salary, but the average monthly salary may differ according to the industry and sector.
- Working hours should not exceed 48 hours in a week, including overtime. Overtime is usually compensated with time off in lieu, although some companies will also pay for overtime worked too. Compensation, however, varies according to the terms of the collective agreement or contract.
- In a week, employees are entitled to 2 rest days.
- Employers are obligated to with-hold and pay employees’ personal income tax and social security contributions monthly.
- The notice period for employment termination is two weeks during the statutory probationary period, increasing to four weeks after that, and up to seven months after 20 years’ service.
- The employer and employee may agree to a probationary period of up to 6 months when agreeing on the terms of the employment contract.
- Notice periods for employment termination are mandatory, unless in cases of dismissal due to gross misconduct.
Working with a Recruitment Agency
In Germany, recruitment services are provided by both public and private agencies.
The Federal Employment Agency (Bundesagentur für Arbeit/BA) is Germany’s public point of contact for both individuals and companies on all questions concerning the labor market. One of the BA’s tasks include helping people find training posts or employment. The agency offers consultation and job placement services, financial services for the unemployed, and education/training opportunities.
Offices can be found in most states, and jobseekers may also use Germany’s major online job board known as JOBBÖRSE for employment or traineeship places. However, registration with the agency is required beforehand.
The government organization International and Placement Service (ZAV) support jobseekers from abroad seeking employment and is a department of the Federal Employment Agency. It operates as a bridge between Germany and the world, advising employers and employees in different sectors of the economy and targeting specific groups of international personnel.
Germany is also a member of the European Employment Service (EURES) - a platform which ensures free movement for workers within the European Economic Area (EEA), where employees have access to searching for job availabilities, as well as living and working conditions in the EEA.
Germany also uses the services of private employment agencies, which can employ both national and international employees. Private agencies must be registered with the Chamber of Industry and Commerce and can charge employers for their services.
What are the Benefits of Hiring Outsourcing for Germany?
Outsourcing recruitment into Germany provides a major benefit of more efficient, speedy, and cost-effective business expansion. Optimizing this service allows companies to focus on managing their new enterprise and meeting their development goals. Other significant advantages for outsourcing include:
- An extensive talent search done with reduced costs.
- Guarantees local employment compliance requirements are met with no hassle or reprimands
- Removes the need to set up a subsidiary.
- More control over your company’s capital expenditure.
- Alleviates risks with an easy operation that provides the employer opportunity to explore new markets.
- Improves work flexibility.
- Allows you to focus on your core business operations whilst your administration is taken care of.
At Bradford Jacobs, our Employer of Record (EOR) services take care of employee recruitment, onboarding, payroll, compliance and providing ongoing support. We choose the best-qualified talent to fill the roles you need. We use our expansion know-how to guarantee you comply with all Germany payroll regulations, including salaries, tax, and social insurance by the time your new employees are sitting at their desks.
To get started on your recruitment expansion in Germany, contact us today.