| Germany/Central Europe Employment Legislation Employment legislation in Germany is currently a topical subject. Germany has historically been an expensive and complicated place to hire staff. German employment conditions have been some of the most thorough and longwinded, and this has been a hindrance to Germany and its ability to accommodate growing and expanding foreign companies starting in Germany. There is commonly a standard six month trial period in Germany, which is often negotiated up or down depending on the seniority of the personnel recruited. 6 weeks rising to 3 months notice periods have historically been the norm in Germany, however this is changing, and German employees and employers are quite often agreeing (especially in IT) to four week notice periods on each side. In conclusion German employment contracts are becoming more straightforward and flexible allowing them to compete better with other European nations. Availability of Trained Staff. Germany is well known for generating strong engineering and technical graduates, and the labour costs tend to be quite high. Most Germans do not start any work until their early twenties. Legislation on minimum wages have also forced up the cost of labour. Germany is a good source of qualified and well trained staff. Costs of Employment As many of the Employment laws in Germany have been relaxed, so have the additional costs of hiring been lessened. A realistic 35% should be used as an idea of what to pay over and above salaries in Germany. The Germans are contributing a 3% tax to the development of Eastern Germany, which has had an inevitable effect in forcing up wage costs and demands further. Most Germans expect to have a pension as part of their package. The other significant factor is that in sales posts, the 'fixed salary' (basic) tends to be higher as a proportion of the package than elsewhere. Usually, 60% to 75% of the package is the basic. Language and Cultural Factors The vast majority of German business people in IT speak fluent English, and have reasonable written English skills. Culturally Germany is changing and employees seem to fit into two categories being 'new school' and 'old school'. The new younger German nationals have a more flexible and open minded attitude to employment, and are in much greater sync with the rest of Europe and the USA. They are less obsessed with security and have a more liberal and open-minded attitude to modern employment practises. Historically a career in sales has held little or no esteem in Germany, however this too is changing and more traditional western sales techniques and attitudes are being adopted and embraced. All the same, sales people in Germany often expect high levels of support and insist on having a German company (GmbH) set up before taking employment. Travel and Communication Germany has many major Cities but not one that can be deemed to be the centre of industry. This means there is a choice of potential destinations to set up an office in Germany. The centre for finance is clearly Frankfurt and if a companies business is mostly to the financial institutions then Frankfurt can be the only reasonable contender. One would have to consider the market strengths of a company before deciding where in Germany. ie if the Company plans to evolve in Southern Europe and Eastern Europe then Munich should be strongly considered as it is close to Northern Italy, France, Austria and Switzerland . Austria, is the most common location from which to enter the Eastern European markets. If the business is chiefly in Northern and Western Europe then the best locations could well be either Hanover, Duesseldorf, Bon, Essen, or Cologne, most of the major US software vendors are located in more than one city because of the equal spread of the German population across Germany. Thus generating the old German debate of where their capital should truly lie!
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