In recent years, Germany has been faced with a growing skills gap triggered by a number of factors, including rapid technological advancements, changing demographics, a declining birth rate and an ageing population. The country's high levels of employment and growing need for additional skilled workers across many industries have led the German government to reform immigration policies to attract qualified foreign workers in hopes of addressing the growing labour shortage.
The country's previous visa application process was criticised for its processing delays, long paper application process and waiting times. In response, the German government has introduced a new digital visa system. This new system has been introduced in an effort to streamline immigration, enabling international talent to obtain their visas to enter the workforce more quickly and thus support the country's economic needs and combat the growing shortage of skilled workers.
Increasing demand:
Germany is increasingly experiencing a shortage of skilled workers in a wide variety of roles across a wide range of sectors, including healthcare, engineering, manufacturing, IT, hospitality, education, logistics, green tech and more, including professions where expert candidates are sought. According to Deutsche Welle, a 2023 study by the German Economic Institute identified a shortage of skilled workers, estimated at 573,000, while the country's Foreign Minister Annalena Baerbock highlighted that Germany is short 400,000 workers annually. A study from the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) has found that Germany's working-age population is set to decrease by 2% by 2045. As more of Generation W (otherwise known as the baby boomer generation) reach retirement over the course of the next decade, finding skilled workers to fill their roles and address the growing labour shortage becomes increasingly challenging due to changing demographics and the projected decline in the working population.
Impact of the labour & skills shortage:
A 2024 survey by the IFO Institute found that over 36% of organisations in Germany report they are currently experiencing difficulties finding skilled talent.
This labour shortage is particularly prevalent in the Automotive industry and STEM fields, where skilled worker shortages pose a risk to the innovation and global competitiveness of some of Germany's top industries.
There are also significant concerns that the skilled worker shortage will further stagnation in economic growth. The German Economic Institute has estimated that the skills shortage has cost the German economy 29 billion euros, which is estimated to have increased significantly in the last decade.
The new consular services portal:
This new system, which was launched on 1st January 2025 after work began on this project two years prior, boasts a number of improvements, including:
- Number of visa options: The new system facilitates 28 visa categories serving applicants who wish to relocate to Germany for employment, education or family reunification purposes.
- Reduced location-based barriers: The new consular services portal is currently available across 167 German visa offices, thus reducing the number of location-based barriers for applicants.
- Digitisation of applications: The application process under the new system is online, eliminating the requirement of in-person submissions and physical paperwork required by the previous process.
- Quicker Processing: In response to the criticisms of the previous visa process, the new digital system has been designed to reduce administrative and bureaucratic obstacles, thus making the application process simpler and quicker for those applying for German visas.
- Status Tracking & Updates: Under the new digital system, applicants can check the status of their application at each stage, providing greater clarity.
In a press release published on the country's Federal Foreign Office website in January 2025, Germany's foreign minister Annalena Baerbock acknowledged the issues with the previous application process amid the current labour shortage, stating, "At times like these, we cannot afford to downright put the best off coming here to roll up their sleeves because of long paper application forms and even longer waiting periods."
She continued highlighting the importance of the new system and previous calls for a digital process by adding, "The online visa application process is a real administrative revolution that both craft businesses and major companies have been calling for for a long time. It will strengthen Germany as a business location."
Opportunity for international contract professionals:
The introduction of this new streamlined visa application portal intends to speed up the process for non-EU/EAA citizens, thus making Germany a more attractive location to live and work. This new system may also be a welcome introduction for international contract professionals looking to the European nation for their next opportunity. Germany is already a popular location amongst contract and freelance talent due to its thriving industry, competitive rates and wealth of opportunities. In 2021, freelance and contract professionals comprised 25% of the workforce of German companies, according to a 2023 report by Institut der deutschen Wirtschaft Köln e.V. (IW).
In addition to being a skilled talent solution, recent findings have found that international contractors present many benefits to an organisation. A 2023 report by Institut der deutschen Wirtschaft Köln e.V. (IW) highlighted the vital role and significant impact of external contract workers in German companies in fostering innovation and introducing new technologies and processes. The report's findings, which were based on an IW-Personalpanel 2022 survey, found that contract workers and freelance professionals play a crucial role in the digital transformation of German organisations while aiding organisations in mitigating risk and managing uncertainty.
In conclusion:
Germany's new digital consular services portal marks major improvements in the visa application process. This measure, alongside others such as the Skilled Immigration Act, which saw the term skilled worker widen beyond those with academic qualifications to include those with demonstrated vocational expertise, practical knowledge and vocational qualifications, and the addition of the EU Blue Card introduced by the German government in an effort to minimise barriers and attract foreign talent to combat the country's skilled labour shortage.
The new digital visa system has addressed the barriers of the previous system to offer applicants a faster, more transparent, and accessible pathway to work and live in Germany. At a time when many countries are competing for global talent, the introduction of the new online digital consular services portal is another move to reduce barriers in an effort to attract highly qualified professionals to Germany and sustain its economic growth and global competitiveness.
Your trusted compliance partner in Germany:
While Germany offers a wealth of opportunities for contract workers and organisations hiring and placing international talent, there are several essential compliance factors to consider when embarking on a new venture, from labour law compliance to employment structures and payroll and tax compliance.
Whether you're a contractor looking to work in Germany, a recruiter placing contractors, or a business looking to expand, ensuring compliance is essential!
At 3C Global, we offer end-to-end solutions tailored to your needs!
We offer a wide range of services, including:
- Labour Leasing in Germany (AÜG/ANU)
- A German Employer of Record (EOR) solution.
- Global Payment Solutions (GPS)
- Agent of Record (AOR)
- International Contractor Management (ICM)
- International Contractor Compliance Audit (ICCA)
- Advisory, Consulting & Training (ACT)
Our services are meticulously designed to remove potential risks and uncertainties associated with launching new projects, allowing all parties to focus on their core business objectives, knowing that their contracts and practices are fully compliant.
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Want to learn more about AÜG (Labour Leasing) or Employer of Record (EOR) solutions in Germany?
Contact 3C Global Group today to learn how we can help you hire and place contractors quickly, compliantly and competently in Germany.
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