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Article August 10th, 2017
Infrastructure • Cities • Finance

How did 2,500 refugees find work with 300 German companies?

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The number of people seeking asylum has surged by more than 40% in the past decade

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For any country, the sooner a refugee can find a job, the better

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Business and govt will both benefit if refugees can put their skills and work ethic to good use

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Refugees welcome. There's no doubt it makes for a catchy slogan and hashtag, but it's equally a phrase which stands for an impressive humanitarian response. At the same time, it is obvious that it has not enjoyed universal backing, perhaps due to the sheer scale of the crisis.

At a time when several economies have been fragile and unemployment deeply rooted, the number of people petitioning governments for asylum has surged by more than 40% in the past decade - in Europe alone, there were 1.3 million refugees in 2015. That's a number guaranteed to make an impact, in both the corridors of power and society as a whole.

Different governments have reacted in different ways. Living and working in Munich, I have been able to witness Germany's response, one that has been markedly different - and far more welcoming - than that of many other nations. In 2015, for example, Germany granted asylum to 148,200 people (an increase of 212% compared with 2014). Next up was Sweden, with 34,400 (up 4% on the previous year). This trend has continued, with Germany having granted asylum to more than 500,000 refugees since 2015.

Germany's humanitarian response has prompted admiration from around the world, but at the same time it has not been without controversy. It has been supported by the country's strong economy, but integrating so many new arrivals has been a challenge nonetheless. Where should they work? Where should they live? Where can they settle quickest? Such questions are easy to ask but less straightforward to answer.

Propelled by both a sense of social responsibility and a shortage of skilled workers, German companies have hired thousands of refugees. Most have been given internships, entry-level roles, and training programmes in an effort to integrate them quickly into the labour market and, in turn, help them transition into life in Germany. What can other countries learn from this experience?

Integration nation

At The Boston Consulting Group, we surveyed 300 German companies that have employed 2,500 refugees between them since 2015. We supplemented the survey with interviews and company visits, as well as input from JOBLINGE, a BCG initiative focused on the employment training and placement of disadvantaged, unemployed young people and refugees.

It's important to say at the outset that integration in the job market is feasible. Interestingly, the survey revealed that refugees can be successfully integrated into any industry, regardless of company size. In fact, 60 small companies, each with fewer than 50 employees, collectively took in almost 200 refugees. And while refugees present some challenges that other candidates for employment may not, such as the language barrier and regulatory hurdles like the complex procedures surrounding residency status, the survey also showed that such issues are surmountable.

We discovered that actually working with refugees can allay concerns about these challenges. Indeed, companies that have already hired refugees tend to see fewer obstacles and express fewer reservations about hiring them than companies that have not. Perhaps for this reason, almost all the companies we surveyed said they plan to contribute further to Germany's integration efforts by hiring more refugees in the near future.

Companies should also be reassured that the initial investment in hiring refugees pays off - especially in companies experiencing a labour shortage. The average upfront costs total about €7,500 per employee in the first year, due to factors such as language training and support in finding accommodation. However, the additional earnings the refugees generate - together with state subsidies to the employer - offset these initial costs, and the payback period for the investments is typically only a year.

The golden rules

For any country, the sooner a refugee can find a job, the better. Employment helps a person settle, feel at home, and put down roots. To enable companies to overcome any challenges in this process, we've set out a series of recommendations.

For example, refugee qualifications should be evaluated up front. The government should register refugees and their stated skills, so that the best company matches can be made. But prospective employees' résumés and educational levels may be unavailable or unreliable, so companies must validate their refugee candidates' formal and informal qualifications through testing and one to two weeks of sample work directed towards identifying the best job fit and training courses.

It is also important to focus on entry-level jobs that offer training. This is because internships and other entry-level jobs provide a crucial bridge to the labour market for refugees, giving them an opportunity to learn, grow, gain work experience, and prove themselves. Language courses, too, are vital. Classes offered by public and private entities are a useful first step and deserve support, but on-the-job training - such as four to six hours per week of job-specific, professional language training - should play an important supplementary role.

And there's no denying the fact that regulatory hurdles make planning difficult. Complicated legal procedures, a lack of transparency, and uncertainty as to the long-term status of candidates can all hinder integration. Policymakers should take these factors into consideration and help streamline the process for asylum seekers, thus also reducing uncertainties for employers.

Integration in the job market works

These are just a few suggestions but, taken together, they offer something of a road map for governments and businesses alike. Both stand to benefit if newly-arrived refugees are given the opportunity to quickly put their skills, talents, and work ethic to full use. And, maybe even more importantly, it enables them to live up to their humanitarian responsibilities.

And of course, the refugees themselves, who are likely to have endured much trauma on the journey from their homeland, will doubtless welcome the chance to get back to work. In the process, not only will they regain a much-needed semblance of daily normality but they will also help turn Refugees welcome from a catchphrase into a widely accepted way of life.



Written by:

Alexander Baic
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