Germany is becoming less attractive to top foreign talents, according to a new Bertelsmann/OECD study that will worry Olaf Scholz's government, which is trying to get more foreign skilled workers to fill labor market gaps.

The Organization for Economic Co-operation and Development's (OECD) "Indicators of Talent Attractiveness," released on Thursday, shows Germany slipped from 12th place in 2019 to 15th this year among the 38 OECD countries. The analysis is based on seven "dimensions" that foreign talents are said to value: Quality of opportunities, income and tax, future prospects, family environment, skills environment, inclusiveness, and quality of life.

The study isolated four groups of people that governments hope to attract — highly-qualified specialists, businesspeople, start-up founders, and international students — and found that in only one of those groups, the students, was Germany ranked in the top 10. The top four countries were New Zealand, Sweden, Switzerland, and Australia, with the UK and the US in 7th and 8th place.

Do you speak English? 'No'

Mara knows more about the pluses and minuses of moving to Germany than most. Having previously lived in the UK, the 30-year-old Romanian was delighted to find a good job in advertising in Berlin. But after a year in Germany, she's already planning a way out. "Maybe I'll stay another year or two, but I'm not planning long-term anymore," she told DW. "I'll stay in Germany, but I don't see myself here for the next five or 10 years."

Getting a job was the easy part. She has since struggled with the bureaucracy, with finding an apartment in Berlin's notoriously difficult market, and with learning German. Loneliness has played a role too: Initially forced to work at home by the coronavirus pandemic, she has found it hard to make social contacts and, since her work is mostly in English, she hasn't been able to improve her German, despite taking courses in Bucharest.

In contrast, Germany's bureaucracy for foreigners remains stubbornly in German, which hasn't made things easier. "Of course, I can't ask people in Germany not to speak German. I would never do that," she said. "But I personally felt quite strange when they asked me for different documents, and I didn't understand anything. A little more openness and flexibility would help. And when I ask if they speak English, they usually say 'no' very quickly and loudly."

And yet, Mara opted to move to Germany because she felt the country, and in her case specifically Berlin, had so much to offer. "My first encounter with Berlin in 2015 was a great experience," she said. "It is a good combination between the East and the West. It felt good."

Persuading people to stay

Germany is growing desperate to keep as many foreign skilled workers in the country, as a looming demographic shift is set to leave millions of jobs unfilled in the coming decade: The last of the "baby boomer" generation, which makes up a major part of the current workforce, is expected to retire by 2035.

According to calculations by the Institute for Employment Research (IAB), part of Germany's Federal Employment Agency, the country needs a net balance of 400,000 immigrants to enter the country every year to fill the gaps in the labor market. The latest prognoses by Germany's official statistics office expects a net yearly immigration rate of 290,000 people — potentially leaving 3.6 million people missing in the job market.

But persuading people to come to Germany is only one part of the solution, according to Paul Becker, a social scientist at the Berlin research institute Minor. "For a successful skilled labor strategy, it will be crucial to ensure not only more immigration but also that fewer skilled workers emigrate again and instead remain in Germany with their families," he wrote in a new study released in February. Becker's research indicates that most people who come to Germany to work leave after only three or four years.

Reasons to leave

Moving to a new country is always daunting, and Mara's experience of Berlin chimes in with a pre-study released last December by the Institute for Applied Economic Research (IAW), in Tübingen, southern Germany, which also highlighted issues like integration, dealing with authorities, paying taxes and social insurance.

Based on a survey of 1,885 people who have left Germany, as well as 38 long interviews, the IAW study found a complex set of factors fed into why people left, ranging from residency permits, not being able to find suitable work, not being able to bring family over, the high cost of living, and personal issues.

The most commonly given reason was simple enough: Legal issues associated with residency.

"I'm assuming that in most cases those were residency permits for training or work and these simply expire and weren't extended," said IAW study author Bernhard Boockmann.

Discrimination was also a factor, if only a relatively minor one. Though just over 5% of those questioned by the IAW named discrimination as a factor in their decision to leave, two-thirds of highly-qualified people from non-European countries said they had experienced discrimination either from authorities or at work.

"Of course, we don't want to downplay the problem of discrimination, which is present in very diverse ways, is very problematic, and which needs to be addressed," said Boockmann. "But it's only in rare cases that that's the reason why someone leaves Germany."

What can the government do?

Clearly, the government can only influence a few of the issues, and no single law or new measure is likely to persuade thousands of foreign workers to stay. But Mara, Becker, and Boockmann all think there is a concrete measure that could be taken.

"The Federal Employment Agency (BA) doesn't have any concrete measures for how it should advise people who are thinking about emigrating again," said Boockmann. "For example, we think that in a situation where someone loses their job, the BA should make targeted consultations."

Similarly, Boockmann thinks the government could do more to win back workers who have left Germany, as many of those he interviewed remained well-disposed to the country.

Paul Becker thinks that families are a key factor and that the task goes way beyond labor policy. "If skilled people come to Germany and bring their families, we have to ask: 'Ok, how can we make sure the family members get on well here'," he told DW. "Do they get an apartment easily; can they find a school place or a kindergarten place? Do they have the opportunity to learn the language? And how quickly are they consulted on issues related to the German labor market and receive the assistance they may need finding a job?"

It is, said Becker, a matter of "many little screws" that have to be turned to create a good social framework.

Mara, meanwhile, said one thing would have helped her: A way to make friends. "Industry-specific programs for ex-pats should be supported more," she told DW. "For me, it would have been very helpful to have a place where you can meet other professionals from abroad and exchange ideas. It is important to build a connection, an interpersonal relationship."

Edited by: Rina Goldenberg

Alina Kühnel and Sabine Kinkartz contributed to this report.

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