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Is expanding your business to Germany worth it? Our experts share the biggest benefits and challenges

In May 2021, the People Mobility Alliance brought together more industry experts for a second insightful Lunch & Learn session. This time, the focus was on businesses considering expanding operations into Germany. Our experts delved into the most critical aspects including compliance, compensation and policy, sharing valuable insights along the way. This article showcases the key findings and insights from the session.

Key Findings on Expanding to Germany:

Germany is a country of unique opportunities for businesses. And as the global workforce expands, so does the attraction of expanding your operations. But there are also other considerations. Here are the key findings on expanding to Germany from our Lunch & Learn session:

1. The Appeal of Germany:

Germany is a European powerhouse and therefore an attractive destination for companies of all sizes. It captures the hearts of many international workers looking to embark on cross-cultural mobility journeys, with thriving hubs like Berlin, Munich, Cologne and Hamburg are particular highlights for global expansion.

2. Talent Shortages in Critical Sectors:

It is no secret that Germany is suffering from a huge shortage of talent, especially in critical infrastructure sectors. The German government not only acknowledges this shortage but has also implemented an immigration law reform to make it easier for skilled workers from non-EU citizens to move to the country.

3. Role of Employers of Record:

Employers of Record play a pivotal role in the recruitment of international talent and ensuring a smooth transition. But even when using these services in the ever-expanding world, one truth remains: the essence of a strong company culture remains essential.

Legal Focus on Expanding to Germany:

When considering expansion to Germany, there are a myriad of diverse, complicated and intricate matters you must consider. In this section, we will take a look at the insights provided by our experts around the legal facets that underpin global expansion.

1. Diverse Company Types:

Every company in Germany requires legal services, including international corporations, startups and those with pre-existing German subsidiaries. From corporate law and employment advice to post-merger integration and consolidation legal advice, these legal services span a wide spectrum. But one thing is certain: this legal expertise is absolutely essential and serves as the compass that steers each company through the maze of German business regulations.

2. Founding a German Subsidiary:

Launching an international company in Germany often begins with establishing a German subsidiary. This is often in the form of a GmbH (Limited Liability Company). Employers of Record can also help here, offering a fast and efficient way to expedite your launch process. Their local knowledge and awareness can create a smooth path to a successful expansion.

Corporate Perspective:

From a corporate perspective, the appeal of Germany is obvious. Our experts share the strategic significance of Germany’s economy, the benefits of Employers of Record, and why you should always prepare for delays.

1. Germany’s Economic Appeal:

Germany is Europe’s largest economy and therefore a highly strategic move. With constant growth and a thriving business environment, it offers a number of opportunities for businesses seeking to broaden their operations.

2. Employers of Record Benefits:

Employers of Record provide valuable local knowledge, especially for companies who are venturing into Germany for the first time. Beyond insights and experience, Employers of Record also have access to a diverse talent pool, spanning blue-collar workers to high-end professionals.

3. Timeline Considerations:

As your expansion journey unfolds, it’s essential to be mindful of timelines. The end-to-end launch process of international operations in Germany typically takes between 6-12 weeks. However, in a period of time marked by consistent unprecedented circumstances like the COVID-19 pandemic, preparedness for potential delays becomes essential. Flexibility in planning is paramount.

Individual Perspective:

Expanding to Germany isn’t only something corporations do. From an individual perspective, Germany is also a land of opportunity. People move here on cross-cultural exchanges, expatriate programmes or simply because they themselves want to sample life in a new country and culture. Here are the key things that drive individuals to explore Germany.

1. Career Opportunities in Germany:

Simply put, people move to Germany because they want to expand their careers. They are drawn to Germany’s business and cultural hubs like Berlin, Munich, Cologne and Hamburg. It is this allure of cross-cultural mobility that often takes them on a journey of professional growth.

2. Mobility and Flexibility:

Many people, both internationals and German nationals, seek more and more flexibility in their careers. They want the opportunity to explore new countries and climates. Once again, Employers of Record come into play here, as they can ensure a smooth transfer experience, particularly for families who make the choice to relocate with their spouses, children and even pets.

3. Government Recognition:

The positive news for employees is that the German government actively recognizes talent shortages in critical infrastructure sectors and is pushing to make the immigration process easier for internationals who want to move here for work. The recent reform of the immigration law also brings emphasis to the desperation for international talent in Germany.

Summary:

Germany shines as a beacon of opportunity in the corporate world of global expansion. It presents significant opportunities, but also great complexities and nuances. Whether you are expanding business operations to Germany, or an international individual looking to move to Germany for work, it is clear that journey is multifaceted. With thanks to our experts during our second Lunch & Learn session, this article sheds some light on the essential considerations when venturing into Germany.

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Anas Abdi

Business Development Manager

Anas has a background in economics and discovered his passion for the Global Mobility industry a few years ago. With experience at a Big Four, he brings valuable expertise as a consultant. At PMA, he will support the streamlining of our operations and contribute to growth through his active role in sales and business development.

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Alexia Schmolling

Head of Operations & PMA Academy Lead

Alexia is a Project Consultant who joined the PMA in 2024. Her focus lies on international HRM, expat management and mental health. She is responsible for content and partner management, and brings valuable insights from her international experience.

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Ayesha Khan

Marketing & Event Manager

Khan is a data-driven marketing professional with expertise in performance marketing, analytics, and digital strategy. She focuses on optimising marketing campaigns, enhancing audience engagement, and driving business growth. With a background in Marketing
and Finance, Ayesha leverages data insights to develop effective strategies and deliver measurable results. She is currently pursuing her MSc in International Information Systems at FAU in Germany, integrating technology with marketing to drive innovation
and growth.

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Mira Pathak

Co-Founder

Mira currently works for AIRINC in Germany and has been working in Global Mobility since 2006. Of German-Indian origin, she has lived and worked in different countries but spent the majority of her working life in London before moving back to her native Germany in 2019. She believes that personal connection and experiences are the key to successful business interactions. And that even in business, it’s the person behind the employee that makes all the difference.

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Stefan Remhof

Managing Partner

Stefan joined the People Mobility Alliance at the beginning of 2023. He brings valuable insights into the academic side of People Mobility into the Alliance. Together with co-founders Daniel and Mira he is part of the PMA Management team.

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Daniel Zinner

Co-founder

Daniel is a global workforce consultant, podcaster and investor. Cultural diversity and global collaboration have been his passion for more than 20 years. He has worked in Global Mobility for various corporations in many different countries, but is currently based in Berlin, where he enjoys the city’s creativity, diversity and open mindset.

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International Talent Development

International talent development faces challenges like cultural differences, language barriers, and varying educational backgrounds, which affect training and communication. Aligning development programs with local norms while maintaining global standards is difficult. Differences in work ethics, leadership styles, and career expectations complicate talent retention and growth. Additionally, logistical issues like time zones and technology access can hinder the implementation of consistent development initiatives.

Our consulting approach on international talent development involves creating tailored strategies that respect cultural differences and align with global business goals. This includes designing cross-cultural training programs, leadership development initiatives, and succession planning. Our consultants address language barriers, diverse learning preferences, and varying educational backgrounds. They also advise on retaining top talent, ensuring global consistency in skills development, and leveraging technology to deliver effective training across regions.

Change Management

HR change management faces challenges like employee resistance, where fear of the unknown or discomfort with new processes can hinder acceptance. Communication breakdowns can lead to misunderstandings and decreased morale. Aligning leadership and getting their buy-in is critical but can be difficult. Managing the pace of change to avoid overwhelming staff, addressing skill gaps through training, and maintaining productivity during transitions are also significant hurdles. Additionally, measuring the effectiveness of change and making necessary adjustments is an ongoing challenge.

Our consulting approach on change management involves guiding organisations through transitions by developing strategies to address resistance, ensuring clear and consistent communication, and aligning leadership with change objectives. Our consultants design tailored training programs to close skill gaps and support employee adaptation. We help manage the pace of change to minimize disruption, maintain productivity, and implement metrics to measure success. Continuous feedback and adjustments are made to ensure a smooth and effective transformation.

Global Mindset

The challenges of a global mindset include navigating cultural differences, language barriers, and varying business practices, which can lead to misunderstandings and conflicts. Additionally, managing diverse teams requires sensitivity and adaptability to different communication styles and expectations. Balancing global strategies with local needs can be complex, and staying informed about international regulations, economic conditions, and political climates adds further complexity to decision-making processes.

Our consulting approach on global mindset involves guiding organisations to embrace cultural diversity, fostering cross-cultural communication, and aligning global strategies with local practices. We help teams to navigate international markets, adapt to varying regulations, and manage diverse teams effectively. Our consultants also emphasise the importance of cultural sensitivity, inclusivity, and adaptability in leadership to ensure successful global operations and sustainable growth.

Global Workforce Management

Global workforce management faces challenges like cultural differences, varying labour laws, time zone coordination, and communication barriers. It also involves managing remote teams, ensuring consistent training, addressing different work ethics, and navigating political and economic instability.

Our consulting approach helps to balance global policies. This involves advising on cross-cultural communication, aligning global and local HR policies, and navigating diverse labour laws. Our team offers strategies for managing the complexities of remote teams, optimising talent acquisition, and ensuring compliance with international regulations. Our consultants also address challenges in employee engagement, leadership development, and compensation strategies. We help organisations to effectively manage a diverse, global workforce while maintaining productivity and cohesion.

Expat Wellbeing

Expat wellbeing faces challenges such as adapting to new cultures, managing isolation, and balancing work-life dynamics in an unfamiliar environment. Expatriates often struggle with the loss of familiar social networks, language barriers, and cultural differences, which can lead to stress and burnout. Ensuring mental and physical well-being while navigating different healthcare systems and support structures adds complexity to the expatriate experience.

Our consulting approach on expat wellbeing focuses on providing comprehensive support to ensure expatriates thrive in their new environment. Our consultants offer resources and training to enhance cultural adaptation, promote mental resilience, and improve work-life balance. We help organisations implement wellness programs, foster strong support networks, and establish open communication channels. This approach strengthens expatriate well-being, increases job satisfaction, and enhances overall performance abroad.

Global People Collaboration

Global People Collaboration faces challenges such as coordinating across time zones, overcoming language barriers, and aligning different work styles and cultural expectations. Teams often struggle with maintaining clear communication and fostering trust in remote, cross-border environments. Misunderstandings can arise due to cultural differences, which may hinder collaboration and decision-making. Additionally, managing virtual teams can complicate relationship-building and team cohesion, leading to a lack of engagement and reduced productivity.

Our consulting approach to global people collaboration focuses on helping organisations enhance communication, trust, and teamwork in multinational environments. Our consultants provide training on effective virtual collaboration, cultural sensitivity, and inclusive communication strategies. We assist in developing processes that encourage knowledge sharing and cross-cultural understanding, ensuring that teams are aligned in their goals and can work efficiently across borders. This approach fosters stronger relationships, increases engagement, and drives productivity, creating a more connected and effective global workforce.

Sustainability

Sustainability faces challenges such as reducing environmental impact while maintaining operational efficiency, adapting to evolving regulatory requirements, and fostering a company-wide commitment to sustainable practices. Balancing short-term business goals with long-term environmental responsibility can be complex, as can tracking and measuring progress toward sustainability targets. Engaging employees at all levels to adopt sustainable habits and practices requires ongoing education and leadership support.

Our consulting approach on sustainability focuses on helping organisations integrate sustainable practices into their operations. Our consultants provide training on reducing environmental impact, optimising resource use, and meeting regulatory standards. We assist in developing sustainability strategies that align with company goals while fostering a culture of environmental responsibility. Through the learning of sustainable habits and continuous support, we help organisations track progress, engage employees, and achieve tangible sustainability outcomes.

Cultural Awareness

Cultural awareness faces challenges like overcoming unconscious biases and stereotypes that can hinder understanding and inclusion. Communicating effectively across different cultures can be complex due to language barriers and varying norms. Misinterpretations of behaviors or traditions may lead to conflict or offense. Integrating diverse cultural perspectives into decision-making can be difficult, and there’s the challenge of ensuring all employees feel respected and valued, which requires ongoing education and open dialogue.

Our consulting approach on cultural awareness involves guiding organisations to recognise and respect diverse cultural perspectives. Our consultants provide training to overcome biases, improve cross-cultural communication, and foster an inclusive environment. We help develop policies and practices that integrate diverse viewpoints into decision-making. Additionally, our consultants facilitate open dialogue and continuous learning, ensuring all employees feel respected and valued. This approach enhances collaboration, reduces conflicts, and supports a more cohesive workplace culture.

Local ecosystem connections

Local ecosystem building faces challenges like limited resources, including funding and talent, which can hinder growth. Fragmented networks and poor collaboration between stakeholders often lead to inefficiencies. There’s also a lack of trust and shared vision among participants. Regulatory hurdles and slow policy adaptation can stifle innovation. Additionally, small markets may struggle to attract investors and scale, while cultural resistance to change can impede progress.

Our consulting approach on local ecosystem connections involves helping organisations build and strengthen relationships within their community. Our consultants identify key stakeholders, such as local businesses, government entities, and nonprofits, and create strategies to foster collaboration and mutual support. We facilitate networking opportunities, promote knowledge sharing, and help align the organisation’s goals with community needs. Additionally, we assist in leveraging local resources, enhancing the organization’s reputation, and driving sustainable growth within the local ecosystem.

People-Focused Approach

A people-focused approach faces challenges such as balancing individual needs with organisational goals, which can lead to conflicting priorities. Ensuring consistent and fair treatment while accommodating diverse employee needs can be complex. Managing varying expectations and maintaining engagement across different personality types requires nuanced strategies. Additionally, measuring the impact of people-focused initiatives on overall performance and adjusting approaches based on feedback can be challenging. Ensuring resources are allocated effectively to support people-centered practices is also crucial.

Our consulting approach on a people-focused approach involves assessing organisational culture and individual needs to create strategies that prioritise employee well-being and engagement. Our consultants design tailored initiatives that align personal goals with business objectives, ensuring fairness and consistency. They facilitate effective communication, provide training, and support leadership in fostering a positive work environment. Our consultants also help measure the impact of people-focused practices, adjust strategies based on feedback, and optimise resource allocation to enhance overall effectiveness.

HR Digitalisation Project Implementation

Implementing HR digitalisation projects faces challenges like resistance to change, where employees may fear job displacement or struggle with new systems. Integrating new digital tools with existing legacy systems can be complex and costly. Ensuring data security and privacy compliance is critical, especially with sensitive employee information. Additionally, inadequate training and support can hinder adoption, while managing the project’s scope, budget, and timeline adds further pressure to successful implementation.

Our consulting approach on HR digitalisation projects involves addressing key challenges such as resistance to change by fostering a culture of openness and providing clear communication about the benefits and support available. Our consultants help ensure a smooth integration of new tools with legacy systems, minimising disruption and costs. We emphasise data security and privacy compliance, crucial for protecting sensitive employee information. Our effective training programs are designed to enhance user adoption, and consultants meticulously manage the project scope, budget, and timeline to ensure successful implementation.

Tech Vendor Screening

Tech vendor screening presents challenges like assessing vendor reliability, as companies must evaluate a vendor’s financial stability, reputation, and track record. Identifying the right fit requires aligning the vendor’s offerings with business needs, which can be difficult with technical complexities. Data security is a critical concern, demanding thorough scrutiny of the vendor’s security practices. Additionally, there’s the challenge of managing vendor lock-in risks and negotiating favorable contract terms.

Our consulting approach on tech vendor screening involves guiding businesses through selecting the best vendors by assessing their offerings, reliability, and compatibility with the organisation’s needs. Our consultants evaluate vendors’ financial stability, scalability, and long-term viability. We also ensure compliance with industry regulations, focus on data security, and mitigate the risk of vendor lock-in. Additionally, our consultants help align vendor choices with the company’s budget and growth strategies, ensuring a tailored, sustainable partnership.

Tech Vendor Selection

Selecting the right tech vendor poses challenges such as navigating a crowded market with numerous options, making it hard to distinguish between similar offerings. There’s a risk of vendor lock-in, where future flexibility is compromised. Assessing the vendor’s reliability, financial stability, and long-term viability is crucial. Compatibility with existing systems, data security, and compliance with regulations are also key concerns. Budget constraints and ensuring the vendor can scale with business growth further complicate the decision.

Our consulting approach on tech vendor selection involves helping organisations choose the best vendor to meet their specific needs. Consultants assess business requirements, compare vendors, and evaluate their offerings for compatibility, scalability, and security. Our consultants consider the vendor’s reputation, financial health, and customer support. We also negotiate contracts to avoid vendor lock-in and ensure cost-effectiveness. The goal is to align vendor capabilities with long-term business strategies, reducing risks and ensuring value.

Global Talent Pools

Global talent pools present challenges such as managing diverse skill sets, cultural differences, and varying educational standards. Time zone disparities can hinder collaboration, while legal and regulatory differences complicate employment contracts and compliance. Language barriers may affect communication and integration. Additionally, ensuring equitable opportunities and managing compensation across regions are difficult. Competition for top talent is intense, making retention a critical issue.

Our consulting approach on global talent pools involves helping organisations source, attract, and manage talent from diverse regions. It requires strategies for navigating cultural differences, ensuring compliance with local labor laws, and overcoming language barriers. Our consultants guide on optimising remote work, aligning global talent with business needs, and fostering collaboration across time zones. We also focus on creating equitable opportunities, competitive compensation packages, and effective retention strategies in a global context.

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