Refugees are revitalizing the German labor market despite the crises
Recent developments in the German labor market show encouraging signs despite the difficult economic conditions and the ongoing high unemployment rates for nearly three years.
The number of working Ukrainians has increased significantly, as recent data from the Federal Employment Agency showed that about 256,000 Ukrainians were employed in jobs subject to social security in February, an increase of nearly 45% compared to last year. With the addition of those working in small jobs (Minijobs), the total number of workers from Ukraine exceeds 300,000 for the first time.
The integration rate of other refugees from countries such as Syria and Afghanistan has also seen positive development. The number of employees subject to social insurance from the eight countries that export the most asylum seekers has increased by 12% to reach 629,000 people. In comparison, the number of employees subject to social insurance in Germany as a whole has only increased by 0.2%.
Demographic change, especially the retirement of an increasing number of seniors, has also contributed to changes in the labor market, as the number of German workers decreased by 0.6% over one year until February 2025. In contrast, the number of foreign workers, including EU citizens and workers from third countries, increased by about 257,000 or approximately 5%.
Despite these positive developments, there are still significant challenges in the area of integration. Official statistics indicate that there are 1.1 million refugees from Ukraine and major host countries receiving Bürgergeld assistance, which represents an increase of 2.3% compared to the previous year. According to the coalition agreement between the Union and SPD, those newcomers from Ukraine who do not work will receive less assistance in the future under the Asylum Seekers Benefits Act.
Daniel Tirtsinbach, a member of the board of the Federal Employment Agency, believes that employers' experiences with refugees have become "more positive", which enhances the chances of combating labor and skills shortages. Tirtsinbach was a special commissioner from the German government for the integration of refugees into the labor market until 2024 and oversaw the implementation of the "Job-Turbo" program.
The German language remains the biggest barrier to the employment of refugees, which has prompted the "Ampel" government to reactivate the employment priority for refugees receiving Bürgergeld assistance, encouraging them to accept support jobs even before mastering the language.
Tertsenbach relied on a study conducted by the German Association for Human Resource Management in collaboration with the Employment Agency, which included about 300 human resource managers. 66% of them reported having experience with refugees who only have basic knowledge of the German language, an increase of 16 percentage points from the previous year. Additionally, 58% of these indicated that they had actually hired refugees in the past year.
While the employment rate has risen slightly, 55% of HR managers rated their experiences with refugees positively, compared to only 6% who considered them negative. Notably, this positive percentage has increased by 4 points from the previous year.
Despite the decrease in the percentage of companies suffering from skill shortages to 69% (a drop of 11 points), 70% of participants still see refugees as an opportunity to fill the labor gap, especially in low-skilled jobs.
According to the study, language difficulty remains the biggest challenge. About two-thirds of companies consider language courses accompanying work to be one of the most important support measures, along with demands for financial assistance to companies such as supporting employee wages. Therefore, job centers and the federal agency will continue to face significant challenges, both in terms of human resources and funding.