With Brexit and the global pandemic having caused great upsets in many economies, we take a more focused look at the impact of these on the DACH region and what it means for employers and job seekers.
Employment rate drops
We have seen the employment rate decrease across every sector in the DACH region, and in many cases, those drops were quite considerable. Not surprisingly, the sectors that took a major a hit were hospitality, travel and tourism as the pandemic effectively shut these industries down, which equates to a large percentage of the workforce in the region. However, each country responded differently towards the pandemic – for example, Switzerland’s rapid response meant they experienced growth in the financial services sector, and as a result we saw a subtle incline in the hiring of Finance Managers and M&A Directors. In Germany the unemployment rate is at its lowest since COVID restrictions were put in place 13 months ago. To protect people’s job, the German government carried out a furlough scheme, known as Kurzarbeit (short work), which meant workers were paid around 60% of their salary. Many sectors in Germany put their hiring processes on hold to see the effects of the coronavirus. However, we have seen a significant demand for Strategy and M&A roles in the healthcare and technology sectors.
Inevitable impact of Brexit
One of the inevitable consequences of Brexit has been a reduction of the EU workforce in the UK and vice versa. With UK citizens no longer having an automatic right to live or work in the EU, businesses in the DACH region who look to the UK to fill talent gaps will need to check the new immigration rules. This will make it harder for UK citizens to work abroad and businesses will need to consider sponsoring candidates or paying for their visa fees. Ultimately stricter movement of labour will inevitably lead to talent shortages which will either drive wages up or force employers to accept sponsorship as an additional cost of hiring. With London being the key hub for the financial sector across Europe, it will be interesting to see if so many candidates will commit to relocating for these roles or will Frankfurt or Paris now become the new hub for banking in Europe.
One of the biggest changes we have seen is a mind-set shift in candidates with regards to location commitment. There has been a huge rise in candidates requesting a flexible working model before they will consider a new opportunity, with many only considering completely remote opportunities. Post- pandemic it will be interesting to see the appetite for candidates to travel for work, with many enjoying the much greater work/life balance that they now have. Employers will need to be mindful of this if they wish to attract the best talent in the market.
Mindset shift across the region
Over the last year, we have witnessed our clients change their mind-set on how businesses should be managed and operated. For some companies the pandemic had an adverse effect, which made them very cautious and placed hiring freezes as they waited to see how the economy performed. Other businesses in healthcare or technology took this opportunity to expand and increase innovation to gain a competitive advantage and increase their market share. We have seen this actively through many of the M&A hires we have made across the region. Our clients have been keen to bring in the best talent to help with their inorganic growth plans. We have also seen a major increase in the number of start-ups within tech. These small and agile companies have been effective in the market with their lower overheads and have managed to manoeuvre around larger players in the market, which has led to growth and hiring.
Private equity backed businesses have been active across the DACH region over the last year, with many of the large and mid-cap funds seeing it as key investment area. Healthcare, technology and with finance portfolio companies within the region have also been particularly active with hiring.
Strategy a key focus for employers
There’s been an uptick in the number of strategy, M&A and business development roles across the region. Many of our large listed clients have increased their strategy departments as they look to streamline and assess market opportunities across the region. We have seen many clients look to gain market share and this has been particularly driven by inorganic growth and M&A activities. The ability to source and originate deals that can bring real value is a particularly desirable skill set across the market now. Finally due to growth within pharmaceuticals and healthcare we have seen an increase in demand for business development & licensing skills, for companies to build their product lines and opportunities. As a result, we have seen higher salary demands and offers for candidates who can either add real value or save costs for businesses. Knowing their real value to a business particularly in a difficult market is key for candidates in the market currently.
We are cautiously optimistic that as vaccine rollouts continue, lockdowns will become less likely, and business will be able to continue to grow. M&A will likely remain key to many hiring firms across DACH. Businesses who are struggling will continue to buy themselves out of trouble and businesses who are booming will continue to follow their acquisitive nature and look to dominate the market. The impact of COVID will have a lasting impact on what we view as a normal working model; flexibility and remote setups will in many cases be expected rather than considered. Whether this will counteract the impact of Brexit as mobility will be less of an issue is yet to be seen. We retain a positive outlook on the state of the market and continue to support several exciting mandates across the DACH region.