In Germany, there are many cities where, due to an economic boom, the number of vacancies is growing while average rent remains low.
Million-plus cities: rent eats up salaries
As Deutsche Welle notes, a very unique situation has developed in them, according to researchers at the German Economic Institute (IW) in Cologne: thriving companies are creating more and more new jobs, while rental housing costs remain relatively low. This, experts point out, increases the attractiveness of such cities for the labor force and becomes a serious competitive advantage for German regions over million-plus cities.
There are four such cities in Germany: Berlin, Hamburg, Munich, and Cologne. Here, naturally, one can find a wide variety of interesting and well-paid jobs. For example, in Berlin, the German startup capital, over 20,000 new jobs have been created in the IT sector in recent years, the study authors note. At the same time, it indicates that rental housing costs in the German capital range from 130 to 142 percent of the national average rent, depending on the district.
And that's not the limit. In Munich, the city with the most expensive real estate in Germany, the so-called Kaltmiete (rent excluding electricity, water, and telephone) reaches 170 percent of the national average. Due to such a high cost of living, Munich employers often pay bonuses to highly qualified specialists, but workers with average incomes do not receive them, the IW researchers emphasize.
Opportunities in the south, west, and university cities
In this situation, companies in medium-sized and small German cities that are acutely in need of skilled workers should more actively advertise the favorable housing conditions in their areas, experts recommend. And for those who want to find a job and are ready to relocate, they advise targeting regions where good employment opportunities are combined with low rental housing costs.
At the same time, the researchers formulate a kind of "golden rule": the chances of finding an attractive job are higher in southern and western Germany than in the north and east.
The study provides a number of specific examples. For instance, the city of Jena, with a population of 100,000 in the south of the former GDR, which many in the Soviet Union knew for the diverse optical products of the Carl Zeiss Jena combine, is today the most important high-tech center in the state of Thuringia. This medieval city has two higher education institutions, including a university, which is practically a guarantee of a large number of knowledge-intensive jobs, since in today's Germany, research institutes, highly specialized firms, and clinics are usually clustered around universities.
In Jena, the number of vacancies is 67 per 100 registered unemployed (compared to the national average of 47 vacancies). Considering, the IW researchers write, that employers usually report only half of the available vacancies to the employment agency, this means: there are actually more vacancies in the city than job seekers. From a statistical point of view, this indicates an acute shortage of skilled workers. And rental housing costs in Jena and the surrounding area amount to 81 percent of the national average.
Small towns, small businesses, and "hidden champions"
Another region attractive to well-trained personnel, according to researchers at the Cologne Institute, is the southern part of Westphalia in western Germany. For example, in the city of Iserlohn, with a population of nearly 100,000, and its surroundings, there are 57 vacancies per 100 unemployed, and rent for an apartment or house is only 78 percent of the national average.
In this wooded and hilly region in the state of North Rhine-Westphalia, there are no large enterprises, but, the IW study notes, there are over 150 "hidden champions." This is the name for small, highly specialized firms, mostly in mechanical engineering, that work mainly for export and are among the world leaders in certain segments.
In some regions of Germany, the number of officially announced vacancies even exceeds the number of registered unemployed. One of them is in Lower Saxony in the northwest of the country, on the border with the Netherlands. In the city of Nordhorn, with a population of 50,000, there are 111 vacancies per 100 job seekers, and housing costs 78 percent of the national average.
Bavaria: high technology in historic cities
A similar situation—101 vacancies and rent at 82 percent of the average—has developed, for example, in the south of the country, in the state of Baden-Württemberg, in the picturesque historic city of Schwäbisch Hall, with a population of 40,000, and the surrounding region. Here, as in Nordhorn, the demand is not so much for specialists for high-tech firms as for holders of ordinary professions.
Nevertheless, the greatest interest for those seeking both well-paid work and affordable housing is in various regions of Bavaria, the IW researchers point out. As an example, they cite the city of Regensburg, founded by the ancient Romans, whose historic center is a UNESCO World Heritage site. Today, about 140,000 people live here, and many "large and small companies are developing new technologies, especially digital ones," the study notes.
The authors chose Regensburg and its surroundings as an example also because rental costs here are almost exactly at the German average, while the number of job vacancies per 100 unemployed is more than twice the national average, at 101 vacancies. However, using the interactive map on the IW institute's website, one can easily see that there is also a huge demand for personnel in a number of other Bavarian cities, such as Würzburg, Ansbach, or Donauwörth.
According to a study by the online platform Joblift, Bavaria ranks third after North Rhine-Westphalia and Berlin among federal states with high demand for Russian-speaking specialists. Another figure from the same study: nationwide, 40 percent of job advertisements seeking Russian-speaking employees are placed by small businesses – firms with fewer than 50 employees.