Germany’s economy is one of the strongest in the world, driven by a thriving Mittelstand (small and medium-sized businesses) and its leadership in global trade. However, German companies are also grappling with a major challenge — a growing shortage of skilled workers.
Recent surveys show the country needs as many as 400,000 qualified professionals annually to meet the demand. The problem is especially severe in the IT sector, where more than 137,000 specialist roles remained unfilled in 2022, a gap that’s only widened since then.
One way Germany can solve its skilled labor shortage? Global hiring.
So, which countries are German companies turning to for their hiring needs— and what makes them a good fit for sourcing talent?
Key takeaways:
- Spain, Portugal, and France are top choices for German companies for many reasons, including proximity, reduced friction due to their EU membership, and a large number of highly skilled workers.
- German companies hiring for roles in financial services, fintech, creative industries, and legal consulting often tap into the available talent pool in the U.K.
- India remains a prime spot for companies seeking to fill tech, IT, and engineering positions.
Spain: Creativity, Tech Hubs, and Cultural Compatibility
Spain has emerged as one of Europe’s most dynamic talent markets, particularly in technology and creative industries. Cities like Barcelona and Madrid are now global hubs, attracting entrepreneurs, startups, and multinational firms. Both cities offer vibrant ecosystems supported by strong digital infrastructure and government incentives for innovation.
Barcelona, in particular, has become a leading destination for remote workers and digital nomads, thanks to its cosmopolitan culture, coworking spaces, and growing number of tech accelerators. Madrid, on the other hand, is home to many corporate headquarters and research centers, serving as a key link between European, Latin American, and North African markets.
Spain's focus on innovation and sustainability, combined with its robust education system and multilingual workforce, makes it an attractive option for German companies seeking top-tier talent.
Why German companies are choosing Spain:
- Thriving tech ecosystem: Barcelona is ranked among Europe’s top startup cities, with a strong focus on AI, biotech, and SaaS. Madrid, meanwhile, is becoming a hub for fintech and digital innovation.
- EU consistency: As fellow EU members, Germany and Spain benefit from labor laws and mobility frameworks that simplify compliance and cross-border employment.
- Cultural and economic ties: Germany and Spain already collaborate extensively in trade, energy, and education. This translates into smoother business relationships and cultural alignment.
- Multilingual advantage: Many Spanish professionals are fluent in English, and a growing number also speak German, making collaboration easier.
Hiring remote talent in Spain enables German companies to access the Spanish’s unique blend of technical expertise and cultural compatibility.
For example, an automotive company might tap into the country’s creative workforce to hire a Spanish product designer or software engineer.
Portugal: Affordability Meets Innovation
Portugal has become one of Europe’s fastest-growing choices for finding skilled talent. Once known primarily as a tourism hotspot, it’s now recognized as a thriving hub for digital services, innovation, and startups.
The country has made significant investments in its tech infrastructure and education system, cultivating a new generation of highly skilled professionals in fields like software engineering, data science, design, and digital marketing.
Lisbon, in particular, has transformed into a magnet for international tech companies, entrepreneurs, and digital nomads. The city’s affordable cost of living, mild climate, and welcoming business environment have helped attract global firms and remote professionals seeking a European base. Cities like Porto and Braga are emerging as smaller but vibrant innovation centers, offering access to strong developer communities.
Combined with government incentives for startups and a growing number of coworking spaces and incubators, Portugal is a top choice for companies looking to scale efficiently.
Advantages of hiring Portuguese employees for German employers:
- Cost-effective: Salaries for tech roles in Portugal are typically 20-30% lower than in Germany, but without compromising skill levels.
- Strong English proficiency: The Portuguese are ranked among the top 10 globally in the EF English Proficiency Index.
- Startup culture: Lisbon hosts the annual Web Summit, one of the world’s largest technology conferences, attracting international talent and investors.
- Geographic and time zone alignment: Portugal’s working hours mesh with Germany’s, ensuring real-time collaboration for teams.
German startups and scaleups often see Portugal as the perfect “nearshore” base. For instance, a German SaaS company might hire remote support and engineering staff in Lisbon to reduce costs while ensuring quality and connectivity with headquarters.
United Kingdom: Deep Expertise and Global Perspective
Despite the complexities of Brexit, the United Kingdom remains one of the most influential global talent markets. London, Manchester, and Edinburgh continue to attract leading professionals in finance, business services, and technology.
London, in particular, stands out as one of the world’s top financial and tech capitals. It boasts a deep talent pool spanning fintech, artificial intelligence, cybersecurity, and creative industries.
Manchester has emerged as a northern innovation hub, home to a fast-growing tech scene, digital media firms, and advanced manufacturing companies. Its combination of lower operating costs and access to highly educated graduates makes it an appealing alternative to London.
Meanwhile, Edinburgh is building a reputation as a leader in financial technology and data science, thanks to its growing ecosystem of tech-driven companies.
Why German companies prefer to hire in the U.K.:
- Specialized expertise: The U.K. is a leader in financial services, fintech, creative industries, and legal consulting — all areas where German companies benefit from global insight.
- Global mindset: U.K. professionals are often experienced working with international teams, making them ideal for cross-border roles.
- Economic ties: Germany is one of the U.K.’s largest trading partners, which strengthens relationships between the two workforces.
- Time zone convenience: Germany and the U.K. share overlapping working hours, simplifying the communication process.
For German businesses targeting international expansion — especially those looking to enter English-speaking markets — U.K. professionals offer invaluable expertise. A German fintech firm, for example, might hire compliance specialists in London to bridge EU operations with global regulations.
India: The Powerhouse for Tech and Scalability
India is one of the most popular countries for sourcing skilled professionals in technology, engineering, and digital services.
The country has established a global reputation for excellence in software development, data analytics, artificial intelligence, and cloud computing, making it a preferred option for businesses seeking to scale their technical capabilities efficiently.
India’s competitive advantage extends beyond technical expertise. The workforce is highly adaptable, English-proficient, and increasingly skilled in remote work environments.
Combined with cost efficiency and time zone alignment with both European and Asia-Pacific markets, India offers companies flexibility and convenience in building distributed teams.
Why India stands out:
- Unmatched talent bench: India produces more than 1.5 million engineering graduates annually, with many specializing in software development, AI, and data science.
- Cost efficiency: Salaries are significantly lower compared to those in Europe, allowing German companies to scale their operations cost-effectively.
- Scalability: Businesses can quickly build large teams across various functions, including software engineering, customer support, and back-office operations.
- Proven partnerships: Many German multinational companies already rely on Indian teams for IT services and R&D.
A German logistics company seeking to digitize its operations may consider hiring developers in Bangalore to leverage India's advanced software expertise on a large scale.
France: Proximity and Shared Opportunities
French workers, known for their strong technical education, creativity, and linguistic adaptability, are a natural fit for German employers.
France and Germany are often referred to as the “engine of Europe,” a reflection of their powerful economies and strong relationship. The two countries share deep trade ties, complementary industries, and a long history of collaboration in manufacturing, engineering, and innovation, making cross-border employment both practical and beneficial.
Their economic integration has led to a high degree of labor mobility and cooperation, with many French professionals working for German companies and vice versa.
Key benefits of hiring in France:
- Strategic sectors: France is a leader in aerospace, pharmaceuticals, energy, and R&D — industries where Germany also excels.
- Geographic and economic proximity: A shared border and strong trade ties facilitate collaboration, making it easy and efficient.
- EU compliance: France’s labor and regulatory frameworks align with EU standards, reducing complexity.
- Cross-border synergy: Many professionals in France are multilingual, simplifying conversations with German teams.
For a German biotech or pharmaceutical company, hiring French researchers could be a key step in driving innovation.
Honorable Mentions
Several other countries are also emerging as top hiring picks for German businesses:
- Poland: Known for its growing IT and shared services sector, Poland offers proximity, cultural alignment, and competitive labor costs. The country has become a key choice for European and U.S. companies, particularly in cities like Warsaw, Kraków, and Wrocław, which boast strong infrastructure and highly educated workforces.
- Czech Republic: Many German companies already operate factories and R&D centers in the Czech Republic (Czechia). The country’s focus on innovation, supported by technical universities and government incentives for foreign investment, continues to attract advanced manufacturing and technology-driven industries looking to expand hiring within Central Europe.
- Netherlands: With Amsterdam serving as a leading international hub, the Netherlands offers access to multilingual professionals, strong logistics expertise, and extensive global business networks. The country's progressive business environment and emphasis on innovation make it particularly appealing to companies in the tech, finance, and sustainability sectors.
- Eastern Europe more broadly: Countries like Hungary, Romania, and Bulgaria are gaining attention for skilled tech and finance professionals at competitive costs. These markets are home to rapidly developing innovation hubs, supported by strong STEM education systems and growing foreign investment.
All of these countries are quickly evolving into nearshoring destinations for German companies seeking high-quality talent with excellent English proficiency and a strong work ethic.
Hire and Manage Your International Team RemoFirst
German companies are entering a new era of hiring. With talent shortages at home, building a global remote team provides the opportunity to find the skilled employees they need, and often at a more competitive rate.
The challenge, of course, lies in hiring compliantly and efficiently across multiple countries. It can become overwhelming for German companies to manage on their own, especially if they’ve never hired international employees before. That’s where we come in.
As an Employer of Record (EOR), RemoFirst removes the administrative burdens of human resources by handling contracts, payroll, compliance, employee benefits, and more. With RemoFirst, your company can hire employees in over 185 countries and contractors in more than 150 countries.
Schedule a demo today to learn how we can help your company employ a global team, whether you're based in Germany — or anywhere else in the world.
