German job market - Corona update: Learn which sectors are recovering and which are still under pressure

BY LUCIANO FACCION

Time for another update!

It’s the end of September 2020 and Corona has been affecting the world as well as the German labor market for nearly 7 months now. Since our latest update has been over two months ago it's time that we present the latest development to you, including which industries are now eager to hire new employees and which are still struggling from the effects of the corona pandemic. Continue reading to learn job opportunities are resulting from this development.

Total job posting development in the corona crisis

Job postings started strong in 2020, till the corona pandemic hit the job market in mid March. After a hard decline the biggest impact of the corona crisis was felt at the end of May when job postings were 38% lower in comparison to last year. Since then new job postings have experienced an upward trend, an indicator for the beginning recovery of the job market. While there is often news of huge numbers of lay-offs, part of those are based on long-term strategic decisions and are not related to the current crisis. More importantly, often they affect low-level income jobs and groups.

These are the main findings on job development in Germany

1. New job postings have been in an upwards trend since June and are part of the starting recovery of the German job market.

2. In most job sectors we can see positive developments in new job postings. The numbers are rising fast, but it's still too early for an all-clear.

3. However, the “job-mix” has changed. Systemically relevant and economic independent jobs in healthcare are getting more important in job postings, while the same applies for education. On the other hand, jobs in production and manufacturing as well as office and administration jobs are declining again.

Companies are still hiring, but less compared to 2019

At the same time, the unemployment rate continued to rise, amounting to 6.1% in May and 6.2% in June 2020. According to the job search engine indeed, the development of job advertisements was -26% at the end of May, compared to 2019. The negative trend has slowed since mid-April and has been more or less stable since then.

In other words, companies are still hiring, but compared to last year it is less. This also means that investment in new employees is not continuing to decline sharply. However, the uncertainty among companies remains high and a significant recovery of the trend yet needs to be seen.

When looking at the development of new job ads one can detect a similar trend. As the number of job advertisements increased sharply at the end of May 2019, the difference to the current corona developments is beginning to diverge further. At the end of May, the development of new job advertisements was -36% compared to the previous year's development.

The importance of new jobs as a sign of progress

While overall job postings are still below last year’s level by over 20%, those job postings not older than 7 days are even over last year’s level, and that is since mid August So at the moment it's all about new job openings. There is a market for new applications with a fast changing environment. So get out there and don't waste the new opportunities coming at you! This development has been going on for two month now so it's not a short term fluctuation but is a constant and reliable trend.

Where job postings have grown the most since May

Nearly every sector has rising job posting numbers since the end of May. But the growth rates are different in each sector. As a result, some industries have more open jobs to offer than last year, while others are still struggling in comparison. The highest growth rate in job postings is - naturally and unexpectedly - in tourism, retail and gastronomy, where there is a rise of up to 99% compared to the end of May.

While there is an average increase of up to 40% in general management, recruitment and project management, areas such as architecture, IT support and software development are at around 20%. But, keep in mind that this is the development since May so you can only see how much the sectors are recovering, which largely depends on how much they were affected by the crisis in the first place.

Compared to last year see which are the winners and losers of the crisis

To see which sectors are better off in general, we are now going to compare the numbers to the previous year:

Winners of the corona pandemic are definitely software developers who are far better off than last year with a rise in job offerings of 30%. The same goes for architects who experience a rise in job postings of 10%. It may be surprising but in these two areas job candidates have even more options then before COVID 19 hit the job market. Since there are no reliable predictions possible at the moment, how the pandemic will continue to shape the job market, it is well advised to apply to these jobs as soon as possible, while so many new jobs are available.

Unaffected are jobs in project management, customer service, and general management. These areas all experienced a change of a small single digit percentage in job posting in comparison to last year. All of them have recovered from the down in May and are back to their former strength.

But it's not all good news. There are also some losers, who haven't fully recovered fully from there down in May as of yet. Especially job postings in accounting, tourism and recruiting (HR) are still low in comparison to last year, although they are by far better than they have been in May. Tourism, for example, has experienced a 99% growth in job postings since the end of May. However, you need to consider that 99% of very little is still... very little.
A special case is the professional industries covering IT support and IT infrastructure, where we can see a decline of 9% compared to last year. Due to a general lack of IT specialists in Germany it is expected that this number will rise again quickly.

Conclusion: The sky is beginning to clear up

It seems like companies are getting optimistic and are beginning to invest in the future and therefore in new employees like you. But while new job offerings are on the rise, the overall job market is still not where it used to be, especially in certain sectors like tourism that have suffered greatly from the corona crisis.

But with the constant rise of new job postings there is hope that in a short time even the remembrance of the bad job market between March and June is soon forgotten. Overall the german job market is recovering fast, in some sectors faster than in others, and if the trend continues it can be expected that the german job market will be fully recovered by the end of the year. But corona is still a factor of uncertainty so it is well advised to use the current high demand in certain job sectors to your advantage and apply yourself as soon as possible.

The German Federal Employment Agency (Bundesagentur für Arbeit) is talking about a recovering German economy, while mentioning that the job market remains under pressure. Meanwhile, the unemployment caused by corona has stopped at least for the moment. So there is again reason for a more optimistic outlook on the German labor market.

This article is based on the following contribution by job market specialist Annina Hering published September 4, 2020: https://www.hiringlab.org/de/blog/2020/09/04/corona-krise-arbeitsmarkt-update/