The German employment market: Why is employer branding so important in times of crisis?

For more than 14 years, employment in Germany rose continuously. This trend came to an abrupt end in 2020 with the beginning of the Corona pandemic. Last year, an average of around 44.8 million people with a place of work in Germany were in employment - 11% less than in 2019. However, according to the press release of 29 January, the Federal Employment Agency sees the labour market " still in robust shape". The unemployment rate rose to 6.3%. In total, around 2.9 million people were without employment in January (+475,000 compared to the same period last year). Of these, 250,943 were unemployed people aged 15 to 25. Most young unemployed people are in the federal state of North Rhine-Westphalia (63,625).

 

Underemployment was 3.679 million (+354,000). This figure also takes into account short-term inability to work and changes in labour market policy. 745,000 persons received economically induced short-time allowance from 1 to 25 January. The IAB labour market barometer (a leading indicator based on a monthly survey of all local employment agencies) also fell in January to 100.2 (-0.4) points. Nevertheless, the employment agencies remain confident and believe that the labour market as a whole can withstand the prolonged lockdown. The reasons include the prospect of vaccinations starting up. In addition, many pandemic-related dismissals have already taken place in the second quarter of 2020. Although no new hirings on a large scale are currently expected, some companies are in the process of restructuring and are already looking for employees in new sectors.

How employers behave during the Corona crisis and stay true to their employer branding strategy has a direct impact on their attractiveness in the labour market. It is a mistake to save on effective employer branding measures now - because: Existing staff need positive signals and potential new employees need a perspective in a consistently well-positioned company. Employees who have had bad experiences with their employer pass these on as multipliers - with access to various social media platforms and employer rating portals, the reach is enormous and the damage to the image is quickly done.

 

Sectors affected by the Corona crisis

12.8% of the German economy is directly affected by the current pandemic measures (4.5% education, 3.4% retail, 1.6% hospitality, 1.6% motor trade/repair, 1.4% arts, entertainment, recreation, 0.3% travel agencies/tour operators)*. Unemployment or short-time work has the most severe impact on trade, transport and hospitality, non-public business services and personal services (in health and social work) and manufacturing (excluding construction). In 2020, about 207,000 employees in trade, transport and hospitality and 281,000 service providers lost their employment. The manufacturing sector (excluding construction) lost 191,000 workers. The metal and electrical industries were also hard hit. Classic company concepts based on tourism or MICE (Meetings, Incentives, Conventions, Exhibitions or Events) hardly work in the current situation. New ideas are needed here. Employees in the cultural sector (musicians, cabaret artists etc.), the creative industries and the entertainment sector, for whom interaction with the audience is crucial, fear for their existence. Solo self-employed workers, depending on their business model, may face ruin. Employees in the temporary work industry are released more often, mini-jobs are cancelled. Working parents and single parents are under extreme professional pressure.

 

Successful through the pandemic: these industries and business models are boosting

Sectors in which home offices are possible and the risk of contagion is considered lower proved to be more stable on the labour market. It became clear which companies had built up a good digital infrastructure. Smaller and medium-sized companies, which are often family-run, tended to find it more difficult to catch up on their failures in terms of digitalisation.

Which industries and business models proved successful in the pandemic or even benefited from the developments?
As expected, companies with digital business models were ahead. Since shops and storefronts were closed, an above-average amount of orders were placed. Online retail profited enormously. The big winner was the shopping giant amazon. Compared to the same quarter in 2020, amazon's turnover rose from 87.44 billion US dollars to 125.56 billion US dollars (Statista, 4th quarter 2020). Companies in the logistics sector also felt the impact of the pandemic very strongly. Due to the increased need for deliveries, parcel delivery services in particular were able to become part of the value chain. Food retailing, which was not affected by the lockdown-related closures, recorded a 16.7% increase in sales in 2020 (full-range retailers, handelsdaten.de). Some restaurateurs relied on cooperation with delivery services. One of the best known is the industry giant Lieferando. Last year, the turnover of the Lieferando parent "Just Eat Takeaway" climbed by more than half to about 2.4 billion euros compared to 2019. In the fourth quarter of 2020, sales even rose by 60%. But the competition is not sleeping in this sector either. In Germany, besides Lieferando (20%), Amazon Fresh/Pantry (6%), Rewe Lieferservice (6%) and Lieferheld (6%), among others, are also used.

Hardly surprising: social media platforms continued to increase their relevance for social exchange as a Corona-compliant way to get in touch with fellow human beings. On Facebook alone, the number of daily active Facebook users in 2020 rose by 30 million to around 1.82 billion within three months. Twitter's daily active users also climbed by around 27 % to an average of 192 million. The app developers Paul Davison and Rohan Seth, who launched Clubhouse in spring 2020, also recognised the current opportunity. By the end of December, the app, which is still in beta, had 600,000 users.

Streaming providers such as Netflix and Amazon Prime also benefited from the lockdown-related restrictions. Netflix, for example, recorded around 200 million customers in Q4 2020.

Some companies from severely affected sectors managed to convert their business models to digital solutions with creative ideas and ingenuity: For example, 23% of respondents to market research by Appino said they now use online home sports services. Companies from different sectors were still able to make their advisory services available via (video) chat function. Further qualification courses were implemented in virtual classrooms. Of course, the success of new digital offers depends on a smooth technical implementation. So it is not surprising that a joint study by LinkedIn and the ifo Institute showed that job advertisements in the software & IT sector increased by 21%**. There was also a demand for skilled employees in the particularly system-relevant health sector, with around 46% more job ads being placed.

 

How employers win points in the crisis

Why should employers focus on employer branding in times of crisis? Aren't these just additional costs? The success of a company is largely determined by the skills of qualified employees and their motivation to work. Globalisation and spatially flexible working are increasingly permeating everyday life and opening up a seemingly borderless labour market with new perspectives for potential skilled workers. It is becoming more and more important for employers to compete against the ever-growing competition. Building a strong employer brand is essential for this and investing in employer branding measures is an investment in the future.

Although the current pandemic has put a brake on economic development, there will be many new opportunities and major catch-up effects once the current difficulties have been overcome. This should bring the longed-for upswing to many sectors. To achieve this, companies will continue to need well-trained employees in order to survive in the market in the future. Many companies want to keep as many employees as possible, even in times of lockdown. Behind this is the concern that otherwise they will not be able to fill the necessary positions during the economic recovery. Demographic change is making employees a scarce resource. Many employees from sectors affected by the lockdown are reorienting themselves and leaving their traditional fields. Some trainee positions are not being filled, many school leavers are uncertain and first have to find their way around. Career changers could become a new recruiting target group for many employers. A company's good reputation, authenticity in terms of corporate values and respectful treatment of the workforce will become even stronger criteria for potential new employees when looking for work in the future.

The WilsonHCG 2021 Fortune 500 Employment Branding Report released on 9 February 2021, now in its seventh year of analysing and ranking the employer brands of every Fortune 500 company, clearly shows that "companies that invested in their workforce during the pandemic performed exceptionally well in our rankings," said John Wilson, CEO of WilsonHCG. How companies treated their employees during the pandemic will be a factor in decision-making for applicants when choosing new employment.

Employers must be transparent and keep their staff informed even in the case of structural changes, especially in times of crisis. If employees only learn about innovations and restructuring from the press, they feel ignored and not taken seriously. A good internal communication strategy is therefore an important element of employer branding. But a forward-looking approach is also needed externally. When looking for talents, employers should take a proactive approach. For the new generation of employees, a clear attitude towards issues such as diversity, equal opportunities, inclusion, sustainability, but also occupational safety, a responsible approach to health issues and modern working practices as well as employee leadership are relevant.

The Fortune 500 Employment Branding Report evaluates according to the criteria of personnel marketing & recruiting, job postings & career pages, satisfaction surveys & candidate experience, awards & innovations, social and corporate social responsibility. The best employer brand was IT and networking giant CISCO (85 points), followed by technology company Google (82 points) and pharmaceutical and consumer goods manufacturer Johnson & Johnson (82 points).

 

Why not get in touch with us?

We would be happy to advise you on the topic of employer branding in times of Corona.

Please contact:
Katrin Jetter (Senior Consultant)
[email protected]

 

Further information and source reference:

* 13 Prozent der Wirtschaft direkt von Lockdown betroffen, statista/Statistisches Bundesamt

Bundesagentur für Arbeit: Arbeitsmarkt im Januar 2021 

IAB-Arbeitsmarktbarometer: Arbeitsmarkt hält dem Lockdown stand

Corona beendet langen Aufwärtstrend am Arbeitsmarkt (Zeit online)

Arbeitsmarkt 2021: 20 Prozent mehr Arbeitslose durch Corona (Handelsblatt)

**in the period from March-May 2019 to March-May 2020
Wie stark sind einzelne Branchen vom Coronavirus betroffen?

Wie die Corona-Krise die Suchprozesse am Arbeitsmarkt beeinflusst 

Nutzen Sie während des Lockdowns einen der folgenden Essens- oder Lebensmittel-Lieferdienste? (statista)

The 2021 Fortune 500 Employment Branding Report. Uncharted territory: Navigating the future of employment brand

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