On the face of it, job seeking and recruiting is the same in most developed countries. It follows the same tenets of relevance and speed. It has the same success criteria and it most often features the same complaints and wishes from candidates and recruiters.
Except clearly this isn’t true. Otherwise we couldn’t reel off all the companies and brands that went into our markets and failed horribly. They failed because either they were not aware of the differences in the business environment or they were not aware of the different cultural aspects. In most cases it was a combination of the two.
Let’s take Germany to illustrate the case and to highlight the difficulties companies (especially from an Anglo-Saxon background) face when entering the European powerhouse. Looking from the outside in, we see a strong economy, with nearly full employment and a talent shortage, combined with a recruitment market more akin to the one we experienced in the UK and US around 1998, with high recruitment advertising rates. So a market that seems ripe for disruption. The only issue seems to be the language. To overcome it, the website will be translated and a German-speaking customer services team installed in Dublin. Everything is set for success, correct? If only.
The German economy
There are only around 250 big corporates in Germany, the rest is made up of the Mittelstand (up to 500 employees). The Mittelstand are SMBs, mainly family-owned and often global market leaders. The owners of the companies think in terms of generations and dynasties and the companies are built on stable foundations. Innovation to increase productivity trumps innovation to cut costs.
In big companies, unions and workers’ representations are strong and are involved in all key decisions, especially when it affects workers. Their first instinct is to decline and slow down any change from the status quo. One example is their rejection of video interviewing for no apparent reason.
Most German HRDs either have a background in law as they need to negotiate with the unions and look after contracts or in psychology and education, as the focus in on employee wellbeing and development.
The German recruitment market
The German recruitment marketed is comparable to the UK’s around 1998. 3/4 of the ad spend is still earned by regional newspapers through branded ads (practically 4 colour ads). The German job seeker wants a lot of information before even applying to a role (see below regarding trust). He/She not only wants to have all the detail but also a feeling for the company behind the job. No wonder that German companies place much more emphasis on Employer Branding and Recruitment Marketing than their counterparts in other countries. The big corporations (like elsewhere) are quite advanced in their recruitment marketing, are deploying talent communities and are already well on their way to implementing the ‘new recruitment model’.
Most of the other companies (which as discussed above is the vast majority) turn to recruitment ad agencies to create the ads and the media schedule and manage the relationship to the media owner. The media owner pays the agency a revenue share and allows volume discount. Some of the agencies now also move into pre-selection. If a brand hasn’t been established and setting up an extensive field sales team isn’t on the cards, these ad agencies are the best route to market. Obviously, the commercial terms need to be attractive enough and hiring a business development person who actually knows the owners is essential.
Stepstone is the undisputed market leader for digital classifieds. For Monster, Germany is the second biggest country behind the USA. CPCs are not a novelty in Germany as most German job boards started with a CPC model and several, such as MeineStadt, still offer it. LinkedIn is mainly being used for recruiting foreign citizens. Xing is the predominant social network in Germany but active sourcing is not as well established as in other countries and is also often frowned upon by the candidates.
Indeed, growing massively in traffic is still in its beginnings as their business model does not support the revenue share of the agencies. This “arbitrage model” of the recruitment ad agencies is the key defining factor in the German recruitment landscape and slows adoption of other, lower yielding models.
Active sourcing and mobile recruiting are the hot topics at the moment, but so far no product or vendor has established itself, which given the German mindset and market dynamics isn’t a surprise.
The German mindset
Germans are conservative. They are more concerned about what they could lose instead of what they could gain. To move jobs or suppliers requires that all avenues (financial, emotional, etc.) are covered satisfactorily. As a consequence the sales cycle takes longer than in other countries and requires the creation of a trust basis. This trust basis is created via physical visits. Once a deal has been sealed, the supplier benefits from a lot of goodwill.
The conservatism is also expressed in concerns about data protection and privacy. Since the NSA affair, sending data into the USA has become even more frowned upon. If in doubt the German will not share his/her data. Once in employment, continuing to update a public profile is seen as career suicide.
This conservatism is also evident in companies, where financial controlling plays an important role and all costs need to be allocated against departments and tasks. It is expected that the supplier provides the information in the required detail.
A further example is the negativity and scepticism towards cloud computing. It is seen as insecure and internal IT departments fear it will minimise their influence. On-site solutions are certainly preferred.
Doing business in Germany requires commitment and investment. Without centralisation (Germany is better understood as 7 big regions instead of one country and has no clear commercial centre similar to London) and trust at the heart of interactions and decisions, companies will experience a long sales cycle yet require investment into the brand and into a field sales team.
Every country has its differences. Sometimes there are even differences within countries – compare the coastal regions of the USA versus the rest of the country (just read the fascinating book “The American Nations” by Colin Woodard). Sometimes there are differences how a law is interpreted (and we haven’t even touched on this in the example of Germany): whilst the UK and Italy are bound by the same European data protection act, they have completely different interpretations, which have significant effects on businesses and shows that the EU actually isn’t as homogeneous as it might look from the outside. The important thing is to understand the fundamentals of one’s business and then adapt to the local differences by employing local knowledge.