A report released on 24 November 2025 by the Cologne-based Institute of the German Economy (IW) concludes that Germany’s long-term labour shortages cannot be solved by recruitment drives alone; companies and local governments must do more to retain the international professionals they already have. The study—commissioned by the economic-development agency of the Northern Black Forest region—shows that one in five skilled workers there now holds a foreign passport, yet 40 % of newcomers plan to leave within five years.
Researchers analyse vacancy data from the Federal Employment Agency and migration statistics to highlight the scale of the challenge: in 2024 the region posted a vacancy-to-unemployment ratio of 47.6 %, far above the national average of 39.2 %. Demographic pressures will intensify the gap as baby-boomers retire, the authors warn, estimating that the German economy will need a net inflow of roughly 290,000 people per year until 2040 just to keep the labour force stable.
![New IW study warns: Germany must focus on retention, not just recruitment, of foreign talent]()
To stop the revolving-door effect, the paper recommends a “welcome-and-stay culture” that includes faster recognition of foreign qualifications, multilingual onboarding, affordable housing and support for spouses’ careers. Without such measures, even high-profile reforms like the Skilled Immigration Act risk delivering only short-term relief, the IW argues.
For corporate mobility teams the implications are immediate: relocation packages should incorporate long-term integration services—language courses, community networking and spousal job placement—rather than focusing solely on the first months after arrival. HR departments should also track assignment satisfaction and attrition among international staff to identify emerging retention risks early.
Local chambers of commerce are urged to expand mentoring schemes that pair foreign hires with German colleagues, while municipalities should streamline residence-permit renewals to signal that international talent is welcome to settle permanently. Taken together, the recommendations outline a retention-first strategy that could become as important as recruitment campaigns in Germany’s battle for global skills.
Researchers analyse vacancy data from the Federal Employment Agency and migration statistics to highlight the scale of the challenge: in 2024 the region posted a vacancy-to-unemployment ratio of 47.6 %, far above the national average of 39.2 %. Demographic pressures will intensify the gap as baby-boomers retire, the authors warn, estimating that the German economy will need a net inflow of roughly 290,000 people per year until 2040 just to keep the labour force stable.
To stop the revolving-door effect, the paper recommends a “welcome-and-stay culture” that includes faster recognition of foreign qualifications, multilingual onboarding, affordable housing and support for spouses’ careers. Without such measures, even high-profile reforms like the Skilled Immigration Act risk delivering only short-term relief, the IW argues.
For corporate mobility teams the implications are immediate: relocation packages should incorporate long-term integration services—language courses, community networking and spousal job placement—rather than focusing solely on the first months after arrival. HR departments should also track assignment satisfaction and attrition among international staff to identify emerging retention risks early.
Local chambers of commerce are urged to expand mentoring schemes that pair foreign hires with German colleagues, while municipalities should streamline residence-permit renewals to signal that international talent is welcome to settle permanently. Taken together, the recommendations outline a retention-first strategy that could become as important as recruitment campaigns in Germany’s battle for global skills.
