The importance of cooperation between Germany and India for German SMEs, especially with regard to the shortage of skilled labour in Germany

Introduction

The German economy is strongly orientated towards exports and German SMEs play an important role in this. However, in recent years there has been a shortage of skilled labour in Germany, which has become a challenge for many companies. India, on the other hand, has a large pool of well-trained professionals working in IT, engineering and other fields.

The shortage of skilled labour in Germany

The shortage of skilled labour is a challenge for many companies in Germany. There are many reasons for this: an ageing population, a shortage of trainees in certain professions and a high rate of emigration of qualified skilled workers abroad are just some of them. According to a skilled labour shortage analysis conducted by the Federal Statistical Office in 2020, there are currently shortages in Germany in professions such as engineering, IT, healthcare and skilled trades.

This shortage of skilled labour is having an impact on the German economy. Many companies are finding it difficult to fill vacancies, which can lead to production delays, declining quality and a drop in sales. In addition, the shortage of skilled labour can impair the innovative strength and competitiveness of German companies.

India's skilled labour potential

India has a large pool of well-trained skilled labour. In recent years, India has launched a number of initiatives to modernise the education system and increase the number of graduates in the fields of IT, engineering, science and management. According to the report "India's Talent Imperative" by McKinsey & Company, India is expected to have more than 28 million graduates by 2025, most of them in the fields of IT and engineering.

However, India's skilled labour potential is not without its challenges. One of the biggest disadvantages is the language barrier. Although many Indian professionals have a good command of English, misunderstandings can still occur as English in India often differs from that spoken in Europe. There are also cultural differences that can make collaboration more difficult.

Definition and categorisation

Indian skilled workers are highly qualified employees from India who are employed in Germany. These professionals help to increase the competitiveness of German companies by bringing expert knowledge and skills to the companies. They can also help open up new markets and play an important role in the development of new technologies.

Indian specialists can be employed in many areas. They can work as experts in IT, software development, supply chain management or research and development. They are also in demand in the areas of customer service, marketing and financial services. Indian professionals represent a combination of technical knowledge and international experience that enables German companies to compete on a global level.

However, Indian skilled labour is not only a resource for German SMEs, but also a growing opportunity for larger companies. Since India has a large population with a large number of highly skilled professionals, access to these resources is essential for German companies. It is therefore important that companies are aware of the legal framework that applies to the employment of Indian skilled labour in Germany.

Indian skilled labour also represents an opportunity for German companies to reduce their costs. As India is much cheaper than Germany, companies can achieve cost savings due to lower labour costs. This is particularly advantageous for companies that find themselves in difficult economic times.

Indian professionals can also help improve a company's image and make it more international. As they have a different culture and background, they can bring in new ideas and approaches and thus take the company to a new level.

In today's world, it is therefore important that companies utilise Indian professionals to improve their competitiveness and tap into new markets. Indian professionals enable companies to achieve cost savings, bring in global expertise and improve their image. It is therefore important that companies understand and utilise the legal framework for employing Indian professionals.

Co-operation between Germany and India

Co-operation between Germany and India can be of great benefit to German SMEs. One possible form of co-operation is the outsourcing of services or the establishment of joint ventures in India. This offers German companies access to India's skilled labour potential and can help them to alleviate the shortage of skilled workers in Germany. In addition, co-operation can also lead to a reduction in costs and an increase in efficiency.

The Indo-German Chamber of Commerce (IGCC) promotes cooperation between German and Indian companies and offers various services to facilitate collaboration. These include arranging business contacts, organising business trips and providing training on intercultural cooperation.

However, there are also challenges when working with Indian companies. These include cultural differences, legal and bureaucratic hurdles and quality problems. Companies must overcome these

Best practices and success stories

There are a number of companies that have already worked successfully with Indian companies. One example of this is Siemens. The company has established a co-operation with the Indian company Tata Consultancy Services (TCS) to jointly develop software solutions. The co-operation has enabled both Siemens and TCS to benefit from their respective strengths and open up new markets.

Another example is Bosch, which has set up its own research and development department in India. The department develops products and solutions specifically for the Indian market, which helps Bosch to strengthen its position in India.

Reasons for hiring Indian experts

Indian experts offer German companies many advantages. On the one hand, they can provide highly qualified professionals with a broad range of knowledge and a variety of specialised skills and abilities. Secondly, they can reduce costs by doing their work more efficiently and effectively.

Indian experts bring a high level of expertise and experience to a company. They can help in the development of innovative products, services and business processes and integrate new ideas into the corporate culture. This can give German companies a competitive advantage by driving the market faster in new technologies and trends.

Indian experts can also help to reduce costs. They are usually very well qualified and can do more in less time than their German colleagues. This allows companies to save money by completing more tasks in less time.

Indian experts can also be a valuable resource for companies looking for new market segments. They can help companies expand their business into new markets and attract new customers.

Hiring Indian experts can also improve the corporate culture. They bring new ideas and a different perspective to the company and can thus contribute to a better understanding of the different cultures and markets.

In addition, there are also some legal framework conditions that must be observed when hiring Indian experts in Germany. However, these are usually not too difficult to fulfil and can easily be met with the right support.

Overall, Indian experts are a valuable resource for German companies. They can help reduce costs, open up new market segments, drive innovation and improve corporate culture. It is therefore worth learning more about the legal framework and considering the benefits of hiring Indian experts.

The advantages that Indian specialists offer German companies

Indian skilled labour is an invaluable competitive advantage for German companies. They offer a wealth of benefits that can help strengthen the competitiveness of German companies. First and foremost, Indian professionals are a cost-effective solution for German companies as they often earn less compared to their German counterparts. In addition, they can also offer higher labour productivity at a lower price, as they often have greater work experience and a higher work rate.

Furthermore, Indian professionals can produce a higher quality of work than their German counterparts. This is especially due to their ability to react and adapt quickly to new technologies and situations. As they are in a global competitive environment, they need to be constantly at the cutting edge of technology to gain a competitive advantage.

In addition, Indian professionals can also offer greater flexibility. As they can work from home, they can work at any time of the day or night, adapting to the time differences between Germany and India. This allows them to work faster and more efficiently, resulting in higher labour productivity.

Finally, Indian professionals can also offer greater creativity and innovation. As they come from a different culture and background, they can develop new ideas and solutions that can surprise and outperform German competitors.

Overall, Indian professionals offer a number of advantages for German companies, which they can use to increase their competitiveness and maximise their profits. It is therefore important that companies understand the legal framework for employing Indian professionals in Germany and utilise it wisely.

Increasing the competitive advantage

The use of Indian skilled labour can strengthen the competitiveness of German companies. Indian skilled labour is qualified, motivated and cost-effective. They contribute to the competitiveness of German companies by ensuring high quality standards, reducing costs and providing innovative ideas. However, in order to increase the competitive advantage through the use of Indian skilled labour, a number of factors must be taken into account.

Firstly, German companies need to select the right Indian professionals. It is important to ensure that the selected candidates are qualified and have a high level of expertise and experience. In addition, the professionals must be able to quickly adapt to the corporate culture and processes.

Secondly, German companies need to establish good communication and coordination with Indian professionals. It is important that the professionals in Germany have all the relevant information to do their jobs efficiently. Good communication and coordination between the Indian professionals and the management is therefore crucial to ensure that the co-operation runs smoothly.

Thirdly, German companies must comply with the necessary legal framework. It is important that companies comply with the applicable rules and regulations in order to avoid costly problems and inconvenience.

Fourthly, German companies need to create a good working environment that enables Indian professionals to feel comfortable and do their work effectively. A good working environment enables Indian professionals to feel comfortable and motivates them to give their best.

Finally, German companies must support the recruitment of Indian skilled labour by offering appropriate remuneration. Indian professionals are valuable resources who make a significant contribution to a company's competitiveness. Therefore, it is important that companies pay them adequate salaries to encourage them to offer their services.

In order to increase the competitive advantage by utilising Indian professionals, German companies need to consider all the factors mentioned above. If these factors are properly considered, companies can significantly increase the benefits of utilising Indian professionals and thus improve their competitiveness.

Innovation and development of new technologies

India's innovative strength is one of the key characteristics that motivate German companies to hire Indian specialists. India is a country focussed on developing and driving technology and innovation. This enables companies in Germany to benefit from the latest technologies and innovations that originate from India.

The development of new technologies and innovations in India is carried out by qualified specialists who have extensive expertise and experience in the technological fields. This enables German companies to benefit from the various technologies and ideas that are being developed in India. At the same time, companies can utilise the work of professionals of Indian origin to drive their business forward.

Indian specialists not only bring technologies and innovations with them, but also a cultural understanding. This understanding has a particular impact on the development of new technologies and innovations in Germany. Indian experts can better understand consumer needs in Germany and develop a better understanding of the culture and mentality of German consumers.

In addition, Indian professionals can also offer some specific advantages for German companies. For example, Indian professionals can help facilitate technical developments that are customised to local requirements. This customisation can help German companies to be more successful locally and achieve better competitiveness.

Finally, Indian professionals can also be a useful source of inspiration and creativity. They can help develop new ideas and solve problems. Indian professionals can help drive innovation and open up new opportunities that give German companies a competitive edge.

Indian skilled labour is an indispensable resource for German companies when it comes to driving innovation and technology. They can help to develop new ideas, understand consumer needs and increase the competitiveness of companies. Indian professionals therefore play an important role in the development of new technologies and innovations in Germany.

Expansion of the employee base

The number of qualified Indian professionals on the German labour market is increasing. This opens up new opportunities for German companies to become more competitive and expand their employee base.

Indian professionals bring specific expertise and experience in various industries that can impact the productivity and efficiency of German companies. Their commitment to high quality and reliability can help companies satisfy their customers and increase their sales.

Indian professionals can also help alleviate the skills shortage in the German labour market by taking on complex tasks and bringing a high level of creativity and technical knowledge. In addition, they can help to promote cultural diversity in companies by bringing in new ideas and approaches and finding new ways to solve problems.

However, companies must also ensure that they fulfil all legal requirements when hiring Indian professionals. It is important that they find out about the necessary permits and regulations and ensure that the skilled workers are legally active in the German labour market.

Indian professionals can support German SMEs with their specific knowledge and expertise. Indian professionals can help companies find new ways to increase their competitiveness by bringing in new ideas and approaches and a high level of creativity and technical knowledge. However, companies must ensure that they comply with all legal requirements.

Improving productivity and efficiency

Hiring Indian professionals not only brings experienced, technologically savvy and cost-efficient labour to German companies, but also provides an opportunity to increase the productivity and efficiency of the companies. Indian professionals are not only familiar with the latest technologies but also have a lot of experience in handling complex processes. This enables them to quickly learn new processes and organise their work more efficiently.

In addition, Indian skilled labour can also help to close the technological gaps that still exist between Germany and India. This can help companies to adapt more quickly to changing market conditions and optimise their business model.

Another way to increase productivity and efficiency is to involve Indian professionals in the process of digital transformation. Indian professionals can help companies implement digital processes and increase productivity and efficiency.

Utilising Indian professionals can also help companies to reduce costs while increasing the quality of work. In addition, Indian professionals can also help to make the work in a team more efficient by acting as mentors and passing on their experience to their colleagues.

It is therefore important for the managing directors and CEOs of German companies to recognise the benefits of employing Indian professionals and integrate them into their business strategy. Indian professionals can be a valuable addition to the skilled labour available in Germany and can help increase the productivity and efficiency of companies.

Increased flexibility and product quality

The use of Indian skilled labour can help German companies to increase flexibility and product quality. Indian professionals are highly competent in the field of technology and design and are regularly appreciated by companies for their expertise, creativity and quick responsiveness to new challenges. By utilising these professionals, companies can offer their customers high-quality and innovative products that give them a competitive edge.

In addition, Indian professionals also bring the flexibility and agility to a company that is required for the successful implementation of new products and services. Indian professionals are able to respond quickly to changes and demands of the market and enable companies to adapt quickly. This helps companies to adapt to changing market demands and enable them to keep pace with their competitors.

Another important advantage of Indian skilled labour is that they can help improve the quality of products. Indian professionals are able to do an accurate and precise job, which means that the end products are higher quality and more durable. They are able to ensure a consistent level of quality across all products, which can help strengthen a company's brand image.

To reap the benefits of employing Indian professionals, companies need to find the right employees who fulfil the company's requirements. Companies need to ensure that the professionals have the necessary experience, knowledge and skills to fulfil the demands placed on them. They also need to ensure that the professionals have good communication and a professional work attitude.

Indian professionals offer unique advantages to German companies, and utilising these professionals can help increase flexibility and product quality. By utilising Indian experts, companies can increase their competitiveness and gain a competitive advantage over their competitors.

Increase in customer satisfaction

Customer satisfaction is an important factor for the success of a company. Indian professionals can make a significant contribution to increasing customer satisfaction as they have extensive knowledge, skills and abilities to fulfil customer requirements and achieve the best possible results.

Some of the key benefits of utilising Indian professionals to increase customer satisfaction are:

• Experience - Indian specialists have extensive experience in dealing with customer enquiries and customer problems. They are able to respond quickly and efficiently to customer enquiries and work with them to find a solution.
• Communication - Indian professionals are able to communicate in a way that is understandable to customers. They are able to explain complex issues in a simple and understandable way and respond to questions appropriately and competently.
• Creativity - Indian professionals are highly creative and innovative. They can solve complex customer problems in a creative way and develop new ideas to optimally fulfil customer requirements.
• Flexibility - Indian professionals are very flexible and can respond quickly to changing customer requirements. This enables them to fulfil customer requirements efficiently and effectively.

Indian professionals can therefore make a significant contribution to increasing customer satisfaction. By hiring qualified and experienced Indian professionals, companies can increase customer satisfaction and thus improve their competitiveness.

Cost savings

The use of Indian skilled labour can be an important step towards cost savings for German companies. By employing Indian skilled labour, companies can reduce the costs of employing skilled workers and thus achieve significant savings.

Cost savings can be achieved in several ways. On the one hand, companies can reduce their personnel costs by employing Indian specialists, as the salaries paid in India are generally lower than those in Germany. On the other hand, companies can reduce their costs for the training and further education of employees by using Indian specialists, as many Indian specialists already have extensive expertise and a high level of qualification.

In addition, the use of Indian skilled labour can also help to increase the company's competitiveness. By using Indian skilled labour, companies can provide products and services faster and more efficiently, which can lead to an increase in productivity and thus to cost savings.

The use of Indian skilled labour can therefore be a valuable contribution to cost savings. Companies should therefore carefully consider whether and which Indian specialists they would like to employ in order to reduce their costs and increase their competitiveness.

Increasing international competitiveness

German companies are faced with the challenge of having to assert themselves in global competition. To do so, they must adapt to the complex and dynamic conditions of global competition. An important key to success is the utilisation of international skilled workers. Indian skilled labour is a valued resource that can be a valuable addition, especially for German companies.

The recruitment of Indian skilled labour can increase the international competitiveness of German companies. Indian professionals offer a high level of expertise and experience that can have a positive impact on innovation and competitive advantage. Through their intercultural and interdisciplinary approach, Indian professionals can help develop new ideas and approaches and find innovative solutions to business problems.

Indian professionals can also help reduce costs and increase productivity. By hiring Indian professionals, companies can tap into a wider pool of skills and experience that they may not find in their own organisation. This can help improve the company's ability to compete, grow and generate profits.

Indian professionals can also play an important role in the development and implementation of business strategies. Indian professionals can help companies develop strategies that enable them to adapt to dynamically changing global competition. Indian professionals can also help companies develop new technologies, products and services that enable them to enter new markets and target new customer groups.

Indian skilled labour can help German companies to assert themselves in global competition and grow. However, companies need to consider the legal framework for employing Indian professionals in Germany to ensure a smooth process. With the right strategy, Indian professionals can help to increase the international competitiveness of German companies.

Expansion of the customer base

The use of Indian professionals can help companies expand their customer base and thus increase their sales. This can be achieved by hiring Indian professionals who have extensive experience in international business and can help German companies enter international markets.

Indian professionals can help build new customer relationships and strengthen existing customer relationships. Indian professionals have a deep understanding of the Indian market and can help introduce new products and services and develop the right strategy to expand the customer base.

Indian professionals can also help open up new distribution channels and find new opportunities for sales and new markets. Indian professionals also bring with them an extensive knowledge of Indian culture, which in turn can be very useful in opening up new markets.

In addition, Indian professionals can play an important role in expanding the customer base by playing an important role in building a customer network. Indian professionals can assist in developing customer relationships and help in retaining customers.

Indian professionals can also help improve customer service and increase customer satisfaction, which can also lead to an expansion of the customer base. Indian professionals can also help develop new technologies and strategies to enable better customer service.

In order to utilise the advantages of employing Indian skilled workers, companies must observe the legal framework for the employment of Indian skilled workers in Germany. In particular, companies must comply with the applicable laws and regulations regarding work permits, working hours and wages.

Challenges and solutions

Various challenges can arise when working with Indian companies. One of them is the cultural difference. Companies need to understand the different work cultures and business practices in Germany and India to ensure successful collaboration. Another problem can be the legal and bureaucratic hurdles. To overcome these challenges, companies can offer suitable training and intercultural training and look for local partners on the ground who can help them overcome the bureaucratic hurdles.

Quality issues can also be a challenge. To ensure that the quality of products or services remains at a high level, companies should set clear quality standards and carry out regular checks.

Legal framework for the employment of Indian professionals in Germany

Work permits

Indian skilled labour can be a valuable addition for German companies. However, certain legal framework conditions must be observed if Indian skilled workers are to be employed in Germany. One of the most important is the work permit, which is issued by the Federal Office for Migration and Refugees (BAMF).

In order to obtain a work permit, the company must undergo an individual authorisation procedure. This procedure includes checking the employee's personal documents, checking the workplace, checking employee and employer rights and checking pay and working conditions. The work permit is only issued by the BAMF once the above points have been positively checked.

Once the work permit has been issued, it is important that the company reviews it regularly to ensure that all regulations are being adhered to. The company must also support the Indian professionals in complying with the regulations, e.g. by informing them about the applicable employee and employer rights.

Even if a work permit has been issued, the company must bear in mind that the Indian skilled worker's stay in Germany is only temporary. It is therefore advisable to extend the work permit in good time before it expires.

In addition, it is important that the company carefully stores the work permit and the associated documents. This is important in order to prove that the Indian skilled worker is legally employed in Germany and that all regulations are complied with.

In order to facilitate the deployment of Indian skilled workers in Germany, companies can also apply for a residence permit. This permit allows the employee to stay in Germany for a longer period of time and take up employment.

Compliance with the legal framework for the employment of Indian skilled workers in Germany is an essential component of success. It is therefore important that companies apply for work permits carefully and follow the individual steps of the procedure precisely. This is the only way for companies to successfully organise the deployment of Indian skilled workers in Germany.

Tax law aspects

The employment of Indian professionals in Germany raises a number of tax law issues. German tax legislation is one of the most complex in the world, especially in relation to the employment of foreign workers. Therefore, it is important that companies inform themselves about the tax requirements for employing Indian professionals in Germany before hiring them.

The tax liability of Indian skilled workers in Germany depends on the type of employment. As a rule, fixed-term employment contracts are temporary employment relationships and are therefore subject to tax. In some cases, however, the Indian skilled worker can also work tax-free in Germany if the conditions for a so-called "90-day rule" are met. This means that Indian professionals who work in Germany for no more than 90 days are not subject to German income tax.

In addition, the employment of Indian professionals can also bring tax advantages for German companies, especially if the employment contracts are concluded in certain countries that have a double taxation agreement with Germany. This means that the income of Indian professionals in these countries is not taxed in Germany, but only in their home country.

Companies wishing to hire Indian professionals should ensure that their tax arrangements comply with applicable tax law requirements. It is therefore advisable to consult a tax expert to ensure that all tax requirements are met.

The use of Indian specialists can give German companies a competitive advantage, but should take into account the tax requirements. A tax consultant can support companies in complying with legal regulations and in drawing up a tax-optimised employment contract.

Social security and occupational health and safety regulations

The employment of Indian skilled workers in Germany is subject to certain social security and labour protection regulations. Compliance with these regulations is necessary in order to ensure the protection of the skilled workers and at the same time guarantee legally compliant employment.

In principle, every employee in Germany is subject to social security contributions. This means that the employer must pay contributions to the statutory health and pension insurance as well as the statutory accident insurance for the employee. This also applies to Indian skilled workers.

In addition, every employee in Germany is subject to certain labour protection regulations. These regulations include compliance with working hours, break and rest times, workplace safety, protection against hazardous substances, protection against mental and physical stress and other labour law provisions. Indian skilled workers are also subject to these regulations.

In order to ensure that Indian skilled workers are employed in Germany in a legally correct manner, both employers and employees must comply with the applicable social security and occupational health and safety regulations. This means that the employer must pay the relevant contributions to the statutory health and pension insurance schemes and the employee must adhere to the agreed working hours and health and safety regulations.

Furthermore, employers and employees can make additional agreements to optimise the protection of Indian professionals. For example, the employer can take out private accident insurance for the employee or protect the employee from hazardous substances by providing them with special personal protective equipment. Employees can also optimise their protection by being aware of their rights and obligations and complying with them.

In any case, it is important that employers and employees comply with the applicable social security and labour protection regulations in order to ensure that the employment of Indian skilled workers in Germany is legally compliant.

Conclusion

Cooperation between Germany and India can be of great benefit to German SMEs. India's skilled labour potential offers German companies the opportunity to alleviate the shortage of skilled workers in Germany. However, co-operation can also bring challenges that companies need to be aware of and overcome. With appropriate measures and training, companies can successfully co-operate with Indian companies and strengthen their position in the global market.

If you have any questions, I will be happy to be your guide between these two worlds!

References:

• Federal Ministry of Education and Research (BMBF). (2020). Education in Germany 2020. available at: https://www.bmbf.de/files/Bildung_in_Deutschland_2020.pdf
• Federal Statistical Office. (2020). Skilled labour shortage analysis 2020. available at: https://statistik.arbeitsagentur.de/DE/Navigation/Footer/Top-Produkte/Fachkraefteengpassanalyse-Nav.html
• Indo-German Chamber of Commerce (IGCC). (2020). Indo-German Trade Relations - 2020 Report. Available at: https://indien.ahk.de/
• McKinsey & Company. (2018). India's Talent Imperative. Available at: https://www.mckinsey.com/
• Deutsche Bank Research. (2018). India - Opportunities and challenges for German companies. Available at: https://www.dbresearch.de/
• Siemens. (2019). Siemens and TCS partner to deliver big data insights for industrial internet of things. Available at: https://www.siemens.com/press/en/pressrelease/?press=/en/pressrelease/2019/digital-industries/pr2019020136dien.htm
• Bosch. (2019). Bosch set to become one of the largest R&D employers in India. Available at: https://www.bosch-presse.de/pressportal/de/en/iaa-transportation-bosch-intends-to-grow-further-with-climate-neutral-powertrains-246528.html