German companies take aim at EU unemployment

More than half a million training contracts were signed in Germany last year, but 37,000 traineeships are still open, because there weren't enough applicants. It's a new record high.

German companies are finding it increasingly difficult to hire enough newcomers, while at the same time, there are more than 5 million unemployed young people in the EU. In Spain and Greece, every second young person is without a job. The costs for unemployment benefits and unpaid taxes are in the billions.

For years now, there have been attempts to bring many young jobless Europeans to Germany and get them working. It should be a win-win situation. But Karl-Thomas Neumann, chairman of GM subisdiary Opel and president of GM Europe, said that's not the case. "The current programs are not performing well. Too many people are quitting, and there are too few in permanent positions," he said. He described the attempt to bring talented workers to Germany as "not sustainably successful."

Supporting young people locally

One reason for that is because many people prefer to remain in their familiar environment, said Neumann, although he doesn't wish to equate this conclusion with an appeal against mobility. Rather, he is looking for promising alternatives to circumvent the problem. "We simply won't be able to have it so that everyone comes to Germany and works here," he said.

This past spring, he and other leading figures from German industry joined forces with several foundations to create the European InCharge initiative against youth unemployment. "I thought about what might have become of me if I had been unable to find a job when I finished my studies, if I'd had to move back in with my parents and could barely make ends meet," said Neumann. "I wouldn't be the person that I am today."

Encouraging skills

InCharge aims to help young people find a job and give them motivation, orientation and further qualifications. Many young people have never learned how to be active on the job market, and lack employable skills. Often, they don't know how to successfully apply for a job, nor do they have a concept for what their future should look like.

"It's about taking charge of your life and not waiting for something to happen to you," said Neumann. That also means making sacrifices, and perhaps spending time abroad with the goal of one day returning home.

The initiative's first coaching day was held at the end of June in the Spanish city of Zaragoza. Just 10 days after it was announced, there were more than 800 applications. In the end, 420 participants were selected to meet with 23 partner companies. The event was divided into several sessions, including career talks, interviews, company presentations and workshops focusing on applications and job interviews.

Dual training

Nothing is promised that the initiative can't deliver. "It's not about saying that we're going to create thousands of jobs," said Neumann. "There's lots of work out there, there are lots of opportunities and we want to help people qualify for the jobs that are available in their countries."

No state, no society, and no company can create more jobs than it needs. But European factories and foreign branches of German companies are very much dependent on finding skilled workers locally.

Neumann was very impressed by the young applicants in Zaragoza. "They were totally engaged and focused, most had a really good education, and as an employer I would have thought that these were people I would really like to hire in future," he said.

And these are not just empty words - Opel has a factory in Zaragoza and, over the next few years, plans to offer about 1,000 young people job training that is similar to the dual training scheme offered in Germany.

'A large dose of self-interest'

"We feel responsible and we are looking for the right path," said Neumann, who makes no bones about the fact that the initiative is also a part of corporate strategy. "In the future, we will have to go where the talent is - and that's why there's a large dose of self-interest in the whole initiative."

The development and manufacturing sites of German companies will have to be located where the company can find the right employees. And further sweetening the deal is the financial assistance the EU offers to those who create jobs or training opportunities in countries with high youth unemployment. The latest program from the European Commission has 6 billion euros ($6.5 billion) at its disposal. Up until now, only 900 million euros of that money has been spent.

"It is very slow going," said Andrea Nahles, Germany's Labor Minister. Financial assistance is usually only granted for self-employment opportunities and for internships. "But there's much more being offered here," Nahles said, explaining her support for the InCharge initiative for German industry. "This is something that is actively sought after by Germany's federal states."

Neumann said that the European subsidies aren't being used in the right way. "When you ask why billions in EU funding aren't being drawn upon, then you often hear that there are no ideas, no expertise and no dedication, and that's what we want to bring to this."

Neumann knows only too well that his initiative can't work miracles. He won't promise to have solved the problem of youth unemployment in two years' time. "That's not going to happen," he said. But he does believe change is possible. The process has begun in Spain, and Portugal is due to follow at the end of the year. The initiative also plans to become active in Greece, although companies there have been reluctant to get involved due to the current debt crisis.