Want to build a team in Berlin? Here’s what you can expect from the labour market.
In 1891, struggling with the German language the author Mark Twain wrote “I don’t believe there is anything in the whole earth that you can’t learn in Berlin except the German language.” Had he lived there today, Twain would have had an easier time. “For business, in the digital scene, English is the most important language,” says Christian Lepsien, who co-founded recruitment firm artevie in Berlin in 2014. Of course, a good grasp of the German language will help when it comes to carrying out administrative tasks, as Lepsien points out “This is not Luxembourg”. Nevertheless, the fact that English is a lingua franca in Berlin is an asset for startups wishing to hire talent.
Berlin’s golden days are over
Lepsien’s recruitment consultancy helps SMEs and startups solve the challenge of hiring IT and digital talent. “The demand for IT and tech-related skills is growing because every business is becoming more and more IT-driven, no matter what industry is at the end,” Lepsien says.
Talent was easier to source at the start of the Berlin boom cycle around 2007, when space was readily available and life was cheap. “People come from everywhere: from Israel, Greece, Asia, America and Berlin successively became this place that we all know now,” says Lepsien, adding: “For companies in Berlin, it impacted access to talent, on the one hand, because more [digital] talent came, this talent was attracted by the possibilities for a good job […] and on the other hand it became harder for smaller, family-owned local companies to attract talents [e.g. IT People] in increasing competition and also cope with the rise of salaries.”
Be ready to pay high salaries
Since 2007, the cost of living has exploded and over the last decade, house prices doubled, fuelled by the VC-funded hiring sprees of scaleups. And while there is a large talent pool in the German capital (Dealroom estimates there are 73,000 people working in startups and 200,000 students), salary expectations have risen substantially. A lower entry level developer job that would have commanded €40-€50k in the past, today garners up to 25% more because of strong competition. “Salaries increased strongly in the past years in the IT/digital scene, in particular in specialised (tech.) areas of expertise that many companies (and business models) demand. I would say today there is no real cost advantage going to Berlin in order to get the best (tech) talents for a “lower” price compared to other locations or markets,” says Lepsien.
Nevertheless, Berlin’s mature startup scene hosts a substantial talent pool with expertise in e-commerce, e-education, e-banking and e-health, which can be accessed by joining the network and being “clever and smart”. What is more, in some areas, the cost of living is still lower than that of Luxembourg.
“The competition in the central Berlin area for digital talent is very high, so companies need to adapt their recruiting strategies”
Christian Lepsien, artevie founder
Recruitment strategies
One of Lepsien’s approaches is to expand the local search grid to the greater region, to avoid employers having to pay relocation costs and face the disruption of a relocation that might not pan out.
“The competition in the central Berlin area for digital talent is very high, so companies need to adapt their recruiting strategies. For example, some companies attract people from the greater Berlin area with very flexible working models. For instance, people come 4-5 days per month to the office in Berlin and work mainly remotely. That way they are able to attract interesting people, sometimes even with lower salaries and have a better chance of success,” says Christian Lepsien.
Artevie also challenges the type of talent an employer wants in Berlin, in order to get the best value for their money. For example, would hiring a salesperson make sense in such an expensive city?
The firm also helps companies to be attractive to talent by working on their branding and company culture. Here, he warns, however, that having a nice office and table football is not enough.
His parting advice: “If you want to open in Berlin, be aware that it’s also a competitive labour market in digital/IT/tech scene and you need to have a competitive recruiting strategy. If you have this strategy, I think that Berlin is a super interesting market for digital business models. Maybe one of the best in Germany.”
This article is part of a series on the Berlin startup scene. Read more:
