Corporate Germany lacks foreign execs for success
Published on: 25 Mar 2013 07:08 CET
Despite the global nature of Germany's export-led economy, international executives remain a rarity in German corporations.
Peter Löscher, chairman of industrial giant Siemens, complained about the problem in his company in an interview five years ago, saying: "There are only white men in the top positions." Unfortunately, not much has changed since then.
At present, barely ten percent of Siemens' employees come from outside Germany. This number is only higher in the company's office in Munich, according to a spokesperson.
Carmaker Daimler has similarly low figures, with only a handful of foreigners in top management positions. Now, the need to change this situation is slowly being recognized. The chief human resources officer for Daimler, Wilfried Porth has recently introduced a new programme which aims to recruit more top executives from other countries.
"Most companies do accept that the scenario needs to change. But when it comes to concrete measures, it's always 'Sorry, first we need to take care of the women'" said Carolin Griese-Michels from strategy consultant Roland Berger, referring to the issue of gender equality in the corporate world.
In a study conducted last year, less than 20 percent of the German companies that participated took systematic measures to employ more foreigners.
"Companies that are highly research oriented automatically end up having more international personnel," said Christine Stimpel, German head of the personnel consulting agency Heidrick and Struggles.
But in the 'old economy', meaning classic industries which produce products that are tangible, such as the mechanical, chemical and automobile industries, the situation remains much the same.
"The issue of employing more international people has not really been taken up by the automobile industry," Stimpel said.
According to Roland Berger, German corporations could save €21 billion by promoting diversity through targeted measures. Mangers who come from other countries would help the companies tap into lucrative international markets and avoid costly mistakes abroad. When more nationalities work in a company, it appears to lower even employee turnover.
But there's one major problem. "Many families are unwilling to move to Germany because of the language," said Stimpel. Moreover, many managers don't want to move to Germany when the same positions are being offered in places like New York, Hong Kong and London.
Sports equipment giant Adidas is trying its best to lure potential applicants to its headquarters located in provincial Herzogenaurach in Bavaria. The Nike-rival has tried to answer the question "Herzo…what?" on its website and has met with success: 26 percent of employees in the company are non-Germans, according to an Adidas spokesperson. Employees from 75 nationalities work in the central office.
The software company SAP also has a high number of foreign employees in its workforce in Walldorf, Baden Württemberg. The world's fourth largest software company has been trying to increase the quota of its international staff actively since 1966.
"This is due to the nature of the business," said a spokesman. Since SAP develops a lot of its software programs directly with its customers, it needs to have native employees at the location.
Daimler is now taking some concrete steps to mend the situation – 50 percent of the applicants for young executives at Daimler will now come from outside Germany. To this purpose, the carmaker hires 300 to 500 top managers every year.
However, it'll be a while before schemes like this one make an impact. "It'll take three to five years till actual measurable effects are seen," said Griese-Michels from Roland Berger.