The Case for Diversity and Inclusion in Germany: Immigrant Challenges

Generally, Germans don't mince words. Often the bane of communication conflicts and dead deals with other cultures, they simply say what they mean, directly and succinctly. It is not a question of rudeness (and they'd look puzzled if you told them they were), it's a matter of efficiency.

Chancellor Merkel's recent comments about the "utter failure of multiculturalism" in Germany came as no surprise to anyone here since she was simply stating the obvious. The international shock probably had more to do with the fact that a) she clearly stated a truth in a most politically incorrect way and, b) did not claim that "the other party's program" was a complete failure but used the inclusive "we failed".

The local shock was hearing about the death of a program that never existed.

In Germany, there has been much talk about immigration and integration for the last 45 years but it has simply not been a pressing enough issue for Germans to pull together a cohesive program, until very recently. Due to increasing frustration,  this issue is finally receiving the "outing" it deserves today.

Corporate Structure of the Economy

Out of the approximately 2.9 million firms that call themselves German, (2000), 89.4% are the Mittlestand. The Mittlestand are firms with less than 500 employees and annual revenue of €50 million or less. The Mittlestand accounts for 43.2 percent of total revenue of all German firms and they generally operate primarily on home soil. They are often owner-operated which means they are not publically traded. Their stakeholders, although as powerful, yield other kinds of persuasions. Government regulation heavily applies, but on an axis different to what Americans are familiar with. About a third of German GDP is allocated to the ''social budget.'' This translates to employees who are protected, as negotiated by the social partners, the trade unions and the employers' associations. Germany's labor market is heavily regulated. We can see an example of these structures by examining recent activities. Many German firms and employees weathered the recent crisis by going to Kurzarbeit, (reduced working hours). Workers were largely able to retain their jobs, albeit with less pay, firms were supplemented by government funding.

Management in the Mittlestand is often promoted from within and reflects decisions made by the owners, unlike many US firms where as managers climb by hopping between firms, they carry their skills and experiences which blend, influence and are influenced by new exposure. You can say that America has a built-in system of diversity and inclusion as long as they are hiring. It may not seem that way to you, but considering how long the typical length of employment runs for workers here, you feel the difference. Competitive world market forces and the recent crisis have forced changes in Germany today, particularly among the young, but it is still quite common for a worker to be in a firm for 10-20 years and, be respected for it. France and Italy share a similar structure.

The role of the firm plays a somewhat different role here than in the US. The firm, since there are so many Mittlestand, responds to a strong populist voice and often reflects that voice through the personality of its owner. The Mittlestand is German through and through and only recently (the last 10-15 years) are these owner-operators learning how to operate in an international arena. Germans culturally have set world quality standards for decades. Brand Made in Germany has meaning. No one knows better than the Germans that true brand is not built overnight but rather over decades. The Germans are quite proud of their products and of themselves and with good reason.

They had incorporated environmental sensitivity and awareness into the national conscientiousness long before much of the rest of world discovered the green crayon in their coloring box. They (and many of the Northern European countries) are among some of the world's original 'tree-huggers'. Politically, the Greens reflect the ongoing concern of many Germans and are an active and powerful party. They've been in existence since 1979 and today hold a 24% representative share of the population. Multinational German firms (the Big Boys- feed the balance of Industrial GDP), understand that reducing their carbon footprint and fostering stewardship not only polishes image home and abroad, but brings benefits when nurturing local foreign talent and developing local foreign markets where they operate. It is in other issues that German firms are lacking.

The rules of public transparency for the Mittlestand as we know it in the States, do not apply. You will see this reflected in the scarcity of published Corporate Reporting. It is not that they are intransparent. There are indeed very stringent rules for financial reporting and compliance, but this takes place between government and the firm and is not required reading for the public. The Germans have a different perception of discretion and it is bad form to discuss your income over drinks. They do not see the value in publically disclosing the details of their earnings and since many firms are privately held, do not have to woo shareholders. For this reason, it is hard to put a finger on what the Mittlestand is actually doing in terms of diversity and inclusion.

German MNE's on the other hand, generate a large part of their value-added abroad, (not calculated as part of GDP) and operate differently within their borders as compared to out of them. The Big Boys, (Siemens, VW, Bosch, BMW, Allianz, MAN, to name a few) are firmly established in other parts of the world. If they are hiring locally, you can expect that candidates are bilingual on management level. On line level, it is expat management that is expected to speak the lingo. If the firms have sent their management abroad, it is not without heavy preparation in cultural integration and preparation in the host language. Expat management programs are expensive, long-term investments. Those that do go, are seasoned and hand-picked for their adaptability. If they or their families cannot adapt, there are serious losses. Typical German companies like Bosch-Siemens for example, employ a core group of about 100 expat Execs and their families and move them strategically around the world for periods of 2-4 years; 'Get in, take-over, manage, train, replace with local, get out and get to the next location'.

Historically, the Germans have not colonized much of the world therefore they have not gained the experience of myriad races integrating into their home country like the French or the Brits nor has the world been exposed to the German tongue. The deepest experience West Germans had with integrating a "foreign culture" on their own soil on a massive scale took place in the late '80's, a mere 20 years ago. After the initial euphoria of unification wore off, the Germans were faced with the full impact of what integration would cost. Rebuilding the Eastern infrastructure, raising Eastern wages to Western levels, transferring value of the East German Mark on a 1:1 basis to the West German Mark, excessive empty office and living space, heavy migration patterns from East to West, the relative young Eastern work force encompassing a different skill set and generally different morals, values, and cultures, etc. shook the West Germans to their core. They were largely unprepared for and shocked at what they saw must happen regarding training, integration, renovation. Speaking for the Easterners, the culture shock was (and still is) just as disturbing. Both sides are still paying and still trying to sort themselves out. The West Germans do not consider their brethren as immigrants, but rather as emigrants. This integration and all the headaches that accompanied this merger, was faced by a country which has absorbed another country that speaks the same language.

I can imagine that we can expect to see a repeat of these challenges when South Korea faces eventual reunification with North Korea. I would hope there is a reaching out from the Koreans to the Germans or vice versa. There would be much to share in the way of experience.

There are 82 million people living in Germany and an estimated 14 million of them are immigrants (18%). I say estimated because the Germans themselves are still not sure. That may sound un-German like but it is an indication of how this issue has been dealt with up until recently. There are an estimated 4 million Turkish, the largest immigrant group.

It's time to take a closer look at the Turks in Germany:

15.2% have completed requirements for University entrance, (as compared to 15% for Germans), 9.6% have no secondary school diploma, (compared to 1.5% of Germans) and 14% are unemployed (compared to 7.5% of Germans). A study by the Bertelsmann Foundation estimates that failed immigration in general, is costing the country up to €16 billion ($20 billion) per year.

The Brand Made in Germany was not built by Germans alone. The Guest-Worker policy of the sixties embraced and imported largely illiterate Turkish, Italian, Greek and Spanish immigrants who were either semi- or unskilled laborers. They were imported to do the unpopular jobs on assembly lines and rebuild a largely (literally) shattered country.  Not much more was required of them. In return for their physical labor, their wages boosted tax revenues and social security contributions and made a substantial increase to production levels. They made fewer demands than their German co-workers but were no less productive. German firms were ecstatic to have abundant, cheap labor and celebrated what seemed like an unending, renewable resource.

Many German companies had interpreters onsite making learning the German language unnecessary. Germans had less problems with those immigrants who lived and worked among them. But these illiterate immigrants had illiterate children, who had children. As their numbers grew so did their demands on Germany's limited resources. The oil crisis of the 70's turned these "guests" into "burdens". It was not the jobs they were competing for, since many remained unskilled; it was the social programs enlisted to help these immigrants survive after they had already rebuilt the country and were not yet transitioning home.

The first wave of Turks did not use the German education system well and did not easily adapt to the German language. The German education system did focus on the needs of the Turks but wrong choices were made. Germans began to prepare the Turkish for a life back in Turkey and actually introduced supplemental Turkish language lessons. As a result, the Turkish did not assimilate into German society and strangely enough also did not return to Turkey as expected. This surprised the Germans but they were not unaccommodating. Economic and political conditions were uncertain in Turkey and these families were unsure in either world. They stayed and built parallel societies. They were not discouraged from doing so nor encouraged. Although there were grumblings and unrest, German politicians proposed contradictory plans and in the end, little legislation was passed.

In this period, Germans inherited the problems imported from earlier generations of immigrants. The immigrants imported their own system of justice, insistence on their women maintaining traditional female roles, (headscarves, early marriage, limited education), adherence to their deeply religious beliefs. Crime increased. Ironically today, educated Turks that immigrated directly from Turkey to the US and to the UK for example, are well adapted, speak excellent English, are involved in local politics and practice moderate Islam. Both those countries however, have had a more far-sighted immigration policy.

The first time a truly comprehensive immigration and integration program was unveiled, was in 2000. The next stage was in 2005 and the last reform was 2007. These reforms required proficiency in the German language, a valid job contract, educational requirements and an imported investment of €500,000 from any entrepreneur wishing to immigrate. Better late than never, you might say. Too little, too late more like it.

Immigrants bring innovation and creativity. As they are not part of the established "old-boy" network, they can offer a fresh, alternative approach to problem-solving. We forget the European and world immigrants that have been settling in the US over the last 300 years and have given us, to name a few; Hershey's, Telephone and Data Systems, Heinz, Rohm and Haas, Google, Intel, eBay, YouTube.  In 1751, Benjamin Franklin described German immigrants as “boors,” who “will never adopt our language or customs.”  To those Americans who say immigrants will never assimilate in the US or anywhere outside of their own country, I would have to ask where their fathers came from?

The first poll to take place to examine the attitudes of Turks either living in Germany for more than 30 years or born here, yielded some interesting results: Only 54% of Turks believe that they have the same educational opportunities as their German neighbors. Half of all Turks polled in 2009 plan to return to Turkey at some stage and this despite the fact that nearly 61% who responded to the survey were either born in Germany or have been living here for more than 30 years.

The survey revealed that Germans and Turkish-Germans share similar attitudes in terms of the amount of trust they have in the German political system, trust in the school system and to a limited extent, in business. The survey indicates that a great deal of integration for Turkish Germans has already taken place. The real divergence takes place on issues of family life. 47% of Turks do not believe a man and women should live together, 48% believe a woman should be a virgin before marriage and 48% believe their parents should tell them whom to marry. The numbers for Germans are unsurprisingly small in these matters, 8%, 6% and 5%, respectively. We must remember that these Turks are the children's children of illiterate immigrants. Sociologists believe that these children, not being able to identify with either world have become more conservative than even their own parents.

Recently, Turkish Prime Minister Erdogan acknowledged that nearly 3 million of the Turkish Germans living in Germany had problems with both languages and believed that first establishing good Turkish would help this population learn better German. He suggested establishing Turkish schools in Germany. Most German politicians, the German and the Turkish population itself,  disagreed. In 2008, Erdogan said that Turks in Germany could not be expected to assimilate and deny their Turkish identity; "integrate but don't assimilate". This is a confusing message and only complicates matters;  a little of 'same same but different'. Education, sensitivity training, compromise and collaboration must happen on all sides and encompass all sides in order for any acceptance and integration to take place.

Education, Religion, Culture

Not all Turkish in Germany today pursue the same educational goals as do the Germans since it was not a part of their immigrant culture. For the Germans and for many Americans, educational pursuit and achievement is the entrance ticket and most likely route to success. First generation guest-worker Turks did not pass those values to their Second Generation because those were not their values.  The Germans, did not require the Turks to adopt those values because they were sure as soon as their country was satisfactorily rebuilt, their guests would return home.

In the early stages of the program, some Guest-Workers were forced to leave family members in their home country. Germany encouraged familial reunification and supported the establishment of those members in Germany. On the enterprise side, other family members were after all, a potential resource to draw on for cheap labor.  To their credit, German citizens did not feel comfortable with 'forcing' a guest to leave his family. The Turkish put enormous value on hard work, their marriages, their children and their families. Germans were unprepared for the non-integration of Turkish women into the low-skilled workforce, however. Immigrant Turkish culture dictated that men work, women stay at home and raise children. In direct contrast, the German woman was beginning to enjoy emancipation and all of what that encompassed.

Today, the average German has 1.42 children, the average Turk 2.6. The Turkish divorce rate is exceedingly low. Turks value honor and respect, tradition and religion. The West used to hold these values in higher esteem but they have been diluted. Most Germans are either Catholic or Protestant but this is also rather diluted. Our last German Chancellor Gerhard Schröder was married 4 times. The average German does not know nor considers it interesting that their Chancellor Merkel is married but has no children.

How far would Schröder have risen and how long do you suppose Frau Merkel's childless state would have remained out of the media as a headlining issue in the US?

In a Turkish family, sons learn directly from their fathers. Turkish men impart the Islamic religion to their sons. Mothers, traditionally the communicators and biologically the natural networkers, train their daughters in culture.  It is the daughters of the women who are learning German. They are faster to integrate, to embrace the foreign culture. They are also more likely to bear the brunt of the pressures of living between two worlds. They are not allowed to integrate into German society because of discrimination and are unaccepted in their own culture if too "foreign". Young Turkish women are in the most precarious positions.

Not all immigrant children are unskilled and uneducated however. In actuality 15.2% have achieved a University degree. Many others however have failed to obtain the second certificate that most German students go on to get when they will not continue to University. It is this certificate that generally supports the Mittlestand.

The Corporate Reaction

Paradoxically, firms have been turning their noses up at Turks with degrees. A 2009 study conducted by researchers at the Bonn-based Institute for the Study of Labor revealed that job applications sent to firms bearing German-sounding names were 14% more likely to receive call backs than applications with a Turkish-sounding name. This number increased to 24% in the case of applications sent to smaller German firms.

A survey by Monster Worldwide, the leading global online career and recruitment resource, reported that 82% of ethnically diverse online job seekers believe that the resources a company dedicates to diversity recruiting reflects that company's overall commitment to creating a diverse network. Diversity adds a competitive advantage to a firm through the innovation and creativity that immigrants bring.  Should German firms continue to ignore these issues, how will they attract the talent they so desperately need? There is diversity and inclusion happening, but on too small a scale and too narrow a focus. We'll take a closer look in a moment.

Alarming is the rate of Turkish who are leaving Germany. Those who assimilated who went through the German system and could not find jobs are returning, highly skilled and trained to Turkey. The European Union is Turkey's largest trading partner (they are not official members) and Germany is the strongest economy within the Union. Turkey is not a third world country. Young, highly skilled bilinguals are returning home to Turkey and are being hired by …German Multinationals. Even women are doing better in their home country regarding job opportunities. The Turkish culture in Turkey is not the same Turkish culture in Germany.

As an alternative, during the past 20 years, the number of companies founded in Germany by Turkish citizens or with German-Turkish background has tripled to around 65,000 employing 320,000 workers. By 2016, this number should increase to 120,000 companies employing 720,000 workers. The number of companies which are founded by entrepreneurs is twice as high among the Turks as the Germans. They tend to "grow faster and more dynamically than others", says Kemal Sahin, the president of the Turkish-German Chamber of Industry and Commerce. The ratio of self-employed among people with a Turkish background in Germany will surpass 9% in 2010 according to the Association of Turkish Businessmen and Industrialists in Europe (ATIAD).  These businesses span tourism, production, trade and the creative sectors.  "It's harder for them to find a decent job (in Germany). That's why they are highly motivated to seize their opportunities. By setting up their own business they can move to the center of society more easily and achieve a higher status", continues Sahin. He believes that second and third generation Turks who hold University degrees are able to communicate easier with authorities to establish themselves.

Most politicians agree that immigration policies need to be revamped and all recognize that Germany needs to encourage urgently needed, skilled workers.

Trends for the Future

Demographic change may drive development in inclusion policies. There is already a dearth of skilled engineers. The current ratio of retirement age workers in Germany stands at 40 out of every 100. By 2050 this ratio will rise to 80 out of 100. Only 6% of all European firms are preparing for their aging workforce.

The benefits that foreigners bring need to be made clearer to Germans. The benefits and the pursuit of education, adaptation and assimilation need to be made clear to our existing immigrants. The value added by diversity and inclusion programs must be made clear to companies.

Does Corporate Social Responsibility pay off? The debate has been ongoing in the USA for several decades. Some American firms have been striving to satisfy their stakeholders' call for lower operating costs in balance with socially responsible programs that support ethnically diverse populations.  Whether through hiring practices, empowerment programs or Supplier Diversity practices, the numbers tell us that a firm can gain competitive advantage through their diversity and inclusion programs. German stakeholders are not yet sensitized to the benefits of a diverse population and are still in the stage of reluctant "proprietary host".

Empowerment of ethnic diversity by building supplier diversity has been ongoing for maybe 25-30 years in the States. Some US firms recognized early on that building new internal consumer and supplier markets enhances competitive pricing, lowers costs through local sourcing, reduces costs through lower future compliance costs, demonstrates commitment to CSR and brings benefits to the firm. But, we had to have a Civil Rights Movement, the Bakke case, and the Women's Movement to drive those points home. As a result, government intervention had to set quotas.

Women experience the same glass ceiling here as in the US and are in even fewer management positions. As a result, The German Secretary for Family Affairs has been threatening to impose a quota for women in management positions. Most firms immediately protested but there has been a slight increase in promotions for women recently. Perhaps the threat was enough. A diversity quota would be the ticket for immigrants as well. Quotas and affirmative action policies are not the Grail and they come with built-in problems; resentment, suspicion, disrespect for the newly hired. It has taken about 50 years in the US, many of them bloody and painful, for those early entrants to have paved a way for all those who came after. Has the program been successful?  No affirmative action program can be truly successful without intense and repeated training within the firm to raise the awareness of the benefits gained by inclusion programs. These causes must be championed from the top down. Today, women have made enormous gains and are graduating Universities in droves. In some cases, their skills are so up-to-date, they are earning more on average than their masculine co-workers. But we must also consider, that women still only govern 15 of the Fortune 500 and in many industries and locations earn $.77 on every masculine dollar earned,  Americans have a way to go. Without affirmative action, we would not have come even this far.

European firms tend to focus more on women's issues in diversity programs rather than other diversity issues. This is currently a matter of 'the squeakiest wheel getting the oil'. It also reflects the years of indifference to diversity issues. Women have been organizing for rights longer. Firms can no longer ignore them. Firms will have to learn how to multi-task and address several issues simultaneously; integrating and promoting women and immigrants into their workforce, managing an aging work force, attracting new talent, ongoing education and skill enhancement training, etc.

Conclusion

I remember 20 years ago, on a Fall afternoon, pushing my 1 year-old son's baby carriage along a path in a Stuttgart park and discussing the smell of burning wood in the air. I was new in town. This discussion was mostly one-sided and occasionally interspersed with gurgles (his, not mine). He and I were alone. The conversation took place in New York English, my native tongue. A well-dressed elderly couple, the first of thousands I would come to see, interact with and get to know on a daily basis over a 25 year period, strolled by me from the other direction, arm and arm. The man turned back quickly as he passed and hissed out "Ausländerin", (Foreigner!) and actually spat on the ground. I turned quickly behind me searching for the poor unfortunate who so deeply disturbed him but shocked, saw I was alone. "Aber Ich bin Amerikanerin", (I'm American!) I exclaimed in my most outraged, arrogant and insulted voice. "Genau!", (Exactly!) he clipped, smugly pressing his wife's arm and moving quickly along. Shaking with fear and indignation, I pushed the baby as fast as I could back to my in-laws' and collapsed in tears in their kitchen.

Imagine, there used to be a time when Germans hated the Americans!

I imagine now that the debate is raging on the world's stage, German firms will take a closer look at their diversity programs, their numbers and their policies. 'Breakdown can be breakthrough' goes the old saying. The Germans are slow and steady but efficient. In time, they'll figure out that the answer was always right under their upturned noses.