Trending toward social media: Four in ten German SMEs recruit skills through social networks

• Skills shortage and digital natives entering workforce are drivers
• Further increase likely due to the coronavirus crisis
• Small and medium-sized enterprises in other European countries are already more active

Small and medium-sized enterprises in Germany are increasingly using social media to find new talent. This is the finding of a current study by KfW Research. Four in ten SMEs are already using these channels to recruit workers, while a further 22% are planning to do so in the coming two years.

“With skills shortages increasing in Germany, SMEs are looking to go new ways in recruiting workers. In addition, the entry of digital natives with their specific communication behaviour into the workforce is a driver of increased social media activity”, said Dr Fritzi Köhler-Geib, Chief Economist of KfW. “The contact restrictions imposed by the coronavirus crisis are likely to lead to a further surge in the use of social media to hire employees, since traditional recruitment measures such as open days or educational fares cannot take place at this time.”

Among the social media networks, the two career platforms LinkedIn and XING as well as Facebook are the platforms most commonly used by human resources managers. Here businesses maintain a profile of their own in a bid to attract potential applicants. They also trawl the profiles specifically created by users seeking employment and actively contact jobseekers with a promising CV and matching skills.

For the current study, KfW Research interviewed more than 2,500 businesses in Germany, France, Poland, Spain and the United Kingdom in collaboration with other European promotional banks. The jointly conducted European SME Survey 2019 shows that small and medium-sized enterprises in Germany are, on average, less active in recruiting skills on social media platforms than SMEs in other European countries. In the United Kingdom, 52% of all SMEs are already hiring workers through this channel, while that proportion is 50% and 49% in Poland and Spain, respectively. At 39%, France is the only country in the survey with a lower share than Germany. “In an international comparison, German SMEs are only in the lower mid-range in the use of social networks to recruit skilled workers”, said Dr Köhler-Geib.

Besides attracting employees, German SMEs also use social media for image promotion, product marketing and communicating with customers. In total, 59% of all small and medium-sized enterprises were active in social media in 2019. That was 15% more than in the year 2015.

The current analysis by KfW Research can be found at Economics in Brief.