The decision by the German parliament to massively increase defense spending over the coming years could thoroughly reshuffle Germany’s industrial landscape.
It could see jobs moving, for example, from the country’s struggling automakers to the arms industry.
While Germany’s flagship industrial companies like Volkswagen are shedding jobs amid falling sales, German manufacturers of tanks like Rheinmetall and cruise missiles like Diehl, are desperately seeking workers.
How will the European spending boom impact jobs?
A study by consulting firm EY and German lender DekaBank on the “Economic Effects of European Defense Investments,” calculated that Europe’s NATO members will invest an estimated €72 billion ($78 billion) annually in bolstering their military defenses.
This will create or secure 680,000 jobs in Europe, the study found.
Asurvey of top decision makers in Europe’s defense industry by US consulting firm Kearney’s Germany office similarly concludes that jobs in the sector will boom across Europe.
It notes, however, that the exact number of skilled workers needed depends on how much European NATO states really increase their defense spending.
If they allocate 2% of their GDP to defense, as NATO guidelines suggest, about 160,000 skilled workers will be needed by 2030 in Europe, the Kearney analysis finds.
“With a moderate increase (2.5% of GDP), around 460,000 positions could remain unfilled, and with a significant increase (3%), that number could reach up to 760,000 [in Europe],” the authors write, noting that specialists in artificial intelligence and big data were particularly in demand.
Who will benefit from more European defense spending?
Europe’s defense base is mostly centered on France, Germany, Italy, Spain and Sweden.
Germany, the second biggest arms exporting nation in Europe, is expected to be one of the biggest beneficiaries of European rearmament.
The country’s defense sector currently employs around 60,000 people, with an additional 90,000 people working for suppliers to the industry, according to Klaus-Heiner Röhl, an industry expert at the German Economic Institute in Cologne.
Where will workers come from?
Due to the expected surge in demand for military hardware such as artillery pieces, radar technology or armored vehicles, manufacturers are not only searching for new employees but also for production sites to handle the flood of new orders.
So, it would make sense to recruit from German industries that are currently struggling and perhaps shedding jobs.
Oliver Dörre, the CEO of Hensoldt, a leading European defense company headquartered in Germany, openly admitted in an interview with Reuters news agency that Hensoldt would “benefit from the difficulties in the automotive sector.”
Hensoldt focuses on sensor technologies for protection and surveillance missions. Their high-performance radars, for example, are being used in Ukraine’s air defense, and said to be even capable of detecting stealth bombers like the US-built F-35.
In the Reuters interview, Dörre said talks were already underway with German auto suppliers Continental and Bosch about hiring redundant employees.
Defense firm KNDS announced in February that it is planning to take over a plant in east Germany from train manufacturer Alstom, which was set to close in 2026.
KNDS wants to retain about half of the 700 Alstom workforce there and has said it would produce components and modules for its Leopard 2 battle tanks, as well as for its Puma and Boxer armored vehicles at the train factory, with production scheduled to begin as early as 2025.
German arms maker Rheinmetall is also relying on career changersfrom the car industry. German public broadcaster NDR reported recently that at least one worker, who previously manufactured specialty components for the oil industry, now produces gun barrels for Rheinmetall tanks at a factory in northern Germany.
What works — and what doesn’t?
Switching from a civilian to a defense job isn’t always easy, though, said Eva Brückner, Managing Director of the German recruitment consultant Heinrich & Coll.
“A transition is only possible in certain positions and specialized roles,” said Brückner, who specializes in recruitment for the security and defense industry.
A qualified assembly line worker at Volkswagen could, of course, do the same job at a defense company, she said. Similarly, a development engineer can transition into the defense sector after some retraining.
For other roles, however, the transition isn’t as simple, especially in sales or procurement, Brückner said.
“A buyer from the automotive industry, who is used to having suppliers jump at their command, can’t easily be placed in the defense sector,” she told DW.
Security screenings and US opportunities
The CEO of the German Security and Defense Industry Association, Hans Christoph Atzpodien, points to another challenge facing defense companies when hiring fresh personnel: security clearances.
“The current processing times for these approvals are far too long to enable a rapid transition of personnel,” he told DW.
On top of this, Germany’s Security Clearance Check Act, which among other things governs clearances for employees working in defense industries, refers to a list of countries (called the Staatenliste in German) deemed a significant risk to national security, such as Afghanistan, China, Vietnam, Iraq, Iran, Syria and Russia.
Potential employees who are nationals of a country on that list, or even Germans who have had an extended stay in one of the listed nations, may have difficulties gaining the security clearance.
Many experts agree that Europe’s rearmament drive could be slowed down by the current lack of skilled employees on the continent.
What could help though, says Eva Brückner, are the policies of US President Donald Trump.
“Because Trump has announced cuts in funding for research institutes and universities, new opportunities are opening up for Europe,” she said, noting that perceptions about the US and its well-funded elite universities might change among the world’s top talents.
“If funding is reduced, Europe has the chance to position itself as the innovation hub — and recruit these people.”
Brückner said she has already received inquiries from US-based professionals whose Green Cards are not being renewed or who no longer feel valued in their American jobs. Many are questioning whether they want to align with the new US political and geopolitical direction.
“This is a huge opportunity, and it should be seized. Europe could attract some of the brightest minds,” she added.
‘Under-the-radar’ professionals and digital experts in demand
Brückner believes the defense sector needs to rethink its recruitment strategy quickly and also bring in more women in leadership roles in an industry still dominated by former military officers, who are mostly male.
The Kearney analysis points out that the rapid pace of digitization in the defense industry is changing job profiles and requirements.
IT specialists and artificial intelligence (AI) experts for networking modern weapons systems and using big data for situational analysis are in high demand but in short supply, the analysis finds.
“The defense industry has traditionally been analog. Now it lacks the digital talent it needs,” writes Nils Kuhlwein, a co-author of the Kearney analysis.
Higher salaries than in civilian companies are needed to attract the urgently needed specialists, he notes, adding that “firms will have to raise their pay scales even further.”
This article was originally written in German.