Bureaucratic Surge Spurs Creation of 325,000 New Jobs in Germany since 2022

Germany has experienced a significant rise in bureaucratic demands, resulting in the creation of approximately 325,000 new jobs since 2022, predominantly in administrative roles within companies, according to a recent study by the Institute for Employment Research (IAB). This increase stems from tougher regulations that 14% of companies now describe as a 'very high' bureaucratic burden, up from 4% in 2022.

The impact is notable among larger enterprises, with 30% of companies employing between 50-249 workers and those over 250 staff increasing administrative personnel. Smaller firms show lesser increases in bureaucratic hiring, with just 7% of micro-enterprises taking similar steps. Sectors such as energy supply (20%) and public administration (19%) report particularly high bureaucratic staffing growth.

However, this increase comes at a cost: about 80% of businesses face higher operational expenses due to bureaucracy, 55% report drops in productivity, and 19% experience competitive disadvantages. Additionally, 16% view these bureaucratic challenges as barriers to innovation. The General Data Protection Regulation (DSGVO) tops the list of bureaucratic obstacles, burdening two-thirds of surveyed companies, followed by EU IT security rules (32%) and the Supply Chain Due Diligence Act (14%).

IAB researcher Alexander Kubis has proposed a reform to introduce new laws on a temporary basis with a review process to evaluate their impact before permanent adoption, aiming to balance regulation with economic agility.

This study highlights the complex effects of expanding bureaucracy in Germany, showing not only job creation in compliance but also increased costs and productivity challenges for businesses.