German Companies Created 325,000 Jobs Due to Bureaucracy Burden in 2025
German businesses have hired 325,000 extra employees to cope with growing bureaucracy, causing increased costs and reduced productivity in 2025.
- • German companies created 325,000 jobs due to increased bureaucracy in 2025.
- • 14% of companies report very high bureaucratic burden, up from 4% in 2022.
- • 80% of businesses cite higher costs and 55% note productivity losses from bureaucracy.
- • Energy supply and public administration sectors are particularly affected.
- • Government officials acknowledge the burden but concrete solutions are pending.
Key details
A recent study reveals that German companies have created approximately 325,000 additional jobs specifically to handle an increased bureaucratic workload in 2025. This surge in staffing is driven by growing legal requirements and documentation demands, highlighting the significant operational challenges faced by businesses across various sectors.
According to research by the Institute for Employment Research (IAB), 14% of companies reported a very high bureaucratic burden in 2023, up from just 4% in 2022. About 10% of businesses indicated they had hired extra staff to meet these demands. Larger companies, especially those with 250 or more employees, and medium-sized firms (50-249 employees) were notably impacted, with 30% increasing administrative staff. The energy supply sector is particularly affected, with 20% of firms reporting increased staffing due to bureaucracy. Other sectors also facing similar challenges include public administration, defense, and social insurance (19%) as well as education and training (17%).
The increased bureaucracy is leading to broader negative effects: 80% of companies report higher costs related to these administrative demands, while 55% have experienced productivity losses. Additionally, 19% of firms believe bureaucracy contributes to competitive disadvantages, and barriers to innovation have emerged.
Key bureaucratic burdens cited include the General Data Protection Regulation (GDPR), EU IT security regulations, and the Supply Chain Due Diligence Act. Katherina Reiche, Federal Minister of Economics, acknowledged the issue during discussions with small and medium-sized enterprises, stating, “We will not grow by just managing. We will only grow if we create more freedom.” However, specific measures to alleviate the problem were not outlined.
Jörg Dittrich, president of the ZDH craft association, criticized the government’s lack of concrete action, emphasizing that "the foundations of the economy are crumbling" and calling for rapid modification of burdensome rules like supermarket receipt obligations and employee time tracking.
IAB researcher Alexander Kubis suggested a potential approach to ease the burden: introducing new laws with review clauses to assess their impact before they become permanent.
This emerging challenge of excessive bureaucracy highlights the need for policy measures to balance necessary regulation with business growth and efficiency in Germany’s economy.