Germany - Sick leave

Laura Pitel in Berlin NOVEMBER 1 2024

German business executives have warned that high levels of sick leave are damaging the competitiveness of Europe’s largest economy and compounding its economic woes. 

Workers missed an average of 19.4 days because of illness in 2023, according to Techniker Krankenkasse, the country’s largest public health insurance provider.

Preliminary figures suggest the trend is on course to continue its upward trajectory, TK told the Financial Times, exacerbating challenges for an economy that many expect to contract for the second year running in 2024.

While it is notoriously difficult to compare data from country to country, Christopher Prinz, an expert on employment at the OECD, said Germany was “definitely among the higher countries” when it came to sick leave.

The issue has fed into a debate about the future of the country’s economic model, with high energy prices, labour shortages and stifling bureaucracy hitting manufacturers that have for decades driven growth.

An executive at a blue-chip manufacturer lamented “a complete unwillingness”, especially among some “work-shy” younger workers, to understand the sacrifices needed to maintain prosperity and competitiveness.

“And then everyone wonders why Germany is the sick man of Europe,” he said.

Paul Niederstein, co-owner and chief executive of steel galvanising business Coatinc, which has about 600 employees in Germany and 900 elsewhere, said the high absence rate was a symptom of a labour force that had become “too spoilt and too self-confident”. 

A study published in January by the German Association of Research-Based Pharmaceutical Companies (VFA), an industry body, found that were it not for the country’s above-average number of sick days, the German economy would have grown 0.5 per cent last year, rather than shrinking 0.3 per cent.

Claus Michelsen, the study’s author, said high sick levels were exacerbating a shortage of skilled workers.

Heads at Elon Musk’s electric-car maker Tesla in September sought to tackle high sick rates by conducting unannounced home visits to check up on absent employees at its factory near Berlin.

While few German executives support such a controversial approach, there is deep unease in many companies about the trend.

Mercedes-Benz chief executive Ola Källenius recently claimed that sickness absence in its Germany production was sometimes twice as high as in other countries, despite the same conditions.

“As employers, we do a lot to support people: from occupational safety and ergonomic work processes to health advice, flu vaccinations and resilience training,” he told Der Spiegel. “But it takes all sides to achieve an improvement here.”

The TK data show the biggest change, besides a post-coronavirus bump in respiratory illnesses, has come from a steep rise in mental health cases since the turn of the millennium.

There has been growing criticism of pandemic-era rules enabling patients to receive sick notes from a doctor by telephone without a face-to-face examination.

Finance minister Christian Lindner said in September that there was “a correlation between the annual sick leave in Germany and the introduction of the measure” and called for it to be abolished. The country’s association of general practitioners this week pushed back, saying the measure was a rare success story in efforts to reduce bureaucracy in the healthcare system.

But Gerd Röders, who runs a 200-year-old family business supplying parts to the automotive, aviation and pharmaceutical sectors, said it was too easy for workers to be written off sick by a doctor. He suggested that the first three days of absence through sickness could be unpaid. “I don’t want to sound like an asshole, but maybe it would make people think twice,” he said.

Even before the pandemic, sick leave rates were among the highest in the developed world. 

OECD data on compensated absence from work due to illness — compiled from sources including health ministries and health insurers — shows Germany’s rate as the highest in the group of advanced countries, with 22.4 days a year in 2022, the latest available data.

The OECD’s labour force survey, which Prinz said enabled better comparisons because it was self-reported by workers, places Germany seventh — behind countries such as Norway, Finland, Spain and France — with 6.8 per cent of workers’ usual weekly hours lost due to sickness absence.

The OECD survey did not provide figures for the UK, where the statutory sick pay regime is one of the least generous in the developed world. Sickness absence has also increased in Britain since the pandemic, but to a much lower level. The latest UK data, for 2022, shows an absence rate of 2.6 per cent, up from 2 per cent in 2019. 

In Germany, all employees are entitled by law to six weeks’ sick leave a year at full pay. If an employee comes down with an illness during a holiday, and secures a doctor’s note to prove it, they can claim back those days of leave and use them another time. 

Prinz said it was possible that Germany’s policies were well designed. “We want people who are sick to be on sick leave. There’s a strong argument for sickness schemes actually helping productivity, health and labour market participation.” 

Hans-Jürgen Urban, board member of the country’s largest industrial trade union IG Metall, said high sick leave levels in a company should be seen as an “alarm signal” that indicates a raft of underlying pressures on workers. “Anyone who complains about high levels of absenteeism must look for the root causes: in the workplace itself.”

German workers also took a big hit to their pay in real terms following the pandemic, the global energy shock caused by Russia’s invasion of Ukraine and the high inflation that followed.

Despite the weak German economy, wages have been catching up rapidly this year, but remain below their pre-pandemic levels once adjusted for inflation.

Andreas Tautz, chief medical officer at DHL Group, which has about 600,000 employees worldwide and 220,000 in Germany, stressed that Germany was “still one of the most productive countries [in the world]”.

However, in terms of productivity growth, the outlook was less rosy, with a contraction last year.

Coatinc’s Niederstein said it was important for companies to be self-critical, warning that high sickness rates could reflect poor culture and leadership. 

But he added that workers were also “not willing” to appreciate the pressure businesses were under and “understand what happens in Mexico or Turkey or other countries”.

“Germany needs to be much less arrogant and needs to reflect the international business environment that we compete with,” he said.

Additional reporting by Valentina Romei and Delphine Strauss. Data visualisation by Janina Conboye