Germany has mounted a good initial response to a large wave of migrants and now needs to step up investments to ensure they have prospects beyond low-skilled jobs, the Organisation for Economic Cooperation and Development (OECD) said.
The first of the estimated 1.2 million people who arrived in Germany in 2015 and 2016 from countries including Syria, Iraq and Afghanistan are starting to enter the labour market. About 14 percent have found a job.
According to a survey of 2,200 German employers published by the OECD on Tuesday, most refugee hires have been for low-skilled positions. A large majority of employers are happy with their hires, although they are generally made for social reasons, not to plug skills gaps.
The number of native Germans entering the workforce is beginning to slow as the population ages, opening up a demographic hole that many experts hope refugees can help fill.
"This is not the workforce of today but tomorrow - maybe the day after tomorrow," German Labour and Social Affairs Minister Andrea Nahles told a conference in Berlin.
With an unemployment rate of just 5.9 percent, the lowest since German reunification in 1990 and one of the lowest in the OECD, Germany is one of the world's most favourable job markets for new arrivals, the OECD said.
Thomas Liebig, co-author of the OECD report, said firms would now have to make significant investments in on-the-job training to ensure that refugees continue to be employable.
"The real challenge is now. We have to keep up the drive, especially the companies," he told Reuters on the sidelines of the conference.
Access to jobs
Germany has taken measures to make it easier for asylum-seekers to enter the workforce - for example, most can now access the labour market after three months compared with nine months previously and as long as a year in Britain.
But about 30 percent of those who arrived in the first half of 2016 had no formal schooling or had only attended primary school and fewer than 20 percent had a university degree. Iranians and Syrians had the highest levels of education.
More than three quarters of the employers who took part in the survey - which was carried out together with the Association of German Chambers of Commerce and Industry and the German ministry of labour and social affairs - said they had few or no difficulties in daily work with the refugees they had hired.
Those who did have difficulties most frequently cited a lack of German-language skills, vocational skills, different work habits and uncertainty relating to the length of the employee's stay in Germany.